10-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

(Mark one)

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

For the fiscal year ended December 31, 2007

OR

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

For the transition period from                       to                     

Commission file number 0-8135

SIGMA-ALDRICH CORPORATION

(Exact name of Registrant as specified in its charter)

Delaware	43-1050617
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
3050 Spruce Street, St. Louis, Missouri	63103
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code 314-771-5765

Securities registered pursuant to Section 12(b) of the Act:

Common Stock, $1.00 par value; Common Share Purchase Rights

(Title of Class)

Securities registered pursuant to Section 12(g) of the Act: None

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.

Yes  x    No  ¨

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.

Yes  ¨    No  x

Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes  x    No  ¨

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.  ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer. See definition of “accelerated filer and large accelerated filer” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer  x                 Accelerated filer  ¨                 Non-accelerated filer  ¨                 Smaller reporting company  ¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes  ¨    No  x

Aggregate market value of the voting stock held by non-affiliates of the registrant:

$5,474,174,879	June 30, 2007
Value	Date of Valuation

Number of shares of the Registrant’s common stock, $1.00 par value, outstanding as of January 31, 2008 was 129,392,693.

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The following documents are incorporated by reference in the Parts of Form 10-K indicated below:

Documents Incorporated by Reference	Parts of Form 10-K into which Incorporated
Pages 19-50 of the Annual Report to Shareholders for the year ended December 31, 2007	Parts I, II and IV
Proxy Statement for the 2008 Annual Meeting of Shareholders	Part III

The Index to Exhibits is located on page F-2 of this Report.

This Annual Report on Form 10-K (the “Report”) may be deemed to include or incorporate forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934 that involve risk and uncertainty, including financial, business environment and projections, as well as statements that are preceded by, followed by, or that include the words “believes,” “expects,” “anticipates,” “should” or similar expressions, and other statements contained herein regarding matters that are not historical facts. Additionally, the Report contains forward-looking statements relating to future performance, goals, strategic actions and initiatives and similar intentions and beliefs, including, without limitation, statements regarding the Company’s expectations, goals, beliefs, intentions and the like regarding future sales, earnings, return on equity, share repurchases, capital expenditures, acquisitions and other matters. These statements involve assumptions regarding the Company operations, investments, acquisitions and conditions in the markets the Company serves. Although the Company believes its expectations are based on reasonable assumptions, such statements are subject to risks and uncertainties, including, among others, certain economic, political and technological factors. Actual results could differ materially from those stated or implied in the Report, due to, but not limited to, such factors as (1) changes in pricing and the competitive environment, (2) fluctuations in foreign currency exchange rates, (3) dependence on uninterrupted manufacturing and related operations, (4) changes in the regulatory environment in which the Company operates, (5) changes in worldwide tax rates or tax benefits from domestic and international operations, including the matters described in Note 10 – Income Taxes – to the Company’s consolidated financial statements on pages 39-40 of the 2007 Annual Report, which is incorporated herein by reference, (6) exposure to litigation including product liability claims, (7) changes in research funding and the success of research and development activities, (8) the ability to maintain adequate quality standards, (9) reliance on third party package delivery services, (10) the impact of acquisitions and success in integrating and obtaining projected results from the acquisitions, (11) other changes in the business environment in which the Company operates, and (12) the outcome of the matters described in Note 11 - Contingent Liabilities and Commitments - to the Company’s consolidated financial statements on pages 40-41 of the 2007 Annual Report, which is incorporated herein by reference. A further discussion of the Company’s risk factors can be found in Item 1A on page 8 of this Report. The Company does not undertake any obligation to update these forward-looking statements.

PART I

Item 1. Business

(a) General Development of Business

Sigma-Aldrich Corporation (“the Company”) was incorporated under the laws of the State of Delaware in May 1975. Effective July 31, 1975 (“Reorganization”), the Company succeeded, as a reporting company, Sigma International, Ltd., the predecessor of Sigma Chemical Company (“Sigma”), and Aldrich Chemical Company, Inc. (“Aldrich”), both of which had operated continuously for more than 20 years prior to the Reorganization. The Company’s principal executive offices are located at 3050 Spruce Street, St. Louis, Missouri, 63103.

On February 28, 2005, the Company completed its acquisition of all of the outstanding capital securities of JRH Biosciences Pty Ltd., CSL US Inc. and JRH Biosciences Limited, which collectively comprised the JRH Biosciences division (JRH) of CSL Limited for $366.8 million. JRH is a leading global supplier of cell culture and sera products to the biopharmaceutical industry. JRH’s product lines include sera, cell culture media used in the production of therapeutic proteins, reagent growth factors and biological material containers.

On April 1, 2005, the Company acquired the stock of the Proligo Group (Proligo), a global supplier of key genomics research tools including custom DNA, custom RNA and phosphoramidite raw materials used for DNA and RNA synthesis, from Degussa AG.

During 2006, the Company acquired four businesses with aggregate annual sales of approximately $25 million. These acquisitions provided access to several exciting new technology platforms and needed capacity for future growth for our SAFC business and the emerging market in China.

During 2007, the Company acquired two businesses with an aggregate annual sales benefit of approximately $52 million.

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(b) Financial Information About Segments

The Company operates in one segment. Information concerning sales for the Company’s business units is provided in Note 13—Company Operations by Business Unit - to the Company’s consolidated financial statements on page 44 of the 2007 Annual Report, which is incorporated herein by reference.

(c) Narrative Description of Business

The Company is a leading Life Science and High Technology company. The Company develops, manufactures, purchases and distributes the broadest range of high quality biochemicals and organic chemicals available in the world. These chemical products and kits are used in scientific and genomic research, biotechnology, pharmaceutical development, the diagnosis of disease and as key components in pharmaceutical and other high technology manufacturing. The Company operates in 36 countries, manufacturing 46,000 of the 100,000 chemical products it offers. The Company also offers 30,000 equipment products. The Company sells into nearly 160 countries, servicing over 80,000 accounts representing over one million individual customers.

Products

The Company has a customer-centric organizational structure featuring the Research units of Essentials, Specialties and Biotech and a Fine Chemicals unit, SAFC. This structure defines the Company’s approach to serving customers.

The Research Essentials unit sells biological buffers, cell culture reagents, biochemicals, chemicals, solvents, and other reagents and kits.

The Research Specialties unit sells organic chemicals, biochemicals, analytical reagents, chromatography consumables, reference materials and high-purity products.

The Research Biotech unit supplies immunochemical, molecular biology, cell signaling and neuroscience biochemicals and kits used in biotechnology, genomic, proteomic and other life science research applications.

The SAFC (Fine Chemicals) unit is a top 10 supplier of large-scale organic chemicals and biochemicals used in development and production by pharmaceutical, biotechnology, industrial, diagnostic and electronics companies.

Sales and Distribution

During 2007, products were sold to over 80,000 accounts representing over one million individual customers, including commercial laboratories, pharmaceutical, diagnostics, chemical, biotechnology, electronics and industrial companies, universities and hospitals, as well as other non-profit organizations and governmental institutions. Orders in laboratory quantities averaging approximately $400 accounted for 71%, 72% and 74% of the Company’s net sales in 2007, 2006 and 2005, respectively. The Company also makes its chemical products available in larger-scale quantities for use in manufacturing. Sales of these products accounted for 29%, 28% and 26% of net sales in 2007, 2006 and 2005, respectively.

Customers and potential customers, wherever located, are encouraged to contact the Company by telephone (“collect” or on “toll-free” WATS lines) or via its homepage on the World Wide Web (sigma-aldrich.com) for technical staff consultation or for placing orders. Information on the website does not constitute a part of this Report. Shipments are made at least five days a week from all locations. The Company strives to ship its products to customers on the same day an order is received and carries inventory levels which it believes to be appropriate to maintain this policy.

Production and Purchasing

The Company has chemical production facilities in Madison, Milwaukee and Sheboygan, Wisconsin; St. Louis, Missouri; Lenexa, Kansas; Houston, Texas; Bellefonte and Denver, Pennsylvania; Haverhill and Natick, Massachusetts; Bethany, Connecticut; Caseyville and Urbana, Illinois; Miamisburg, Ohio; Mulberry, Florida; Carlsbad and Selma, California; Australia; Canada; France; Germany; India; Ireland; Israel; Japan; Singapore; Switzerland; Taiwan and the United Kingdom. Biochemicals are primarily produced by extraction and purification from yeast, bacteria and other naturally occurring animal and plant sources. Organic and inorganic chemicals and radiolabeled chemicals are primarily produced by synthesis. Chromatography media and columns are produced using proprietary chemical synthesis and proprietary preparation processes. Similar processes are used for filtration and sample collection processes.

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There are 100,000 chemical and 30,000 equipment products listed in the Sigma, Aldrich, Fluka, Riedel-de Haën and Supelco catalogs. The Company produces 46,000 of the chemical products, which represented approximately 60% of sales in 2007. Products not manufactured by the Company are purchased from many sources either under contract or in the open market.

None of the Company’s 10,000 suppliers accounted for more than 10% of the Company’s chemical or equipment purchases in 2007. The Company has generally been able to obtain adequate supplies of products and materials to meet its needs. No assurance can be given that shortages will not occur in the future.

Whether a product is produced by the Company or purchased from outside suppliers, it is subjected to quality control procedures, including the verification of purity, prior to final packaging. Quality control is performed by a staff of chemists and lab technicians utilizing highly calibrated equipment.

Patents, Trademarks and Licenses

The Company holds approximately 500 issued or pending patents, over 570 licenses and has approximately 880 registered trademarks and trademark applications worldwide. The Company’s significant trademarks are the brand names: “Sigma-Aldrich”, “Sigma,” “Aldrich,” “Fluka,” “Riedel-de Haën,” “Supelco,” “SAFC,” “SAFC Biosciences,” “SAFC Supply Solutions,” “SAFC Pharma,” “SAFC Hitech,” “Genosys,” “Proligo” and “Pharmorphix.” The brands are marketed through business units called “Research Essentials,” “Research Specialties,” “Research Biotech,” and “SAFC (Fine Chemicals).” Their related registered logos and the significant trademarks are expected to be maintained indefinitely.

The Company is aware of the desirability for patent and trademark protection for its products. The Company believes that other than its brand names, no single patent, license, trademark (or related group of patents, licenses, or trademarks) is material in relation to its business as a whole.

In addition to patents, the Company relies on trade secrets and proprietary know-how. The Company seeks protection of these trade secrets and proprietary know-how, in part, through confidentiality and proprietary information agreements. The Company makes efforts to require its employees, directors, consultants and advisors, outside scientific collaborators and sponsored researchers, other advisors and other individuals and entities to execute confidentiality agreements upon the start of employment, consulting or other contractual relationships with the Company. These agreements provide that all confidential information developed or made known to the individual or entity during the course of the relationship is to be kept confidential and not disclosed to third parties except in specific circumstances. In the case of employees and some other parties, the agreements provide that all inventions conceived by the individual will be the Company’s exclusive property. These agreements may not provide meaningful protection for or adequate remedies to protect the Company’s technology in the event of unauthorized use or disclosure of information. Furthermore, the Company’s trade secrets may otherwise become known to, or be independently developed by, its competitors.

Dependence on a Single Customer or Product

During the year ended December 31, 2007, no single customer accounted for more than 2%, and no single product accounted for more than 1% of the Company’s net sales.

Backlog

The majority of customer orders are shipped from inventory on the day ordered, resulting in limited backlog. Individual items may occasionally be out-of-stock. These items are shipped as soon as they become available. Some orders for larger scale quantities specify a future delivery date, which we exclude from our backlog calculation. At December 31, 2007, the backlog of firm orders was not significant, at less than 2% of sales. The Company anticipates that substantially all of the December 31, 2007 backlog will be shipped during 2008.

Competition

Substantial competition exists in all of the Company’s marketing and production areas. The Company believes it is a major supplier of organic chemicals and biochemicals for research and manufacturing and chromatography products for analyzing and separating complex chemical mixtures. While the Company offers 130,000 chemical and equipment items and stocks and analyzes many of these products, some of the Company’s products are unique with limited demand. There are many competitors that offer a narrower range of chemicals.

In all product areas, the Company competes primarily on the basis of customer service, product availability, quality and price. The Company’s main marketing vehicles include its website, sigma-aldrich.com, plus printed catalogs in the marketplace for the Sigma, Aldrich, Fluka and Supelco brands. These catalogs are supplemented with advertisements in chemical and other

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scientific journals, the mailing of special product brochures, the electronic distribution of various advertisements and product data, news releases related to new product offerings and by personal visits by management, sales and technical representatives with customers.

Compliance With Regulations

The Company believes that it is in compliance in all material respects with federal, state and local regulations relating to the manufacture, sale and distribution of its products. The following are brief summaries of some of the federal laws and regulations which may have an impact on the Company’s business. These summaries are only illustrative of the extensive regulatory requirements of the federal, state and local governments and are not intended to provide the specific details of each law or regulation.

The Chemical Safety Information, Site Security and Fuels Regulatory Relief Act of 1999, and the regulations promulgated thereunder, regulate the handling and storage of certain flammable fuels and require an associated risk management program.

The Clean Air Act (CAA), as amended, and the regulations promulgated thereunder, regulate the emission of harmful pollutants to the air outside of the work environment. Federal or state regulatory agencies may require companies to acquire permits, perform monitoring and install control equipment for certain pollutants.

The Chemical Facility Anti-Terrorism Standard, the regulations promulgated thereunder, regulate facilities that manufacture, use, store or distribute certain chemicals above a listed Screening Threshold Quantity. A regulated facility must complete and submit a Chemical Security Assessment Tool, Top-Screen by January 19, 2008 or within 60 calendar days of coming into possession of the listed chemicals at or above the listed Chemical Safety Information. If required by the US Department of Homeland Security (DHS) the facility must complete and submit to the DHS, a Security Vulnerability Assessment and Site Security Plan. The Company has several sites subject to the initial screening requirements of this standard.

The Clean Water Act (CWA), as amended, and the regulations promulgated thereunder, regulate the discharge of harmful pollutants into the waters of the United States. Federal or state regulatory agencies may require companies to acquire permits, perform monitoring and to treat wastewater before discharge to the waters of the United States or a Publicly Owned Treatment Works (POTW).

The Comprehensive Environmental Response, Compensation and Liability Act of 1980 (CERCLA) and the Superfund Amendments and Reauthorization Act of 1986 (SARA), and the regulations promulgated thereunder, require notification of certain chemical spills and notification to state and local emergency response groups of the availability of Material Safety Data Sheets (MSDS’s) and the quantities of hazardous materials in the Company’s possession. SARA, and the regulations promulgated thereunder, also stresses the importance of permanent remedies and innovative treatment technologies to clean up hazardous waste sites.

The Emergency Planning & Community Right-To-Know Act of 1986 (EPCRA), as amended, and the regulations promulgated thereunder, regulate MSDS’s, chemical inventories and chemical release reporting. EPCRA also requires coordinated emergency planning with state and local agencies.

The Occupational Safety and Health Act of 1970 (OSHA), including the Hazard Communication Standard (Right to Know), and the regulations promulgated thereunder, require the labeling of hazardous substance containers, the supplying of MSDS’s on hazardous products to customers and hazardous substances to which an employee may be exposed in the workplace, the training of employees in the handling of hazardous substances and the use of the MSDS’s, along with other health and safety programs.

The Pollution Prevention Act of 1990 (PPA), as amended, and the regulations promulgated thereunder, focus on reducing the amount of pollution through cost-effective changes in production and raw materials useage. Pollution prevention also includes other practices that increase efficiency in the use of energy, water or other natural resources, and protect our resource base through conservation.

The Resource Conservation and Recovery Act of 1976 (RCRA), as amended, and the regulations promulgated thereunder, require certain procedures regarding the treatment, storage and disposal of hazardous waste.

The Toxic Substances Control Act of 1976 (TSCA), and the regulations promulgated thereunder, require reporting, testing and pre-manufacture notification procedures for certain chemicals. Exemptions are provided from some of these requirements with respect to chemicals manufactured in small quantities solely for research and development use.

The Department of Transportation (DOT) has promulgated regulations pursuant to the Hazardous Materials Transportation Act, referred to as the Hazardous Material Regulations (HMR), which set forth the requirements for hazard labeling, classification, packaging of chemicals and shipment modes for products destined for shipment in interstate commerce.

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The Hazardous Materials Transportation Act (HMTA), and the regulations promulgated thereunder, seeks to protect against risks to life, property and the environment that are inherent in the transportation of hazardous materials in intrastate, interstate and foreign commerce. The Act regulates the transportation of dangerous goods via air, highway, rail and water. The company ships and receives materials subject to this Act.

Registration, Evaluation and Authorization of Chemicals (REACH) is new European Union (EU) Legislation covering the manufacturing and importation of chemicals that came into law in 2007. Many of the Company’s substances will need pre-registration in 2008 and subsequent registration at various levels over the next few years. Additionally, the amount of products imported or manufactured have to be monitored and more information has to be passed along the supply chain.

The United States Department of Agriculture (USDA), Animal and Plant Health Inspection Service (APHIS), Veterinary Services (VS), regulates the importation of animal-derived materials to ensure that exotic animal and poultry diseases are not introduced into the United States. The USDA has issued importation permits to several Company sites.

Approximately 3,400 products, for which sales are immaterial to the total sales of the Company, are subject to control by either the Drug Enforcement Administration (DEA) or the Nuclear Regulatory Commission (NRC). The DEA and NRC have issued licenses to several Company sites to permit importation, manufacture, research, analysis, distribution and export of certain products. The Company screens customer orders involving products regulated by the DEA and the NRC to verify that a license, if necessary, has been obtained.

Approximately 900 products, for which sales are immaterial to the total sales of the Company, are subject to licensing by the Department of Commerce (DOC). The DOC has promulgated the Export Administration Regulations pursuant to the Export Administration Act of 1979 (EAA), as amended, to regulate the export of certain products to specific destinations by requiring a special export license.

Approximately 60 products, for which sales are immaterial to the total sales of the Company, are regulated by the Centers for Disease Control (CDC). The U.S. Departments of Health and Human Services (HHS) and Agriculture (USDA) published final rules, which implement the provisions of the USA Patriot Act and Public Health Security and Bioterrorism Preparedness and Response Act of 2002 (the Bioterrorism Act), setting forth the requirements for possession, use, and transfer of select agents and toxins. The CDC has issued one site license to the Company to permit the storage and transfer of these materials.

Approximately 850 products, for which sales are immaterial to the total sales of the Company, are sold as flavoring agents regulated by the Public Health Security and the Bioterrorism Act. The Bioterrorism Act requires that the U.S. Food and Drug Administration (FDA) receive prior notice of food items imported into the United States and register facilities handling such items. The Company has registered several sites under the Bioterrorism Act to enable the importation and handling of these items.

The Company engages principally in the business of selling products that are not foods or food additives, drugs or cosmetics within the meaning of the Federal Food, Drug and Cosmetic Act, as amended (the FDC Act). However, a limited number of the Company’s products are subject to labeling, manufacturing and other provisions of the FDC Act.

Research and Development

Research and development expenses were 2.9%, 2.9% and 3.0% of sales in 2007, 2006 and 2005, respectively. The research and development expenses relate primarily to efforts to add new manufactured products. All manufactured products accounted for approximately 60% of net sales in 2007.

Number of Persons Employed

The Company had 7,862 employees as of December 31, 2007. The total number employed in the United States was 4,049 with the remaining 3,813 employed by the Company’s international subsidiaries. The Company employs over 2,300 people who have degrees in chemistry, biochemistry, engineering or other scientific disciplines, including approximately 390 with Ph.D. degrees.

(d) Financial Information About Geographic Areas and Business Units

Information concerning sales by geographic area and business unit for the years ended December 31, 2007, 2006 and 2005, is located in Note 13 - Company Operations by Business Unit - to the Company’s consolidated financial statements on page 44 of the 2007 Annual Report, which is incorporated herein by reference.

In the years ended December 31, 2007, 2006 and 2005, approximately 64%, 62% and 61%, respectively, of the Company’s net sales were to customers located outside the United States. These sales were made directly by the Company, through distributors and by subsidiaries located in 35 other countries.

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(e) Available Information

The Company’s Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and amendments to reports filed pursuant to Sections 13(a) and 15(d) of the Securities Exchange Act of 1934, as amended, are available on the Company’s web site at sigma-aldrich.com as soon as reasonably practicable after being filed electronically with or furnished to the S.E.C. The information on the website does not constitute part of this Report.

(f) Executive Officers of the Registrant

The Executive Officers of the Registrant are:

Name of Executive Officer	Age	Positions and Offices Held
Gilles A. Cottier	49	President, Research Essentials
David R. Harvey	68	Chairman of the Board
Michael R. Hogan	54	Vice President, Chief Administrative Officer & Chief Financial Officer
David W. Julien	53	President, Research Specialties
Richard A. Keffer	52	Vice President, General Counsel & Secretary
Karen J. Miller	50	Controller
Jai P. Nagarkatti	61	President and Chief Executive Officer
Douglas W. Rau	51	Vice President, Human Resources
Kirk A. Richter	61	Treasurer
David A. Smoller	44	President, Research Biotech
Carl S. Turza	49	Chief Information Officer
Gerrit J.C. van den Dool	54	Vice President, Sales
Steven G. Walton	40	Vice President, Safety & Quality
Franklin D. Wicks	54	President, SAFC

There is no family relationship between any of the officers or directors. These officers serve at the pleasure of the Board of Directors subject to the terms of any employment or similar agreements.

Mr. Cottier has been President of the Research Essentials unit of the Company since July 2005. He served as the Vice President of Sales of the Company from 2003 to 2005 and as Vice President International Sales and Operations of the Company from 1999 to 2003.

Dr. Harvey has been Chairman of the Board since January 2001. He served as the Chief Executive Officer for more than five years until December 31, 2005 and as President of the Company for more than five years until August 2004. He is also a director of CF Industries.

Mr. Hogan has been Vice President, Chief Administrative Officer & Chief Financial Officer of the Company for more than five years. He also served as Secretary of the Company for more than five years until August 2006.

Mr. Julien has been President of the Research Specialties unit of the Company since July 2005. He served as President of the Biotechnology unit of the Company for more than five years until July 2005.

Mr. Keffer has been Vice President, General Counsel & Secretary of the Company since August 2006. He served as Vice President, General Counsel and Secretary with D&K Healthcare from 2004 to 2006. Prior to that, he was General Counsel, Secretary and Corporate Compliance Officer for Aurora Foods, Inc. from 2002 to 2003.

Ms. Miller has been Controller of the Company for more than five years.

Dr. Nagarkatti has been Chief Executive Officer of the Company since January 2006. He has been President of the Company since August 2004. He served as Chief Operating Officer of the Company from August 2004 until December 31, 2005. Previously he served as President of the Scientific Research unit of the Company from December 2002 to August 2004.

Mr. Rau has been Vice President Human Resources of the Company since October 2005 . He served as Vice President Human Resources of Kellwood Company from 2002 to 2005.

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Mr. Richter has been Treasurer of the Company for more than five years.

Dr. Smoller has been President of the Research Biotech unit of the Company since July 2007. He served as Vice President Research & Development from June 2004 to June 2007. He served as Vice President of EMG Biosciences from August 2003 until June 2004. Prior to that, he served as President, CEO, and Co-Founder of ProteoPlex, Inc. from November 2001 until August 2003.

Mr. Turza has been Chief Information Officer of the Company since April 2006. He served as Chief Operating Officer for Woodwind & Brasswind from 2004 to 2006. Prior to that, he was Vice President of e-Business for W.W. Grainger from 2000 to 2004.

Mr. van den Dool was named Vice President of Sales in July 2007. He served as Vice President of Sales and Operations, Europe from 2003 to 2007. Prior to that he served as Vice President of Sales, Europe from 1999 to 2003.

Mr. Walton has been Vice President Safety and Quality of the Company since August 2005. Prior to that, he served as Director of Corporate Health and Safety at ArvinMeritor from 2000 to 2005.

Dr. Wicks has been President of the SAFC unit of the Company for more than five years.

Item 1A. Risk Factors

Our business is subject to certain risks and uncertainties, including, among others, certain economic, political and technological factors. You should carefully consider the risk factors below, together with other matters described in this Form 10-K or incorporated herein by reference, in evaluating our business and prospects. If any one or more of the following risks occurs, our business, financial condition or operating results could be adversely impacted and the trading price of our common stock could decline. Additional risks not presently known to us or that we currently deem immaterial may also adversely impact our business, financial condition and operating results. Certain statements in this Form 10-K (including certain of the following factors) constitute forward-looking statements relating to future performance, goals, strategic actions and initiatives and similar intentions and beliefs, including, without limitation, statements regarding the Company’s expectations, goals, beliefs, intentions and the like regarding future sales, earnings, return on equity, share repurchases, capital expenditures, acquisitions and other matters. The Company does not undertake any obligation to update these forward-looking statements.

Risks Related to Our Sales and Operations

We face significant competition, including changes in pricing.

The markets for our products and services are both competitive and price sensitive. Many of our competitors have significant financial, operations, sales and marketing resources and experience in research and development. Competitors could develop new technologies that compete with our products and services or even render our products obsolete. If a competitor develops superior technology or cost-effective alternatives to our products and services, our business could be seriously harmed.

The markets for some of our products are also subject to specific competitive risks because these markets are highly price competitive. Our competitors have competed in the past by lowering prices on certain products. If they do so again, we may be forced to respond by lowering our prices. This would reduce sales and possibly profits. Failure to anticipate and respond to price competition may also impact sales and profits.

We believe that customers in our markets display a significant amount of loyalty to their supplier of a particular product. To the extent we are not the first to develop, offer and/or supply new products, customers may buy from our competitors or make materials themselves, causing our competitive position to suffer.

Due to heavy reliance on manufacturing and related operations to produce, package and distribute the products we sell, our

business could be adversely affected by disruptions of these operations.

We rely upon our manufacturing operations to produce approximately 60% of our sales. Our quality control, packaging and distribution operations support all sales. Any significant disruption of those operations for any reason, such as labor unrest, power interruptions, fire, or other events beyond our control could adversely affect our sales and customer relationships and

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therefore adversely affect our business. While insurance coverage may reimburse us, in whole or in part, for profits lost from such disruptions, our ability to provide these products in the longer term may affect our sales growth expectations and results.

We are subject to regulation by various federal, state and foreign agencies that require us to comply with a wide variety of

regulations, including those regarding the manufacture of products, the distribution of our products and environmental

matters.

Some of our operations are subject to regulation by various U.S. federal agencies and similar state and international agencies, including the U. S. Department of Commerce, U.S. Food and Drug Administration, the U.S. Department of Transportation, the U.S. Department of Agriculture and other comparable state and international agencies. These regulations govern a wide variety of product activities, from design and development to labeling, manufacturing, handling, sales and distribution of products. If we fail to comply with any or all of these regulations, we may be subject to fines or penalties, have to recall products and/or cease their manufacture and distribution, which would increase our costs and reduce our sales.

We are subject to regulations that govern the handling of hazardous substances.

We are subject to various federal, state, local and international laws and regulations that govern the handling, transportation, manufacture, use and sale of substances that are or could be classified as toxic or hazardous substances. Some risk of environmental damage is inherent in our operations and the products we manufacture, sell or distribute. Any failure by us to comply with the applicable government regulations could also result in product recalls or impositions of fines and restrictions on our ability to carry on with or expand in a portion or possibly all of our operations. If we fail to comply with any or all of these regulations, we may be subject to fines or penalties, have to recall products and/or cease their manufacture and distribution, which would increase our costs and reduce our sales.

Changes in worldwide tax rates or tax benefits will impact our tax expense and our profits.

We are subject to a variety of taxes in numerous local, regional, national and international jurisdictions. The laws regulating the taxes which we are subject to may change. We have no control over these changes and their impact, if any, on our results. Additionally, results of tax audit activity may also impact our tax provision and our profits. We reflect changes in our actual or forecast income tax rates as relevant facts and circumstances are known to us. In addition, the adoption on January 1, 2007 of Financial Accounting Standards Board (FASB) Interpretation No. 48, “Accounting for Uncertainty in Income Taxes, an interpretation of FASB Statement No. 109,” (FIN 48) had an impact on our measurement of uncertainties in income taxes and increased the volatility of our 2007 quarterly and full year income tax provisions. Variations to our forecast tax rate and forecast diluted EPS in the future are possible due in part to tax rate changes and changes in the status of tax uncertainties pursuant to FIN 48.

Litigation may harm our business.

Substantial, complex or extended litigation could cause us to incur significant costs and distract our management. For example, lawsuits by employees, stockholders, collaborators, distributors, customers, or competitors or others with protected intellectual property could be very costly and substantially disrupt our business. Disputes from time to time with such companies, organizations or individuals are not uncommon, and we cannot assure you that we will always be able to resolve such disputes or on terms favorable to us. For example, we are currently defending a class action complaint related to an explosion at one of our production facilities. As described in Note 11 - Contingent Liabilities and Commitments - to the Company’s consolidated financial statements on pages 40-41 of the 2007 Annual Report, which is incorporated herein by reference. Unexpected results could cause us to have financial exposure in these matters in excess of recorded reserves and insurance coverage, requiring us to provide additional reserves to address these liabilities, therefore impacting profits.

Potential product liability claims could affect our earnings and financial condition and harm our reputation.

We face potential liability claims based on our products and/or services. We carry product liability insurance coverage, generally available in the market, but which is limited in scope and amount. Our products are generally to be used by trained scientists and operators, however, there is no assurance that they will be used in accordance with our terms and conditions of sale. As a result, we could be held liable in connection with these products or services. For example, we are defending a large number of lawsuits relating to various vaccines manufactured at pharmaceutical companies, for which we provided a product for use in research activities in developing such vaccines. This matter is described in Note 11 - Contingent Liabilities and Commitments - to the Company’s consolidated financial statements on pages 40-41 of the 2007 Annual Report, which is incorporated herein by reference.

Although we seek to reduce our potential liability through measures such as contractual indemnification provisions with customers and/or suppliers, we cannot assure you that such measures will be enforced or effective. We could be materially and adversely affected if we were required to pay damages or incur defense costs in connection with a claim that is outside the scope of the indemnification agreements, if the indemnity, although applicable, is not executed in accordance with its terms or if our

– 9 –

liability exceeds the amount of applicable insurance or indemnification. There can be no assurance that our insurance coverage will be adequate or that insurance coverage will continue to be available on terms acceptable to us. Unexpected results could cause us to have financial exposure in these matters in excess of recorded reserves and insurance coverage, requiring us to provide additional reserves to address these liabilities, impacting profits.

Our sales and results of operations depend on our customers’ research and development efforts and their ability to obtain

funding for these efforts.

Our customers include researchers at pharmaceutical and biotechnology companies, chemical and related companies, academic institutions, government laboratories and private foundations. Fluctuations in the research and development budgets of these researchers and their organizations could have a significant effect on the demand for our products. Our customers determine their research and development budgets based on several factors, including the need to develop new products, the availability of governmental and other funding, competition and the general availability of resources. As we continue to expand our international operations, we expect research and development spending levels in markets outside of the U.S. will become increasingly important to us.

Research and development budgets fluctuate due to changes in available resources, spending priorities, general economic conditions, institutional and governmental budgetary limitations and mergers of pharmaceutical and biotechnology companies. Our business could be seriously harmed by any significant decrease in life science and high technology research and development expenditures by our customers. In particular, a small portion of our sales have been to researchers whose funding is dependent on grants from government agencies such as the U. S. National Institute of Health, the National Science Foundation, the National Cancer Institute and similar agencies or organizations. Government funding of research and development is subject to the political process, which is often unpredictable. Other programs, such as Homeland Security or defense, or general efforts to reduce the U.S. federal budget deficit could be viewed by the government as a higher priority. Any shift away from funding of life science and high technology research and development or delays surrounding the approval of governmental budget proposals may cause our customers to delay or forego purchases of our products and services, which could seriously damage our business.

Some of our customers receive funds from approved grants at a particular time of year, many times set by government budget cycles. In the past, such grants have been frozen for extended periods or have otherwise become unavailable to various institutions without advance notice. The timing of the receipt of grant funds may affect the timing of purchase decisions by our customers and, as a result, cause fluctuations in our sales and operating results.

If we fail to maintain adequate quality standards for our products and services, our business may be adversely affected and

our reputation harmed.

Our life science and high technology customers are often subject to rigorous quality standards to obtain and maintain regulatory approval of their products and the manufacturing processes that generate them. A failure to maintain, or in some instances, upgrade our quality standards to meet our customers’ needs, could result in the loss of a customer’s regulatory license and potentially substantial sales losses to us.

We heavily rely on third party air cargo carriers and other package delivery services, and a significant disruption in these

services or significant increases in prices may disrupt our ability to ship products or import materials, increase our costs and

lower our profitability and harm our reputation.

We emphasize our prompt service and shipment of products as a key element of our sales and marketing strategy. We ship a significant number of products to our customers through independent package delivery companies. In addition, we transport materials between our worldwide facilities and import raw materials from worldwide sources. Consequently, we heavily rely on air cargo carriers and other third party package delivery providers. If any of our key third party providers were to experience a significant disruption such that any of our products, components or raw materials could not be delivered in a timely fashion or we would incur additional costs that we could not pass on to our customers, our costs may increase and our relationships with certain customers may be adversely affected. In addition, if these third party providers increase prices, and we are not able to find comparable alternatives or make adjustments to our selling prices, our profitability could be adversely affected.

Our sales and operating results may vary from period to period.

Our sales and operating results may vary significantly from quarter to quarter and from year to year, depending on a variety of factors including:

• competitive conditions,

• exchange rate fluctuations,

• changes in tax laws, the results of tax audits or the measurement of tax uncertainties,

– 10 –

• the level and timing of our customers’ research and development and manufacturing efforts and activities,

• the timing of our customers’ government funding,

• the timing of our research and development, sales and marketing expenses,

• the timing of significant custom sales orders, typically associated with our SAFC and Research Biotech businesses,

• the expected higher level of sales growth in SAFC creating downward pressure on overall gross margins,

• the introduction of new products by us or our competitors,

• the success of identifying, acquiring and integrating businesses that complement our product offering, add new technologies or add presence in a market,

• customer demand for our products due to changes in purchasing requirements and research needs, and

• general economic conditions.

Our expense levels are based in part on our future sales expectations. Consequently, sales or profits may vary significantly from quarter to quarter or from year to year, and sales and profits in any interim period may not necessarily be indicative of results in subsequent periods.

If we experience a significant disruption in our information technology systems or if we fail to implement new systems and

software successfully, our business could be adversely affected.

We depend on information systems throughout our Company to control our manufacturing processes, process orders, manage inventory, process and bill shipments to and collect cash from our customers, respond to customer inquiries, contribute to our overall internal control processes, maintain records of our property, plant and equipment, and record and pay amounts due vendors and other creditors. If we were to experience a prolonged disruption in our information systems that involve interactions with customers and suppliers, it could result in the loss of sales and customers and/or increased costs, which could adversely affect our business.

If we fail to attract and retain key personnel, our business could be adversely affected.

Most of our products and services are highly technical in nature. In general, only highly qualified and trained scientists have the necessary skills to develop and market our products and provide our services. In addition, some of our manufacturing, quality control, safety and compliance, information technology, sales, and e-commerce related positions are highly technical as well. Our success depends in large part upon our ability to identify, hire, retain and motivate highly skilled professionals. We face intense competition for these professionals from our competitors, customers, marketing partners and other companies throughout the industries in which we compete. Any failure on our part to hire, train, and retain a sufficient number of qualified professionals would seriously damage our business.

We depend heavily on the services of our senior management. We believe that our future success depends on the continued services of such management. Our business may be harmed by the loss of a significant number of our senior management members in a short period of time.

If the expected benefit of our supply chain initiative is not realized, our future profitability may be adversely affected.

During the third quarter of 2007, we implemented an initiative to improve how we procure goods and services, manage inventory and execute other supply chain activities that are key to our customer centric approach. The purpose of this initiative is to reduce our overall manufacturing and procurement costs and expand margins over the next five years. Due to the scope and complexity of this initiative there are certain risks associated with its implementation. If unexpected costs or delays are encountered, our margins may not benefit as much or as quickly as we had anticipated.

Technology innovations in the markets that we serve may create alternatives to our products and result in reduced sales.

Technology innovations which our current and potential customers might have access to could reduce or eliminate their need for our products. A new, competing or other disruptive technology that reduces or eliminates the use of one or more of our products could negatively impact the sale of those products. Our customers also constantly attempt to reduce their manufacturing costs and improve product quality. We may be unable to respond on a timely basis to any or all of the changing needs of our customer base. Our failure to develop, introduce or enhance products able to compete with new technologies in a timely manner could have an adverse effect on our business, results of operations and financial condition.

Demand for our products and services is subject to the commercial success of our customers’ products, which may vary for

reasons outside our control.

Even if we are successful in securing utilization of our products in a customer’s manufacturing process, sales of many of our products and services remain dependent on the timing and volume of the customer’s production, over which we have no control.

– 11 –

The demand for our products depends on regulatory approvals and frequently depends on the commercial success of the customer’s supported product. Regulatory processes are complex, lengthy, expensive and can often take years to complete. Commercial success of a customer’s product, which would drive demand in their production and commensurate demand for our products and services, is dependent on many factors, some of which can change rapidly, despite early positive indications.

Rapid changes in the healthcare industry could directly or indirectly adversely affect our business.

The healthcare industry has undergone significant changes in an effort to control costs. These changes include:

• development of large and sophisticated group purchasing organizations,

• healthcare reform legislation,

• consolidation of pharmaceutical companies,

• increased outsourcing of certain activities, including to low-cost offshore locations,

• lower reimbursements for research and development, and

• legislative limitations on healthcare research.

We expect the healthcare industry to continue to change in the future. Some of these potential changes, such as a reduction in governmental support of healthcare services or adverse changes in legislation or regulations governing the ability to perform healthcare related research and the delivery or pricing of healthcare services or mandated benefits, may cause healthcare industry customers to purchase fewer of our products and services or to reduce the prices they are willing to pay for our products or services.

We may be unable to establish and to maintain collaborative development and marketing relationships with business partners, which could result in a decline in sales or slower than anticipated growth rates.

As a part of our business strategy, we have formed, and intend to continue to form, strategic alliances and distribution arrangements with partners relating to the development and commercialization of certain of our existing and potential products to increase our sales and to leverage our product and service offerings. Our success will depend, in part, on our ability to maintain these relationships and to cultivate additional, acceptable, strategic alliances with such companies.

In addition, we cannot ensure that parties with which we have established, or will establish, collaborative relationships will not, either directly or in collaboration with others, pursue alternative technologies or develop alternative products in addition to, or instead of, products offered as a result of these collaborations. Our business partners may also experience financial or other difficulties that lessen their value to us and to our customers. Our results of operations and opportunities for growth may be adversely affected by our failure to establish and maintain successful collaborative relationships.

Lack of early success with our pharmaceutical and biotechnology customers can shut us out of future business with those

customers.

A number of the products we sell to pharmaceutical and biotechnology customers are incorporated into the customers’ drug manufacturing processes. In some cases, once a customer chooses a particular product for use in a drug manufacturing process, it is unlikely that the customer will later switch to a competing alternative. In many cases, the regulatory license for the product will specify the products qualified for use in the process. Obtaining the regulatory approvals needed for a change in the manufacturing process is time consuming, expensive and uncertain. Accordingly, if a pharmaceutical or biotechnology customer does not select our products early in its manufacturing design phase for any number of reasons including but not limited to cost, ease of use, ability to supply large quantities or similar reasons, we may lose the opportunity to participate in the customer’s manufacturing of such product. Because we face competition in this market from other companies, we run the risk that our competitors could win significant early business with a customer making it difficult for us to recover that late stage commercialization opportunity.

We have significant inventories on hand.

We maintain significant inventories and have an allowance for slow-moving and obsolete inventory. Any significant unanticipated changes in future product demand or market conditions could also have an impact on the value of inventory and adversely impact our results of operations. Additionally, if it would become necessary to rework product to make it saleable, this additional effort would impact the cost and impact our operating results.

Fluctuation in the price and supply of raw fetal bovine serum could affect our business.

The supply of raw fetal bovine serum (FBS) is sometimes limited because serum collections tend to be cyclical. In addition, any discovery of bovine spongiform encephalopathy (popularly referred to as “mad cow disease”), particularly in Australia, may cause an interruption to our primary supply of FBS. These factors can cause the price of raw FBS to fluctuate. The profit margins we achieve on finished FBS have been unstable in the past because of the fluctuations in the price of raw FBS, and any increase in the price could adversely affect those profit margins in the short-term. In addition, if we are unable to obtain an adequate supply of FBS, or if we are unable to meet demand for FBS from our suppliers, we may lose market share.

– 12 –

We expect to continue to implement various process improvement initiatives that may not achieve the desired results.

We have implemented a number of changes designed to improve operating efficiencies and reduce costs. We expect to continue to identify opportunities for operational efficiencies and cost reduction and implement changes to achieve these efficiencies. Such improvements may lead to, among other things, the consolidation and integration of products, brands, facilities, functions, systems and processes, any or all of which might present significant management challenges. There can be no assurance that such actions will be accomplished as rapidly as anticipated or that the full extent of expected cost reductions will be achieved.

Our strategic equity investments may result in losses.

We have made and expect to continue to make strategic equity investments in complementary businesses and technology. We regularly review the carrying value of these investments for impairment, considering factors such as the current stock price, book values from recent financial statements and forecasts and expectations of the investee. The results of these evaluations may fluctuate due to market conditions and other conditions over which we have no control. Estimating the fair value of non-public equity investments in life science or high technology companies is inherently subjective. If actual events differ from our assumptions and other than temporary unfavorable fluctuations in the valuations of the investments are indicated, it could require a reduction in the value of the investment. This could materially impact our results of operations. Realization of any benefit from these strategic investments is uncertain.

Risks Related to Growth of Our Business

Acquisitions are an important part of our growth strategy.

We have acquired several businesses and routinely review additional acquisition opportunities. Certain risks exist including the potential for:

• the acquisition failing to provide the benefits originally anticipated by our management,

• difficulties in integrating the operations and systems of the acquired businesses and in realizing operating synergies,

• difficulties in assimilating and retaining employees and customers of the acquired companies,

• management’s attention being diverted to the integration of the acquired businesses, and

• unanticipated contract or regulatory issues.

None of these difficulties have been historically significant, but if they were to be in the future, we may be unable to achieve expectations from our acquisition strategy. In addition, we compete with other companies for suitable acquisition targets and may not be able to acquire certain targets that we seek. Also, certain businesses we have acquired may not generate the cash flow and/or earnings or other benefits that we anticipated at the time of their acquisition. If we are unable to successfully complete and integrate acquisitions in a timely manner, acquisitions may adversely affect our profitability. In addition, if we are unable to hire and retain key management personnel, we may not be able to execute our acquisition strategy.

We must continually offer new products and technologies.

Our success depends in large part on continuous and timely development and introduction of new products that address evolving customer needs and changes in the market. We also believe that because of the initial time investment required by our customers to reach a purchasing decision for a new product, that once a customer purchases a product from a competitor it may be difficult to regain that customer.

These facts have led us to focus significant efforts and resources on the development and identification of new technologies and products. As a result, we have a very broad product line and are continually seeking to develop, license or acquire new technologies and products to further broaden our offering. If we fail to achieve that, our customers will likely purchase products from our competitors, significantly harming our business. Once we develop or obtain a technology, to the extent that we fail to timely introduce new and innovative products that are accepted by our markets, we could fail to obtain an adequate return on our research and development, licensing and acquisition investments and could lose market share to our competitors, which would be difficult or impossible to regain and could seriously damage our business. Some of the factors affecting market acceptance of our products include:

• availability, quality and price as compared to competitive products,

• the functionality of new and existing products,

• the timing of introduction of our products compared to competitive products,

• scientists’ opinions of the product’s utility and our ability to incorporate their feedback into future products,

– 13 –

• citation of the products in published research, and

• general trends in life sciences research.

Risks Related to International Operations

Foreign currency exchange rate fluctuations may adversely affect our business.

Since we are a multinational corporation that sells and sources products in many different countries, changes in exchange rates have in the past, and could in the future, adversely affect our cash flows and results of operations. For example, the effect of translating foreign currency sales into U.S. dollars increased the 2007, 2006, and 2005 sales growth by 4.8%, 0.4% and 0.7%, respectively. Furthermore, reported sales and purchases made and expenses incurred in non-U.S. currencies by our international businesses, when translated into U.S. dollars for financial reporting purposes, fluctuate due to exchange rate movement. Due to the number of currencies involved, the variability of currency exposures and the potential volatility of currency exchange rates, we cannot predict the effect of exchange rate fluctuations on future sales and operating results.

We are subject to economic, political and other risks associated with our significant international business, which could

adversely affect our financial results.

We operate internationally primarily through wholly-owned subsidiaries located in North and South America, Europe, the Far East, the Middle East, Australia and Africa. Sales outside the United States were in excess of 60% of total sales in 2007. We expect that sales from international operations will continue to represent a growing portion of our sales. During 2007, approximately 9% of the Company’s United States operations’ chemical and equipment purchases were from international suppliers. In addition, many of our manufacturing facilities, employees and suppliers to our international operations are located outside the United States. Our sales and earnings could be adversely affected by a variety of factors resulting from our international operations, including:

• future fluctuations in exchange rates,

• complex regulatory requirements and changes in those requirements,

• trade protection measures, tariff, royalies or taxes, and import or export licensing requirements or restrictions,

• multiple jurisdictions and differing tax laws, as well as changes in those laws,

• restrictions on our ability to repatriate investments and earnings from foreign operations,

• changes in the political or economic conditions in a country or region, particularly in developing or emerging markets,

• difficulty in staffing and managing worldwide operations,

• changes in shipping costs, and

• difficulties in collecting on accounts receivable.

If any of these risks materialize, we could face the loss of sales, and/or substantial increases in costs, which could adversely affect our results of operations.

We have manufacturing and research facilities in Israel for which there are not immediate alternatives.

Capabilities of our manufacturing and research activities in Israel are not generally replicated in other geographic regions. We would incur substantial cost and disruption to our sales and operations if certain activities were interrupted in this country for an extended period of time. Israel sourced sales approximate 6% of our total sales in 2007.

Risks Related to Intellectual Property

We may become involved in disputes regarding our patents and other intellectual property rights, which could result in

prohibition of the use of certain technology in current or planned products, exposure of the business to significant liability

and diversion of management’s focus.

We and our major competitors spend substantial time and resources developing and patenting new and improved products and technologies. Many of our products are based on complex, rapidly developing technologies. Further, while we make every effort to respect others’ intellectual property, we may not have identified each and every instance where our products may infringe or utilize intellectual property rights held by others. Thus, we cannot provide assurance that others will not claim that we are infringing their intellectual property rights or that we do not in fact infringe those rights.

We have been and may in the future be sued by third parties alleging that we are infringing upon their intellectual property rights. Any claims, with or without merit, could:

• be expensive,

• take significant time and divert management’s focus from other business concerns,

– 14 –

• if successful, require us to stop the infringing activity, redesign our product or process or license the intellectual property in question, thereby resulting in delays and loss or deferral of sales,

• require us to pay substantial damage awards, and/or

• require us to enter into royalty or licensing agreements which may not be available on acceptable terms, if at all.

If we are unable to obtain a royalty agreement or license on acceptable terms, or are unable to redesign to avoid conflicts with any third party patent, we may be unable to offer some of our products, which could result in reduced sales.

Our failure to protect our intellectual property may significantly harm our results of operations.

Our success and ability to compete is dependent in part on our ability to protect and maintain our proprietary rights to our intellectual property, particularly trade secrets and proprietary know-how. We generally enter into confidentiality and proprietary information agreements with our employees, consultants and advisors. These agreements may not provide meaningful protection for or adequate remedies to protect the Company’s technology in the event of unauthorized use or disclosure of information. Efforts to address any infringement of our proprietary rights could result in significant litigation costs, and any failure to adequately protect our proprietary rights could result in our competitors offering similar services, potentially resulting in the loss of one or more competitive advantages and decreased sales.

Despite efforts to protect our proprietary rights, existing trade secret, copyright, patent and trademark laws afford us only limited protection. Others may attempt to copy or reengineer aspects of our products or obtain and use information that we regard as proprietary. Accordingly, we may not be able to prevent misappropriation of our products or to deter others from developing similar products. Further, monitoring the unauthorized use of our products and other proprietary rights is difficult. Litigation may be necessary to enforce our intellectual property rights or to determine the validity and scope of the proprietary rights of others. Litigation of this type could result in substantial costs and diversion of resources and could significantly harm our results of operations and reputation.

We may incur impairment charges on our goodwill and other intangible assets with indefinite lives that would reduce our

earnings.

We are subject to Statement of Financial Accounting Standards No. 142, “Goodwill and Other Intangible Assets,”(SFAS 142) which requires that goodwill and other intangible assets that have an indefinite life be tested at least annually for impairment. Goodwill and other intangible assets with indefinite lives must also be tested for impairment between the annual tests if a triggering event occurs that would likely reduce the fair value of the asset below its carrying amount. As of December 31, 2007, goodwill and other intangible assets with indefinite lives represented approximately 16% of our total assets. If we determine that there has been an impairment, our financial results for the relevant period would be reduced by the amount of the impairment, net of tax effects, if any.

Item 1B. Unresolved Staff Comments

None.

– 15 –

Item 2. Properties

The following table shows the location, land area, building area and function of the properties the Company owns or leases at December 31, 2007.

Country	Land Area (Acres)		Building Area (Sq. Ft) (in thousands)	Function
United States	1,627		4,178	admin., production, warehousing, distrib.
Germany	46		646	admin., production, warehousing, distrib.
Switzerland	13		413	admin., production, warehousing, distrib.
United Kingdom	251		452	admin., production, warehousing, distrib.
Israel	6		132	admin., production, warehousing, distrib.
All Other	62		820	admin., production, warehousing, distrib.
Total	2,005		6,641
Percent Owned Property	82	%
Percent Leased Property	18	%

The Company considers the properties to be well maintained, in sound condition and repair, and adequate for its present needs. The Company expects to continue to expand its production, warehousing and distribution capabilities in selected markets.

On average during 2007, the Company used approximately 65% of its manufacturing capacity and expects to increase the utilization of its plants in the future while continuing to make capital investments in plants to support specific business opportunities.

Item 3. Legal Proceedings

The information contained in Note 11 - Contingent Liabilities and Commitments - on pages 40-41 of the 2007 Annual Report is incorporated herein by reference.

Item 4. Submission of Matters to a Vote of Security Holders

No matters were submitted by the Company to the stockholders for a vote during the fourth quarter of 2007.

– 16 –

PART II

Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities

Information concerning the market price of the Company’s Common Stock and related shareholder information for the years ended December 31, 2007 and 2006 is located on page 19 of the 2007 Annual Report under the caption “Common Stock Data,” which is incorporated herein by reference.

See Item 12 for information concerning securities authorized for issuance under equity compensation plans.

The following table represents share repurchases by the Company for the year ended December 31, 2007 (in millions except per share amounts):

Issuer Purchases of Equity Securities

Period	Total Number of Shares Purchased	Average Price Paid per Share		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs	Maximum Number of Shares that May Yet Be Purchased Under the Plans or Programs
Total at Dec 31, 2006		$		80.0	10.0
Jan 1, 2007 – Jan 31, 2007	—		—	80.0	10.0
Feb 1, 2007 – Feb 28, 2007	0.8	$	41.97	80.8	9.2
Mar 1, 2007 – Mar 31, 2007	0.2	$	40.64	81.0	9.0
Apr 1, 2007 – Apr 30, 2007	0.2	$	42.42	81.2	8.8
May 1, 2007 – May 31, 2007	0.8	$	42.81	82.0	8.0
Jun 1, 2007 – Jun 30, 2007	—		—	82.0	8.0
Jul 1, 2007 – Jul 31, 2007	0.2	$	45.32	82.2	7.8
Aug 1, 2007 – Aug 31, 2007	0.8	$	47.31	83.0	7.0
Sep 1, 2007 – Sep 30, 2007	—		—	83.0	7.0
Oct 1, 2007 – Oct 31, 2007	0.3	$	50.95	83.3	6.7
Nov 1, 2007 – Nov 30, 2007	0.7	$	51.75	84.0	6.0
Dec 1, 2007 – Dec 31, 2007	—	$	—	84.0	6.0
Total at Dec 31, 2007	4.0	$	45.76	84.0	6.0

On November 14, 2006, the Board of Directors authorized a two-for-one stock split effected in the form of a 100 percent stock dividend to shareholders of record on December 15, 2006. Shareholders of record received an additional share on January 2, 2007 for each share they owned. The par value of the Company’s common stock remains $1.00 per share. Except as otherwise noted, all share and per share information presented herein has been retroactively adjusted to reflect the common stock split.

On November 11, 2003 and August 9, 2006, the Board of Directors authorized the repurchase of an additional 10 million shares, bringing the total repurchase authorization to 90 million shares after the August 9, 2006 approval. The timing of future repurchases and number of shares repurchased, if any, will depend on market conditions and other factors.

Items 6 through 8. Selected Financial Data, Management’s Discussion and Analysis of Financial Condition and Results of Operations, Quantitative and Qualitative Disclosures about Market Risk and Financial Statements and Supplementary Data

The information required by Items 6 through 8 is incorporated herein by reference to pages 19-50 of the 2007 Annual Report. See Index to Financial Statements on page F-1 of this Report. Those pages of the Company’s 2007 Annual Report listed in the Index or referred to in Items 1 through 4 are incorporated herein by reference.

Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosures

None

– 17 –

Item 9A. Controls and Procedures

Controls and Procedures

The Company’s management, under the supervision and with the participation of the Company’s Chief Executive Officer and Chief Financial Officer, carried out an evaluation of the effectiveness of the design and operation of the Company’s disclosure controls and procedures as of December 31, 2007. Based upon their evaluation, the Company’s Chief Executive Officer and Chief Financial Officer concluded that the Company’s disclosure controls and procedures (as defined in Exchange Act Rule 13a-15(e)) are effective as of that date to provide reasonable assurance that the information required to be disclosed by the Company in the reports it files or submits under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the SEC and that information required to be disclosed by the Company in the reports it files or submits under the Exchange Act is accumulated and communicated to the Company’s management, including its Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure. They have also determined in their evaluation that there was no change in the Company’s internal controls over financial reporting during the quarter ended December 31, 2007 that has materially affected or is reasonably likely to materially affect the Company’s internal control over financial reporting.

Management’s Report on Internal Control over Financial Reporting and Report of Independent Registered Public

Accounting Firm

The information contained in Management’s Report on Internal Control over Financial Reporting and Report of Independent Registered Public Accounting Firm on page 50 of the 2007 Annual Report is incorporated herein by reference.

Item 9B. Other Information

None.

PART III

Item 10. Directors, Executive Officers and Corporate Governance

Information under the captions “Nominees for Board of Directors” and “Section 16(a) Beneficial Ownership Reporting Compliance” of the 2008 Proxy Statement, which will be filed within 120 days after December 31, 2007, is incorporated herein by reference.

Audit Committee Financial Expert

Information under the caption “Audit Committee” of the 2008 Proxy Statement, which will be filed within 120 days after December 31, 2007, is incorporated herein by reference.

Code of Ethics

The Company has a Code of Ethics applicable to the principal executive officer, principal financial officer and principal accounting officer of the Company. A copy of the Code of Ethics is available on our website at sigma-aldrich.com or may be obtained without charge by writing to the Secretary, Sigma-Aldrich Corporation, P.O. Box 14508, St. Louis, Missouri 63178. The content on our website does not constitute part of this Report.

Item 11. Executive Compensation

Information under the captions “Director Compensation and Transactions” and “Information Concerning Executive Compensation” of the 2008 Proxy Statement, which will be filed within 120 days after December 31, 2007, is incorporated herein by reference.

Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

Information under the captions “Security Ownership of Directors, Executive Officers and Principal Beneficial Owners”, “Information Concerning Executive Compensation” and “Equity Compensation Plan Information” of the 2008 Proxy Statement, which will be filed within 120 days after December 31, 2007, is incorporated herein by reference.

Item 13. Certain Relationships and Related Transactions and Director Independence

Information, if any, under the captions “Director Compensation and Transactions,” “Principal Beneficial Owners and Transactions” and “Related Party Disclosure” of the 2008 Proxy Statement, which will be filed within 120 days after December 31, 2007, is incorporated herein by reference.

– 18 –

Item 14. Principal Accountant Fees and Services

Information under the caption “Audit Firm Fee Summary” of the 2008 Proxy Statement, which will be filed within 120 days after December 31, 2007, is incorporated herein by reference.

PART IV

Item 15. Exhibits and Financial Statement Schedules

(a) Documents Filed as Part of this Report

1. Financial Statements

See Index to Financial Statements on page F-1 of this Report. Those pages of the Company’s 2007 Annual Report listed in such Index are hereby incorporated by reference.

2. Financial Statement Schedules.

All schedules are omitted as they are not applicable, not required or the information is included in the consolidated financial statements or related notes to the consolidated financial statements.

3. Exhibits

See Index to Exhibits on page F-2 of this Report.

– 19 –

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this Report to be signed on its behalf by the undersigned, thereunto duly authorized.

SIGMA-ALDRICH CORPORATION

(Registrant)

By	/s/ Karen J. Miller	February 26, 2008 Date
	Karen J. Miller, Controller

Pursuant to the requirements of the Securities Exchange Act of 1934, this Report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated.

By	/s/ Jai P. Nagarkatti	February 26, 2008 Date
	Jai P. Nagarkatti, President and Chief Executive Officer (Principal Executive Officer)
By	/s/ Karen J. Miller	February 26, 2008 Date
	Karen J. Miller, Controller (Principal Accounting Officer)
By	/s/ Michael R. Hogan	February 26, 2008 Date
	Michael R. Hogan, Chief Administrative Officer & Chief Financial Officer (Principal Financial Officer)
By	/s/ David R. Harvey	February 26, 2008 Date
	David R. Harvey, Chairman of the Board
By	/s/ W. Lee McCollum	February 26, 2008 Date
	W. Lee McCollum, Director
By	/s/ Avi M. Nash	February 26, 2008 Date
	Avi M. Nash, Director
By	/s/ William C. O’Neil, Jr.	February 26, 2008 Date
	William C. O’Neil, Jr., Director
By	/s/ Steven M. Paul	February 26, 2008 Date
	Steven M. Paul, Director
By	/s/ J. Pedro Reinhard	February 26, 2008 Date
	J. Pedro Reinhard, Director
By	/s/ Timothy R.G. Sear	February 26, 2008 Date
	Timothy R.G. Sear, Director
By	/s/ D. Dean Spatz	February 26, 2008 Date
	D. Dean Spatz, Director
By	/s/ Barrett A. Toan	February 26, 2008 Date
	Barrett A. Toan, Director

– 20 –

SIGMA-ALDRICH CORPORATION AND SUBSIDIARIES

INDEX TO FINANCIAL STATEMENTS AND RELATED INFORMATION

	Page Number Reference Annual Report to Shareholders (Filed as Exhibit 13 Hereto)
Selected financial data, including Common Stock Data and related stockholder information, Annual Financial Data for the five years ended December  31, 2007 and Quarterly Financial Data for the quarterly periods in 2007 and 2006	19
Management’s Discussion and Analysis	21–29
Market risk disclosure	29
FINANCIAL STATEMENTS:
Consolidated Balance Sheets December 31, 2007 and 2006	31
Consolidated statements for the years ended December 31, 2007, 2006 and 2005
Income	30
Stockholders’ Equity	32
Cash Flows	33
Notes to consolidated financial statements	34–49
Management’s report on internal control over financial reporting	50
Report of independent registered public accounting firm	50

F-1

INDEX TO EXHIBITS

These Exhibits are numbered in accordance with the Exhibit Table of Item 601 of Regulation S-K:

Exhibits
2.1	Purchase and Sale Agreement, dated as of January 18, 2005, by and among CSL Limited, CSL International Pty Ltd., and CSL UK Holdings Limited. — Incorporated by reference to Exhibit 2.1 of Form 8-K filed March 1, 2005, Commission File Number 0-8135.
3 (a)	Certificate of Incorporation and Amendments — Incorporated by reference to Exhibit 3(a) of Form 10-Q filed for the quarter ended June 30, 2004, Commission File Number 0-8135.
(b)	By-Laws, as amended — Incorporated by reference to Exhibit 3(b) of Form 10-K filed for the year ended December 31, 2006, Commission File Number 0-8135.
4	Instruments Defining the Rights of Shareholders, Including Indentures:
(a)	Certificate of Incorporation and Amendments See Exhibit 3(a) above.
(b)	By-Laws, as amended November 14, 2006 See Exhibit 3(b) above.
(c)	Rights Agreement, dated as of August 8, 2000 between Sigma-Aldrich Corporation and Computershare Investor Services, LLC, as Rights Agent, which includes the form of Right Certificate as Exhibit A and the Summary of Common Stock Purchase Rights as Exhibit B. — Incorporated by reference to Exhibit 1 of Form 8-A12(g) filed on August 10, 2000, Commission File number 0-8135.
(d)	The Company agrees to furnish to the Securities and Exchange Commission upon request pursuant to Item 601(b)(4)(iii) of Regulation S-K copies of any instruments defining the rights of holders of long-term debt of the Company and its consolidated subsidiaries where such instrument has not been filed as an exhibit hereto and the total amount of securities authorized thereunder does not exceed 10% of the total assets of the Company and its subsidiaries on a consolidated basis.
10	Material Contracts:
(a)	Share Option Plan of 1987* — Incorporated by reference to Exhibit 10(d) of Form 10-K filed for the year ended December 31, 1992, Commission File Number 0-8135.
(b)	First Amendment to Share Option Plan of 1987* — Incorporated by reference to Exhibit 10(e) of Form 10-K filed for the year ended December 31, 1992, Commission File Number 0-8135.
(c)	Second Amendment to Share Option Plan of 1987* — Incorporated by reference to Exhibit 10(f) of Form 10-K filed for the year ended December 31, 1994, Commission File Number 0-8135.
(d)	Third Amendment to Share Option Plan of 1987* — Incorporated by reference to Exhibit 10(e) of Form 10-K filed for the year ended December 31, 2000, Commission File Number 0-8135.
(e)	Fourth Amendment to Share Option Plan of 1987* — Incorporated by reference to Exhibit 10(f) of Form 10-K filed for the year ended December 31, 2000, Commission File Number 0-8135.
(f)	Employment Agreement with Chairman of the Board David R. Harvey effective January 1, 2006* — Incorporated by reference to Exhibit 10.1 of Form 8-K filed January 19, 2006, Commission File Number 0-8135.
(g)	Amendment to the Employment Agreement effective as of May 19, 2006 by and between the Sigma-Aldrich Corporation and David R. Harvey. * Incorporated by reference to Exhibit 10.1 of Form 8-K filed June 8, 2006, Commission File Number 0-8135.
(h)	Amendment to the Employment Agreement effective as of May 4, 2007 by and between the Sigma-Aldrich Corporation and David R. Harvey. * Incorporated by reference to Exhibit 10.1 of Form 8-K filed May 4, 2007, Commission File Number 0-8135.
(i)	Share Option Plan of 1995* — Incorporated by reference to Appendix A of the Company’s Definitive Proxy statement filed March 30, 1995, Commission File Number 0-8135.
(j)	First Amendment to Share Option Plan of 1995* — Incorporated by reference to Exhibit 10(i) of Form 10-K filed for the year ended December 31, 2000, Commission File Number 0-8135.
(k)	Second Amendment to Share Option Plan of 1995* — Incorporated by reference to Exhibit 10(j) of Form 10-K filed for the year ended December 31, 2000, Commission File Number 0-8135.
(l)	Third Amendment to Share Option Plan of 1995* — Incorporated by reference to Exhibit 10(k) of Form 10-K filed for the year ended December 31, 2000, Commission File Number 0-8135.

F-2

(m)	Fourth Amendment to Share Option Plan of 1995* — Incorporated by reference to Exhibit 10(l) of Form 10-K filed for the year ended December 31, 2000, Commission File Number 0-8135.
(n)	Fifth Amendment to Share Option Plan of 1995* — Incorporated by reference to Exhibit 10(m) of Form 10-K filed for the year ended December 31, 2000, Commission File Number 0-8135.
(o)	Directors’ Nonqualified Share Option Plan of 1998* — Incorporated by reference to Exhibit A of the Company’s Definitive Proxy Statement filed March 27, 1998, Commission File Number 0-8135.
(p)	First Amendment to Directors’ Nonqualified Share Option Plan of 1998* — Incorporated by reference to Exhibit 10(o) of Form 10-K filed for the year ended December 31, 2000, Commission File Number 0-8135.
(q)	Share Option Plan of 2000* — Incorporated by reference to Appendix A of the Company’s Definitive Proxy Statement filed March 30, 2000, Commission File Number 0-8135.
(r)	Form of Employment Agreement (Similar Employment Agreements also exist with Gilles A. Cottier, Michael R. Hogan, David W. Julien, Richard A. Keffer, Karen J. Miller, Douglas W. Rau, Kirk A. Richter, David A. Smoller, Carl S. Turza, Gerrit J.C. van den Dool, Steven G. Walton and Franklin D. Wicks)* — Incorporated by reference to Exhibit 10(p) of Form 10-K filed March 14, 2006, Commission File Number 0-8135.
(s)	2003 Long-Term Incentive Plan, as amended and restated* — Incorporated by reference to Appendix A of the Company’s Definitive Proxy Statement filed March 14, 2006, Commission File Number 0-8135.
(t)	Cash Bonus Plan* — Incorporated by reference to Appendix B of the Company’s Definitive Proxy Statement filed March 29, 2003, Commission File Number 0-8135.
(u)	Summary description of the compensation of Non-Employee Directors of Sigma-Aldrich Corporation — See Exhibit 10(u).
(v)	Summary description of the compensation for the Executive Officers of Sigma-Aldrich Corporation — See Exhibit 10(v).
(w)	Employment Agreement with President and Chief Executive Officer Jai P. Nagarkatti effective January 1, 2006* Incorporated by reference to Exhibit 10.2 of Form 8-K filed January 19, 2006, Commission File Number 0-8135.
(x)	Note Purchase Agreement dated September 12, 2000. See Exhibit 10(x).
(y)	Credit Agreement dated February 23, 2005 with Sigma-Aldrich Corporation and a syndicate of banks, including Wells Fargo, National Association and Wachovia Capital Markets, LLC, which served as joint lead arrangers, and other lenders named therein. Incorporated by reference to Exhibit 10.1 of Form 8-K filed February 25, 2005, Commission File Number 0-8135.
(z)	Amendment No. 1 to Credit Agreement dated December 11, 2006 with Sigma-Aldrich Corporation and a syndicate of banks – Incorporated by reference to Exhibit 10.1 of Form 8-K filed December 13, 2006, Commission File Number 0-8135.
(aa)	Note Purchase Agreement dated December 5, 2006 – Incorporated by reference to Exhibit 10(z) of Form 10-K filed for the year ended December 31, 2006, Commission File Number 0-8135.
(ab)	Credit Facility Agreement dated March 13, 2007 with Sigma-Aldrich Corporation and a syndicate of banks – Incorporated by reference to Exhibit 10.1 of Form 8-K filed March 14, 2007, Commission File Number 0-8135.
(ac)	Flexible Deferral Plan* – Incorporated by reference to Exhibit 10(aa) of Form 10-K filed for the year ended December 31, 2006, Commission File Number 0-8135.
11	Statement Regarding Computation of Net Earnings Per Share — Incorporated by reference to the information on net earnings per share included in Note 15 to the Company’s 2007 consolidated financial statements filed as Exhibit 13 below.
13	Pages 18-47 of the Annual Report to Shareholders for the year ended December 31, 2007.
21	Subsidiaries of Registrant – See Exhibit 21.
23	Consent of Independent Registered Public Accounting Firm – See Exhibit 23.
31.1	Certification of Chief Executive Officer required by Rule 13a-15(e) and 15d-15(e) under the Exchange Act – See Exhibit 31.1.
31.2	Certification of Chief Financial Officer required by Rule 13a-15(e) and 15d-15(e) under the Exchange Act – See Exhibit 31.2.

F-3

32.1	CEO Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes- Oxley Act of 2002 – See Exhibit 32.1.
32.2	CFO Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes- Oxley Act of 2002 – See Exhibit 32.2.

* Represents management contract or compensatory plan or arrangement required to be filed as an exhibit pursuant to Item 15(c) of Form 10-K.

F-4

EX-10.U

Exhibit 10(u)

The following table provides information relating to total compensation amounts paid to non-employee directors in 2007:

Director Compensation Table

Name	Year	Fees Earned or Paid in Cash (1)		Stock Awards (2)		Option Awards (3) (4)		Non-Equity Incentive Plan Comp.		Change in Pension Value and Nonqualified Deferred Comp. Earnings		All Other Comp. (5)		Total
Nina V. Fedoroff (6)	2007	$	30,267	$	46,632	$	109,457	$	—	$	—	$	8,488	$	194,844
W. Lee McCollum (7)	2007		88,009		46,632		109,457		—		—		—		244,098
Avi M. Nash (8)	2007		63,126		46,632		109,457		—		—		—		219,215
William C. O’Neil, Jr. (9)	2007		69,720		46,632		109,457		—		—		—		225,809
Steven M. Paul (10)	2007		55,500		46,632		115,776		—		—		—		217,908
J. Pedro Reinhard (11)	2007		75,515		46,632		109,457		—		—		—		231,604
Timothy R.G. Sear (12)	2007		55,963		46,632		109,457		—		—		—		212,052
D. Dean Spatz (13)	2007		63,872		46,632		109,457		—		—		—		219,961
Barrett A. Toan (14)	2007		64,000		46,632		109,457		—		—		—		220,089

(1) Amounts listed represent payments for meeting attendance, annual retainer and the reimbursement of travel expenses, which are described below under “Cash Compensation.”

(2) Amounts listed represent the compensation cost for shares of our common stock that were awarded to non-employee directors on January 2, 2007. Each non-employee director as of January 2, 2007 received 1,200 shares of stock with a total fair value of $46,632 on the award date.

(3) Represents the compensation cost of option awards, before reflecting assumed forfeitures, over the requisite vesting period, as described in Statement of Financial Accounting Standards No. 123(R), “Accounting for Stock-Based Compensation.” The amount includes compensation cost with respect to awards granted in previous fiscal years and the current fiscal year. Options granted to directors vest over a three-month period. Amounts reflected within the table are in excess of the amounts recognized in the consolidated financial statements due to the assumed forfeiture rate reflected in the consolidated financial statements.

(4) On May 2, 2007, Ms. Fedoroff and Messrs. McCollum, Nash, O’Neil, Reinhard, Sear, Spatz and Toan each received 10,000 options that each had a total grant date fair value of $109,457.

(5) Amounts listed represent consulting fees paid for services that have no relation to the individual’s role as a Director.

(6) Nina V. Fedoroff resigned from the Board of Directors on August 6, 2007.

(7) As of December 31, 2007, Mr. McCollum had 66,000 option awards outstanding and retained ownership of the 1,200 shares of common stock awarded to him on January 2, 2007.

(8) As of December 31, 2007, Mr. Nash had 30,000 option awards outstanding and retained ownership of the 1,200 shares of common stock awarded to him on January 2, 2007.

(9) As of December 31, 2007, Mr. O’Neil had 86,000 option awards outstanding and retained ownership of the 1,200 shares of common stock awarded to him on January 2, 2007.

(10) As of December 31, 2007, Dr. Paul had 20,000 option awards outstanding and retained ownership of the 1,200 shares of common stock awarded to him on January 2, 2007.

(11) As of December 31, 2007, Mr. Reinhard had 66,000 option awards outstanding and retained ownership of the 1,200 shares of common stock awarded to him on January 2, 2007.

(12) As of December 31, 2007, Mr. Sear had 40,000 option awards outstanding and retained ownership of the 1,200 shares of common stock awarded to him on January 2, 2007.

(13) As of December 31, 2007, Mr. Spatz had 86,000 option awards outstanding and retained ownership of the 1,200 shares of common stock awarded to him on January 2, 2007.

(14) As of December 31, 2007, Mr. Toan had 66,000 option awards outstanding and retained ownership of the 1,200 shares of common stock awarded to him on January 2, 2007.

Exhibit 10(u) (continued)

Cash Compensation

Directors who are employed by the Company receive no compensation or fees for serving as a director or for attending board or committee meetings. Directors who are not employed by the Company receive cash and stock compensation, as described below.

[Except for Nina V. Fedoroff, each non-employee director received retainer fees of $40,000 in 2007 for being a member of the Board and its Committees. Ms. Fedoroff, who resigned from the Board in August 2007, received reduced retainer fees of $20,000.] In addition, each non-employee director also received a fee for his or her participation in Board and Committee meetings. The following table provides information related to the meeting fees paid to non-employee directors:

	Board of Directors		Audit Committee [(1)]		Compensation Committee [(2)]		Corporate Governance Committee [(2)]
Participation in person (3)	$	3,000	$	1,000	$	1,000	$	1,000
Participation via conference call	$	1,500	$	500	$	500	$	500

(1) [During 2007, the Audit Committee Chairman received $4,000 for every meeting attended in person and $2,000 for every conference call in which he participated.]

(2) [During 2007, the Compensation and Corporate Governance Committee Chairmen each received $2,000 for every meeting attended in person and $1,000 for every conference call in which they participated. ]

(3) Non-employee directors participating in person at meetings also received reimbursement of travel expenses.

Stock Compensation

Pursuant to the Company’s 2003 Long-Term Incentive Plan, the Company currently provides non-employee directors with stock compensation as follows:

• Newly elected directors will be granted options to acquire 20,000 shares of common stock upon the date of his or her initial election to the Board; and

• Eligible directors serving on the Board on the day after any annual shareholder meeting, who have served on the Board for at least six months prior to the annual meeting, will be granted options to acquire 10,000 shares of common stock on such date.

• Each non-employee director will be awarded 1,200 shares of common stock on January 1^st of each fiscal year.

[Eight of the nine non-employee directors received options to purchase 10,000 shares of common stock in 2007. Since Dr. Paul had not served on the board for at least six months prior to the annual meeting, he did not receive options to purchase 10,000 shares of common stock the day after the meeting. If elected at the 2008 annual meeting, the seven continuing non-employee directors will receive options to purchase 10,000 shares of common stock the day after the meeting.] The option price per share is equal to the fair market value, or the closing stock price, of the common stock on the date the option is granted. No option will vest or may be exercised to any extent until the holder has continually served as a director for at least three months from the date of grant, provided that such options will vest and become exercisable upon termination of service by reason of death, disability or retirement, subject to the terms and conditions of the plan. The options expire ten years from the date of grant.

[Each non-employee director received 1,200 shares of common stock at January 2, 2007 and January 2, 2008.]

EX-10.V

Exhibit 10(v)

INFORMATION CONCERNING EXECUTIVE COMPENSATION

The following table presents details of compensation information previously discussed within the Compensation Discussion and Analysis for the Principal Executive Officer, the Principal Financial Officer and the three other most highly compensated executive officers, based on total compensation in 2007 and 2006:

Summary Compensation Table

	Year	Salary		Bonus (1)		Stock Awards (2)		Option Awards (3)		Nonequity Incentive Plan Comp. (4)		Change in Pension Value and Nonqualified Deferred Comp. Earnings (5)		All Other Comp. (6)		Total
Jai P. Nagarkatti President & CEO	2007 2006	$	660,000 600,000	$	—   —	$	397,678 129,259	$	858,906 514,301	$ $	439,105 416,874	$	40,069 80,269	$	195,000 191,590	$	2,590,758 1,932,293
Michael R. Hogan Chief Administrative Officer & CFO	2007 2006		430,000 430,000		—   —		133,412 51,704		328,637 313,127		213,495 222,955	$	4,965 12,201		42,000 41,820		1,152,509 1,071,807
David R. Harvey Chairman	2006		250,000		500,000		—		868,068		500,000		56,718		9,235		2,184,021
Franklin D. Wicks President, SAFC	2007 2006		340,000 330,000		—   —		133,412 51,704		328,637 313,127		156,570 177,375	$	6,544 54,713		42,810 41,586		1,007,973 968,505
David W. Julien President, Research Specialties	2007 2006		330,000 320,000		—   —		133,412 51,704		328,637 313,127		163,845 165,920	$	5,551 32,124		43,382 42,592		1,004,827 925,467
Gilles A. Cottier President, Research Specialties	2007		290,000		—		133,412		264,832		143,985	$	11,469		40,333		884,031

(1) Represents the amount paid to Dr. Harvey on January 3, 2006 pursuant to the terms of his prior employment agreement based on his continued employment through that date. Effective January 3, 2006, we entered into a new agreement with Dr. Harvey, described under “Employment Agreements” on page 31 of the 2008 Proxy Statement incorporated herein by reference.

(2) Amounts listed represent the amount of expense recognized for financial reporting purposes in 2007 and 2006 for performance shares, before reflecting assumed forfeitures, in accordance with SFAS 123(R). Assumptions used in the calculation of these targeted amounts are included in Note 12 “Common Stock” to our consolidated financial statements for 2007 included in our annual report on Form 10-K filed with the SEC on February 26, 2008. The performance shares were granted pursuant to our 2003 LTIP. Dividends are not paid on these performance shares. The ultimate number of shares awarded, pursuant to these grants, will depend upon our performance over the three-year period ending December 31, 2008 and December 31, 2009. These shares will be awarded in 2009 and 2010 after the results for the performance period have been determined.

(3) Represents the amount of expense recognized for financial reporting purposes in 2007 and 2006, before reflecting assumed forfeitures, as described in SFAS 123(R), and thus includes amounts from awards granted in and prior to 2007 based on the vesting of these awards. Assumptions used in the calculation of these amounts are included in Note 12 “Common Stock” to our consolidated financial statements for 2007 included in our annual report on Form 10-K filed with the SEC on February 26, 2008.

(4) Amounts are earned and accrued during the fiscal year indicated and are paid subsequent to the end of the fiscal year pursuant to our cash bonus plan, discussed on page 16, except for Dr. Harvey, who earned the amount paid to him on January 3, 2006 pursuant to the terms of his prior employment agreement based on the achievement of targeted financial performance for 2003, 2004 and 2005.

(5) Amounts represent the change in the present value of accrued benefits under our defined benefit pension plan, discussed on page 27 of the 2008 Proxy Statement incorporated herein by reference, from November 30, 2006 to November 30, 2007. This corresponds to the plan’s measurement date used for financial reporting purposes. There are no above-market or preferential investment earnings on nonqualified deferred compensation arrangements for any of our named executive officers or any other employees.

(6) Components of this column are described within the “All Other Compensation” table on page 25 of the 2008 Proxy Statement incorporated herein by reference.

(7) Mr. Cottier replaced Dr. Harvey as a named executive officer in 2007 for purposes of compensation presentations.

Exhibit 10(v) (continued)

The components of all other compensation for 2007 are as follows:

All Other Compensation

Name	Year	401(k) Retirement Savings Plan		Supplemental Retirement Plan		Personal Use of Company Vehicle		Total
Jai P. Nagarkatti	2007	$	8,700	$	182,300	$	4,000	$	195,000
Michael R. Hogan	2007		8,700		33,300		—		42,000
Franklin D. Wicks	2007		8,700		27,900		6,210		42,810
David W. Julien	2007		8,700		27,300		7,382		43,382
Gilles A. Cottier	2007		8,700		24,900		6,733		40,333

EX-10.X

Exhibit 10(x)

SIGMA–ALDRICH CORPORATION

$100,000,000

7.687% Senior Notes due September 12, 2010

NOTE PURCHASE AGREEMENT

Dated: September 12, 2000

Exhibit 10(x) (continued)

TABLE OF CONTENTS

SECTION	HEADING	PAGE
SECTION 1.	AUTHORIZATION OF NOTES	1
SECTION 2.	SALE AND PURCHASE OF NOTES	1
SECTION 3.	CLOSING	2
SECTION 4.	CONDITIONS TO CLOSING	2
Section 4.1.	Representations and Warranties	2
Section 4.2.	Performance; No Default	2
Section 4.3.	Compliance Certificates	2
Section 4.4.	Opinions of Counsel	3
Section 4.5.	Purchase Permitted by Applicable Law, etc.	3
Section 4.6.	Sale of Other Notes	3
Section 4.7.	Intentionally Deleted	3
Section 4.8.	Private Placement Number	3
Section 4.9.	Changes in Corporate Structure	3
Section 4.10.	Proceedings and Documents	3
SECTION 5 REPRESENTATIONS AND WARRANTIES OF THE COMPANY		4
Section 5.1.	Organization; Power and Authority	4
Section 5.2.	Authorization, etc	4
Section 5.3.	Disclosure	4
Section 5.4.	Organization and Ownership of Shares of Subsidiaries	4
Section 5.5.	Financial Statements	5
Section 5.6.	Compliance with Laws, Other Instruments, etc.	5
Section 5.7.	Governmental Authorizations, etc.	5
Section 5.8.	Litigation; Observance of Statutes and Orders	6
Section 5.9.	Taxes	6
Section 5.10.	Title to Property; Leases	6
Section 5.11.	Licenses, Permits, etc.	6
Section 5.12.	Compliance with ERISA	7
Section 5.13.	Private Offering by the Company	8
Section 5.14.	Use of Proceeds; Margin Regulations	8
Section 5.15.	Existing Indebtedness	8
Section 5.16.	Foreign Assets Control Regulations, etc.	8
Section 5.17.	Status under Certain Statutes	8
Section 5.18.	Environmental Matters	9
SECTION 6.	REPRESENTATIONS OF THE PURCHASER	9
Section 6.1.	Purchase for Investment	9

i

Exhibit 10(x) (continued)

Section 6.2.	Source of Funds	9
SECTION 7. INFORMATION AS TO COMPANY		11
Section 7.1.	Financial and Business Information	11
Section 7.2.	Officer’s Certificate	13
Section 7.3.	Inspection	14
SECTION 8.	PREPAYMENT OF THE NOTES	14
Section 8.1.	Intentionally Deleted	14
Section 8.2.	Optional Prepayments with Make-Whole Amount	14
Section 8.3.	Allocation of Partial Prepayments	14
Section 8.4.	Maturity; Surrender, etc.	15
Section 8.5.	Purchase of Notes	15
Section 8.6.	Make-Whole Amount	15
Section 8.7.	Change in Control	17
SECTION 9.	AFFIRMATIVE COVENANTS	18
Section 9.1.	Compliance with Law	18
Section 9.2.	Insurance	18
Section 9.3.	Maintenance of Properties	19
Section 9.4.	Payment of Taxes	19
Section 9.5.	Corporate Existence, etc.	19
Section 9.6.	Pari Passu Ranking	19
Section 9.7.	Line of Business	20
SECTION 10.	NEGATIVE COVENANTS	20
Section 10.1.	Transactions with Affiliates	20
Section 10.2.	Merger, Consolidation, etc.	20
Section 10.3.	Maintenance of Consolidated Net Worth	21
Section 10.4.	Limitation on Consolidated Indebtedness	21
Section 10.5.	Limitation on Priority Debt	21
Section 10.6.	Sale of Assets	21
Section 10.7.	Limitations on Liens	21
SECTION 11.	EVENTS OF DEFAULT	23
SECTION 12.	REMEDIES ON DEFAULT, ETC.	25
Section 12.1.	Acceleration	25
Section 12.2.	Other Remedies	26
Section 12.3.	Rescission	26
Section 12.4.	No Waivers or Election of Remedies, Expenses, etc.	26
SECTION 13.	REGISTRATION; EXCHANGE; SUBSTITUTION OF NOTES	27
Section 13.1.	Registration of Notes	27
Section 13.2.	Transfer and Exchange of Notes	27
Section 13.3.	Replacement of Notes	27
SECTION 14.	PAYMENTS ON NOTES	28

ii

Exhibit 10(x) (continued)

Section 14.1.	Place of Payment	28
Section 14.2.	Home Office Payment	28
SECTION 15.	EXPENSES, ETC.	29
Section 15.1.	Transaction Expenses	29
Section 15.2.	Survival	29
SECTION 16.	SURVIVAL OF REPRESENTATIONS AND WARRANTIES; ENTIRE AGREEMENT	29
SECTION 17.	AMENDMENT AND WAIVER	29
Section 17.1.	Requirements	29
Section 17.2.	Solicitation of Holders of Notes	30
Section 17.3.	Binding Effect, etc.	30
Section 17.4.	Notes Held by Company, etc.	31
SECTION 18.	NOTICES	31
SECTION 19.	REPRODUCTION OF DOCUMENTS	31
SECTION 20.	CONFIDENTIAL INFORMATION	32
SECTION 21.	SUBSTITUTION OF PURCHASER	33
SECTION 22.	MISCELLANEOUS	33
Section 22.1.	Successors and Assigns	33
Section 22.2.	Payments Due on Non-Business Days	33
Section 22.3.	Severability	34
Section 22.4.	Construction	34
Section 22.5.	Counterparts	34
Section 22.6.	Governing Law	34

SCHEDULE A	—	Information Relating to Purchasers
SCHEDULE B	—	Defined Terms
SCHEDULE 4.9	—	Changes in Corporate Structure
SCHEDULE 5.3	—	Disclosure Materials
SCHEDULE 5.4	—	Subsidiaries of the Company and Ownership of Subsidiary Stock
SCHEDULE 5.5	—	Financial Statements
SCHEDULE 5.8	—	Certain Litigation
SCHEDULE 5.11	—	Patents, etc.
SCHEDULE 5.14	—	Use of Proceeds
SCHEDULE 5.15	—	Existing Indebtedness
SCHEDULE 10.7(f)	—	Existing Liens
EXHIBIT 1	—	Form of 7.687% Senior Note due September 12, 2010
EXHIBIT 4.4	—	Form of Opinion of Special Counsel for the Company

iii

Exhibit 10(x) (continued)

SIGMA–ALDRICH CORPORATION

3050 SPRUCE STREET

ST. LOUIS, MISSOURI 63103

7.687% SENIOR NOTES due September 12, 2010

September 12, 2000

TO EACH OF THE PURCHASERS LISTED IN

    THE ATTACHED SCHEDULE A:

Ladies and Gentlemen:

Sigma–Aldrich Corporation, a Delaware corporation, together with its successors and assigns (the “Company”), agrees with you as follows:

SECTION 1. AUTHORIZATION OF NOTES.

The Company has authorized the issue and sale of $100,000,000 aggregate principal amount of its 7.687% Senior Notes due September 12, 2010 (the “Notes”, such term to include any such notes issued in substitution therefor pursuant to Section 13 of this Agreement or the Other Agreements (as hereinafter defined)). The Notes shall be substantially in the form set out in Exhibit 1, with such changes therefrom, if any, as may be approved by you and the Company. Certain capitalized terms used in this Agreement are defined in Schedule B; references to a “Schedule” or an “Exhibit” are, unless otherwise specified, to a Schedule or an Exhibit attached to this Agreement.

SECTION 2. SALE AND PURCHASE OF NOTES.

Subject to the terms and conditions of this Agreement, the Company will issue and sell to you and you will purchase from the Company, at the Closing provided for in Section 3, Notes in the principal amount specified opposite your name in Schedule A at the purchase price of 100% of the principal amount thereof.

Contemporaneously with entering into this Agreement, the Company is entering into separate Note Purchase Agreements (the “Other Agreements”) identical with this Agreement with each of the other purchasers named in Schedule A (the “Other Purchasers”), providing for the sale at such Closing to each of the Other Purchasers of Notes in the principal amount specified opposite its name in Schedule A. Your obligation hereunder and the obligations of the Other Purchasers under the Other Agreements are several and not joint obligations and you shall have no obligation under any Other Agreement and no liability to any Person for the performance or nonperformance by any Other Purchaser thereunder.

Exhibit 10(x) (continued)

SECTION 3. CLOSING.

The sale and purchase of the Notes to be purchased by you shall occur at the offices of Bryan Cave, LLP, 211 North Broadway, One Metropolitan Square, Suite 3600, St. Louis, Missouri 63102 at 10:00 a.m. CDT, at a closing (the “Closing”) on September 12, 2000 or on such other Business Day thereafter on or prior to October 1, 2000 as may be agreed upon by the Company and you. At the Closing the Company will deliver to you the Notes to be purchased by you in the form of a single Note dated the date of the Closing and registered in your name (or in the name of your nominee), against delivery by you to the Company or its order of immediately available funds in the amount of the purchase price therefor by wire transfer of immediately available funds for the account of the Company to: Firstar Bank, N.A., ABA# 081-000-210, Account #1005017999, Account Name: Sigma-Aldrich Corporation. If at the Closing the Company shall fail to tender such Notes to you as provided above in this Section 3, or any of the conditions specified in Section 4 shall not have been fulfilled to your satisfaction, you shall, at your election, be relieved of all further obligations under this Agreement, without thereby waiving any rights you may have by reason of such failure or such nonfulfillment.

SECTION 4. CONDITIONS TO CLOSING.

Your obligation to purchase and pay for the Notes to be sold to you at the Closing is subject to the fulfillment to your satisfaction, prior to or at the Closing, of the following conditions:

Section 4.1. Representations and Warranties. The representations and warranties of the Company in this Agreement shall be correct when made and at the time of the Closing.

Section 4.2. Performance; No Default. The Company shall have performed and complied with all agreements and conditions contained in this Agreement required to be performed or complied with by it prior to or at the Closing and after giving effect to the issue and sale of the Notes (and the application of the proceeds thereof as contemplated by Schedule 5.14) no Default or Event of Default shall have occurred and be continuing.

Section 4.3. Compliance Certificates.

(a) Officer’s Certificate. The Company shall have delivered to you an Officer’s Certificate, dated the date of the Closing, certifying that the conditions specified in Sections 4.1, 4.2 and 4.9 have been fulfilled.

(b) Secretary’s Certificate. The Company shall have delivered to you a certificate certifying as to the resolutions attached thereto and other corporate proceedings relating to the authorization, execution and delivery of the Notes and the Agreements.

2

Exhibit 10(x) (continued)

Section 4.4. Opinions of Counsel. You shall have received an opinion in form and substance satisfactory to you, dated the date of the Closing from Bryan Cave, counsel for the Company, covering the matters set forth in Exhibit 4.4 and covering such other matters incident to the transactions contemplated hereby as you or your counsel may reasonably request (and the Company hereby instructs its counsel to deliver such opinion to you).

Section 4.5. Purchase Permitted by Applicable Law, etc. On the date of the Closing your purchase of Notes shall (i) be permitted by the laws and regulations of each jurisdiction to which you are subject, without recourse to provisions (such as Section 1405(a)(8) of the New York Insurance Law) permitting limited investments by insurance companies without restriction as to the character of the particular investment, (ii) not violate any applicable law or regulation (including, without limitation, Regulation G, T or X of the Board of Governors of the Federal Reserve System) and (iii) not subject you to any tax, penalty or liability under or pursuant to any applicable law or regulation, which law or regulation was not in effect on the date hereof. If requested by you, you shall have received an Officer’s Certificate certifying as to such matters of fact as you may reasonably specify to enable you to determine whether such purchase is so permitted.

Section 4.6. Sale of Other Notes. Contemporaneously with the Closing the Company shall sell to the Other Purchasers and the Other Purchasers shall purchase the Notes to be purchased by them at the Closing as specified in Schedule A.

Section 4.7. Intentionally deleted.

Section 4.8. Private Placement Number. A Private Placement Number issued by Standard & Poor’s CUSIP Service Bureau (in cooperation with the Securities Valuation Office of the National Association of Insurance Commissioners) shall have been requested by and obtained for the Notes by the Purchaser.

Section 4.9. Changes in Corporate Structure. Except as specified in Schedule 4.9, the Company shall not have changed its jurisdiction of incorporation or been a party to any merger or consolidation and shall not have succeeded to all or any substantial part of the liabilities of any other entity, at any time following the date of the most recent financial statements referred to in Schedule 5.5.

Section 4.10. Proceedings and Documents. All corporate and other proceedings in connection with the transactions contemplated by this Agreement and all documents and instruments incident to such transactions shall be satisfactory to you and your counsel, and you and your counsel shall have received all such counterpart originals or certified or other copies of such documents as you or they may reasonably request.

3

Exhibit 10(x) (continued)

SECTION 5. REPRESENTATIONS AND WARRANTIES OF THE COMPANY.

The Company represents and warrants to you as of the Date of the Closing that:

Section 5.1. Organization; Power and Authority. The Company is a corporation duly organized, validly existing and in good standing under the laws of its jurisdiction of incorporation, and is duly qualified as a foreign corporation and is in good standing in each jurisdiction in which such qualification is required by law, other than those jurisdictions as to which the failure to be so qualified or in good standing would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect. The Company has the corporate power and authority to own or hold under lease the properties it purports to own or hold under lease, to transact the business it transacts and proposes to transact, to execute and deliver this Agreement and the Other Agreements and the Notes and to perform the provisions hereof and thereof.

Section 5.2. Authorization, etc. This Agreement and the Other Agreements and the Notes have been duly authorized by all necessary corporate action on the part of the Company, and this Agreement constitutes, and upon execution and delivery thereof each Note will constitute, a legal, valid and binding obligation of the Company enforceable against the Company in accordance with its terms, except as such enforceability may be limited by (i) applicable bankruptcy, insolvency, reorganization, moratorium or other similar laws affecting the enforcement of creditors’ rights generally and (ii) general principles of equity (regardless of whether such enforceability is considered in a proceeding in equity or at law).

Section 5.3. Disclosure. The Company has executed and delivered to you that certain Commitment dated August 9, 2000 which contained a Term Sheet (the “Term Sheet”) summarizing the main terms relating to the transactions completed herein. Except as disclosed in Schedule 5.3, this Agreement, the Term Sheet, the documents, certificates or other writings identified in Schedule 5.3 and the financial statements listed in Schedule 5.5, taken as a whole, do not contain any untrue statement of a material fact or omit to state any material fact necessary to make the statements therein not misleading in light of the circumstances under which they were made. Except as disclosed in the Term Sheet or as expressly described in Schedule 5.3, or in one of the documents, certificates or other writings identified therein, or in the financial statements listed in Schedule 5.5, since December 31, 1999 there has been no change in the financial condition, operations, business or properties of the Company or any of its Subsidiaries except changes that individually or in the aggregate would not reasonably be expected to have a Material Adverse Effect.

Section 5.4. Organization and Ownership of Shares of Subsidiaries.

(a) Schedule 5.4 is (except as noted therein) a complete and correct list of the Company’s Subsidiaries, showing, as to each Subsidiary, the correct name thereof, the jurisdiction of its organization, and the percentage of shares of each class of its capital stock or similar equity interests outstanding owned by the Company and each other Subsidiary.

4

Exhibit 10(x) (continued)

(b) All of the outstanding shares of capital stock or similar equity interests of each Subsidiary shown in Schedule 5.4 as being owned by the Company and its Subsidiaries have been validly issued, are fully paid and nonassessable and are owned by the Company or another Subsidiary free and clear of any Lien (except as otherwise disclosed in Schedule 5.4).

(c) Each Subsidiary identified in Schedule 5.4 is a corporation or other legal entity duly organized, validly existing and in good standing under the laws of its jurisdiction of organization, and is duly qualified as a foreign corporation or other legal entity and is in good standing in each jurisdiction in which such qualification is required by law, other than those jurisdictions as to which the failure to be so qualified or in good standing would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect. Each such Subsidiary has the corporate or other power and authority to own or hold under lease the properties it purports to own or hold under lease and to transact the business it transacts and proposes to transact.

Section 5.5. Financial Statements. The Company has delivered to each Purchaser copies of the financial statements of the Company and its Subsidiaries listed on Schedule 5.5. All of said financial statements (including in each case the related schedules and notes) fairly present in all material respects the consolidated financial position of the Company and its Subsidiaries as of the respective dates specified in such Schedule and the consolidated results of their operations and cash flows for the respective periods so specified and have been prepared in accordance with GAAP consistently applied throughout the periods involved except as set forth in the notes.

Section 5.6. Compliance with Laws, Other Instruments, etc. The execution, delivery and performance by the Company of this Agreement and the Notes will not (x) contravene, result in any breach of, or constitute a default under, or result in the creation of any Lien in respect of any property of the Company or any Subsidiary under any Material: (i) indenture; (ii) mortgage; (iii) deed of trust; (iv) loan; (v) purchase or credit agreement; (vi) lease; (vii) corporate charter or by-laws; or (viii) any other agreement or instrument to which the Company or any Subsidiary is bound or by which the Company or any Subsidiary or any of their respective properties may be bound or affected, (y) conflict with or result in a breach of any of the terms, conditions or provisions of any order, judgment, decree, or ruling of any court, arbitrator or Governmental Authority applicable to the Company or any Subsidiary or (z) violate any provision of any statute or other rule or regulation of any Governmental Authority applicable to the Company or any Subsidiary.

Section 5.7. Governmental Authorizations, etc. No consent, approval or authorization of, or registration, filing or declaration with, any Governmental Authority is required in connection with the execution, delivery or performance by the Company of this Agreement or the Notes.

5

Exhibit 10(x) (continued)

Section 5.8. Litigation; Observance of Statutes and Orders. (a) Except as disclosed in Schedule 5.8, there are no actions, suits or proceedings pending or, to the knowledge of the Company, threatened against or affecting the Company or any Subsidiary or any property of the Company or any Subsidiary in any court or before any arbitrator of any kind or before or by any Governmental Authority that, individually or in the aggregate, would reasonably be expected to have a Material Adverse Effect.

(b) Neither the Company nor any Subsidiary is in default under any order, judgment, decree or ruling of any court, arbitrator or Governmental Authority or is in violation of any applicable law, ordinance, rule or regulation (including without limitation Environmental Laws) of any Governmental Authority, which default or violation, individually or in the aggregate, would reasonably be expected to have a Material Adverse Effect.

Section 5.9. Taxes. As of September 15, 1999, the Company and its Subsidiaries have filed all income tax returns that are required to have been filed in any jurisdiction, and have paid all taxes shown to be due and payable on such returns and all other taxes and assessments payable by them, to the extent such taxes and assessments have become due and payable and before they have become delinquent, except for any taxes and assessments (i) the amount of which is not individually or in the aggregate Material or (ii) the amount, applicability or validity of which is currently being contested in good faith by appropriate proceedings and with respect to which the Company or a Subsidiary, as the case may be, has established adequate reserves in accordance with GAAP. The United States Federal income tax liabilities of the Company and its Subsidiaries have been determined, examined and accepted by the Internal Revenue Service and paid for all fiscal years up to and including the fiscal year ended December 31, 1996.

Section 5.10. Title to Property; Leases. The Company and its Subsidiaries have good and sufficient title to their respective Material properties, including all such properties reflected in the most recent audited balance sheet referred to in Section 5.5 or purported to have been acquired by the Company or any Subsidiary after said date (except as sold or otherwise disposed of in the ordinary course of business), in each case free and clear of Liens prohibited by this Agreement, except for those defects in title and Liens that, individually or in the aggregate, would not have a Material Adverse Effect. All Material leases are valid and subsisting and are in full force and effect in all material respects.

Section 5.11. Licenses, Permits, etc. Except as disclosed in Schedule 5.11, the Company and its Subsidiaries own or possess all licenses, permits, franchises, authorizations, patents, copyrights, service marks, trademarks and trade names, or rights thereto, that are Material, without known conflict with the rights of others, except for those conflicts that, individually or in the aggregate, would not have a Material Adverse Effect.

6

Exhibit 10(x) (continued)

Section 5.12. Compliance with ERISA. To the best of the Company’s knowledge:

(a) the Company and each ERISA Affiliate have operated and administered each Plan in compliance with all applicable laws except for such instances of noncompliance as have not resulted in and could not reasonably be expected to result in a Material Adverse Effect. Neither the Company nor any ERISA Affiliate has incurred any liability pursuant to Title I or IV of ERISA or the penalty or excise tax provisions of the Code relating to employee benefit plans (as defined in Section 3 of ERISA), and no event, transaction or condition has occurred or exists that would reasonably be expected to result in the incurrence of any such liability by the Company or any ERISA Affiliate, or in the imposition of any Lien on any of the rights, properties or assets of the Company or any ERISA Affiliate, in either case pursuant to Title I or IV of ERISA or to such penalty or excise tax provisions or to Section 401(a)(29) or 412 of the Code, other than such liabilities or Liens as would not be individually or in the aggregate Material.

(b) The present value of the aggregate benefit liabilities under each of the Plans (other than Multi-employer Plans), determined as of the end of such Plan’s most recently ended plan year on the basis of the actuarial assumptions specified for funding purposes in such Plan’s most recent actuarial valuation report, did not exceed the aggregate current value of the assets of such Plan allocable to such benefit liabilities. The term “benefit liabilities” has the meaning specified in Section 4001 of ERISA and the terms “current value” and “present value” have the meaning specified in Section 3 of ERISA.

(c) The Company and its ERISA Affiliates have not incurred withdrawal liabilities (and are not subject to contingent withdrawal liabilities) under section 4201 or 4204 of ERISA in respect of Multi-employer Plans that individually or in the aggregate are Material.

(d) The expected post-retirement benefit obligation (determined as of the last day of the Company’s most recently ended fiscal year in accordance with Financial Accounting Standards Board Statement No. 106, without regard to liabilities attributable to continuation coverage mandated by section 4980B of the Code) of the Company and its Subsidiaries is approximately $42,600,000 as of December 31, 1999.

(e) The execution and delivery of this Agreement and the issuance and sale of the Notes hereunder will not involve any transaction that is subject to the prohibitions of section 406 of ERISA or in connection with which a tax could be imposed pursuant to section 4975(c)(1)(A)-(D) of the Code. The representation by the Company in the first sentence of this Section 5.12(e) is made in reliance upon and subject to (i) the accuracy of your representation in Section 6.2 as to the sources of the funds to be used to pay the purchase price of the Notes to be purchased by you and (ii) the assumption, made solely for the purpose of making such representation, that Department of Labor Interpretive Bulletin 75-2 with respect to prohibited transactions remains valid in the circumstances of the transactions contemplated herein.

7

Exhibit 10(x) (continued)

Section 5.13. Private Offering by the Company. Neither the Company nor anyone acting on its behalf has offered the Notes or any similar securities for sale to, or solicited any offer to buy any of the same from, or otherwise approached or negotiated in respect thereof with, any person other than you, who has been offered the Notes at a private sale for investment. Neither the Company nor anyone acting on its behalf has taken, or will take, any action that would subject the issuance or sale of the Notes to the registration requirements of Section 5 of the Securities Act.

Section 5.14. Use of Proceeds; Margin Regulations. The Company will apply the proceeds of the sale of the Notes as set forth in Schedule 5.14. No part of the proceeds from the sale of the Notes hereunder will be used, directly or indirectly, for the purpose of buying or carrying any margin stock within the meaning of Regulation U of the Board of Governors of the Federal Reserve System (12 CFR 221) other than the capital stock of the Company which will be immediately retired or held by the Company as treasury stock, or for the purpose of buying or carrying or trading in any securities under such circumstances as to involve the Company in a violation of Regulation U of said Board (12 CFR 224) or to involve any broker or dealer in a violation of Regulation T of said Board (12 CFR 220). Margin stock does not constitute more than 0% of the value of the consolidated assets of the Company and its Subsidiaries and the Company does not have any present intention that margin stock will constitute more than 0% of the value of such assets. As used in this Section, the terms “margin stock” and “purpose of buying or carrying” shall have the meanings assigned to them in said Regulation U.

Section 5.15. Existing Indebtedness. Except as described therein, Schedule 5.15 sets forth a complete and correct list of all outstanding Indebtedness of the Company and its Subsidiaries as of July 31, 2000, since which date there has been no Material change in the amounts, interest rates, sinking funds, installment payments or maturities of the Indebtedness of the Company or its Subsidiaries. Neither the Company nor any Subsidiary is in default and no waiver of default is currently in effect, in the payment of any principal or interest on any Indebtedness of the Company or such Subsidiary and no event or condition exists with respect to any Indebtedness of the Company or any Subsidiary the outstanding principal amount of which exceeds $10,000,000 that would permit (or that with notice or the lapse of time, or both, would permit) one or more Persons to cause such Indebtedness to become due and payable before its stated maturity or before its regularly scheduled dates of payment.

Section 5.16. Foreign Assets Control Regulations, etc. Neither the sale of the Notes by the Company hereunder nor its use of the proceeds thereof will violate the Trading with the Enemy Act, as amended, or any of the foreign assets control regulations of the United States Treasury Department (31 CFR, Subtitle B, Chapter V, as amended) or any enabling legislation or executive order relating thereto.

Section 5.17. Status under Certain Statutes. Neither the Company nor any Subsidiary is subject to regulation under the Investment Company Act of 1940, as amended, the Public Utility Holding Company Act of 1935, as amended, the Interstate Commerce Act, as amended, or the Federal Power Act, as amended.

8

Exhibit 10(x) (continued)

Section 5.18. Environmental Matters. Neither the Company nor any Subsidiary has knowledge of any claim or has received any notice of any claim, and no proceeding has been instituted raising any claim against the Company or any of its Subsidiaries or any of their respective real properties now or formerly owned, leased or operated by any of them or other assets, alleging any damage to the environment or violation of any Environmental Laws, except, in each case, such as could not reasonably be expected to result in a Material Adverse Effect. Except as otherwise disclosed to you in writing:

(a) neither the Company nor any Subsidiary has knowledge of any facts which would give rise to any claim, public or private, of violation of Environmental Laws or damage to the environment emanating from, occurring on or in any way related to real properties now or formerly owned, leased or operated by any of them or to other assets or their use, except, in each case, such as could not reasonably be expected to result in a Material Adverse Effect;

(b) neither the Company nor any of its Subsidiaries has stored any Hazardous Materials on real properties now or formerly owned, leased or operated by any of them or disposed of any Hazardous Materials in a manner contrary to any Environmental Laws in each case in any manner that could reasonably be expected to result in a Material Adverse Effect; and

(c) all buildings on all real properties now owned, leased or operated by the Company or any of its Subsidiaries are in compliance with applicable Environmental Laws, except where failure to comply could not reasonably be expected to result in a Material Adverse Effect.

SECTION 6. REPRESENTATIONS OF THE PURCHASER.

Section 6.1. Purchase for Investment. You represent that you are purchasing the Notes for your own account or for one or more separate accounts maintained by you or for the account of one or more pension or trust funds and not with a view to the distribution thereof, provided that the disposition of your or their property shall at all times be within your or their control. You understand that the Notes have not been registered under the Securities Act and may be resold only if registered pursuant to the provisions of the Securities Act or if an exemption from registration is available, except under circumstances where neither such registration nor such an exemption is required by law, and that the Company is not required to register the Notes.

Section 6.2. Source of Funds. You represent that at least one of the following statements is an accurate representation as to each source of funds (a “Source”) to be used by you to pay the purchase price of the Notes to be purchased by you hereunder:

(a) if you are an insurance company, the Source does not include assets allocated to any separate account maintained by you in which any employee benefit plan (or its related trust) has any interest, other than a separate account that is maintained

9

Exhibit 10(x) (continued)

solely in connection with your fixed contractual obligations under which the amounts payable, or credited, to such plan and to any participant or beneficiary of such plan (including any annuitant) are not affected in any manner by the investment performance of the separate account; or

(b) the Source is either (i) an insurance company pooled separate account, within the meaning of Prohibited Transaction Exemption (“PTE”) 90-1 (issued January 29, 1990), or (ii) a bank collective investment fund, within the meaning of the PTE 91-38 (issued July 12, 1991) and, except as you have disclosed to the Company in writing pursuant to this paragraph (b), no employee benefit plan or group of plans maintained by the same employer or employee organization beneficially owns more than 10% of all assets allocated to such pooled separate account or collective investment fund; or

(c) the Source constitutes assets of an “investment fund” (within the meaning of Part V of the QPAM Exemption) managed by a “qualified professional asset manager” or “QPAM” (within the meaning of Part V of the QPAM Exemption), no employee benefit plan’s assets that are included in such investment fund, when combined with the assets of all other employee benefit plans established or maintained by the same employer or by an affiliate (within the meaning of Section V(c)(1) of the QPAM Exemption) of such employer or by the same employee organization and managed by such QPAM, exceed 20% of the total client assets managed by such QPAM, the conditions of Part I(c) and (g) of the QPAM Exemption are satisfied, neither the QPAM nor a person controlling or controlled by the QPAM (applying the definition of “control” in Section V(e) of the QPAM Exemption) owns a 5% or more interest in the Company and (i) the identity of such QPAM and (ii) the names of all employee benefit plans whose assets are included in such investment fund have been disclosed to the Company in writing pursuant to this paragraph (c); or

(d) the Source is a governmental plan; or

(e) the Source is one or more employee benefit plans, or a separate account or trust fund comprised of one or more employee benefit plans, each of which has been identified to the Company in writing pursuant to this paragraph (e); or

(f) the Source does not include assets of any employee benefit plan, other than a plan exempt from the coverage of ERISA; or

(g) the Source is an “insurance company general account” within the meaning of PTE 95-60 (issued July 12, 1995) and there is no employee benefit plan, treating as a single plan, all plans maintained by the same employer or employee organization, with respect to which the amount of the general account reserves and liabilities for all contracts held by or on behalf of such plan, exceed 10% of the total reserves and liabilities of such general account (exclusive of separate account liabilities) plus surplus, as set forth in the NAIC Annual Statement filed with your state of domicile.

10

Exhibit 10(x) (continued)

As used in this Section 6.2, the terms “employee benefit plan”, “governmental plan”, “party in interest” and “separate account” shall have the respective meanings assigned to such terms in Section 3 of ERISA.

SECTION 7. INFORMATION AS TO COMPANY.

Section 7.1. Financial and Business Information. The Company shall deliver to each holder of Notes that is an Institutional Investor:

(a) Quarterly Statements. Within 60 days after the end of each quarterly fiscal period in each fiscal year of the Company (other than the last quarterly fiscal period of each such fiscal year), duplicate copies of:

(i) a consolidated balance sheet of the Company and its Subsidiaries as at the end of such quarter, and

(ii) consolidated statements of income, changes in shareholders’ equity and cash flows of the Company and its Subsidiaries, for such quarter and (in the case of the second and third quarters) for the portion of the fiscal year ending with such quarter,

setting forth in each case in comparative form the figures for the corresponding periods in the previous fiscal year, all in reasonable detail, prepared in accordance with GAAP applicable to quarterly financial statements generally, and certified by a Senior Financial Officer as fairly presenting, in all material respects, the financial position of the companies being reported on and their results of operations and cash flows, subject to changes resulting from year-end adjustments, provided that delivery within the time period specified above of copies of the Company’s Quarterly Report on Form 10-Q prepared in compliance with the requirements therefor and filed with the Securities and Exchange Commission shall be deemed to satisfy the requirements of this Section 7.1(a);

(b) Annual Statements. Within 105 days after the end of each fiscal year of the Company, duplicate copies of,

(i) a consolidated balance sheet of the Company and its Subsidiaries, as at the end of such year, and

(ii) consolidated statements of income, changes in shareholders’ equity and cash flows of the Company and its Subsidiaries, for such year, setting forth in each case in comparative form the figures for the previous fiscal year, all in reasonable detail, prepared in accordance with GAAP, and accompanied by an opinion thereon of independent certified public accountants of recognized national standing, which opinion shall state that such financial statements present fairly, in all material respects, the financial position of the companies being reported upon and their results of operations and cash flows and have been prepared in conformity with GAAP, and that the examination of such accountants in connection with such financial statements has been

11

Exhibit 10(x) (continued)

made in accordance with generally accepted auditing standards, and that such audit provides a reasonable basis for such opinion in the circumstances, provided that the delivery within the time period specified above of the Company’s Annual Report on Form 10-K for such fiscal year (together with the Company’s annual report to shareholders, if any, prepared pursuant to Rule 14a-3 under the Exchange Act) prepared in accordance with the requirements therefor and filed with the Securities and Exchange Commission shall be deemed to satisfy the requirements of this Section 7.1(b);

(c) SEC and Other Reports. Promptly upon their becoming available, one copy of (i) each financial statement, report, notice or proxy statement sent by the Company or any Subsidiary to public securities holders generally, and (ii) each regular or periodic report, each registration statement that shall have become effective (without exhibits except as expressly requested by such holder), and each final prospectus and all amendments thereto filed by the Company or any Subsidiary with the Securities and Exchange Commission;

(d) Notice of Default or Event of Default. Promptly, and in any event within five days after a Responsible Officer becoming aware of the existence of any Default or Event of Default, a written notice specifying the nature and period of existence thereof and what action the Company is taking or proposes to take with respect thereto;

(e) ERISA Matters. Promptly, and in any event within five days after a Responsible Officer becoming aware of any of the following, a written notice setting forth the nature thereof and the action, if any, that the Company or an ERISA Affiliate proposes to take with respect thereto:

(i) with respect to any Plan, any reportable event, as defined in section 4043(b) of ERISA and the regulations thereunder, for which notice thereof has not been waived pursuant to such regulations as in effect on the date hereof; or

(ii) the taking by the PBGC of steps to institute, or the threatening by the PBGC of the institution of, proceedings under section 4042 of ERISA for the termination of, or the appointment of a trustee to administer, any Plan, or the receipt by the Company or any ERISA Affiliate of a notice from a Multiemployer Plan that such action has been taken by the PBGC with respect to such Multiemployer Plan; or

(iii) any event, transaction or condition that could result in the incurrence of any liability by the Company or any ERISA Affiliate pursuant to Title I or IV of ERISA or the penalty or excise tax provisions of the Code relating to employee benefit plans, or in the imposition of any Lien on any of the rights, properties or assets of the Company or any ERISA Affiliate pursuant to Title I or IV of ERISA or such penalty or excise tax provisions, if such liability or Lien, taken together with any other such liabilities or Liens then existing, would reasonably be expected to have a Material Adverse Effect;

12

Exhibit 10(x) (continued)

(f) Requested Information. With reasonable promptness, such other data and information relating to the business, operations, affairs, financial condition, assets or properties of the Company or any of its Subsidiaries or relating to the ability of the Company to perform its obligations hereunder and under the Notes as from time to time may be reasonably requested by any such holder of Notes;

(g) Notices from Governmental Authority. Promptly, and in any event within 30 days of receipt thereof, copies of any notice to the Company or any Subsidiary from any Federal or state Governmental Authority relating to any order, ruling, statute or other law or regulation that could reasonably be expected to have a Material Adverse Effect; and

(h) Actions, Proceedings. Promptly after a Responsible Officer becomes aware of the commencement thereof, notice of any action or proceeding relating to the Company or any Subsidiary in any court or before any Governmental Authority or arbitration board or tribunal as to which there is a reasonable possibility of an adverse determination and that, if adversely determined, could reasonably be expected to have a Material Adverse Effect.

Section 7.2. Officer’s Certificate. Each set of financial statements delivered to a holder of Notes pursuant to Section 7.1(a) or Section 7.1(b) hereof shall be accompanied by a certificate of a Senior Financial Officer setting forth:

(a) Covenant Compliance. The information (including detailed calculations) required in order to establish whether the Company was in compliance with the requirements of Section 10 hereof, inclusive, during the quarterly or annual period covered by the statements then being furnished (including with respect to each such Section, where applicable, the calculations of the maximum or minimum amount, ratio or percentage, as the case may be, permissible under the terms of such Sections, and the calculation of the amount, ratio or percentage then in existence); and

(b) Event of Default. A statement that such officer has reviewed the relevant terms hereof and has made, or caused to be made, under his or her supervision, a review of the transactions and conditions of the Company and its Subsidiaries from the beginning of the quarterly or annual period covered by the statements then being furnished to the date of the certificate and that such review shall not have disclosed the existence during such period of any condition or event that constitutes a Default or an Event of Default or, if any such condition or event existed or exists (including, without limitation, any such event or condition resulting from the failure of the Company or any Subsidiary to comply with any Environmental Law), specifying the nature and period of existence thereof and what action the Company shall have taken or proposes to take with respect thereto.

13

Exhibit 10(x) (continued)

Section 7.3. Inspection. The Company shall permit the representatives of each holder of Notes that is an Institutional Investor:

(a) No Default. If no Default or Event of Default then exists, at the expense of such holder and upon reasonable prior notice to the Company, to visit the principal executive office of the Company, to discuss the affairs, finances and accounts of the Company and its Subsidiaries with the Company’s officers, and, with the consent of the Company (which consent will not be unreasonably withheld) to visit the other offices and properties of the Company and each Subsidiary, all at such reasonable times and as often as may be reasonably requested in writing; and

(b) Default. If a Default or Event of Default then exists, at the expense of the Company to visit and inspect any of the offices or properties of the Company or any Subsidiary, to examine all their respective books of account, records, reports and other papers, to make copies and extracts therefrom, and to discuss their respective affairs, finances and accounts with their respective officers and independent public accountants (and by this provision the Company authorizes said accountants to discuss the affairs, finances and accounts of the Company and its Subsidiaries), all at such times and as often as may be requested.

SECTION 8. PREPAYMENT OF THE NOTES.

Section 8.1. Intentionally deleted.

Section 8.2. Optional Prepayments with Make-Whole Amount. The Company may, at its option, upon notice as provided below, prepay at any time all, or from time to time any part of, the Notes, in a principal amount of not less than $10,000,000 in the case of a partial prepayment, at 100% of the principal amount so prepaid, plus accrued interest plus the Make-Whole Amount determined for the prepayment date with respect to such principal amount. The Company will give each holder of Notes written notice of each optional prepayment under this Section 8.2 not less than 30 days and not more than 60 days prior to the date fixed for such prepayment. Each such notice shall specify such date, the aggregate principal amount of the Notes to be prepaid on such date, the principal amount of each Note held by such holder to be prepaid (determined in accordance with Section 8.3), and the interest to be paid on the prepayment date with respect to such principal amount being prepaid, and shall be accompanied by a certificate of a Senior Financial Officer as to the estimated Make-Whole Amount due in connection with such prepayment (calculated as if the date of such notice were the date of the prepayment), setting forth the details of such computation. Two Business Days prior to such prepayment, the Company shall deliver to each holder of Notes a certificate of a Senior Financial Officer specifying the calculation of such Make-Whole Amount as of the specified prepayment date.

Section 8.3. Allocation of Partial Prepayments. In the case of each partial prepayment of the Notes, the principal amount of the Notes to be prepaid shall be allocated among all of the Notes at the time outstanding in proportion, as nearly as practicable, to the respective unpaid principal amounts thereof not theretofore called for prepayment.

14

Exhibit 10(x) (continued)

Section 8.4. Maturity; Surrender, etc. In the case of each prepayment of Notes pursuant to this Section 8, the principal amount of each Note to be prepaid shall mature and become due and payable on the date fixed for such prepayment, together with interest on such principal amount accrued to such date and the applicable Make-Whole Amount, if any. From and after such date, unless the Company shall fail to pay such principal amount when so due and payable, together with the interest and Make-Whole Amount, if any, as aforesaid, interest on such principal amount shall cease to accrue. Any Note paid or prepaid in full shall be surrendered to the Company and cancelled and shall not be reissued, and no Note shall be issued in lieu of any prepaid principal amount of any Note.

Section 8.5. Purchase of Notes. The Company will not and will not permit any Affiliate to purchase, redeem, prepay or otherwise acquire, directly or indirectly, any of the outstanding Notes except (a) upon the payment or prepayment of the Notes in accordance with the terms of this Agreement and the Notes or (b) pursuant to an offer to purchase made by the Company or an Affiliate pro rata to the holders of all Notes at the time outstanding upon the same terms and conditions. Any such offer shall provide each holder with sufficient information to enable it to make an informed decision with respect to such offer, and shall remain open for at least thirty (30) Business Days. If the holders of more than 50% of the principal amount of the Notes then outstanding accept such offer, the Company shall promptly notify the remaining holders of such fact and the expiration date for the acceptance by holders of Notes of such offer shall be extended by the number of days necessary to give each such remaining holder at least fifteen (15) Business Days from its receipt of such notice to accept such offer. The Company will promptly cancel all Notes acquired by it or any Affiliate pursuant to any payment, prepayment or purchase of Notes pursuant to any provision of this Agreement and no Notes may be issued in substitution or exchange for any such Notes.

Section 8.6. Make-Whole Amount. The term “Make-Whole Amount” means, with respect to any Note, an amount equal to the excess, if any, of the Discounted Value of the Remaining Scheduled Payments with respect to the Called Principal of such Note over the amount of such Called Principal, provided that the Make-Whole Amount may in no event be less than zero. For the purposes of determining the Make-Whole Amount, the following terms have the following meanings:

“Called Principal” means, with respect to any Note, the principal of such Note that is to be prepaid pursuant to Section 8.2 or has become or is declared to be immediately due and payable pursuant to Section 12.1, as the context requires.

“Discounted Value” means, with respect to the Called Principal of any Note, the amount obtained by discounting all Remaining Scheduled Payments with respect to such Called Principal from their respective scheduled due dates to the Settlement Date with respect to such Called Principal, in accordance with accepted financial practice and at a discount factor (applied on the same periodic basis as that on which interest on the Notes is payable) equal to the Reinvestment Yield with respect to such Called Principal.

15

Exhibit 10(x) (continued)

“Reinvestment Yield” means, with respect to the Called Principal of any Note, the sum of (a) .30% plus (b) the yield to maturity implied by (i) the ask yields reported, as of the close of business on the second Business Day preceding the Settlement Date with respect to such Called Principal, on the “HP” (historical price) pages for actively traded U.S. Treasury securities from the “PX1” page of the Bloomberg Financial Markets screens, having a maturity equal to the Remaining Average Life of such Called Principal as of such Settlement Date, or (ii) if such yields are not reported as of such time or the yields reported as of such time are not ascertainable, the Treasury Constant Maturity Series Yields reported, for the latest day for which such yields have been so reported as of the second Business Day preceding the Settlement Date with respect to such Called Principal, in U.S. Federal Reserve Statistical Release H.15 (519) (or any comparable successor publication) for actively traded U.S. Treasury securities having a constant maturity equal to the Remaining Average Life of such Called Principal as of such Settlement Date. Such implied yield will be determined, if necessary, by (1) converting U.S. Treasury bill quotations to bond-equivalent yields in accordance with accepted financial practice and (2) interpolating linearly between (A) the actively traded U.S. Treasury security with the maturity closest to and greater than the Remaining Average Life and (B) the actively traded U.S. Treasury security with the maturity closest to and less than the Remaining Average Life.

“Remaining Average Life” means, with respect to any Called Principal, the number of years (calculated to the nearest one-twelfth year) obtained by dividing

(i) such Called Principal into

(ii) the sum of the products obtained by multiplying

(A) the principal component of each Remaining Scheduled Payment with respect to such Called Principal by

(B) the number of years (calculated to the nearest one-twelfth year) that will elapse between the Settlement Date with respect to such Called Principal and the scheduled due date of such Remaining Scheduled Payment.

“Remaining Scheduled Payments” means, with respect to the Called Principal of any Note, all payments of such Called Principal and interest thereon that would be due after the Settlement Date with respect to such Called Principal if no payment of such Called Principal were made prior to its scheduled due date, provided that if such Settlement Date is not a date on which interest payments are due to be made under the terms of the Notes, then the amount of the next succeeding scheduled interest payment will be reduced by the amount of interest accrued to such Settlement Date and required to be paid on such Settlement Date pursuant to Section 8.2 or 12.1.

16

Exhibit 10(x) (continued)

“Settlement Date” means, with respect to the Called Principal of any Note, the date on which such Called Principal is to be prepaid pursuant to Section 8.2 or has become or is declared to be immediately due and payable pursuant to Section 12.1, as the context requires.

Section 8.7. Change in Control.

(a) Notice of Change in Control or Control Event. The Company will, within fifteen (15) Business Days after any Responsible Officer has knowledge of the occurrence of any Change in Control or Control Event, give written notice of such Change in Control or Control Event to each holder of Notes unless notice in respect of such Change in Control (or the Change in Control contemplated by such Control Event) shall have been given pursuant to Section 8.7(b). If a Change in Control has occurred, such notice shall contain and constitute an offer to prepay Notes as described in Section 8.7(c) and shall be accompanied by the certificate described in Section 8.7(g).

(b) Condition to Company Action. The Company will not take any action that consummates or finalizes a Change in Control unless at least 30 days prior to such action it shall have given to each holder of Notes written notice containing and constituting an offer to prepay Notes as described in Section 8.7(c), accompanied by the certificate described in Section 8.7(g), and contemporaneously with such action, it prepays all Notes required to be prepaid in accordance with this Section 8.7.

(c) Offer to Prepay Notes. The offer to prepay Notes contemplated by Section 8.7(a) and Section 8.7(b) shall be an offer to prepay, in accordance with and subject to this Section 8.7, all, but not less than all, the Notes held by each holder (in this case only, “holder” in respect of any Note registered in the name of a nominee for a disclosed beneficial owner shall mean such beneficial owner) on a date specified in such offer (the “Proposed Prepayment Date”). If such Proposed Prepayment Date is in connection with an offer contemplated by Section 8.7(a), such date shall be not less than 45 days and not more than 60 days after the date of such offer. If the Proposed Prepayment Date shall not be specified in such offer, the Proposed Prepayment Date shall be the 60th day after the date of such offer.

(d) Acceptance and Rejection. A holder of Notes may accept the offer to prepay made pursuant to this Section 8.7 by causing a notice of such acceptance to be delivered to the Company at least fifteen (15) days prior to the Proposed Prepayment Date. The failure by a holder of Notes to respond to an offer to prepay made pursuant to this Section 8.7 shall be deemed to constitute an acceptance of such offer by such holder.

(e) Prepayment. Prepayment of the Notes to be prepaid pursuant to this Section 8.3 shall be at 100% of the principal amount of such Notes, together with interest on such Notes accrued to the date of prepayment. The prepayment shall be made on the Proposed Prepayment Date except as provided in Section 8.7(f).

17

Exhibit 10(x) (continued)

(f) Deferral of Obligation to Purchase. The obligation of the Company to prepay Notes pursuant to the offers accepted in accordance with Section 8.7(d) is subject to the occurrence of the Change in Control in respect of which such offers and acceptances shall have been made. In the event that such Change in Control does not occur on the Proposed Prepayment Date in respect thereof, the prepayment shall be deferred until and shall be made on the date on which such Change in Control occurs. The Company shall keep each holder of Notes reasonably and timely informed of: (i) any such deferral of the date of prepayment; (ii) the date on which such Change in Control and the prepayment are expected to occur; and (iii) any determination by the Company that the efforts to effect such Change in Control have ceased or been abandoned (in which case the offers and acceptances made pursuant to this Section 8.7 in respect of such Change in Control shall be deemed rescinded).

(g) Officer’s Certificate. Each offer to prepay the Notes pursuant to this Section 8.7 shall be accompanied by a certificate, executed by a Senior Financial Officer and dated the date of such offer, specifying: (i) the Proposed Prepayment Date; (ii) that such offer is made pursuant to this Section 8.7; (iii) the principal amount of each Note offered to be prepaid; (iv) the interest that would be due on each Note offered to be prepaid, accrued to the Proposed Prepayment Date; (v) the last date upon which the offer can be accepted or rejected, and setting forth the consequences of failing to provide an acceptance or rejection, as provided in Section 8.7(d); (vi) that the conditions of this Section 8.7 have been fulfilled; and (vii) in reasonable detail, the nature and date or proposed date of the Change in Control.

SECTION 9. AFFIRMATIVE COVENANTS.

The Company covenants that so long as any of the Notes are outstanding:

Section 9.1. Compliance with Law. The Company will and will cause each of its Subsidiaries to comply with all laws, ordinances or governmental rules or regulations to which each of them is subject, including, without limitation, Environmental Laws, and will obtain and maintain in effect all licenses, certificates, permits, franchises and other governmental authorizations necessary to the ownership of their respective properties or to the conduct of their respective businesses, in each case to the extent necessary to ensure that non-compliance with such laws, ordinances or governmental rules or regulations or failures to obtain or maintain in effect such licenses, certificates, permits, franchises and other governmental authorizations would not reasonably be expected, individually or in the aggregate, to have a Material Adverse Effect on the business, operations, affairs, financial condition, properties or assets of the Company and its Subsidiaries taken as a whole.

Section 9.2. Insurance. The Company will and will cause each of its Subsidiaries to maintain, with financially sound and reputable insurers, insurance with respect to their respective properties and businesses against such casualties and contingencies, of such types, on such terms and in such amounts (including deductibles, co-insurance and self-insurance, if adequate reserves are maintained with respect thereto) as is customary in the case of entities of established reputations engaged in the same or a similar business and similarly situated.

18

Exhibit 10(x) (continued)

Section 9.3. Maintenance of Properties. The Company will and will cause each of its Subsidiaries to maintain and keep, or cause to be maintained and kept, their respective properties in good repair, working order and condition (other than ordinary wear and tear), so that the business carried on in connection therewith may be properly conducted at all times, provided that this Section shall not prevent the Company or any Subsidiary from discontinuing the operation and the maintenance of any of its properties if such discontinuance is desirable in the conduct of its business and the Company has concluded that such discontinuance would not, individually or in the aggregate, have a Material Adverse Effect on the business, operations, affairs, financial condition, properties or assets of the Company and its Subsidiaries taken as a whole.

Section 9.4. Payment of Taxes. The Company will and will cause each of its Subsidiaries to file all income tax or similar tax returns required to be filed in any jurisdiction and to pay and discharge all taxes shown to be due and payable on such returns and all other taxes, assessments, governmental charges, or levies payable by any of them, to the extent such taxes and assessments have become due and payable and before they have become delinquent, provided that neither the Company nor any Subsidiary need pay any such tax or assessment if (i) the amount, applicability or validity thereof is contested by the Company or such Subsidiary on a timely basis in good faith and in appropriate proceedings, and the Company or a Subsidiary has established adequate reserves therefor in accordance with GAAP on the books of the Company or such Subsidiary or (ii) the nonpayment of all such taxes and assessments in the aggregate would not reasonably be expected to have a Material Adverse Effect on the business, operations, affairs, financial condition, properties or assets of the Company and its Subsidiaries taken as a whole.

Section 9.5. Corporate Existence, etc. The Company will at all times preserve and keep in full force and effect its corporate existence. Subject to Sections 10.2 and 10.6, the Company will at all times preserve and keep in full force and effect the corporate existence of each of its Subsidiaries (unless merged into the Company or a Subsidiary) and all rights and franchises of the Company and its Subsidiaries unless, in the good faith judgment of the Company, the termination of or failure to preserve and keep in full force and effect such corporate existence, right or franchise would not, individually or in the aggregate, have a Material Adverse Effect on the business, operations, affairs, financial condition, properties or assets of the Company and its Subsidiaries taken as a whole.

Section 9.6 Pari Passu Ranking. The Notes shall at all times rank pari passu, without preference or priority, with all other outstanding, unsecured, unsubordinated obligations of the Company, present and future, that have not been accorded preferential rights.

19

Exhibit 10(x) (continued)

Section 9.7. Line of Business. The Company will, and will cause each of its Subsidiaries to carry on their business in substantially the same manner and in substantially the same fields as such business is carried on and maintained as of the date of the Closing.

SECTION 10. NEGATIVE COVENANTS.

The Company covenants that so long as any of the Notes are outstanding:

Section 10.1. Transactions with Affiliates. The Company will not and will not permit any Subsidiary to enter into directly or indirectly any Material transaction or Material group of related transactions (including without limitation the purchase, lease, sale or exchange of properties of any kind or the rendering of any service) with any Affiliate (other than the Company or another Subsidiary), except pursuant to the reasonable requirements of the Company’s or such Subsidiary’s business and upon fair and reasonable terms no less favorable to the Company or such Subsidiary than would be obtainable in a comparable arm’s-length transaction with a Person not an Affiliate.

Section 10.2. Merger, Consolidation, etc. The Company shall not consolidate with or merge with any other corporation or convey, transfer or lease substantially all of its assets in a single transaction or series of transactions to any Person (except that a Subsidiary of the Company may: (x) consolidate with or merge with, or convey, transfer or lease substantially all of its assets in a single transaction or series of transactions to the Company or another Subsidiary of the Company; and (y) convey, transfer or lease all of its assets in compliance with the provisions of Section 10.6) unless:

(a) the successor formed by such consolidation or the survivor of such merger or the Person that acquires by conveyance, transfer or lease substantially all of the assets of the Company as an entirety, as the case may be (the “Successor Corporation”), shall be a solvent corporation organized and existing under the laws of the United States or any State thereof (including the District of Columbia), and, if the Company is not such corporation, such corporation shall have executed and delivered to each holder of any Notes its assumption of the due and punctual performance and observance of each covenant and condition of this Agreement, the Other Agreements and the Notes; and

(b) the Successor Corporation would he permitted to incur at least $1.00 of additional Indebtedness owing to a Person other than a Subsidiary or Successor Corporation; and

(c) immediately after giving effect to such transaction, no Default or Event of Default shall have occurred and be continuing.

No such conveyance, transfer or lease of substantially all of the assets of the Company shall have the effect of releasing the Company or any successor corporation that shall theretofore have become such in the manner prescribed in this Section 10.2 from its liability under this Agreement or the Notes.

20

Exhibit 10(x) (continued)

Section 10.3. Maintenance of Consolidated Net Worth. The Company will not, at any time, permit Consolidated Net Worth to be less than $750,000,000.

Section 10.4. Limitation on Consolidated Indebtedness. The Company will not, at any time permit Consolidated Indebtedness to exceed 55% of the Consolidated Capitalization.

Section 10.5. Limitation on Priority Debt. The Company will not, at any time, permit Priority Debt to exceed 30% of the Consolidated Net Worth as of the then most recently ended fiscal quarter of the Company.

Section 10.6. Sale of Assets. The Company will not, and will not permit any Subsidiary to, make any asset sale unless:

(a) the Book Value of the property subject to such asset sale, together with the aggregate Book Value of all property of the Company and its Subsidiaries that were the subject of an asset sale during the then current fiscal year of the Company, would not exceed 20% of Consolidated Total Assets determined as of the end of the then most recently ended fiscal year of the Company; and, provided further that the cumulative Book Value of all property sold in accordance with this Section 10.6 will not exceed 30% of Consolidated Total Assets existing at the end of the most recent fiscal quarter; or

(b) the sale proceeds equal or exceed the fair market value (as determined in the good faith opinion of the board of directors of the Company) and where sale proceeds are used to acquire productive assets or to reduce Indebtedness not subordinate to these Notes within twelve (12) months of the asset sale; and

(c) in the event of any asset sale in accordance with Section 10.6 (a) or (b), immediately after giving effect to such asset sale, no Default or Event of Default would exist.

Section 10.7. Limitations on Liens. The Company will not, and will not permit any of its Subsidiaries to, directly or indirectly create, incur, assume or permit to exist (upon the happening of a contingency or otherwise) any Lien on or with respect to any property or asset (including, without limitation, any document or instrument in respect of goods or accounts receivable) of the Company or any such Subsidiary, whether now owned or held or hereafter acquired, or any income or profits therefrom, or assign or otherwise convey any right to receive income or profits, except:

(a) Liens for taxes, assessments or other governmental charges which are not yet due and payable or the payment of which is not at the time required by Section 9.4;

21

Exhibit 10(x) (continued)

(b) Liens (other than any Lien imposed by ERISA) incurred or deposits made in the ordinary course of business (i) in connection with workers’ compensation, unemployment insurance and other types of social security or retirement benefits, or (ii) to secure (or to obtain letters of credit that secure) the performance of tenders, statutory obligations, surety bonds, appeal bonds, bids, leases (other than Capital Leases), performance bonds, purchase, construction or sales contracts and other similar obligations, in each case not incurred or made in connection with the borrowing of money, the obtaining of advances or credit or the payment of the deferred purchase price of property;

(c) any attachment or judgment Lien, unless the judgment it secures shall not, within sixty (60) days after the entry thereof, have been discharged or execution thereof stayed pending appeal;

(d) leases or subleases granted to others, easements, rights-of-way, restrictions and other similar charges or encumbrances, in each case incidental to, and not interfering with, the ordinary conduct of the business of the Company or any of its Subsidiaries, provided that such Liens do not, in the aggregate, materially detract from the value of such property;

(e) Liens on property or assets of any Subsidiary securing Indebtedness owing to the Company or to another Subsidiary;

(f) Liens existing on the date of this Agreement and securing Indebtedness of the Company and its Subsidiaries as listed on Schedule 10.7(f);

(g) any Lien created to secure all or any part of the purchase price, or to secure Indebtedness incurred or assumed to pay all or any part of the purchase price or cost of construction, of property (or any improvement thereon) acquired or constructed by the Company or a Subsidiary after the date of the Closing, provided that:

(i) any such Lien shall extend solely to the item or items of such property (or improvement thereon) so acquired or constructed and, if required by the terms of the instrument originally creating such Lien, other property (or improvement thereon) which is an improvement to or is acquired for specific use in connection with such acquired or constructed property (or improvement thereon) or which is real property being improved by such acquired or constructed property (or improvement thereon),

(ii) the principal amount of the Indebtedness secured by any such Lien shall at no time exceed an amount equal to 100% of the lesser of (A) the cost to the Company or such Subsidiary of the property (or improvement thereon) so acquired or constructed and (B) the fair market value (as determined in good faith by the board of directors of the Company) of such property (or improvement thereon) at the time of such acquisition or construction, and

22

Exhibit 10(x) (continued)

(iii) any such Lien shall be created contemporaneously with, or within180 days after, the acquisition or construction of such property;

(h) any Lien existing on property of a Person immediately prior to its being consolidated with or merged into the Company or a Subsidiary or its becoming a Subsidiary, or any Lien existing on any property acquired by the Company or any Subsidiary at the time such property is so acquired (whether or not the Indebtedness secured thereby shall have been assumed), provided that (i) no such Lien shall have been created or assumed in contemplation of such consolidation or merger or such Person’s becoming a Subsidiary or such acquisition of property, and (ii) each such Lien shall extend solely to the item or items of property so acquired and, if required by the terms of the instrument originally creating such Lien, other property which is an improvement to or is acquired for specific use in connection with such acquired property;

(i) any Lien renewing, extending or refunding any Lien permitted by paragraphs (a) through (h) of this Section 10.7, provided that: (i) the principal amount of Indebtedness secured by such Lien immediately prior to such extension, renewal or refunding is not increased or the maturity thereof reduced; (ii) such Lien is not extended to any other property; (iii) immediately after such extension, renewal or refunding no Default or Event of Default would exist; and (iv) the weighted average life to maturity of the Indebtedness secured by such Lien(s) is not reduced;

(j) other Liens not otherwise permitted by paragraphs (a) through (i) provided that such Liens be considered Priority Debt.

SECTION 11. EVENTS OF DEFAULT.

An “Event of Default” shall exist if any of the following conditions or events shall occur and be continuing:

(a) the Company defaults in the payment of any principal or Make-Whole Amount, if any, on any Note when the same becomes due and payable, whether at maturity or at a date fixed for prepayment or by declaration or otherwise; or

(b) the Company defaults in the payment of any interest on any Note for more than five Business Days after the same becomes due and payable; or

(c) the Company defaults in the performance of or compliance with any term contained in Sections 10.3, 10.4, 10.5 or 10.6;

(d) the Company defaults in the performance of or compliance with any term contained in Sections 10.1, 10.2, 10.7, 10.8, 10.9, or 10.10 and such default is not remedied within fifteen (15) days after the earlier of (i) a Responsible Officer obtaining actual knowledge of such default and (ii) the Company receiving written notice of such default from any holder of a Note (any such written notice to be identified as a “notice of default” and to refer specifically to this paragraph (d) of Section 11); or

23

Exhibit 10(x) (continued)

(e) the Company defaults in the performance of or compliance with any term contained herein (other than those referred to in paragraphs (a), (b), (c) and (d) of this Section 11) and such default is not remedied within 30 days after the earlier of (i) a Responsible Officer obtaining actual knowledge of such default and (ii) the Company receiving written notice of such default from any holder of a Note (any such written notice to be identified as a “notice of default” and to refer specifically to this paragraph (e) of Section 11); or

(f) any representation or warranty made in writing by or on behalf of the Company or by any officer of the Company in this Agreement or in any writing furnished in connection with the transactions contemplated hereby proves to have been false or incorrect in any material respect on the date as of which made; or

(g) the Company or any Subsidiary is in default (as principal or as guarantor or other surety): (i) in the payment of any principal of or premium or make-whole amount or interest on any Indebtedness that is outstanding in an aggregate principal amount of at least $10,000,000 beyond any period of grace provided with respect thereto, or (ii) in the performance of or compliance with any term of any evidence of any Indebtedness in an aggregate outstanding principal amount of at least $10,000,000 or of any mortgage, indenture or other agreement relating thereto or any other condition exists, and as a consequence of such default or condition such Indebtedness has become, or has been declared due and payable before its stated maturity or before its regularly scheduled dates of payment; or

(h) the Company or any Subsidiary (i) is generally not paying, or admits in writing its inability to pay, its debts as they become due, (ii) files, or consents by answer or otherwise to the filing against it of, a petition for relief or reorganization or arrangement or any other petition in bankruptcy, for liquidation or to take advantage of any bankruptcy, insolvency, reorganization, moratorium or other similar law of any jurisdiction, (iii) makes an assignment for the benefit of its creditors, (iv) consents to the appointment of a custodian, receiver, trustee or other officer with similar powers with respect to it or with respect to any substantial part of its property, (v) is adjudicated as insolvent or to be liquidated, or (vi) takes corporate action for the purpose of any of the foregoing; or

(i) a court or governmental authority of competent jurisdiction enters an order appointing, without consent by the Company or any of its Subsidiaries, a custodian, receiver, trustee or other officer with similar powers with respect to it or with respect to any substantial part of its property, or constituting an order for relief or approving a petition for relief or reorganization or any other petition in bankruptcy or for liquidation or to take advantage of any bankruptcy or insolvency law of any jurisdiction, or ordering the dissolution, winding-up or liquidation of the Company or any of its Subsidiaries, or any such petition shall be filed against the Company or any of its Subsidiaries and such petition shall not be dismissed within 60 days; or

24

Exhibit 10(x) (continued)

(j) an uninsured final judgment or judgments for the payment of money aggregating in excess of $10,000,000 are rendered against one or more of the Company and its Subsidiaries and which judgments are not, within 60 days after entry thereof, bonded, discharged or stayed pending appeal, or are not discharged within 60 days after the expiration of such stay; or

(k) if (i) any Plan shall fail to satisfy the minimum funding standards of ERISA or the Code for any plan year or part thereof or a waiver of such standards or extension of any amortization period is sought or granted under section 412 of the Code, (ii) a notice of intent to terminate any Plan shall have been or is reasonably expected to be filed with the PBGC or the PBGC shall have instituted proceedings under ERISA section 4042 to terminate or appoint a trustee to administer any Plan or the PBGC shall have notified the Company or any ERISA Affiliate that a Plan may become a subject of any such proceedings, (iii) the aggregate “amount of unfunded benefit liabilities” (within the meaning of section 4001(a)(18) of ERISA) under all Plans, determined in accordance with Title IV of ERISA, shall exceed 5% of Consolidated Net Worth, (iv) the Company or any ERISA Affiliate shall have incurred or is reasonably expected to incur any liability pursuant to Title I or IV of ERISA or the penalty or excise tax provisions of the Code relating to employee benefit plans, (v) the Company or any ERISA Affiliate withdraws from any Multiemployer Plan, or (vi) the Company or any Subsidiary establishes or amends any employee welfare benefit plan that provides post-employment welfare benefits in a manner that would increase the liability of the Company or any Subsidiary thereunder; and any such event or events described in clauses (i), (ii), (iv), (v) and (vi) above, either individually or together with any other such event or events, would reasonably be expected to have a Material Adverse Effect.

As used in Section 11(j), the terms “employee benefit plan” and “employee welfare benefit plan” shall have the respective meanings assigned to such terms in Section 3 of ERISA.

SECTION 12. REMEDIES ON DEFAULT, ETC.

Section 12.1. Acceleration. (a) If an Event of Default with respect to the Company described in paragraph (h) or (i) of Section 11 (other than an Event of Default described in clause (i) of paragraph (h) or described in clause (vi) of paragraph (h) by virtue of the fact that such clause encompasses clause (i) of paragraph (h)) has occurred, all the Notes then outstanding shall automatically become immediately due and payable.

(b) If any other Event of Default has occurred and is continuing, any holder or holders of more than 50% in principal amount of the Notes at the time outstanding may at any time at its or their option, by notice or notices to the Company, declare all the Notes then outstanding to be immediately due and payable.

(c) If any Event of Default described in paragraph (a) or (b) of Section 11 has occurred and is continuing, any holder or holders of Notes at the time outstanding affected by such Event of Default may at any time, at its or their option, by notice or notices to the Company, declare all the Notes held by it or them to be immediately due and payable.

25

Exhibit 10(x) (continued)

Upon any Notes becoming due and payable under this Section 12.1, whether automatically or by declaration, such Notes will forthwith mature and the entire unpaid principal amount of such Notes, plus (x) all accrued and unpaid interest thereon and (y) the Make-Whole Amount determined in respect of such principal amount (to the full extent permitted by applicable law), shall all be immediately due and payable, in each and every case without presentment, demand, protest or further notice, all of which are hereby waived. The Company acknowledges, and the parties hereto agree, that each holder of a Note has the right to maintain its investment in the Notes free from repayment by the Company (except as herein specifically provided for) and that the provision for payment of a Make-Whole Amount by the Company in the event that the Notes are prepaid or are accelerated as a result of an Event of Default, is intended to provide compensation for the deprivation of such right under such circumstances.

Section 12.2. Other Remedies. If any Default or Event of Default has occurred and is continuing, and irrespective of whether any Notes have become or have been declared immediately due and payable under Section 12.1, the holder of any Note at the time outstanding may proceed to protect and enforce the rights of such holder by an action at law, suit in equity or other appropriate proceeding, whether for the specific performance of any agreement contained herein or in any Note, or for an injunction against a violation of any of the terms hereof or thereof, or in aid of the exercise of any power granted hereby or thereby or by law or otherwise.

Section 12.3. Rescission. At any time after any Notes have been declared due and payable pursuant to clause (b) of Section 12.1, the holders of not less than 50% in principal amount of the Notes then outstanding, by written notice to the Company, may rescind and annul any such declaration and its consequences if (a) the Company has paid all overdue interest on the Notes, all principal of and Make-Whole Amount, if any, on any Notes that are due and payable and are unpaid other than by reason of such declaration, and all interest on such overdue principal and Make-Whole Amount, if any, and (to the extent permitted by applicable law) any overdue interest in respect of the Notes, at the Default Rate, (b) all Events of Default and Defaults, other than non-payment of amounts that have become due solely by reason of such declaration, have been cured or have been waived pursuant to Section 17, and (c) no judgment or decree has been entered for the payment of any monies due pursuant hereto or to the Notes. No rescission and annulment under this Section 12.3 will extend to or affect any subsequent Event of Default or Default or impair any right consequent thereon.

Section 12.4. No Waivers or Election of Remedies, Expenses, etc. No course of dealing and no delay on the part of any holder of any Note in exercising any right, power or remedy shall operate as a waiver thereof or otherwise prejudice such holder’s rights, powers or remedies. No right, power or remedy conferred by this Agreement or by any Note upon any holder thereof shall be exclusive of any other right, power or remedy referred to herein or therein or now or hereafter available at law, in equity, by statute or

26

Exhibit 10(x) (continued)

otherwise. Without limiting the obligations of the Company under Section 15, the Company will pay to the holder of each Note on demand such further amount as shall be sufficient to cover all costs and expenses of such holder incurred in any enforcement or collection under this Section 12, including, without limitation, reasonable attorneys’ fees, expenses and disbursements.

SECTION 13. REGISTRATION; EXCHANGE; SUBSTITUTION OF NOTES

Section 13.1. Registration of Notes. The Company shall keep at its principal executive office a register for the registration and registration of transfers of Notes. The name and address of each holder of one or more Notes, each transfer thereof and the name and address of each transferee of one or more Notes shall be registered in such register. Prior to due presentment for registration of transfer, the Person in whose name any Note shall be registered shall be deemed and treated as the owner and holder thereof for all purposes hereof, and the Company shall not be affected by any notice or knowledge to the contrary. The Company shall give to any holder of a Note that is an Institutional Investor promptly upon request therefor, a complete and correct copy of the names and addresses of all registered holders of Notes.

Section 13.2. Transfer and Exchange of Notes. Upon surrender of any Note at the principal executive office of the Company for registration of transfer or exchange (and in the case of a surrender for registration of transfer, duly endorsed or accompanied by a written instrument of transfer duly executed by the registered holder of such Note or his attorney duly authorized in writing and accompanied by the address for notices of each transferee of such Note or part thereof), the Company shall execute and deliver, at the Company’s expense (except as provided below), one or more new Notes (as requested by the holder thereof) in exchange therefor, in an aggregate principal amount equal to the unpaid principal amount of the surrendered Note. Each such new Note shall be payable to such Person as such holder may request and shall be substantially in the form of Exhibit 1. Each such new Note shall be dated and bear interest from the date to which interest shall have been paid on the surrendered Note or dated the date of the surrendered Note if no interest shall have been paid thereon. The Company may require payment of a sum sufficient to cover any stamp tax or governmental charge imposed in respect of any such transfer of Notes. Notes shall not be transferred in denominations of less than $1,000,000, provided that if necessary to enable the registration of transfer by a holder of its entire holding of Notes, one Note may be in a denomination of less than $1,000,000. Any transferee, by its acceptance of a Note registered in its name (or the name of its nominee), shall be deemed to have made the representation set forth in Section 6.2.

Section 13.3. Replacement of Notes. Upon receipt by the Company of evidence reasonably satisfactory to it of the ownership of and the loss, theft, destruction or mutilation of any Note (which evidence shall be, in the case of an Institutional Investor, notice from such Institutional Investor of such ownership and such loss, theft, destruction or mutilation), and

27

Exhibit 10(x) (continued)

(a) in the case of loss, theft or destruction, of indemnity reasonably satisfactory to it (provided that if the holder of such Note is, or is a nominee for, an original Purchaser or another holder of a Note with a minimum net worth of at least $100,000,000, such Person’s own unsecured agreement of indemnity shall be deemed to be satisfactory), or

(b) in the case of mutilation, upon surrender and cancellation thereof, the Company at its own expense shall execute and deliver, in lieu thereof, a new Note, dated and bearing interest from the date to which interest shall have been paid on such lost, stolen, destroyed or mutilated Note or dated the date of such lost, stolen, destroyed or mutilated Note if no interest shall have been paid thereon.

SECTION 14. PAYMENTS ON NOTES.

Section 14.1. Place of Payment. Subject to Section 14.2, payments of principal, Make-Whole Amount, if any, and interest becoming due and payable on the Notes shall be made in St. Louis, Missouri at the principal office of the Company in such jurisdiction. The Company may at any time, by notice to each holder of a Note, change the place of payment of the Notes so long as such place of payment shall be either the principal office of the Company in such jurisdiction or the principal office of a bank or trust company in such jurisdiction.

Section 14.2. Home Office Payment. So long as you or your nominee shall be the holder of any Note, and notwithstanding anything contained in Section 14.1 or in such Note to the contrary, the Company will pay all sums becoming due on such Note for principal, Make-Whole Amount, if any, and interest by the method and at the address specified for such purpose below your name in Schedule A, or by such other method or at such other address as you shall have from time to time specified to the Company in writing for such purpose, without the presentation or surrender of such Note or the making of any notation thereon, except that upon written request of the Company made concurrently with or reasonably promptly after payment or prepayment in full of any Note, you shall surrender such Note for cancellation, reasonably promptly after any such request, to the Company at its principal executive office or at the place of payment most recently designated by the Company pursuant to Section 14.1. Prior to any sale or other disposition of any Note held by you or your nominee you will, at your election, either endorse thereon the amount of principal paid thereon and the last date to which interest has been paid thereon or surrender such Note to the Company in exchange for a new Note or Notes pursuant to Section 13.2. The Company will afford the benefits of this Section 14.2 to any Institutional Investor that is the direct or indirect transferee of any Note purchased by you under this Agreement and that has made the same agreement relating to such Note as you have made in this Section 14.2.

28

Exhibit 10(x) (continued)

SECTION 15. EXPENSES, ETC.

Section 15.1. Transaction Expenses. The Company will pay all costs and expenses (including reasonable attorneys’ fees of a special counsel and, if reasonably required, local or other counsel) incurred by you and each Other Purchaser or holder of a Note in connection with any amendments, waivers or consents under or in respect of this Agreement or the Notes (whether or not such amendment, waiver or consent becomes effective), including, without limitation: (a) the costs and expenses incurred in enforcing or defending (or determining whether or how to enforce or defend) any rights under this Agreement or the Notes or in responding to any subpoena or other legal process or informal investigative demand issued in connection with this Agreement or the Notes, or by reason of being a holder of any Note, and (b) the costs and expenses, including financial advisors’ fees, incurred in connection with the insolvency or bankruptcy of the Company or any Subsidiary or in connection with any work-out or restructuring of the transactions contemplated hereby and by the Notes.

Section 15.2. Survival. The obligations of the Company under this Section 15 will survive the payment or transfer of any Note, the enforcement, amendment or waiver of any provision of this Agreement or the Notes, and the termination of this Agreement.

SECTION 16. SURVIVAL OF REPRESENTATIONS AND WARRANTIES; ENTIRE AGREEMENT.

All representations and warranties contained herein shall survive the execution and delivery of this Agreement and the Notes, the purchase or transfer by you of any Note or portion thereof or interest therein and the payment of any Note, and may be relied upon by any subsequent holder of a Note, regardless of any investigation made at any time by or on behalf of you or any other holder of a Note. All statements contained in any certificate or other instrument delivered by or on behalf of the Company pursuant to this Agreement shall be deemed representations and warranties of the Company under this Agreement. Subject to the preceding sentence, this Agreement and the Notes embody the entire agreement and understanding between you and the Company and supersede all prior agreements and understandings relating to the subject matter hereof.

SECTION 17. AMENDMENT AND WAIVER.

Section 17.1. Requirements. This Agreement and the Notes may be amended, and the observance of any term hereof or of the Notes may be waived (either retroactively or prospectively), with (and only with) the written consent of the Company and the Required Holders, except that (a) no amendment or waiver of any of the provisions of Section 1, 2, 3, 4, 5, 6 or 21 hereof, or any defined term (as it is used therein), will be effective as to you unless consented to by you in writing, and (b) no such amendment or waiver may, without the written consent of the holder of each Note at the time outstanding affected thereby, (i) subject to the provisions of Section 12 relating to acceleration or rescission, change the amount or time of any prepayment or payment of principal of, or reduce the

29

Exhibit 10(x) (continued)

rate or change the time of payment or method of computation of interest or of the Make-Whole Amount on, the Notes, (ii) change the percentage of the principal amount of the Notes the holders of which are required to consent to any such amendment or waiver, or (iii) amend any of Sections 8, 11(a), 11(b), 12, 17 or 20.

Section 17.2. Solicitation of Holders of Notes.

(a) Solicitation. The Company will provide each holder of the Notes (irrespective of the amount of Notes then owned by it) with sufficient information, sufficiently far in advance of the date a decision is required, to enable such holder to make an informed and considered decision with respect to any proposed amendment, waiver or consent in respect of any of the provisions hereof or of the Notes. The Company will deliver executed or true and correct copies of each amendment, waiver or consent effected pursuant to the provisions of this Section 17 to each holder of outstanding Notes promptly following the date on which it is executed and delivered by, or receives the consent or approval of, the requisite holders of Notes.

(b) Payment. The Company will not directly or indirectly pay or cause to be paid any remuneration, whether by way of supplemental or additional interest, fee or otherwise, or grant any security, to any holder of Notes as consideration for or as an inducement to the entering into by any holder of Notes or any waiver or amendment of any of the terms and provisions hereof unless such remuneration is concurrently paid, or security is concurrently granted, on the same terms, ratably to each holder of Notes then outstanding even if such holder did not consent to such waiver or amendment.

(c) Amendment or Waiver in Contemplation of Transfer. Any amendment or waiver made pursuant to this Section 17.2 by a holder of Notes that has transferred or has agreed to transfer its Notes to the Company, any Subsidiary or any Affiliate of the Company and has provided or has agreed to provide such amendment or waiver as a condition to such transfer shall be void and of no force or effect except solely as to such holder, and any amendments effected or waivers granted that would not have been or would not be so effected or granted but for such amendment or waiver (and the amendments or waivers of all other holders of Notes that were acquired under the same or similar conditions) shall be void and of no force or effect, except solely as to such holder.

Section 17.3. Binding Effect, etc. Any amendment or waiver consented to as provided in this Section 17 applies equally to all holders of Notes and is binding upon them and upon each future holder of any Note and upon the Company without regard to whether such Note has been marked to indicate such amendment or waiver. No such amendment or waiver will extend to or affect any obligation, covenant, agreement, Default or Event of Default not expressly amended or waived or impair any right consequent thereon. No course of dealing between the Company and the holder of any Note nor any delay in exercising any rights hereunder or under any Note shall operate as a waiver of any rights of any holder of such Note. As used herein, the term “this Agreement” and references thereto shall mean this Agreement as it may from time to time be amended or supplemented.

30

Exhibit 10(x) (continued)

Section 17.4. Notes Held by Company, etc. Solely for the purpose of determining whether the holders of the requisite percentage of the aggregate principal amount of Notes then outstanding approved or consented to any amendment, waiver or consent to be given under this Agreement or the Notes, or have directed the taking of any action provided herein or in the Notes to be taken upon the direction of the holders of a specified percentage of the aggregate principal amount of Notes then outstanding, Notes directly or indirectly owned by the Company or any of its Affiliates shall be deemed not to be outstanding.

SECTION 18. NOTICES.

All notices and communications provided for hereunder shall be in writing and sent (a) by telecopy if the sender on the same day sends a confirming copy of such notice by a recognized overnight delivery service (charges prepaid), or (b) by registered or certified mail with return receipt requested (postage prepaid), or (c) by a recognized overnight delivery service (with charges prepaid). Any such notice must be sent:

(i) if to you or your nominee, to you or it at the address specified for such communications in Schedule A, or at such other address as you or it shall have specified to the Company in writing,

(ii) if to any other holder of any Note, to such holder at such address as such other holder shall have specified to the Company in writing, or

(iii) if to the Company, to the Company at its address set forth at the beginning hereof to the attention of Treasury Director, or at such other address as the Company shall have specified to the holder of each Note in writing.

Notices under this Section 18 will be deemed given only when actually received.

SECTION 19. REPRODUCTION OF DOCUMENTS.

This Agreement and all documents relating thereto, including, without limitation: (a) consents, waivers and modifications that may hereafter be executed, (b) documents received by you at the Closing (except the Notes themselves), and (c) financial statements, certificates and other information previously or hereafter furnished to you, may be reproduced by you by any photographic, photostatic, microfilm, microcard, miniature photographic or other similar process and you may destroy any original document so reproduced. The Company agrees and stipulates that, to the extent permitted by applicable law, any such reproduction shall be admissible in evidence as the original itself in any judicial or administrative proceeding (whether or not the original is in existence and whether or not such reproduction was made by you in the regular course of

31

Exhibit 10(x) (continued)

business) and any enlargement, facsimile or further reproduction of such reproduction shall likewise be admissible in evidence. This Section 19 shall not prohibit the Company or any other holder of Notes from contesting any such reproduction to the same extent that it could contest the original, or from introducing evidence to demonstrate the inaccuracy of any such reproduction.

SECTION 20. CONFIDENTIAL INFORMATION.

For the purposes of this Section 20, “Confidential Information” means information delivered to you by or on behalf of the Company or any Subsidiary in connection with the transactions contemplated by or otherwise pursuant to this Agreement that is proprietary in nature and that was clearly marked or labeled or otherwise adequately identified when received by you as being confidential information of the Company or such Subsidiary (including, without limitation, any oral information that is specifically identified by the Company to your representatives as “confidential” at the time that such information is received by you), provided that such term does not include information that (a) was publicly known or otherwise known to you prior to the time of such disclosure, (b) subsequently becomes publicly known through no act or omission by you or any person acting on your behalf, (c) otherwise becomes known to you other than through disclosure by the Company or any Subsidiary or (d) constitutes financial statements delivered to you under Section 7.1 that are otherwise publicly available. You will maintain the confidentiality of such Confidential Information in accordance with procedures adopted by you in good faith to protect confidential information of third parties delivered to you and not use (except as contemplated by this Agreement), trade while in possession of, or disclose (to outside third parties) such Confidential Information, provided that you may deliver or disclose Confidential Information to (i) your directors, officers, employees, agents, attorneys and affiliates (to the extent such disclosure reasonably relates to the administration of the investment represented by your Notes) and such directors, officers, employees, agents, attorneys and affiliates will be subject to the terms of this Section 20, (ii) your financial advisors and other professional advisors who agree to hold confidential the Confidential Information substantially in accordance with the terms of this Section 20, (iii) any other holder of any Note, (iv) any Institutional Investor to which you sell or offer to sell such Note or any part thereof or any participation therein (if such Person has agreed in writing prior to its receipt of such Confidential Information to be bound by the provisions of this Section 20), (v) any Person from which you offer to purchase any security of the Company (if such Person has agreed in writing prior to its receipt of such Confidential Information to be bound by the provisions of this Section 20), (vi) any federal or state regulatory authority having jurisdiction over you, (vii) the National Association of Insurance Commissioners or, subject to reasonable prior notice and provided such Confidential Information is identified prominently as being confidential, any similar organization or any nationally recognized rating agency that requires access to information about your investment portfolio, or (viii) subject to reasonable prior notice and provided such Confidential Information is identified prominently as being confidential, any other Person to which such delivery or disclosure may be necessary or appropriate (w) to effect compliance with any law, rule, regulation or order applicable to you, (x) in response to any subpoena or

32

Exhibit 10(x) (continued)

other legal process, (y) in connection with any litigation to which you are a party or (z) if an Event of Default has occurred and is continuing, to the extent you may reasonably determine such delivery and disclosure to be necessary or appropriate in the enforcement or for the protection of the rights and remedies under your Notes and this Agreement. You agree to cooperate with the Company or any Subsidiary, to the extent the Company or such Subsidiary seeks to object to, or file pleadings or motions with respect to (all objections, pleadings and the like at the sole expense of the Company, including reimbursement to each holder of the Notes from the Company for any out of pocket costs, fees and/or expenses that such Noteholder may incur as a result of such cooperation), any disclosure pursuant to Clause (vii) (except in the case of the National Association of Insurance Commissioners) or pursuant to Clause (viii). Each holder of a Note, by its acceptance of a Note, will be deemed to have agreed to be bound by and to be entitled to the benefits of this Section 20 as though it were a party to this Agreement. On reasonable request by the Company in connection with the delivery to any holder of a Note of information required to be delivered to such holder under this Agreement or requested by such holder (other than a holder that is a party to this Agreement or its nominee), such holder will enter into an agreement with the Company embodying the provisions of this Section 20.

SECTION 21. SUBSTITUTION OF PURCHASER.

You shall have the right to substitute any one of your Affiliates as the purchaser of the Notes that you have agreed to purchase hereunder, by written notice to the Company, which notice shall be signed by both you and such Affiliate, shall contain such Affiliate’s agreement to be bound by this Agreement and shall contain a confirmation by such Affiliate of the accuracy with respect to it of the representations set forth in Section 6. Upon receipt of such notice, wherever the word “you” is used in this Agreement (other than in this Section 21), such word shall be deemed to refer to such Affiliate in lieu of you. In the event that such Affiliate is so substituted as a purchaser hereunder and such Affiliate thereafter transfers to you all of the Notes then held by such Affiliate, upon receipt by the Company of notice of such transfer, wherever the word “you” is used in this Agreement (other than in this Section 21), such word shall no longer be deemed to refer to such Affiliate, but shall refer to you, and you shall have all the rights of an original holder of the Notes under this Agreement.

SECTION 22. MISCELLANEOUS.

Section 22.1. Successors and Assigns. All covenants and other agreements contained in this Agreement by or on behalf of any of the parties hereto bind and inure to the benefit of their respective successors and assigns (including, without limitation, any subsequent holder of a Note) whether so expressed or not.

Section 22.2. Payments Due on Non-Business Days. Anything in this Agreement or the Notes to the contrary notwithstanding, any payment of principal of or Make-whole Amount or interest on any Note that is due on a date other than a Business Day shall be made on the next succeeding Business Day without including the additional days elapsed in the computation of the interest payable on such next succeeding Business Day.

33

Exhibit 10(x) (continued)

Section 22.3. Severability. Any provision of this Agreement that is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof, and any such prohibition or unenforceability in any jurisdiction shall (to the full extent permitted by law) not invalidate or render unenforceable such provision in any other jurisdiction.

Section 22.4. Construction. Each covenant contained herein shall be construed (absent express provision to the contrary) as being independent of each other covenant contained herein, so that compliance with any one covenant shall not (absent such an express contrary provision) be deemed to excuse compliance with any other covenant. Where any provision herein refers to action to be taken by any Person, or which such Person is prohibited from taking, such provision shall be applicable whether such action is taken directly or indirectly by such Person.

Section 22.5. Counterparts. This Agreement may be executed in any number of counterparts, each of which shall be an original but all of which together shall constitute one instrument. Each counterpart may consist of a number of copies hereof, each signed by less than all, but together signed by all, of the parties hereto.

Section 22.6. Governing Law. This Agreement shall be construed and enforced in accordance with, and the rights of the parties shall be governed by, the law of the State of Illinois excluding choice-of-law principles of the law of such State that would require the application of the laws of a jurisdiction other than such State.

SIGNATURE PAGE TO FOLLOW

34

Exhibit 10(x) (continued)

If you are in agreement with the foregoing, please sign the form of agreement on the accompanying counterpart of this Agreement and return it to the Company, whereupon the foregoing shall become a binding agreement between you and the Company.

Very truly yours,
SIGMA–ALDRICH CORPORATION
By:	/s/ Kirk Richter
Name: Kirk Richter Title: Treasurer
By:	/s/ Karen Miller
Name: Karen Miller Title: Controller

The foregoing is hereby

agreed to as of the

date thereof.

STATE FARM LIFE INSURANCE COMPANY

By:	/s/ Lyle Triebwasser
Name: Lyle Triebwasser Its: Senior Investment Officer
By:	/s/ Julie Pierce
Name: Julie Pierce Its: Investment Officer

STATE FARM LIFE AND ACCIDENT ASSURANCE COMPANY

By:	/s/ Lyle Triebwasser
Name: Lyle Triebwasser Its: Senior Investment Officer
By:	/s/ Julie Pierce
Name: Julie Pierce Its: Investment Officer

35

Exhibit 10(x) (continued)

INFORMATION RELATING TO PURCHASERS

STATE FARM LIFE INSURANCE COMPANY

TAX ID #37-0533090

Participation Amount: $95,000,000

Wire Transfer Instructions:

The Chase Manhattan Bank

ABA No. 021000021

SSG Private Income Processing

A/C #900-9-000200

For Credit To Account Number G 06893

Ref. PPN # 826552 A* 2

Rate: 7.687%

Maturity Date: September 12, 2010

Send notices (as well as a photocopy of the original security) to:

State Farm Life Insurance Company

Investment Dept. E-10

One State Farm Plaza

Bloomington, IL 61710

Send confirms to:

State Farm Life Insurance Company

Investment Accounting Dept. D-3

One State Farm Plaza

Bloomington, IL 61710

Send the original security (via registered mail) to:

Chase Manhattan Bank

Attn: Barbara Walsh

(North America Insurance)

3 Chase Metrotech Center-6th Floor

Brooklyn, New York 11245

Send an additional copy of the original security plus an original set of closing documents and two conformed copies of the Note Purchase Agreement to:

State Farm Insurance Companies

One State Farm Plaza E-8

Bloomington, Illinois 61710

Attn: Investment Legal E-8

Larry Rottunda, Investment Counsel

SCHEDULE A-1

(to Note Purchase Agreement)

Exhibit 10(x) (continued)

STATE FARM LIFE & ACCIDENT ASSURANCE COMPANY

TAX ID #37-0805091

Participation Amount: $5,000,000

Wire Transfer Instructions:

The Chase Manhattan Bank

ABA No. 021000021

SSG Private Income Processing

A/C #900-9-000200

For Credit To Account Number G 06895

Ref. PPN # 826552 A* 2

Rate: 7.687%

Maturity Date: September 12, 2010

Send notices (as well as a photocopy of the original security) to:

State Farm Life and Accident Assurance Company

Investment Dept. E-10

One State Farm Plaza

Bloomington, IL 61710

Send confirms to:

State Farm Life and Accident Assurance Company

Investment Accounting Dept. D-3

One State Farm Plaza

Bloomington, IL 61710

Send the original security (via registered mail) to:

Chase Manhattan Bank

Attn: Barbara Walsh

(North America Insurance)

3 Chase Metrotech Center-6th Floor

Brooklyn, New York 11245

Send an additional copy of the original security plus an original set of closing documents and two conformed copies of the Note Purchase Agreement to:

State Farm Insurance Companies

One State Farm Plaza E-8

Bloomington, Illinois 61710

Attn: Investment Legal E-8

Larry Rottunda, Investment Counsel

SCHEDULE A-2

(to Note Purchase Agreement)

Exhibit 10(x) (continued)

DEFINED TERMS

As used herein, the following terms have the respective meanings set forth below or set forth in the Section hereof following such term:

“Affiliate” means, at any time, and with respect to any Person, any other Person that at such time directly or indirectly through one or more intermediaries Controls, or is Controlled by, or is under common Control with, such first Person. As used in this definition, “Control” means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of a Person, whether through the ownership of voting securities, by contract or otherwise. Unless the context otherwise clearly requires, any reference to an “Affiliate” is a reference to an Affiliate of the Company. For purposes of this Agreement, the Purchaser shall not be considered an Affiliate by virtue of its common stock ownership in the Company.

“Book Value” means the applicable property’s original cost less its accumulated depreciation all in accordance with GAAP.

“Business Day” means (a) for the purposes of Section 8.6 only, any day other than a Saturday, a Sunday or a day on which commercial banks in New York City are required or authorized to be closed, and (b) for the purposes of any other provision of this Agreement, any day other than a Saturday, a Sunday or a day on which commercial banks in Chicago, Illinois are required or authorized to be closed.

“Capital Lease” means, at any time, a lease with respect to which the lessee is required concurrently to recognize the acquisition of an asset and the incurrence of a liability in accordance with GAAP.

“Change in Control” means any of the following events or circumstances: (a) if any Person or Persons acting in concert together with Affiliates thereof, shall in the aggregate, directly or indirectly, control or own (beneficially or otherwise) more than 50% (by number of shares) of the issued and outstanding [voting] stock of the Company.; or (b) if any person (as such term is used in section 13(d) and section 14(d)(2) of the Exchange Act as in effect on the date of the Closing) or related persons constituting a group (as such term is used in Rule 13d-5 under the Exchange Act), become the “beneficial owners” (as such term is used in Rule 13d-3 under the Exchange Act as in effect on the date of the Closing), directly or indirectly, of more than 50% of the total voting power of all classes then outstanding of the Company’s voting stock.

“Closing” is defined in Section 3.

SCHEDULE B-1

(to Note Purchase Agreement)

Exhibit 10(x) (continued)

“Code” means the Internal Revenue Code of 1986, as amended from time to time, and the rules and regulations promulgated thereunder from time to time.

“Company” means Sigma-Aldrich Corporation, a Delaware corporation.

“Confidential Information” is defined in Section 20.

“Consolidated Capitalization” means the sum of Consolidated Indebtedness and Consolidated Net Worth.

“Consolidated Indebtedness” means, as of any date of determination, the total of all Indebtedness of the Company and its Subsidiaries outstanding on such date, after eliminating all offsetting debits and credits between the Company and its Subsidiaries and all other items required to be eliminated in the course of the preparation of consolidated financial statements of the Company and its Subsidiaries in accordance with GAAP.

“Consolidated Net Worth” means, at any time: (a) the total assets of the Company and its Subsidiaries which would be shown as assets on a consolidated balance sheet of the Company and its Subsidiaries as of such time prepared in accordance with GAAP, after eliminating all amounts properly attributable to minority interests, if any, in the stock and surplus of Subsidiaries; minus (b) the total liabilities of the Company and its Subsidiaries which would be shown as liabilities on a consolidated balance sheet of the Company and its Subsidiaries as of such time prepared in accordance with GAAP; minus (c) any consolidated balance sheet foreign currency translation adjustment.

“Consolidated Total Assets” means the total assets of the Company and its Subsidiaries which would be shown as assets on a consolidated balance sheet of the Company and its Subsidiaries as of such time prepared in accordance with GAAP, after eliminating all amounts properly attributable to minority interests, if any, in the stock and surplus of Subsidiaries.

“Control Event” means: (a) the execution by the Company or any of its Subsidiaries or Affiliates of any agreement or letter of intent with respect to any proposed transaction or event or series of transactions or events which, individually or in the aggregate, may reasonably be expected to result in a Change in Control; or (b) the execution of any written agreement which, when fully performed by the parties thereto, would result in a Change in Control; or (c) the making of any written offer by any person (as such term is used in section 13(d) and section 14(d)(2) of the Exchange Act as in effect on the date of the Closing) or related persons constituting a group (as such term is used in Rule 13d-5 under the Exchange Act as in effect on the date of the Closing) to the holders of the common stock of the Company, which offer, if accepted by the requisite number of holders, would result in a Change in Control.

SCHEDULE B-2

(to Note Purchase Agreement)

Exhibit 10(x) (continued)

“Default” means an event or condition the occurrence or existence of which would, with the lapse of time or the giving of notice or both, become an Event of Default.

“Default Rate” means that rate of interest that is the greater of: (i) 2% per annum above the rate of interest stated in clause (a) of the first paragraph of the Notes or (ii) 2% over the rate of interest publicly announced by Chase Manhattan Bank in New York, New York as its “base” or “prime” rate.

“Environmental Laws” means any and all Federal, state, local, and foreign statutes, laws, regulations, ordinances, rules, judgments, orders, decrees, permits, concessions, grants, franchises, licenses, agreements or governmental restrictions relating to pollution and the protection of the environment or the release of any materials into the environment, including but not limited to those related to hazardous substances or wastes, air emissions and discharges to waste or public systems.

“ERISA” means the Employee Retirement Income Security Act of 1974, as amended from time to time, and the rules and regulations promulgated thereunder from time to time in effect.

“ERISA Affiliate” means any trade or business (whether or not incorporated) that is treated as a single employer together with the Company under section 414 of the Code.

“Event of Default” is defined in Section 11.

“Exchange Act” means the Securities Exchange Act of 1934, as amended.

“GAAP” means generally accepted accounting principles as in effect from time to time in the United States of America.

“Governmental Authority” means

(a) the government of:

(i) the United States of America or any State or other political subdivision thereof, or

(ii) any jurisdiction in which the Company or any Subsidiary conducts all or any part of its business, or which asserts jurisdiction over any properties of the Company or any Subsidiary, or

Schedule B-3

(to Note Purchase Agreement)

Exhibit 10(x) (continued)

(b) any entity exercising executive, legislative, judicial, regulatory or administrative functions of, or pertaining to, any such government.

“Guaranty” means, with respect to any Person, any obligation (except the endorsement in the ordinary course of business of negotiable instruments for deposit or collection) of such Person guaranteeing or in effect guaranteeing any indebtedness, dividend or other obligation of any other Person in any manner, whether directly or indirectly, including (without limitation) obligations incurred through an agreement, contingent or otherwise, by such Person:

(a) to purchase such indebtedness or obligation or any property constituting security therefor;

(b) to advance or supply funds (i) for the purchase or payment of such indebtedness or obligation, or (ii) to maintain any working capital or other balance sheet condition or any income statement condition of any other Person or otherwise to advance or make available funds for the purchase or payment of such indebtedness or obligation;

(c) to lease properties or to purchase properties or services primarily for the purpose of assuring the owner of such indebtedness or obligation of the ability of any other Person to make payment of the indebtedness or obligation; or

(d) otherwise to assure the owner of such indebtedness or obligation against loss in respect thereof.

In any computation of the indebtedness or other liabilities of the obligor under any Guaranty, the indebtedness or other obligations that are the subject of such Guaranty shall be assumed to be direct obligations of such obligor.

“Holder” means, with respect to any Note, the Person in whose name such Note is registered in the register maintained by the Company pursuant to Section 13.1.

“Indebtedness” with respect to any Person means, at any time, without duplication, including both short and long term obligations,

(a) its liabilities for borrowed money and its redemption obligations in respect of mandatorily redeemable Preferred Stock;

(b) its liabilities for the deferred purchase price of property acquired by such Person [excluding: (i) contingent “earn-out” liabilities relevant to the Company’s

Schedule B-4

(to Note Purchase Agreement)

Exhibit 10(x) (continued)

acquisition of First Medical Incorporated, contingent “earn-out” liabilities which are not anticipated (by the Company) to be Material; and (ii) accounts payable arising in the ordinary course of business but including all liabilities created or arising under any conditional sale or other title retention agreement with respect to any such property];

(c) all liabilities appearing on its balance sheet in accordance with GAAP in respect of Capital Leases;

(d) all liabilities for borrowed money secured by any Lien with respect to any property owned by such Person (whether or not it has assumed or otherwise become liable for such liabilities);

(e) all its liabilities in respect of letters of credit or instruments serving a similar function issued or accepted for its account by banks and other financial institutions (whether or not representing obligations for borrowed money) excluding letters of credit backing up worker’s compensation claims, bid bonds and other similar obligations (incurred in the Company’s and its Subsidiary’s ordinary course of business which are not, on an accumulated basis, Material;

(f) Swaps of such Person, excluding foreign forward currency contracts; and

(g) any Guaranty of such Person with respect to liabilities of a type described in any of clauses (a) through (f) hereof.

“Institutional Investor” means (a) any original purchaser of a Note, (b) any subsequent holder of a Note, and (c) any bank, trust company, savings and loan association or other financial institution, any pension plan, any investment company, any insurance company, any broker or dealer, or any other similar financial institution or entity, regardless of legal form.

“Lien” means, with respect to any Person, any mortgage, lien, pledge, charge, security interest or other encumbrance, or any interest or title of any vendor, lessor, lender or other secured party to or of such Person under any conditional sale or other title retention agreement or Capital Lease, upon or with respect to any property or asset of such Person (including in the case of stock, stockholder agreements, voting trust agreements and all similar arrangements).

“Make-Whole Amount” is defined in Section 8.6.

“Material” means material in relation to the business, operations, affairs, financial condition, assets, or properties of the Company and its Subsidiaries taken as a whole which, on a cumulative consolidated basis, exceeds 5% of the Company’s Consolidated Total Assets.

Schedule B-5

(to Note Purchase Agreement)

Exhibit 10(x) (continued)

“Material Adverse Effect” means a material adverse effect on: (i) the financial condition or operations of the Company and its Subsidiaries taken as a whole; (ii) the ability of the Company to perform its obligations under this Agreement and the Notes; and (iii) the legality, validity or enforceability of this Agreement or the Notes.

“Multi-employer Plan” means any Plan that is a “multi-employer plan” (as such term is defined in section 4001(a)(3) of ERISA).

“Notes” is defined in Section 1.

“Officer’s Certificate” means a certificate of a Senior Financial Officer or of any other officer of the Company whose responsibilities extend to the subject matter of such certificate.

“Other Agreements” is defined in Section 2.

“Other Purchasers” is defined in Section 2.

“PBGC” means the Pension Benefit Guaranty Corporation referred to and defined in ERISA or any successor thereto.

“Person” means an individual, partnership, corporation, limited liability company, association, trust, unincorporated organization, or a government or agency or political subdivision thereof.

“Plan” means an “employee benefit plan” (as defined in section 3(3) of ERISA) that is or, within the preceding five years, has been established or maintained, or to which contributions are or, within the preceding five years, have been made or required to be made, by the Company or any ERISA Affiliate or with respect to which the Company or any ERISA Affiliate may have any liability.

“Preferred Stock” means any class of capital stock of a corporation that is preferred over any other class of capital stock of such corporation as to the payment of dividends or the payment of any amount upon liquidation or dissolution of such corporation.

“Priority Debt” means, without duplication, the sum of (a) all Indebtedness of the Company secured by any Lien with respect to any property owned by the Company or any

Schedule B-6

(to Note Purchase Agreement)

Exhibit 10(x) (continued)

of its Subsidiaries per Section 10.7(j); and (b) all Indebtedness of Subsidiaries (except Indebtedness owed to the Company or a Subsidiary).

“property” or “properties” means, unless otherwise specifically limited, real or personal property of any kind, tangible or intangible, choate or inchoate.

“QPAM Exemption” means Prohibited Transaction Class Exemption 84-14 issued by the United States Department of Labor.

“Required Holders” means, at any time, the holders of at least 51% in principal amount of the Notes at the time outstanding (exclusive of Notes then owned by the Company or any of its Affiliates).

“Responsible Officer” means any Senior Financial Officer and any other officer of the Company with responsibility for the administration of the relevant portion of this agreement.

“Securities Act” means the Securities Act of 1933, as amended from time to time.

“Senior Financial Officer” means the chief financial officer, principal accounting officer, treasurer or controller of the Company.

“Subsidiary” means, as to any Person, any corporation, association or other business entity in which such Person or one or more of its Subsidiaries or such Person and one or more of its Subsidiaries owns sufficient equity or voting interests to enable it or them (as a group) ordinarily, in the absence of contingencies, to elect a majority of the directors (or Persons performing similar functions) of such entity, and any partnership or joint venture if more than a 50% interest in the profits or capital thereof is owned by such Person or one or more of its Subsidiaries or such Person and one or more of its Subsidiaries (unless such partnership can and does ordinarily take major business actions without the prior approval of such Person or one or more of its Subsidiaries). Unless the context otherwise clearly requires, any reference to a “Subsidiary” is a reference to a Subsidiary of the Company.

“Successor Corporation” has the meaning set forth in Section 10.2 (a)

“Swaps” means, with respect to any Person, payment obligations with respect to interest rate swaps, currency swaps and similar obligations obligating such Person to make payments, whether periodically or upon the happening of a contingency. For the purposes of this Agreement, the amount of the obligation under any Swap shall be the

Schedule B-7

(to Note Purchase Agreement)

Exhibit 10(x) (continued)

amount determined in respect thereof as of the end of the then most recently ended fiscal quarter of such Person, based on the assumption that such Swap had terminated at the end of such fiscal quarter, and in making such determination, if any agreement relating to such Swap provides for the netting of amounts payable by and to such Person thereunder or if any such agreement provides for the simultaneous payment of amounts by and to such Person, then in each such case, the amount of such obligation shall be the net amount so determined.

“Term Sheet” means the summary of terms and conditions of the Financing that was attached to the August 9, 2000 Revised Commitment Letter.

Schedule B-8

(to Note Purchase Agreement)

Exhibit 10(x) (continued)

EXHIBIT 1

FORM OF NOTE

SIGMA–ALDRICH CORPORATION

7.687% SENIOR NOTE DUE SEPTEMBER 12, 2010

No. ____	September 12, 2000
$	PPN 826552 A* 2

FOR VALUE RECEIVED, the undersigned, SIGMA–ALDRICH CORPORATION (herein called the “Company”), a corporation organized and existing under the laws of the State of Delaware, hereby promises to pay to [State Farm Entity] or registered assigns, the principal sum of One Hundred Million DOLLARS ($100,000,000) on September 12, 2010 with interest (computed on the basis of a 360-day year of twelve 30-day months) (a) on the unpaid balance thereof at the rate of 7.687% per annum from the date hereof, payable semiannually, on the 12^th day of March and September in each year, commencing on March 12, 2001, until the principal hereof shall have become due and payable, and (b) to the extent permitted by law on any overdue payment (including any overdue prepayment) of principal, any overdue payment of interest and any overdue payment of any Make-Whole Amount (as defined in the Note Purchase Agreements referred to below), payable semiannually as aforesaid (or, at the option of the registered holder hereof, on demand), at a rate per annum from time to time equal to the greater of (i) 9.687% or (ii) 2% over the rate of interest publicly announced by Chase Manhattan Bank from time to time in New York, New York as its “base” or “prime” rate.

Payments of principal of, interest on and any Make-Whole Amount with respect to this Note are to be made in lawful money of the United States of America at the principal office of the Company in St. Louis, Missouri or at such other place as the Company shall have designated by written notice to the holder of this Note as provided in the Note Purchase Agreements referred to below.

This Note is issued pursuant to the Note Purchase Agreement, dated as of September 12, 2000 (as from time to time amended, the “Note Purchase Agreement”), between the Company and the respective Purchasers named therein and is entitled to the benefits thereof. Each holder of this Note will be deemed, by its acceptance hereof, (i) to have agreed to the confidentiality provisions set forth in Section 20 of the Note Purchase Agreements and (ii) to have made the representation set forth in Section 6.2 of the Note Purchase Agreements.

EXHIBIT 1

(to Note Purchase Agreement)

Exhibit 10(x) (continued)

This Note is a registered Note and, as provided in the Note Purchase Agreement, upon surrender of this Note for registration of transfer, duly endorsed, or accompanied by a written instrument of transfer duly executed, by the registered holder hereof or such holder’s attorney duly authorized in writing, a new Note for a like principal amount will be issued to, and registered in the name of, the transferee. Prior to due presentment for registration of transfer, the Company may treat the person in whose name this Note is registered as the owner hereof for the purpose of receiving payment and for all other purposes, and the Company will not be affected by any notice to the contrary.

This Note is subject to optional prepayment, in whole or from time to time in part, at the times and on the terms specified in the Note Purchase Agreement, but not otherwise.

If an Event of Default, as defined in the Note Purchase Agreements, occurs and is continuing, the principal of this Note may be declared or otherwise become due and payable in the manner, at the price (including any applicable Make-Whole Amount) and with the effect provided in the Note Purchase Agreements.

This Senior Note shall be construed and enforced in accordance with, and the rights of the parties shall be governed by, the law of the State of Illinois excluding choice of law principles of the law of such State that would require the application of the laws of a jurisdiction other than such State.

SIGMA–ALDRICH CORPORATION

By:

Name: Kirk Richter

Title: Treasurer

By:

Name: Karen Miller

Title: Controller

EXHIBIT 1

(to Note Purchase Agreement)

Exhibit 10(x) (continued)

Schedule 4.9

CHANGES IN CORPORATE STRUCTURE

Subsequent to December 31, 1999, the Company completed the acquisitions of ARK Scientific GmbH Biosystems, First Medical, Inc. and Amelung GmbH. Under the terms of the acquisition agreements, the Company assumed certain liabilities of these entities. The liabilities assumed were primarily accounts payable and other liabilities incurred in the normal course of business by the acquired entities, in each case less than $1,000,000.

In the acquisition of First Medical, Inc. the Company paid at closing an existing loan of First Medical, Inc. of approximately $550,000.

In the acquisition of Amelung GmbH, the Company assumed and, in effect, cancelled a loan of $3,000,000 payable to the Company.

SCHEDULE 4.9

(to Note Purchase Agreement)

Exhibit 10(x) (continued)

Schedule 5.3

DISCLOSURE MATERIALS

Discontinued Operations

As disclosed in its annual report for the year ending December 31, 1999, the Company announced on November 22, 1999, its strategic decision to seek a buyer for its B-Line Systems metal business. On March 27, 2000, the Company reached an agreement to sell B-Line Systems to Cooper Industries, Inc. On May 1, 2000, the Company completed the sale to Cooper Industries, Inc. for $425.2 million. The buyer is reviewing a purchase price adjustment, which is expected to add approximately $6 million to the initial purchase price of $425.2 million. A portion of the funds received from the sale reduced short-term borrowings. Additional funds were used to continue share repurchase, for acquisitions and other general corporate purposes.

SCHEDULE 5.3

(to Note Purchase Agreement)

Exhibit 10(x) (continued)

Schedule 5.4

Subsidiaries

Sigma-Aldrich

Corporation

Subsidiaries List

Name of Entity - Principal Place of Business	Description of Operations	State of Incorporation	Inc.
Sigma-Aldrich Corporation - St. Louis, MO	Research Chemicals	Delaware	1975
1       Sigma-Aldrich Co. (Illinois)	Research Chemicals	Illinois	1996
(A) Sigma Chemical Company - St. Louis, MO	Research Chemicals	Missouri	1996
(i) Sigma Second Street Redevelopment Corporation	Real Estate Holding	Missouri	1983
(i) Barton/Second Streets Redevelopment Corp.	Real Estate Holding	Missouri	1988

SCHEDULE 5.4-1

(to Note Purchase Agreement)

Exhibit 10(x) (continued)

	(i) Barton Real Estate Holdings, Inc.	Real Estate Holding	Missouri	1988
	(i) Sigma Redevelopment Corporation	Real Estate Holding	Missouri	1979
	(i) 3506 South Broadway Redevelopment Corp.	Real Estate Holding	Missouri	1995
	(i) Second President Properties Company	Research Chemicals	Missouri	1988
	(i) Midwest Consultants Co. - St. Louis, MO	Research Chemicals	Missouri	1971
*	(ii) Little Creek Farm, Inc. - Leslie, MO	Dormant/Inactive	Missouri	1980
*	(i) Sigma F & D Division, Inc.	Dormant/Inactive	Missouri	1974
*	(i) Sigma-Aldrich Marketing, Inc. - St. Louis, MO	Dormant/Inactive	Missouri	1990
*	(i) Pathfinder Laboratories Company	Dormant/Inactive	Missouri	1987
*	(i) Planetary Chemical Inc.	Dormant/Inactive	Missouri	1951
*	(i) Sigma Pharmaceutical Co.	Dormant/Inactive	Missouri	1971
	(B) Sigma-Aldrich Chemie Holding GmbH (Germany)	Research Chemicals	Germany	1985

SCHEDULE 5.4-2

(to Note Purchase Agreement)

Exhibit 10(x) (continued)

	(i) Sigma-Aldrich Chemie GmbH (Germany)	Research Chemicals	Germany	1974
	(ii) Sigma-Aldrich Laborchemikalien GmbH (Germany)	Research Chemicals	Germany	1997
	(i) Sigma-Aldrich Producktions GmbH (Germany)	Research Chemicals	Germany	1998
	(i) Amelung (Germany)	Research Chemicals	Germany	2000
	(i) ARK Scientific GmbH (Germany)	Research Chemicals	Germany	2000
	(C) Sigma-Aldrich S.r.l.- Milano, Italy	Research Chemicals	Italy	1987
++	(D) Sigma-Aldrich Chemie Verwaltungs GmbH - Munich, Germany	Research Chemicals	Germany	1983
++	(E) Sigma-Aldrich Grundstucksverwaltung GmbH & Co. K.G. - Munich, Germany	Research Chemicals	Germany	1974
#	(F) Sigma-Aldrich N.V./S.A. - Bornem, Belgium	Research Chemicals	Belgium	1984
	(i) Sigma Chemie B.V. (The Netherlands)	Research Chemicals	Holland	1995

SCHEDULE 5.4-3

(to Note Purchase Agreement)

Exhibit 10(x) (continued)

	(G) Sigma-Aldrich Israel, Ltd. - Rehovot, Israel	Research Chemicals	Israel	1969
	(H) 6Aldrich Chemical Foreign Holding Company - Milwaukee, WI	Holding Company	Missouri	1989
	(i) Sigma-Aldrich Chimie S.N.C. Partnership - Cedex, France	Research Chemicals	France	1989
	(ii) Sigma-Aldrich Chimie S.a.r.l. (France) - Cedex, France	Research Chemicals	France	1987
	(I) 6Sigma Chemical Foreign Holding Company (Missouri)	Holding Company	Missouri	1989
	(J) 1,2 Aldrich Chemical Company, Inc. - - Milwaukee, WI	Research Chemicals	Delaware	1996
*	(i) GLM Holdings, Inc. - Milwaukee, WI	Dormant/Inactive	Wisconsin	1991
*	1(i) Aldrich-Boranes, Inc.	Dormant/Inactive		1972
	(K) Sigma-Aldrich Business Holdings, Inc.	Real Estate Holding	Delaware	1996

SCHEDULE 5.4-4

(to Note Purchase Agreement)

Exhibit 10(x) (continued)

	(i) Sigma-Aldrich Research Biochemicals, Inc. - Natick, MA		Delaware	1997
*	(i) Research Biochemicals Limited Partnership	Dormant/Inactive		1997
	(L) Sigma-Aldrich Lancaster, Inc.	Research Chemicals	Missouri	1996
	(i) Carbolabs, Inc. - Bethany, CT	Research Chemicals	Conneticut	1969
	(i) Techcare Systems, Inc. - Redwood, CA	Research Chemicals	California	1984
	(ii) MedChem, Ltd. (Russia)	Research Chemicals	Russia	1997
	(iii) SAFLab (Russia)	Research Chemicals	Russia	1999
	(ii) TechMed Biochem, Ltd. (Russia)	Research Chemicals	Russia	1994
	(i) Chemical Trade, Ltd. (Russia)	Research Chemicals	Russia	1996
	(M) 3,4,5 Sigma-Genosys, Inc - Woodlands, Texas	Research Chemicals	Texas	1987
	(N) Sigma Diagnostics, Inc. - St. Louis, MO	Research Chemicals	Missouri	1996
	(i) First Medical, Inc. (California)			2000
	(O) Supelco, Inc. - Bellefonte, PA	Chromotography	Delaware	1996

SCHEDULE 5.4-5

(to Note Purchase Agreement)

Exhibit 10(x) (continued)

	*	(P) James F. Burns Co., Inc.	Dormant/Inactive		1972
	*	(Q) KL Acquisition Corp.	Dormant/Inactive		1990
2		Sigma-Aldrich Inc. - St. Louis, MO	Sales & Marketing	Wisconsin	1996
			of Chemical Products
3		Sigma- Aldrich Finance Co. - Hamilton, Bermuda	Holding Company	Missouri	1996
4		Sigma-Aldrich & Subs Foreign Sales Corporation - Barbados	FSC	Barbados	1994
5		Sigma-Aldrich Company, Ltd. - Poole, England	Research Chemicals	United Kingdom	1987
	*	(A) Sigma- Aldrich Holding, Ltd. (U.K.)	Dormant/Inactive	United Kingdom	1985
		(i) Sigma-Genosys Limited (UK)	Research Chemicals	United Kingdom	1997
	*	(i) Sigma Chemical Company, Ltd. (U.K.)	Dormant/Inactive	United Kingdom	1963
	*	(ii)Wessex Biochemicals Ltd. (U.K.)	Dormant/Inactive	United Kingdom	1963
	*	(i) Aldrich Chemical Company, Ltd. (U.K.)	Dormant/Inactive	United Kingdom	1959
	*	(ii) Webnest, Ltd. (U.K.)	Dormant/Inactive	United Kingdom	1973

SCHEDULE 5.4-6

(to Note Purchase Agreement)

Exhibit 10(x) (continued)

	*	(i) Bristol Organics Ltd. (U.K.)	Dormant/Inactive	United Kingdom	1970
	*	(i) B-Line Systems Limited (U.K.)	Dormant/Inactive	United Kingdom	1990
6	**	Fluka Holding AG – Buchs, Switzerland	Holding Compnay	Switzerland	1950
		(A) Fluka Chemie GmbH (Switzerland)	Research Chemicals	Switzerland	1999
		(B) Fluka Production GmbH (Switzerland)	Research Chemicals	Switzerland	1999
		(i) Fluka GmbH (Switzerland)	Holding Company	Switzerland	1999
	*	(C) Fluka Chemical Corp. (Delaware)	Dormant/Inactive	Delaware	1996
	*	(D) Fluka Chemical Company, Ltd. (U.K.)	Dormant/Inactive	United Kingdom	1967
7		Sigma-Aldrich Foreign Holding Company - St. Louis, Missouri	Holding Company	Missouri	1989
		(A) Sigma-Aldrich Handels GmbH - Vienna, Austria	Research Chemicals	Austria	1993
		(B) Sigma-Aldrich de Argentina S.A. - Buenos Aires, Argentina	Research Chemicals	Argentina	1997
	+	(C) Sigma-Aldrich Pty., Limited - N.S.W. 2154, Australia	Research Chemicals	Australia	1991
		(D) Sigma-Aldrich Quimica Brasil Ltda. - Sao Paulo, Brazil	Research Chemicals	Brazil	1992

SCHEDULE 5.4-7

(to Note Purchase Agreement)

Exhibit 10(x) (continued)

(E)	Sigma-Aldrich spol.. s.r.o. - Czech Republic	Research Chemicals	Czech Republic	1992
(F)	Sigma-Aldrich Canada, Ltd. - Ontario, Canada	Research Chemicals	Canada	1980
(G)	Sigma-Aldrich Denmark A/S - Denmark	Research Chemicals	Denmark	1998
(H)	Ya-Kemia Oy - Helsinki, Finland	Research Chemicals	Finland	1994
(I)	Sigma-Aldrich (OM) Ltd. - Athens, Greece	Research Chemicals	Greece	1997
(J)	Sigma-Aldrich Kft. - Budapest, Hungary	Research Chemicals	Hungry	1993
(K)	Sigma-Aldrich India (Bangalore) Branch	Research Chemicals	India	1992
(L)	Sigma-Aldrich Financial Services Limited - Dublin, Ireland	Holding Company	Ireland	1998
(M)	Sigma-Aldrich Ireland Ltd.- Dublin, Ireland	Research Chemicals	Ireland	1997
(N)	Sigma-Aldrich Japan K.K. - Tokyo, Japan	Research Chemicals	Japan	1994
(O)	Sigma-Aldrich Korea, Ltd. - Seoul, Korea	Research Chemicals	Korea	1995
(P)	Sigma-Aldrich Quimica, S.A. de C.V. (Mexico)	Research Chemicals	Mexico	1993
(Q)	Sigma-Aldrich Norway AS - Oslo, Norway	Research Chemicals	Norway	1996
(R)	Sigma-Aldrich Sp. zo.o - Piznan, Poland	Research Chemicals	Poland	1994

SCHEDULE 5.4-8

(to Note Purchase Agreement)

Exhibit 10(x) (continued)

(S)	Sigma-Aldrich Quimica S.A. - Madrid, Spain	Research Chemicals	Spain	1989
	(i) Sigma-Aldrich Quimica S.A. (Portugal) Branch	Research Chemicals	Portugal	1998
(T)	Sigma-Aldrich Sweden AB - Stockholm, Sweden	Research Chemicals	Sweden	1954
(U)	Sigma-Aldrich Pte, Ltd. (Singapore)	Singapore	Singapore	1994
	(i) Sigma-Aldrich (M) Sdn. Bhd.- Kuala Lumpur, Malaysia	Malaysia	Malaysia	1997
	(i) Sigma-Aldrich Pte. Ltd., (Taiwan) Branch	Taiwan	Taiwan
(V)	Sigma-Aldrich Pty. Ltd. - Midrand, South Africa	Research Chemicals	South Africa	1995

SCHEDULE 5.4-9

(to Note Purchase Agreement)

Exhibit 10(x) (continued)

The above symbols represent the following:

* Dormant/Inactive Company

- Branch Office

+ Ownership interest is: 99 shares Sigma-Aldrich Foreign Holding Co.; 1 share Frank Wicks (with agreement requiring the transfer of the share upon termination of employment.)

- Sigma-Aldrich Company Ltd. (UK) includes the following divisions: Scotland, Sigma, Aldrich, Fluka, Sigma Production and Aldrich Production

** Ownership is as follows: Sigma-Aldrich Corporation owns 88.14% and Supelco, Inc. owns 11.86% of Fluka Holding AG

++ Ownership is as follows: Sigma-Aldrich Co. owns 95% of Sigma-Aldrich Grundstucksverwaltung GmbH & Co. K.G. (formerly Aldrich Chemie GmbH & Co. K.G. ) and Sigma-Aldrich Chemie Verwaltungs GmbH (formerly Aldrich Chemie Verwaltungs G,bH) owns 5% of Sigma-Aldrich Grundstrcksverwaltung GmbH & Co. K.G. Sigma-Aldrich Co. owns 100% of Sigma-Aldrich Chemie Verwaltungs GmbH.

- Sigma-Aldrich Foreign Holding Co. owns all but 1 share by Alfredo Jacobo Sadler (naturalized Argentine citizen; with agreeemnt requiring the transfer of the share upon termination of employment.)

# Belgium law requires 2 shareholders. Sigma-Aldrich Co. owns 1249 shares and Sigma-Aldrich Corporation owns 1 share.

Additional Joint Venture and Partnership information.

1 Aldrich Chemical Company, Inc. and Aldrich-Boranes, Inc. own 59.5% and 0.5% respectively, of AAPL Joint Venture

2 Aldrich Chemical Compnay, Inc. owns 39.11% of CAMAG Chemie-Erzeugnisse and Adsorptionstechnik AG

3 Sigma-Genosys, Inc. and Science Tanaka, Ltd. own 50% each of Sigma-Genosys Japan KK Joint Venture

4 Sigma-Genosys, Inc. and Glen Research Corporation own 50.1% and 49.9% respectively of Genosys Biotin Partners partnership.

5 Sigma-Genosys, Inc. own s 37.5% of Chemicus, Inc.

6 Ownership interest in Sigma-Aldrich Chimie SNC partnership (France): Sigma Chemical Foreign Holding Co. 23% and Aldrich Chemical Foreign Holding Co. 77%.

SCHEDULE 5.4-10

(to Note Purchase Agreement)

Exhibit 10(x) (continued)

SCHEDULE 5.5

FINANCIAL STATEMENTS

The following Financial Statements are included in and provided with the 1999 Sigma-Aldrich Corporation Annual Report:

Consolidated Statements of Income for the years ended December 31, 1999, 1998 and 1997

Consolidated Balance Sheets as of December 31, 1999 and 1998

Consolidated Statement of Stockholders’ Equity for the years ended December 31, 1999, 1998 and 1997

Consolidated Statements of Cash Flows for the years ended December 31, 1999, 1998 and 1997

SCHEDULE 5.5

(to Note Purchase Agreement)

Exhibit 10(x) (continued)

SCHEDULE 5.8

Certain Litigation

None.

SCHEDULE 5.8

(to Note Purchase Agreement)

Exhibit 10(x) (continued)

SCHEDULE 5.11

Patents, Etc.

None

SCHEDULE 5.11

(to Note Purchase Agreement)

Exhibit 10(x) (continued)

SCHEDULE 5.14

Use of Proceeds

Proceeds of the sale of the Notes are to be used by the Company:

1) to reduce short term borrowings;

2) to finance future acquisitions;

3) to continue share repurchase program;

4) to pay income tax liabilities related to the gain on the sale of B-Line Systems;

5) for other general corporate purposes.

SCHEDULE 5.14

(to Note Purchase Agreement)

Exhibit 10(x) (continued)

Schedule 5.15

OUTSTANDING INDEBTEDNESS

SIGMA-ALDRICH

CORPORATION

Schedule of Indebtedness

As of July 31, 2000

Payable to	Amount Outstanding (in U. S. Dollars)		Currency	Interest Rate		Date Due	Security
Firstar Bank, N.A. St. Louis, MO	$	75,501,000	USD	6.9875	%	Revolving credit facility	Unsecured
Bank of Tokyo Mitsubishi Tokyo, Japan		4,388,640	JPY	0.90	%	Revolving credit facility	Unsecured
Sanwa Bank Tokyo, Japan		3,977,205	JPY	0.85	%	Revolving credit facility	Unsecured
Commerzbank Heidenheim, Germany		229,652	DM			2002	Warehouse facility Steinheim, Germany
Bank BPPC Lyon, France		248,368	FFR	5.30	%	Bank overdraft facility	Unsecured
ABN - Amro Lyon, France		1,006,913	FFR	4.75	%	Bank overdraft facility	Unsecured
Fluka Chemie AG Pension Fund Buchs, Switzerland		223,954	CHF	4.25	%	Current account	None

SCHEDULE 5.14

(to Note Purchase Agreement)

Exhibit 10(x) (continued)

Schedule 10.7(f)

Existing Liens

Mortgage Holder Commerzbank Heidenheim, Germany

Mortgaged Property Warehouse, Steinheim, Germany

Property Owner Sigma-Aldrich Grundstucksverwaltung GmbH & Co. K.G.

Balance due on Mortgage at July 31, 2000 DM 484,375

Payment Schedule DM 96,875 semi-annually

SCHEDULE 10.7(f)

(to Note Purchase Agreement)

Exhibit 10(x) (continued)

FORM OF OPINION OF SPECIAL COUNSEL

TO THE COMPANY

Matters to be Covered in the

Opinions of the Special Counsel to the Company

1. The Company and each of its Subsidiaries being duly incorporated, validly existing and in good standing and having requisite corporate power and authority to issue and sell the Notes and to execute and deliver the documents.

2. The Company and each of its Subsidiaries being duly qualified and in good standing as a foreign corporation in appropriate jurisdictions.

3. Due authorization and execution of the documents and such documents being legal, valid, binding and enforceable.

4. No conflicts with charter documents, laws or other Material agreements attached to the applicable Opinion as Schedule A.

5. All consents required to issue and sell the Notes and to execute and deliver the documents having been obtained.

6. No litigation questioning validity of documents.

7. The Notes not requiring registration under the Securities Act of 1933, as amended; no need to qualify an indenture under the Trust Indenture Act of 1939, as amended.

8. No violation of Regulations G, T or X of the Federal Reserve Board.

9. Company not an “investment company”, or a company “controlled” by an “investment company”, under the Investment Company Act of 1940, as amended.

Exhibit 4.4(a)

(to Note Purchase Agreement)

EX-13

Exhibit 13

SELECTED FINANCIAL DATA

(Unaudited)

Common Stock Data (per share):

	2007 Price Range				2006 Price Range				Dividends
	High		Low		High		Low		2007		2006
First Quarter	$	42.67	$	37.77	$	33.22	$	31.27	$	0.115	$	0.105
Second Quarter		43.54		41.12		36.50		32.54		0.115		0.105
Third Quarter		49.49		42.67		38.15		33.38		0.115		0.105
Fourth Quarter		55.87		48.20		39.68		34.09		0.115		0.105

The Company’s common stock is traded in the National Association of Securities Dealers Automated Quotation System (“NASDAQ”) Global Select Market. The trading symbol is SIAL.

Options in the Company’s common stock are traded on the Chicago Board Options Exchange. On January 31, 2008, there were 819 record holders of the Company’s common stock.

See Management’s Discussion and Analysis related to items affecting the comparability of results and accounting changes for the financial data presented below.

Annual Financial Data (in millions, except per share data):

	2007		2006		2005		2004		2003
Net sales	$	2,038.7	$	1,797.5	$	1,666.5	$	1,409.2	$	1,298.1
Net income from continuing operations		311.1		276.8		258.3		232.9		190.4
Per share:
Net income from continuing operations — Basic		2.38		2.08		1.90		1.69		1.35
Net income from continuing operations — Diluted		2.34		2.05		1.88		1.67		1.34
Dividends		0.46		0.42		0.38		0.34		0.25
Total assets		2,629.1		2,334.3		2,131.3		1,745.0		1,548.2
Long-term debt		207.0		337.9		283.2		177.1		176.3

Quarterly Financial Data (in millions, except per share data):

	2007 Quarter Ended
	March 31		June 30		Sept. 30		Dec. 31
Net sales	$	495.9	$	507.5	$	503.2	$	532.1
Gross profit		254.4		260.5		255.9		265.2
Net income		74.9		79.7		71.6		84.9
Net income per share — Basic		0.57		0.61		0.55		0.66
Net income per share — Diluted		0.56		0.60		0.54		0.64

	2006 Quarter Ended
	March 31		June 30		Sept. 30		Dec. 31
Net sales	$	443.1	$	448.5	$	441.4	$	464.5
Gross profit		228.8		234.5		222.7		234.2
Net income		66.5		70.3		68.4		71.6
Net income per share — Basic		0.50		0.53		0.52		0.54
Net income per share — Diluted		0.49		0.52		0.51		0.53

All per share and common stock information presented above prior to 2007 has been retroactively adjusted to reflect the December 2006 common stock split.

19

Sigma-Aldrich

2007 FINANCIAL REPORT

Table of Contents

Management’s Discussion and Analysis	21
Consolidated Statements of Income	30
Consolidated Balance Sheets	31
Consolidated Statements of Stockholders’ Equity	32
Consolidated Statements of Cash Flows	33
Notes to Consolidated Financial Statements	34
Management’s Report on Internal Control Over Financial Reporting	50
Report of Independent Registered Public Accounting Firm	50

20

MANAGEMENT’S DISCUSSION AND ANALYSIS

($ In Millions, Except Per Share Data)

The following should be read in conjunction with the consolidated financial statements and related notes.

INTRODUCTION

Sigma-Aldrich Corporation (“the Company”) is a leading Life Science and High Technology company. The Company develops, manufactures, purchases and distributes the broadest range of high quality biochemicals and organic chemicals available throughout the world. These chemical products and kits are used in scientific and genomic research, biotechnology, pharmaceutical development, the diagnosis of disease and as key components in pharmaceutical and other high technology manufacturing. The Company operates in 36 countries, manufacturing 46,000 of the 100,000 chemical products it offers. The Company also offers 30,000 equipment products. The Company sells into nearly 160 countries, servicing over 80,000 accounts representing over one million individual customers.

In 2006, the Company was organized into four business units featuring the Research units of Essentials, Specialties and Biotech and the Fine Chemicals unit, SAFC, to better align the Company with the customers it serves. The units are closely interrelated in their activities and share services such as order entry, billing, tech services, Internet, purchasing and inventory control and share production and distribution facilities. Additionally, these units are supported by centralized functional areas such as finance, human resources, quality, safety and compliance and information technology.

Research Essentials, representing approximately 19% of sales, provides customized, innovative solutions for our economic buyers. Research Specialties, representing approximately 37% of sales, facilitates accelerated research by lab scientists through information and innovation in services and new products. Research Biotechnology, representing approximately 15% of sales, provides innovative first-to-market products and technologies for the Life Science researcher. SAFC, representing approximately 29% of sales, drives commercial project managers’ success through rapid delivery of custom projects.

The Company has a broad customer base of commercial laboratories, pharmaceutical companies, industrial companies, universities, diagnostics companies, biotechnology companies, electronics companies, hospitals, governmental institutions and non-profit organizations located in the United States and internationally, and would not be significantly impacted by the loss of any one customer. However, economic conditions and government research funding in the United States and internationally do impact demand from our customers. In 2007, we estimate that market growth in the research markets served by the Company was about 3–4% and market growth in the fine chemicals market about 2–3%.

The Company expects organic sales growth for 2008 of approximately 7%, benefiting from close alignment with our customers, enhanced Internet capabilities, expansion in fast growing world economies and ongoing commitments to process improvements. Ongoing efforts to identify and pursue additional desirable acquisition candidates may further enhance the Company’s organic sales growth.

COMPARABILITY

The net income summaries below present the results of our operations before certain other items affecting our business. These summaries show the impact certain other items had on our net income and basic and diluted net income per share. The Company uses this non-GAAP presentation of adjusted income amounts and comparisons to supplement its GAAP disclosures because it excludes these certain other items in judging its performance and believes this information is useful to investors as well. The Company does not, and does not suggest investors should, consider such non-GAAP financial measures in isolation from, or as a substitute for, GAAP financial information.

	Net Income
Years Ended December 31	2007		2006			2005
Net income before certain other items	$	311.1	$	278.9		$	252.2
Tax claim settlement benefit		—		—			11.3
Inventory purchase accounting charge		—		(2.1	)		(10.7	)
Tax charge for repatriation of accumulated foreign earnings under the American Jobs Creation Act of 2004		—		—			(4.1	)
Pro-forma stock-based compensation expense		—		—			9.6
Total		—		(2.1	)		6.1
Reported net income	$	311.1	$	276.8		$	258.3

21

MANAGEMENT’S DISCUSSION AND ANALYSIS (continued)

($ In Millions, Except Per Share Data)

The following should be read in conjunction with the consolidated financial statements and related notes.

COMPARABILITY (continued)

	Net Income Per Share — Basic
	2007		2006			2005
Net income before certain other items		$2.38		$2.10			$1.86
Tax claim settlement benefit		—		—			0.08
Inventory purchase accounting charge		—		(0.02	)		(0.08	)
Tax charge for repatriation of accumulated foreign earnings under the American Jobs Creation Act of 2004		—		—			(0.03	)
Pro-forma stock-based compensation expense		—		—			0.07
Total		—		(0.02	)		0.04
Reported net income	$	2.38	$	2.08		$	1.90
	Net Income Per Share — Diluted
	2007		2006			2005
Net income before certain other items		$2.34		$2.07			$1.84
Tax claim settlement benefit		—		—			0.08
Inventory purchase accounting charge		—		(0.02	)		(0.08	)
Tax charge for repatriation of accumulated foreign earnings under the American Jobs Creation Act of 2004		—		—			(0.03	)
Pro-forma stock-based compensation expense		—		—			0.07
Total		—		(0.02	)		0.04
Reported net income		$2.34		$2.05			$1.88

The per share information presented above has been adjusted to reflect the Company’s December 2006 common stock split.

NON-GAAP FINANCIAL MEASURES

The Company uses certain non-GAAP financial measures to supplement its GAAP disclosures. The Company does not, and does not suggest investors should, consider such non-GAAP financial measures in isolation from, or as a substitute for, GAAP financial information. These non-GAAP measures may not be consistent with the presentation by similar companies in the Company’s industry. Whenever the Company uses such non-GAAP measures, it provides a reconciliation of such measures to the most closely applicable GAAP measure.

With over 60% of sales denominated in currencies other than the U.S. dollar, management uses currency adjusted growth, and believes it is useful to investors, to judge the Company’s controllable, local currency performance. Organic sales growth data presented herein excludes currency, and where indicated, acquisition impacts. While we are able to report currency impacts after the fact, we are unable to estimate changes that may occur later in 2008 to applicable exchange rates and are thus unable to reconcile the projected non-GAAP, currency adjusted internal growth rates to reported GAAP growth rates for the year 2008 as required by Regulation G adopted by the Securities and Exchange Commission. Any significant changes in currency exchange rates would likely have a significant impact on our reported growth rates due to the volume of our sales denominated in foreign currencies.

The Company also reports both GAAP and adjusted sales and income amounts and comparisons to reflect what it believes is ongoing and/or comparable operating results excluding currency impacts and certain other items. The Company excludes these other items in judging its historical performance and in assessing its expected future performance and believes this non-GAAP information is useful to investors as well.

22

MANAGEMENT’S DISCUSSION AND ANALYSIS (continued)

($ In Millions, Except Per Share Data)

The following should be read in conjunction with the consolidated financial statements and related notes.

HIGHLIGHTS

Reported sales increased 13.4% to $2,038.7 in 2007 from $1,797.5 in 2006. Organic sales growth, excluding currency impacts and the contribution from the acquisition of Epichem, Ltd. (Epichem), was 6.5% in 2007. The impact of changes in currency rates increased otherwise reportable sales growth by 4.8%. The acquisition of Epichem in February 2007 added 2.1% to sales growth.

Reported net income in 2007 increased 12.4% to $311.1 from $276.8 in 2006. The increase in net income in 2007 resulted from organic sales growth in each of the Company’s four business units, lower selling, general and administrative expense levels and lower net interest costs. A higher effective tax rate partially offset net income improvement.

Reported sales increased 7.9% to $1,797.5 in 2006 from $1,666.5 in 2005. Organic growth, including integrated acquisitions, provided 6.4 percentage points of growth. The February 2005 acquisition of the JRH Biosciences division (JRH) of CSL Limited’s industrial cell culture business added 1.1 percentage points of sales growth. Changes in currency rates contributed 0.4 percentage points of benefit to the sales increase.

Reported net income in 2006 increased 7.2% to $276.8 from $258.3 in 2005. Net income in 2006 included an $11.0 charge for stock-based compensation expense and an inventory purchase accounting charge of $2.1. On a comparable basis, net income before certain other items increased 10.6% to $278.9 from $252.2, adjusting 2005 for the impact of Statement of Financial Accounting Standards No. 123 (Revised 2004), “Share-Based Payment” (SFAS 123(R)), as if it had been implemented during that period and other recorded items. The increase in net income before certain other items primarily resulted from organic sales growth in each of the Company’s four business units, successful process improvement activities and enhanced operating margin results, partially offset by higher interest costs due to the full year impact of increased borrowings to fund acquisitions and share repurchases and higher short-term interest rates. A higher effective tax rate also offset net income improvement.

Diluted earnings per share in 2007 increased 14.1% to $2.34 from $2.05 in 2006. The increase in diluted earnings per share resulted from items previously identified in the discussion of net income, with additional benefits from share repurchase activity.

Diluted earnings per share in 2006 increased 9.0% to $2.05 from $1.88 in 2005. Diluted earnings per share was impacted by a $0.02 charge for inventory purchase accounting. Diluted earnings per share before certain other items increased 12.5% to $2.07 from $1.84, adjusting 2005 for the impact of SFAS 123(R), as if it had been implemented during that period, and other recorded items. The significant components of the increase were previously identified in the discussion of net income.

ITEMS AFFECTING COMPARABILITY OF RESULTS

• During 2007, the Company acquired two businesses with an aggregate annual sales benefit of approximately $52.0.

• In November 2006, the Board of Directors authorized a two-for-one stock split effected in the form of a 100 percent stock dividend to shareholders of record on December 15, 2006. Shareholders of record received an additional share on January 2, 2007 for each share they owned. The par value of the Company’s common stock remains $1.00 per share. The stock split is reflected in the Consolidated Statements of Stockholders’ Equity as a reclassification from Retained Earnings to Common Stock. Except as otherwise noted, all share and per share information presented prior to 2007 herein has been retroactively adjusted to reflect the common stock split.

• The Company adopted the provisions of SFAS 123(R), as required, on January 1, 2006. As a result, selling, general and administrative expenses include stock-based compensation of $19.0 and $13.3 in 2007 and 2006, respectively. Stock-based compensation expense is not reflected in the consolidated financial statements for years prior to 2006.

• During 2006, the Company acquired four businesses with an aggregate annual sales benefit of approximately $25.0.

• On April 1, 2005, the Company purchased the Proligo Group (Proligo).

• On February 28, 2005, the Company purchased JRH Biosciences division from CSL Limited.

• At December 31, 2007, 2006, and 2005, the Company had repurchased 84.0 million, 80.0 million and 76.0 million of its outstanding shares, respectively.

23

MANAGEMENT’S DISCUSSION AND ANALYSIS (continued)

($ In Millions, Except Per Share Data)

The following should be read in conjunction with the consolidated financial statements and related notes.

CRITICAL ACCOUNTING ESTIMATES

The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States requires management to use judgment in making estimates and assumptions that affect the reported amounts of assets and liabilities, disclosures of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the years presented. Actual results could differ from those estimates under different assumptions or conditions.

The following accounting policies are based on, among other things, judgments and assumptions made by management that include inherent risks and uncertainties. Management’s estimates are based on the relevant information available at the end of each period.

Inventories

Inventories are valued at the lower of cost or market. The Company regularly reviews inventories on hand and records a provision for slow-moving and obsolete inventory, inventory not meeting quality standards and inventory subject to expiration. The provision for slow-moving and obsolete inventory is based on current estimates of future product demand, market conditions and related management initiatives. Any significant unanticipated changes in future product demand or market conditions that vary from current expectations could have an impact on the value of inventories.

Long-Lived Assets

Long-lived assets, including intangibles with definite lives, are amortized over their expected useful lives. Goodwill and other intangibles with indefinite lives are not amortized against earnings. Goodwill is assessed annually for impairment. Other intangibles are assessed whenever events and changes in business conditions indicate that the carrying amount of an asset may not be fully recoverable. If impairment is indicated, the asset value is written down to its fair market value.

Pension and Other Post-Retirement Benefits

The determination of the obligation and expense for pension and other post-retirement benefits is dependent on the Company’s selection of certain assumptions used by actuaries to calculate such amounts. Those assumptions are described in Note 14 to the consolidated financial statements and include, among others, the discount rates, expected return on plan assets and rates of increase in compensation and health care costs.

In accordance with U.S. generally accepted accounting principles, actual results that differ from the assumptions are accumulated and amortized over future periods and therefore, generally affect the recognized expense and recorded obligation in such future periods. While the Company believes that the assumptions are appropriate, significant differences in actual experience or significant changes in the assumptions may materially affect the Company’s pension and other post-retirement benefit obligations and the Company’s future expense. A 1% increase in the discount rate assumption would have reduced the net periodic benefit cost by $0.7 for the U.S. plans and $4.1 for the International plans. A 1% reduction in the discount rate assumption would have increased the net periodic benefit cost by $0.7 for the U.S. plans and $5.5 for the International plans. A 1% change in the expected return on plan assets would have an impact on the Company’s pension expense of $2.4 for the Company’s plans.

Stock Options

The Company accounts for stock-based compensation in accordance with Statement of Financial Accounting Standards No. 123 (Revised 2004), “Share-Based Payment” (SFAS 123(R)). Under the provisions of SFAS 123(R), stock-based compensation cost, for stock options, is estimated at the grant date based on the award’s fair value as calculated by the Black-Scholes option-pricing model and is recognized as expense ratably over the requisite service period. The Black-Scholes model requires the input of various estimates including volatility, forfeiture rates and expected option life. Those inputs to the Black-Scholes model are described in Note 12 to the consolidated financial statements. If any of the assumptions used in the Black-Scholes model vary significantly from current expectations, stock-based compensation expense may also change significantly. Therefore, current year stock-based compensation expense is not necessarily indicative of future results.

Taxes

The Company operates within multiple taxing jurisdictions and is subject to audit in these jurisdictions. These audits can involve complex issues, which may require an extended period of time to resolve. The Company regularly reviews its potential tax liabilities for tax years subject to audit. Changes in the Company’s tax provision and liability occurred in 2007, 2006 and 2005 and may occur in the future as its assessments change based on the progress of tax examinations in various jurisdictions and/or changes in worldwide tax regulations. In management’s opinion, adequate provisions for income taxes have been made for all years presented.

Deferred tax assets and liabilities are recognized for the future tax benefits or liabilities attributable to differences between the consolidated financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates would be recognized in income in the period that includes the enactment date. The Company regularly reviews its deferred tax assets for recoverability and establishes a valuation allowance when it believes that such assets may not be recovered, taking into consideration historical operating results, expectations of future earnings, changes in its operations and the expected timing of the reversals of existing temporary differences.

24

MANAGEMENT’S DISCUSSION AND ANALYSIS (continued)

($ In Millions, Except Per Share Data)

The following should be read in conjunction with the consolidated financial statements and related notes.

OPERATING RESULTS

Sales

(millions of dollars)

In 2006, the Company was organized into four business units featuring the Research units of Essentials, Specialties and Biotech and the Fine Chemicals unit, SAFC, to better align the Company with the customers it serves. Prior to 2006, the Company consisted of three business units: Scientific Research, Biotechnology (collectively “Research Chemicals”) and SAFC. In both cases, the business unit structure is the Company's approach to serving customers and reporting sales rather than an internal division used to allocate resources. Accordingly, as it would provide minimal value, the Company did not restate sales prior to 2005 into the new four business unit structure. As a result, sales growth rates in 2005 are presented for total Research Chemicals only and SAFC.

Sales increased 13.4%, 7.9%, and 18.3% in 2007, 2006 and 2005, respectively. Sales increases were primarily attributable to improved unit volume growth, price increases, acquisitions and currency benefits. The Company’s pricing strategy has remained constant and price increases in 2007 provided similar contributions to those realized in prior periods. New product sales, while not material in the year introduced, do contribute to sales growth in subsequent years. The effect of translating foreign currency sales into U.S. dollars increased the 2007, 2006 and 2005 sales growth by 4.8%, 0.4% and 0.7%, respectively. With over 60% of sales denominated in currencies other than the U.S. dollar, the Company uses currency adjusted growth, and believes it is useful to investors, to judge the Company's controllable, local currency performance. The Company does not, and does not suggest investors should, consider such non-GAAP financial measures in isolation from, or as a substitute for, GAAP financial information.

Reported sales growth, currency benefits, sales increases from the acquisitions of JRH's industrial cell culture business and Epichem and the adjusted sales changes are as follows:

	Year Ended December 31, 2007
	Reported		Currency Benefit		Acquisition		Adjusted
Research Essentials	9.2	%	4.6	%	—	%	4.6	%
Research Specialties	13.6	%	5.3	%	—	%	8.3	%
Research Biotech	8.1	%	4.4	%	—	%	3.7	%
Research Chemicals	11.2	%	4.9	%	—	%	6.3	%
SAFC	19.1	%	4.4	%	7.6	%	7.1	%
Total	13.4	%	4.8	%	2.1	%	6.5	%
	Year Ended December 31, 2006
	Reported		Currency Benefit		Acquisition		Adjusted
Research Essentials	4.2	%	0.4	%	—	%	3.8	%
Research Specialties	6.9	%	0.4	%	—	%	6.5	%
Research Biotech	5.6	%	—	%	—	%	5.6	%
Research Chemicals	5.9	%	0.3	%	—	%	5.6	%
SAFC	13.4	%	0.7	%	4.3	%	8.4	%
Total	7.9	%	0.4	%	1.1	%	6.4	%
	Year Ended December 31, 2005
	Reported		Currency Benefit		Acquisition		Adjusted
Research Chemicals	7.3	%	0.8	%	—	%	6.5	%
SAFC	66.2	%	0.6	%	50.4	%	15.2	%
Total	18.3	%	0.7	%	9.4	%	8.2	%

Currency and acquisition adjusted sales growth in Research Essentials, Research Specialties, Research Biotech and SAFC for 2007 was 4.6%, 8.3%, 3.7% and 7.1%, respectively. Research Essentials’ sales growth was due to strong demand in all customer segments and all geographies, with particularly strong growth in the industrial and pharmaceutical customer segments and the cell culture and lab essentials product initiatives. Research Specialties delivered sales growth that beat long-term expectations fueled by increased sales to pharmaceutical and academic accounts in Europe, the U.S. and CAPLA (Canada, Asia Pacific and Latin America). Better product availability from intentional inventory increases and new supplier relationships in CAPLA markets continued to fuel double-digit organic growth in CAPLA. Customer-centric marketing programs aimed at serving pharmaceutical customers and their contract research organizations wherever located around the globe continued to gain traction. Research Biotech growth was driven by strong spending by academic customers in Europe and by growth in molecular biology and peptide products in both the U.S. and Europe in the latter part of the year. 2007 growth was impacted by softness in demand for synthetic DNA products. The addition of sales specialists and ongoing expansion of product offerings through internal development and technology licenses contributed to resurgent growth during the last half of 2007. Hitech products, including sales from Epichem, helped SAFC drive double-digit growth with commercial and industrial customers in European and CAPLA markets. Strong sales to pharmaceutical customers in the U.S. also contributed to this unit’s growth. Demand for industrial cell culture products declined during the second half of 2007.

Currency and acquisition adjusted sales growth in Research Essentials, Research Specialties, Research Biotech and SAFC for 2006 was 3.8%, 6.5%, 5.6% and 8.4%, respectively. Research Essentials achieved sales gains in all major geographical areas due to price increases and higher unit sales volume to academic and commercial customer segments. Research Specialties achieved sales gains from increased pricing and higher unit volumes due to increased sales to commercial and pharmaceutical customer groups and continued emphasis on offering the broadest range of core products for analytical applications, chemical synthesis and fundamental Life Science research. Research Biotech sales growth was impacted by a modest reduction in market growth in 2006, together with slower than anticipated acceptance of new and innovative products for our Research Biotech customers. Currency and acquisition adjusted sales growth in SAFC for 2006 was 8.4% compared to 15.2% for 2005. The 2006 sales growth rate reflected increased demand from pharmaceutical customers and other manufacturers.

Our goal to accelerate growth in our non-European international markets was achieved, increasing sales in these markets to approximately 20% of total sales during 2007. Our focus countries of China, India and Brazil all achieved reported sales growth in a range from approximately 35% to 50% in 2007. Our initiative to build on our Internet superiority continued to drive sales growth. Web based sales increased to 40% of total Research based sales in 2007. Other initiatives also showed progress in 2007 with continued benefits from process improvement and growth added through acquisitions.

25

MANAGEMENT’S DISCUSSION AND ANALYSIS (continued)

($ In Millions, Except Per Share Data)

The following should be read in conjunction with the consolidated financial statements and related notes.

OPERATING RESULTS (continued)

Gross profit

Gross Profit

(percent of sales)

Gross profit was 50.8%, 51.2% and 50.9% of sales in 2007, 2006 and 2005, respectively. The following table reflects the significant contributing factors to the net change in gross profit margin for the years ended December 31, 2007, 2006 and 2005, respectively, as a percentage of sales compared to the same period in the prior year:

	Year Ended December 31,
Contributing Factors	2007		2006		2005
Inventory purchase accounting charges	0.2	%	0.9	%	(1.0	)%
Unfavorable product mix	—		(0.7	)	(1.9	)
Favorable pricing	0.6		0.7		0.4
Higher unit sales volume	0.6		0.8		3.4
Higher manufacturing and distribution costs	(1.8	)	(1.8	)	(1.2	)
Lower margin acquired business1	(0.7	)	—		(2.7	)
Favorable/(unfavorable) currency impact	1.1		(0.3	)	0.7
Other impacts	(0.4	)	0.7		(0.1	)
Net (decline)/improvement in gross margin as a percentage of sales	(0.4	)%	0.3	%	(2.4	)%

(1) Relates to significant acquired business, in the year acquired. 2007 impact relates to Epichem. 2005 activity relates to JRH.

The decrease in gross profit as a percent of sales of 0.4% in 2007 is primarily due to higher manufacturing and distribution costs partially offset by favorable pricing, and increased unit sales volume and favorable currency benefits. There was also downward pressure on gross margin from lower margin acquired business in 2007.

The increase in gross profit as a percent of sales of 0.3% in 2006 is primarily due to the absence of the inventory purchase accounting charge, favorable pricing and unit volume increases. These improvements were partially offset by higher manufacturing and distribution costs and the impact of lower gross margin products for our SAFC business as reflected in product mix.

The decrease in gross profit as a percent of sales of 2.4% in 2005 is primarily due to the impact of the inventory purchase accounting charge and lower average gross margins associated with SAFC’s acquisition of JRH. Increased manufacturing and distribution costs further reduced 2005 gross profit. This decrease in gross profit as a percent of sales was partially offset by an increase in unit sales volume, an increase in average sales prices and currency benefits.

Selling, General and Administrative Expenses

Selling, General and

Administrative Expenses

(percent of sales)

Selling, general and administrative expenses were 25.4%, 25.8% and 26.2% of sales in 2007, 2006 and 2005, respectively. Insurance expense decreased by 0.6% of sales in 2007 as compared to 2006 as a result of decreased claims activity and other recoveries. No other expense category was individually significant as a percent of sales. Salaries and benefits increased 0.5% of sales for 2006 compared to 2005 due largely to the impact of stock-based compensation expense. Insurance expenses also increased 0.3% of sales for 2006 compared to 2005 due to higher claim costs. These increases were more than offset by declines in professional fees, advertising and non-product related compliance costs and from process improvement benefits that collectively reduced selling, general and administrative expenses by 1.2% of sales.

Research and Development Expenses

Research and development expenses were 2.9%, 2.9% and 3.0% of sales in 2007, 2006 and 2005, respectively. The research and development expenses relate primarily to efforts to add new manufactured products. All manufactured products currently account for approximately 60% of total sales.

Interest Expense, Net

Net interest expense reduced pretax earnings by $22.0, $24.0 and $18.1 in 2007, 2006 and 2005, respectively. Lower interest rates during 2007 and shifting debt from higher rate to lower rate world areas reduced net interest expense, even with consistently higher debt levels during 2007 as compared to 2006. The increase in net interest expense in 2006 from 2005 reflects the impact of increased interest costs from borrowings for both acquisitions and share repurchases in 2006 and 2005 and higher short-term interest rates in 2006.

Income Taxes

Income taxes, which include federal, state and international taxes were 28.9%, 26.9% and 24.8% of pretax income in 2007, 2006 and 2005, respectively. The higher effective tax rate for the full year of 2007 compared to the same period in 2006 reflects the absence of a net benefit from audit activity in 2007 and expiring U.S. export tax benefits in 2006, partially offset by an increase in the U.S. manufacturing deduction and reduced international taxes in 2007. The higher effective tax rate for 2006 of 26.9% compared to the same period in 2005 largely reflects a lower level of international tax benefits, partially offset by the absence of the tax charge to repatriate accumulated foreign earnings in 2005.

Our effective tax rate for 2008 is expected to increase to a range of 30% to 32% due to a higher net international tax level due to a large 2007 benefit from changes in our international organization and the expiration of the U.S. R&D tax credit. Reinstatement of the U.S. R&D credit currently being considered by the U.S. Congress would likely drive the tax rate for 2008 to the lower end of the 30-32% range.

Accounting Changes

In September 2006, the Financial Accounting Standards Board (FASB) issued Statement of Financial Accounting Standards No. 157, “Fair Value Measurements” (SFAS 157). SFAS 157 establishes a common definition of fair value for financial instruments, sets a framework for measuring fair value and expands disclosure about such fair value measurements. This Statement applies only to fair value measurements that are already required or permitted by other accounting standards and is effective for fiscal years beginning after November 15, 2007. The Company currently discloses fair value information, in Notes 7 and 8 to its consolidated financial statements. The adoption of SFAS 157 in January 2008 is not expected to have a significant impact on the Company’s consolidated financial statements.

In September 2006, the FASB issued Statement of Financial Accounting Standards No. 158, “Employers’ Accounting for Defined Benefit Pension and Other Postretirement Plans” (SFAS 158). SFAS 158 requires companies to recognize, on a prospective basis, the funded status of their defined benefit pension and other post-retirement benefit plans in the Consolidated Balance Sheets and recognize as a component of other comprehensive income, net of tax, the gains or losses and prior service costs or credits that arise during the period but are not recognized as components of net periodic benefit costs. SFAS 158 also requires additional disclosures in the notes to the consolidated financial statements and requires the use of a company’s fiscal year-end as the measurement date for plan assets and benefit obligations, eliminating the use of earlier measurement dates that are currently permissible. The Company adopted all provisions of SFAS 158 as of December 31, 2006, except the measurement date requirement. The net impact of applying SFAS 158 on the Company’s 2006 consolidated financial statements was a $31.7 reduction of stockholders’ equity. The new measurement date requirement is not effective until fiscal years ending after December 15, 2008. The Company is in the process of assessing the impact of the SFAS 158 measurement date requirement on its consolidated financial statements.

In February 2007, the FASB issued Statement of Financial Accounting Standards No. 159, “The Fair Value Option for Financial Assets and Financial Liabilities – Including an Amendment of FASB Statement No. 115” (SFAS 159). SFAS 159 provides

26

MANAGEMENT’S DISCUSSION AND ANALYSIS (continued)

($ In Millions, Except Per Share Data)

The following should be read in conjunction with the consolidated financial statements and related notes.

OPERATING RESULTS (continued)

companies with an option to measure certain financial instruments and certain other items at fair value that are not currently required to be measured at fair value. SFAS 159 is effective for fiscal years beginning after November 15, 2007. The adoption of SFAS 159 in January 2008 is not expected to have a significant impact on the Company’s consolidated financial statements.

In June 2007, the Emerging Issues Task Force (EITF) reached a consensus on EITF Issue No. 07-3, “Accounting for Advance Payments for Goods or Services to Be Used in Future Research and Development Activities” (EITF 07-3). Under EITF 07-3, non-refundable advance payments to acquire goods or pay for services that will be consumed or performed in future periods in conducting research and development activities on behalf of an entity should be capitalized as an asset when the payments are made, and recognized as an expense as the research and development activities are performed. The consensus is effective for fiscal years beginning after December 15, 2007, and should be applied to contractual arrangements entered beginning January 1, 2008. The adoption of EITF 07-3 in January 2008 is not expected to have a significant impact on the Company’s consolidated financial statements.

In December 2007, the FASB issued Statement of Financial Accounting Standards No. 141 (revised 2007), “Business Combinations” (SFAS 141(R)).

SFAS 141(R) establishes principles and requirements for how an acquiring entity recognizes and measures in its financial statements the assets acquired and liabilities assumed. SFAS 141(R) also establishes disclosure requirements to enable the evaluation of the nature and financial effects of the business combination. SFAS 141(R) is effective for fiscal years beginning after December 15, 2008, and will be applied prospectively to acquisitions beginning January 1, 2009. The Company is in the process of assessing the impact of SFAS 141(R) on its consolidated financial statements.

In December 2007, the EITF reached a consensus on EITF Issue No. 07-1, “Accounting for Collaborative Arrangements” (EITF 07-1). EITF 07-1 addresses the accounting for activities of collaborative arrangements outside of an established separate legal entity, such as those to jointly develop and commercialize intellectual property. Under EITF 07-1, revenues and costs incurred with third parties in connection with the collaborative arrangement should be presented gross or net based on the criteria in EITF Issue No. 99-19, “Reporting Revenue Gross as Principal versus Net as an Agent” and other applicable accounting literature. The consensus is effective for fiscal years beginning after December 15, 2008, and will be applied to using a retrospective method that requires reclassification in all periods presented for those arrangements still in effect at January 1, 2009. The Company is in the process of assessing the impact of EITF 07-1 on its consolidated financial statements.

LIQUIDITY AND CAPITAL RESOURCES

The Company’s cash flows from operating, investing and financing activities, as reflected in the Consolidated Statements of Cash Flows, are summarized in the following table:

	Years Ended December 31,
	2007			2006			2005
Net cash provided by (used in):
Operating activities	$	419.1		$	330.4		$	280.5
Investing activities		(151.1	)		(104.4	)		(513.2	)
Financing activities		(212.0	)		(156.2	)		171.1

Operating Activities

Net cash provided by operations increased $88.7 or 26.8% in 2007 compared to 2006. The increase relates primarily to higher net income from operations, including the $19.0 non-cash impact of stock-based compensation expense. The most significant offset to operating cash inflows was the impact of higher inventory balances at December 31, 2007 as compared to 2006 when high accounts receivable balances were the significant impact. Higher inventory balances are due to international inventory increases to improve service to customers in CAPLA markets. Income taxes paid in 2007 were impacted by the timing of international payments resulting in an increase in accrued income taxes at December 31, 2007.

Net cash provided by operating activities increased $49.9 in 2006 compared to 2005. This increase results primarily from increased net income from operations, including the $13.3 non-cash impact of stock-based compensation expense and net increases in accounts payable and accrued expenses. The most significant offset to the operating cash inflows was higher accounts receivable balances at December 31, 2006. The increased accounts receivable balance was due largely to the strong growth in non-European international sales where average days sales outstanding for all countries in this group typically range from 60 to 65 days. Operating inflows were also partially offset by increases in inventory levels, due to an increase in stocks added at major U.S. distribution locations to improve on-time deliveries and a modest amount of acquired inventory from 2006 acquisitions.

Investing Activities

2007 investing activities were focused on capital expenditures for upgrading our web site to improve the customer experience, continuing to expand our business systems utilizing SAP software, and providing incremental production capacity for material science and pharmaceutical customers. These activities are included in the $79.7 of capital expenditures in 2007. Acquisitions used another $67.6 of cash in 2007.

In 2006, investing activities were focused on capital expenditures of $74.5 and the funding of four small acquisitions for $20.0. Capital expenditures included the construction of a new production facility in India and the expansion of production facilities in Wisconsin and Missouri. Additional capital was invested to expand distribution in Wisconsin and for upgrading our Internet ordering systems.

During 2008, capital spending is expected to be approximately $115.

Financing Activities

In 2007, financing cash outflows included the repayment of long-term debt of $69.7 and payment of dividends of $60.0. The most significant outflow was for the purchase of treasury stock at $184.3. Cash inflows were received from the exercise of stock options and the issuance of short-term debt.

In 2006, the Company’s financing activities used cash of $156.2. Cash used in the payment of dividends was $55.7. Cash paid for treasury stock purchases was $138.2. Cash was provided by the issuance of short-term debt, net of repayments, of $45.3. Long-term debt of $100.0 was issued in 2006 offset by repayments of long-term debt of $142.8. Cash received from the exercise of stock options were $30.9.

In March 2007, the Company entered into a $200.0 seven-year multi-currency European revolving credit facility with a syndicate of banks having a maturity date of March 13, 2014. Borrowings of $56.5 were outstanding at December 31, 2007.

In December 2006, the Company entered into a $300.0 five-year credit facility with a syndicate of banks having a maturity date of December 11, 2011. In October 2007, the Company exercised the option in the facility to extend the facility for one year to December 11, 2012. The facility provides back-up liquidity to the commercial paper program. The Company had commercial paper outstanding of $171.2 and $146.0 at December 31, 2007 and 2006, respectively.

In December 2006, the Company issued $100.0 of 5.11% Senior Notes due December 5, 2011 to a private investor. In November 2006, the Company paid the $75.0 of 5.16% Senior Notes at maturity.

27

MANAGEMENT’S DISCUSSION AND ANALYSIS (continued)

($ In Millions, Except Per Share Data)

The following should be read in conjunction with the consolidated financial statements and related notes.

LIQUIDITY AND CAPITAL RESOURCES (continued)

Long-term debt at December 31, 2007 was $207.0 compared to $337.9 in 2006. Total debt as a percentage of total capitalization was 25.0% and 27.2% at December 31, 2007 and 2006, respectively.

For a description of the Company's material debt covenants, see Notes 6 and 7 to the consolidated financial statements.

Share Repurchases

At December 31, 2007 and December 31, 2006, the Company had repurchased a total of 84.0 million shares and 80.0 million shares, respectively. During 2006, the Company was authorized to increase its share repurchase from 80.0 million to 90.0 million shares to be completed within three years of the authorization. There were 129.4 million shares outstanding as of December 31, 2007. The Company expects to acquire the remaining 6.0 million authorized shares, however, the timing of the repurchases and number of shares repurchased, if any, will depend upon market conditions and other factors.

Liquidity and Risk Management

Liquidity risk refers to the risk that the Company might be unable to meet potential cash outflows promptly and cost effectively. Factors that could cause such risk to arise might be disruption to the securities market, downgrades in the Company’s credit rating or the unavailability of funds. In addition to the Company’s cash flows from operations, the Company utilizes commercial paper, its credit facilities and long-term debt as funding sources. The Company maintains committed bank lines of credit to support its commercial paper borrowings, term loans and local bank lines of credit to support international operations. Downgrades in the Company’s credit rating or other limitations on the ability to access short-term financing, including the ability to refinance short-term debt as it becomes due, would increase interest costs and adversely affect profitability.

Management believes that the Company’s financial condition is such that internal and external resources are sufficient and available to satisfy the Company’s requirements for debt service, capital expenditures, acquisitions, dividends, share repurchases and working capital presently and for the next 12 months.

OTHER MATTERS

The Company is involved in legal proceedings generally incidental to its business, as described below:

Insurance and Other Contingent Liabilities and Commitments

The Company is a defendant in several lawsuits and claims related to the normal conduct of its business, including lawsuits and claims related to product liability and personal injury matters. The Company accrues for such liabilities when it is probable that future costs (including legal fees and expenses) will be incurred and such costs can be reasonably estimated. The Company has self-insured retention limits and has obtained insurance to provide coverage above the self-insured limits for product liability and personal injury claims, subject to certain limitations and exclusions. Reserves have been provided to cover expected payments for these self-insured amounts at December 31, 2007 and 2006.

In one group of lawsuits and claims, the Company, as well as others engaged in manufacturing and distributing similar products, is a defendant in multiple claims alleging injuries from exposure to various chemicals by a limited number of employees of one electronics manufacturer. These claims have been filed in three states. A global settlement has been reached for all cases, which will be submitted to the court for approval. The settlement is not significant to the Company’s consolidated financial statements.

In another group of lawsuits and claims, the Company provided a product for use in research activities in developing various vaccines at pharmaceutical companies. The Company, together with other manufacturers and distributors offering the same product and several pharmaceutical companies, has been named as a defendant and served in 294 lawsuits, of which 56 lawsuits have been dismissed to date. Several of the outstanding suits have been stayed by various state and federal courts pending a decision on coverage available under a federal government relief program. No definite date has been set for this decision.

In all cases, the Company believes its products in question were restricted to research use and that proper information for safe use of the products was provided to the customer.

A class action complaint was filed against a subsidiary of the Company in the Montgomery County, Ohio Court of Common Pleas related to a 2003 explosion in a column at the Company’s Isotec facility in Miamisburg, Ohio. The case was separated into the following four phases: phase one – existence of liability, phase two – quantification of any compensatory damages, phase three – existence of any punitive damages and phase four – quantification of any punitive damages. Class certification was granted to phases one, three and four, but denied to phase two. Compensatory damages for all plaintiffs must be established before the case can proceed to the punitive damages phases. The Company has accepted responsibility for phase one, existence of liability. The case is currently in the compensatory damages phase, where, because no class status exists, each plaintiff must individually establish actual damages. The initial phase two, compensatory damages trial, for 31 plaintiffs was completed on April 27, 2007 with a jury verdict establishing actual damages of approximately two hundred dollars per plaintiff. The plaintiffs filed an appeal staying further action on the case until the appeal has been resolved. The original appeal has been dismissed, but the plaintiffs are in the process of refiling their appeal. The Company continues to believe it has substantial legal defenses to the allegations, which it will vigorously assert.

The Company believes its reserves and insurance are sufficient to provide for claims outstanding at December 31, 2007. While the outcome of the current claims cannot be predicted with certainty, the possible outcome of the claims is reviewed at least quarterly and reserves adjusted as deemed appropriate based on these reviews. Based on current information available, the Company believes that the ultimate resolution of these matters will not have a material adverse effect on its consolidated financial condition, results of operations or liquidity. Future claims related to the use of these categories of products may not be covered in full by the Company’s insurance program.

At December 31, 2007, there were no other known contingent liabilities that management believes could have a material adverse effect on the Company’s consolidated financial condition or results of operations, nor were there any material commitments outside of the normal course of business. Material commitments in the normal course of business include notes payable, long-term debt, lease commitments and pension and other post-retirement benefit obligations which are disclosed in Note 6, Note 7, Note 9 and Note 14, respectively, to the consolidated financial statements for the year ended December 31, 2007.

INFLATION

Management recognizes that inflationary pressures may have an adverse effect on the Company through higher asset replacement costs and higher material and other operating costs. The Company tries to minimize these effects through cost reductions and productivity improvements as well as price increases to maintain reasonable profit margins. It is management’s view, however, that inflation has not had a significant impact on operations in the three years ended December 31, 2007.

28

MANAGEMENT’S DISCUSSION AND ANALYSIS (continued)

($ In Millions, Except Per Share Data)

The following should be read in conjunction with the consolidated financial statements and related notes.

MARKET RISK SENSITIVE INSTRUMENTS AND POSITIONS

The market risk inherent in the Company’s financial instruments and positions represents the potential loss arising from adverse changes in interest rates and foreign currency exchange rates.

Interest Rates

At December 31, 2007, the Company’s outstanding debt represents 25.0% of total capitalization. Approximately 38.5% of the Company’s outstanding debt at December 31, 2007 is at a fixed rate. Cash flows from operations and available credit facilities are sufficient to meet the working capital requirements of the Company. It is management's view that market risk or variable interest rate risk will not significantly impact the Company's results of operations.

Foreign Currency Exchange Rates

The functional currency of the Company’s international subsidiaries is generally the dominant currency in the respective country of residence of the subsidiary. The translation from the functional currencies to the U.S. dollar for revenues and expenses is based on the average exchange rate during the period. Large increases or decreases in the spread between currencies have affected and may continue to affect the Company’s revenues, revenue growth rates, gross margins and net income.

The Company transacts business in many parts of the world and is subject to risks associated with changing foreign currency exchange rates. The Company’s objective is to minimize the impact of foreign currency exchange rate changes during the period of time between the original transaction date and its cash settlement. Accordingly, the Company uses forward exchange contracts to stabilize the value of certain receivables and payables denominated in foreign currencies. Most of the contracts are single currency. Gains and losses on these contracts, based on the difference in the contract rate and the spot rate at the end of each month for all contracts still in force, are typically offset either partially or completely by transaction gains and losses, with any net gains and losses included in selling, general and administrative expenses. The market risk of foreign currency rate changes represents the potential loss in fair value of net currency positions at year-end due to an adverse change in foreign currency exchange rates. The Company does not enter into foreign currency contracts for speculative trading purposes. The Company’s policy is to manage the risks associated with existing receivables, payables and commitments.

The market risk of the Company’s foreign currency positions at December 31, 2007, assuming a hypothetical 10% change in foreign currency exchange rates, would be less than $4.5.

AGGREGATE CONTRACTUAL OBLIGATIONS

The following table represents contractual obligations of the Company at December 31, 2007:

	Payments due by period
	Total		Less than 1 year		1–3 years		3–5 years		More than 5 years
Contractual Obligations
Long-term debt	$	297.0	$	90.0	$	107.0	$	100.0		—
Interest payments related to long-term debt		42.0		13.9		23.4		4.7		—
Operating lease obligations		114.4		33.3		46.8		24.0		10.3
Purchase obligations		165.2		75.7		33.6		34.2		21.7
Total	$	618.6	$	212.9	$	210.8	$	162.9	$	32.0

See Notes 7 and 9 to the consolidated financial statements for additional disclosures related to long-term debt and lease commitments, respectively. See Note 14 to the consolidated financial statements for the Company’s obligations with respect to its pension and post-retirement medical benefit plans.

FORWARD-LOOKING STATEMENTS

Management’s Discussion and Analysis and other sections of this Annual Report to shareholders should be read in conjunction with the consolidated financial statements and notes thereto. Except for historical information, the statements in this discussion may constitute forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934 that involve risk and uncertainty, including financial, business environment and projections, as well as statements that are preceded by, followed by, or that include the words “believes,” “expects,” “anticipates,” “should” or similar expressions, and other statements contained herein regarding matters that are not historical facts. Additionally, this Annual Report to shareholders contains forward-looking statements relating to future performance, goals, strategic actions and initiatives and similar intentions and beliefs, including without limitation, statements regarding the Company’s expectations, goals, beliefs, intentions and the like regarding future sales, earnings, return on equity, share repurchases, capital expenditures, acquisitions and other matters. These statements involve assumptions regarding the Company operations, investments, acquisitions and conditions in the markets the Company serves. Although the Company believes its expectations are based on reasonable assumptions, such statements are subject to risks and uncertainties, including, among others, certain economic, political and technological factors. Actual results could differ materially from those stated or implied in this Annual Report to shareholders, due to, but not limited to, such factors as (1) changes in pricing and the competitive environment, (2) fluctuations in foreign currency exchange rates, (3) dependence on uninterrupted manufacturing operations, (4) changes in the regulatory environment in which the Company operates, (5) changes in worldwide tax rates or tax benefits from domestic and international operations, including the matters described in Note 10 — Income Taxes to the consolidated financial statements (6) exposure to litigation including product liability claims, (7) changes in research funding and the success of research and development activities, (8) the ability to maintain adequate quality standards, (9) reliance on third party package delivery services, (10) the impact of acquisitions and success in integrating and obtaining projected results from the acquisitions, (11) other changes in the business environment in which the Company operates and (12) the outcome of the matters described in Note 11 — Contingent Liabilities and Commitments to the consolidated financial statements. A further discussion of the Company’s risk factors can be found in Item 1A of the Company’s December 31, 2007 Form 10-K. The Company does not undertake any obligation to update these forward-looking statements.

29

CONSOLIDATED STATEMENTS OF INCOME

($ In Millions, Except Per Share Data)

	Years ended December 31,
	2007		2006		2005
Net sales	$	2,038.7	$	1,797.5	$	1,666.5
Cost of products sold		1,002.7		877.3		818.0
Gross profit		1,036.0		920.2		848.5
Selling, general and administrative expenses		517.1		464.6		437.3
Research and development expenses		59.3		52.9		49.8
Interest, net		22.0		24.0		18.1
Income before income taxes		437.6		378.7		343.3
Provision for income taxes		126.5		101.9		85.0
Net income	$	311.1	$	276.8	$	258.3
Weighted average number of shares outstanding — Basic		130.6		132.9		135.8
Weighted average number of shares outstanding — Diluted		133.1		134.9		137.5
Net income per share — Basic	$	2.38	$	2.08	$	1.90
Net income per share — Diluted	$	2.34	$	2.05	$	1.88

The accompanying notes are an integral part of these statements.

30

CONSOLIDATED BALANCE SHEETS

($ In Millions, Except Per Share Data)

	December 31,
	2007			2006
ASSETS
Current assets:
Cash and cash equivalents	$	237.6		$	173.8
Accounts receivable, less allowance for doubtful accounts of $4.4 and $4.7, respectively		276.3			248.0
Inventories		653.6			596.0
Deferred taxes		57.7			49.6
Other current assets		57.3			45.5
Total current assets		1,282.5			1,112.9
Property, plant and equipment:
Land		51.8			47.1
Buildings and improvements		663.8			612.9
Machinery and equipment		734.8			681.0
Construction in progress		44.9			33.6
Less — accumulated depreciation		(813.8	)		(729.5	)
Property, plant and equipment, net		681.5			645.1
Goodwill, net		420.3			361.3
Intangibles, net		136.9			126.0
Other assets		107.9			89.0
Total assets	$	2,629.1		$	2,334.3
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Note payable and current maturities of long-term debt	$	331.3		$	189.0
Accounts payable		131.0			97.2
Accrued payroll and payroll taxes		55.0			47.4
Accrued income taxes		47.1			48.6
Other accrued expenses		70.6			60.4
Total current liabilities		635.0			442.6
Long-term debt		207.0			337.9
Deferred post-retirement benefits		36.9			38.5
Deferred taxes		42.3			48.1
Other liabilities		91.3			56.3
Total liabilities		1,012.5			923.4
Stockholders’ equity:
Common stock, $1.00 par value; 300.0 shares authorized; 201.8 shares issued at December 31, 2007 and 2006; 129.4 and 132.0 shares outstanding at December 31, 2007 and 2006, respectively		201.8			201.8
Capital in excess of par value		109.7			79.1
Common stock in treasury, at cost, 72.4 and 69.8 shares at December 31, 2007 and 2006, respectively		(1,534.1	)		(1,375.4	)
Retained earnings		2,679.3			2,424.7
Accumulated other comprehensive income		159.9			80.7
Total stockholders’ equity		1,616.6			1,410.9
Total liabilities and stockholders’ equity	$	2,629.1		$	2,334.3

The accompanying notes are an integral part of these statements.

31

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

($ In Millions, Except Per Share Data)

	Common Stock		Capital in Excess of Par Value			Common Stock in Treasury			Retained Earnings			Accumulated Other Comprehensive Income/(Loss)			Total Stockholders’ Equity			Comprehensive Income
Balance, December 31, 2004	$	100.9	$	52.6		$	(1,163.1	)	$	2,097.5		$	123.8		$	1,211.7
Net income		—		—			—			258.3			—			258.3		$	258.3
Other comprehensive loss — foreign currency translation		—		—			—			—			(96.6	)		(96.6	)		(96.6	)
Minimum pension liability		—		—			—			—			5.5			5.5			5.5
Unrealized gain on securities, net		—		—			—			—			0.7			0.7			0.7
Comprehensive income		—		—			—			—			—			—		$	167.9
Dividends ($.76 per share)		—		—			—			(51.3	)		—			(51.3	)
Shares exchanged for stock options		—		(0.2	)		—			—			—			(0.2	)
Exercise of stock options		—		5.8			18.1			—			—			23.9
Restricted stock grant		—		0.8			—			—			—			0.8
Stock repurchases		—		—			(119.4	)		—			—			(119.4	)
Balance, December 31, 2005		100.9		59.0			(1,264.4	)		2,304.5			33.4			1,233.4
Net income		—		—			—			276.8			—			276.8		$	276.8
Other comprehensive income — foreign currency translation		—		—			—			—			75.6			75.6			75.6
Unrealized gain on securities, net		—		—			—			—			3.4			3.4			3.4
Comprehensive income		—		—			—			—			—			—		$	355.8
Adjustment to initially apply Statement of Financial Accounting Standards No. 158, net of tax		—		—			—			—			(31.7	)		(31.7	)
Dividends ($.84 per share)		—		—			—			(55.7	)		—			(55.7	)
Shares exchanged for stock options		—		(1.7	)		—			—			—			(1.7	)
Exercise of stock options		—		11.2			25.6			—			—			36.8
Restricted stock grant		—		(0.4	)		1.6			—			—			1.2
Stock-based compensation expense		—		11.0			—			—			—			11.0
Stock repurchases		—		—			(138.2	)		—			—			(138.2	)
Common stock split		100.9		—			—			(100.9	)		—			—
Balance, December 31, 2006		201.8		79.1			(1,375.4	)		2,424.7			80.7			1,410.9
Net income		—		—			—			311.1			—			311.1		$	311.1
Other comprehensive income — foreign currency translation		—		—			—			—			71.5			71.5			71.5
Pension and Post Retirement		—		—			—			—			8.4			8.4			8.4
Unrealized gain (loss) on securities, net		—		—			—			—			(0.7	)		(0.7	)		(0.7	)
Comprehensive income		—		—			—			—			—			—		$	390.3
Dividends ($.46 per share)		—		—			—			(60.0	)		—			(60.0	)
Shares exchanged for stock options		—		(0.9	)		—			—			—			(0.9	)
Exercise of stock options		—		17.3			24.0			—			—			41.3
Restricted stock grant		—		0.7			1.6			—			—			2.3
Stock-based compensation expense		—		13.5			—			—			—			13.5
Stock repurchases		—		—			(184.3	)		—			—			(184.3	)
Adjustment to initially apply FIN 48		—		—			—			3.5			—			3.5
Balance, December 31, 2007	$	201.8	$	109.7		$	(1,534.1	)	$	2,679.3		$	159.9		$	1,616.6

Common stock shares issued and common stock shares in treasury are summarized below:

	Common Stock Issued	Common Stock in Treasury
Balance, December 31, 2004	100.9	32.2
Exercise of stock options	—	(0.5	)
Stock repurchases	—	2.0
Balance, December 31, 2005	100.9	33.7
Exercise of stock options	—	(0.8	)
Stock repurchases	—	2.0
Common stock split	100.9	34.9
Balance, December 31, 2006	201.8	69.8
Exercise of stock options	—	(1.4	)
Stock repurchases	—	4.0
Balance, December 31, 2007	201.8	72.4

The accompanying notes are an integral part of these statements.

The share information presented above prior to the December 2006 common stock split has not been restated.

32

CONSOLIDATED STATEMENTS OF CASH FLOWS

($ In Millions)

	Years Ended December 31,
	2007			2006			2005
Cash flows from operating activities:
Net income	$	311.1		$	276.8		$	258.3
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		97.8			90.9			90.1
Deferred income taxes		(21.7	)		(44.1	)		(33.9	)
Stock-based compensation expense		19.0			13.3			—
Other		(0.3	)		7.8			0.1
Changes in assets and liabilities:
(Increase) decrease in accounts receivable		(7.3	)		(25.2	)		17.0
Increase in inventories		(25.2	)		(11.5	)		(4.8	)
Increase (decrease) in accrued income taxes		25.0			(5.4	)		(11.9	)
Other		20.7			27.8			(34.4	)
Net cash provided by operating activities		419.1			330.4			280.5
Cash flows from investing activities:
Property, plant and equipment additions		(79.7	)		(74.5	)		(92.2	)
Proceeds from sales of property, plant and equipment		1.3			2.8			4.0
Acquisitions of businesses, net of cash acquired		(67.6	)		(20.0	)		(416.6	)
Other, net		(5.1	)		(12.7	)		(8.4	)
Net cash used in investing activities		(151.1	)		(104.4	)		(513.2	)
Cash flows from financing activities:
Net issuance of short-term debt		61.8			45.3			118.0
Issuance of long-term debt		—			100.0			205.8
Repayment of long-term debt		(69.7	)		(142.8	)		(2.9	)
Payment of dividends		(60.0	)		(55.7	)		(51.3	)
Treasury stock purchases		(184.3	)		(138.2	)		(119.4	)
Exercise of stock options		32.4			30.9			20.9
Excess tax benefits from stock-based compensation		7.8			4.3			—
Net cash (used in) provided by financing activities		(212.0	)		(156.2	)		171.1
Effect of exchange rate changes on cash		7.8			5.4			(9.0	)
Net change in cash and cash equivalents		63.8			75.2			(70.6	)
Cash and cash equivalents at beginning of year		173.8			98.6			169.2
Cash and cash equivalents at end of year	$	237.6		$	173.8		$	98.6
Supplemental disclosures of cash flow information:
Income taxes paid	$	113.9		$	120.5		$	104.9
Interest paid, net of capitalized interest		29.6			34.7			21.2

The accompanying notes are an integral part of these statements.

33

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

($ In Millions, Except Per Share Data)

NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Nature of Operations

Sigma-Aldrich Corporation (“the Company”) develops, manufactures, purchases and distributes a broad range of high quality biochemicals and organic chemicals throughout the world. These chemical products and kits are used in scientific and genomic research, biotechnology, pharmaceutical development, the diagnosis of disease and as key components in pharmaceutical and other high technology manufacturing.

Principles of Consolidation

The consolidated financial statements include the accounts of the Company and all majority-owned subsidiaries. All significant intercompany accounts and transactions have been eliminated.

Financial Instruments

The Company has no financial instruments that have a materially different fair value than the respective instrument’s carrying value, except as described in Notes 7 and 8.

Revenue

Revenue, which includes shipping and handling fees billed to customers, is generally recognized upon transfer of title of the product to the customer, which occurs upon shipment to the customer, and is not dependent upon any post-shipment obligations.

Research and Development

Expenditures relating to the development of new products and processes, including significant improvements to existing products or processes, are expensed as incurred as research and development.

Cash and Cash Equivalents

Cash and cash equivalents include cash on hand and investments with original maturities of less than three months.

Property, Plant and Equipment

The cost of property, plant and equipment is depreciated over the estimated useful lives of the assets using the straight-line method with lives ranging from three to twelve years for machinery and equipment and fifteen to forty years for buildings and improvements. Depreciation expense was $86.1, $80.0 and $78.4 for the years ended December 31, 2007, 2006 and 2005, respectively. The Company capitalizes interest as part of the cost of constructing major facilities and equipment.

Goodwill

Statement of Financial Accounting Standards No. 142, “Goodwill and Other Intangible Assets,” requires the Company to assess goodwill for impairment rather than to systematically amortize goodwill against earnings. The goodwill impairment test compares the fair value of a reporting unit to its carrying amount, including goodwill. The Company operates as one reporting unit and its fair value exceeds its carrying value, including goodwill. Therefore, the Company has determined that no impairment of goodwill existed at December 31, 2007 and 2006.

Long-Lived Assets

Long-lived assets are reviewed for impairment whenever conditions indicate that the carrying value of assets may not be fully recoverable. Such impairment tests are based on a comparison of the undiscounted cash flows prior to income taxes to the recorded value of the asset. If impairment is indicated, the asset value is written down to its fair market value or using discounted cash flows if the fair market value is not readily determinable.

Stock Options

In December 2004, the Financial Accounting Standards Board (FASB) issued Statement of Financial Accounting Standards No. 123 (Revised 2004), “Share-Based Payment” (SFAS 123(R)). SFAS 123(R) requires companies to recognize compensation cost for employee services received in exchange for an award of equity instruments. Stock-based compensation cost, for stock options, is estimated at the grant date based on the award’s fair value as calculated by the Black-Scholes option-pricing model and is recognized as expense ratably over the requisite service period.

The Company adopted the provisions of SFAS 123(R) on January 1, 2006 using the “modified prospective” method. As a result of using this method, the consolidated financial statements for the year ended December 31, 2006 reflect the impact of SFAS 123(R), while the consolidated financial statements of previous years presented were not restated for such impact. See Note 12 for the disclosures related to stock options.

Foreign Currency Translation

Assets and liabilities denominated in foreign currencies are translated at current exchange rates and profit and loss accounts are translated at weighted average exchange rates. Resulting translation gains and losses are included as a separate component of stockholders’ equity as accumulated other comprehensive income or loss.

Use of Estimates

The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the years presented. Actual results could differ from those estimates under different assumptions or conditions.

Common Stock Split

In November 2006, the Board of Directors authorized a two-for-one stock split effected in the form of a 100 percent stock dividend to shareholders of record on December 15, 2006. Shareholders of record received an additional share on January 2, 2007 for each share they owned. The par value of the Company’s common stock remains $1.00 per share. The stock split is reflected in the Consolidated Statements of Stockholders’ Equity as a reclassification from Retained Earnings to Common Stock. Except as otherwise noted, all share and per share information presented prior to 2007 herein has been retroactively adjusted to reflect the common stock split.

Reclassifications

The accompanying consolidated financial statements for prior years contain certain reclassifications to conform with the presentation used in 2007.

Effect of New Accounting Standards

In September 2006, the Financial Accounting Standards Board (FASB) issued Statement of Financial Accounting Standards No. 157, “Fair Value Measurements” (SFAS 157). SFAS 157 establishes a common definition of fair value for financial instruments, sets a framework for measuring fair value and expands disclosure about such fair value measurements. This Statement applies only to fair value measurements that are already required or permitted by other accounting standards and is effective for fiscal years beginning after November 15, 2007. The Company currently discloses fair value information, in Notes 7 and 8 to its consolidated financial statements. The adoption of SFAS 157 in January 2008 is not expected to have a significant impact on the Company’s consolidated financial statements.

In September 2006, the FASB issued Statement of Financial Accounting Standards No. 158, “Employers’ Accounting for Defined Benefit Pension and Other Postretirement Plans” (SFAS 158). SFAS 158 requires companies to recognize, on a prospective basis, the funded status of their defined benefit pension and other post-retirement benefit plans in the Consolidated Balance Sheets

34

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

($ In Millions, Except Per Share Data)

NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

and recognize as a component of other comprehensive income, net of tax, the gains or losses and prior service costs or credits that arise during the period but are not recognized as components of net periodic benefit costs. SFAS 158 also requires additional disclosures in the notes to the consolidated financial statements and requires the use of a company’s fiscal year-end as the measurement date for plan assets and benefit obligations, eliminating the use of earlier measurement dates that are currently permissible. The Company adopted all provisions of SFAS 158 as of December 31, 2006, except the measurement date requirement. The net impact of applying SFAS 158 on the Company’s 2006 consolidated financial statements was a $31.7 reduction of stockholders’ equity. The new measurement date requirement is not effective until fiscal years ending after December 15, 2008. The Company is in the process of assessing the impact of the SFAS 158 measurement date requirement on its consolidated financial statements.

In February 2007, the FASB issued Statement of Financial Accounting Standards No. 159, “The Fair Value Option for Financial Assets and Financial Liabilities – Including an Amendment of FASB Statement No. 115” (SFAS 159). SFAS 159 provides companies with an option to measure certain financial instruments and certain other items at fair value that are not currently required to be measured at fair value. SFAS 159 is effective for fiscal years beginning after November 15, 2007. The adoption of SFAS 159 in January 2008 is not expected to have a significant impact on the Company’s consolidated financial statements.

In June 2007, the Emerging Issues Task Force (EITF) reached a consensus on EITF Issue No. 07-3, “Accounting for Advance Payments for Goods or Services to Be Used in Future Research and Development Activities” (EITF 07-3). Under EITF 07-3, non-refundable advance payments to acquire goods or pay for services that will be consumed or performed in future periods in conducting research and development activities on behalf of an entity should be capitalized as an asset when the payments are made, and recognized as an expense as the research and development activities are performed. The consensus is effective for fiscal years beginning after December 15, 2007, and will be applied to contractual arrangements entered beginning January 1, 2008. The adoption of EITF 07-3 in January 2008 is not expected to have a significant impact on the Company’s consolidated financial statements.

In December 2007, the FASB issued Statement of Financial Accounting Standards No. 141 (revised 2007), “Business Combinations” (SFAS 141(R)). SFAS 141(R) establishes principles and requirements for how an acquiring entity recognizes and measures in its financial statements the assets acquired and liabilities assumed. SFAS 141(R) also establishes disclosure requirements to enable the evaluation of the nature and financial effects of the business combination. SFAS 141(R) is effective for fiscal years beginning after December 15, 2008, and will be applied prospectively to acquisitions beginning January 1, 2009. The Company is in the process of assessing the impact of SFAS 141(R) on its consolidated financial statements.

In December 2007, the EITF reached a consensus on EITF Issue No. 07-1, “Accounting for Collaborative Arrangements” (EITF 07-1). EITF 07-1 addresses the accounting for activities of collaborative arrangements outside of an established separate legal entity, such as those to jointly develop and commercialize intellectual property. Under EITF 07-1, revenues and costs incurred with third parties in connection with the collaborative arrangement should be presented gross or net based on the criteria in EITF Issue No. 99-19, “Reporting Revenue Gross as Principal versus Net as an Agent” and other applicable accounting literature. The consensus is effective for fiscal years beginning after December 15, 2008, and will be applied to using a retrospective method that requires reclassification in all periods presented for those arrangements still in effect at January 1, 2009. The Company is in the process of assessing the impact of EITF 07-1 on its consolidated financial statements.

NOTE 2: ACQUISITIONS

On February 28, 2005, the Company completed its acquisition of all of the outstanding capital securities of JRH Biosciences Pty Ltd., CSL US Inc. and JRH Biosciences Limited, which collectively comprised the JRH Biosciences division (JRH) of CSL Limited. JRH is a global supplier of cell culture and sera products to the biopharmaceutical industry. Headquartered in Lenexa, Kansas, JRH has major manufacturing facilities and/or serum collection and processing centers in the United States, the United Kingdom and Australia.

The purchase price paid (including direct acquisition costs) by the Company in the transaction was $366.8. The Company funded the acquisition with borrowings of $340.0 and the balance from available cash.

This acquisition has been accounted for using the purchase method of accounting and accordingly, its results are included in the Company’s consolidated financial statements from the date of acquisition. The purchase price (including direct acquisition costs) of $366.8 has been allocated primarily to receivables ($14.4); inventory ($116.9); other assets ($10.3); property, plant and equipment ($38.0); intangible assets ($98.5); goodwill ($178.8); accounts payable and accrued liabilities ($43.6); net deferred income tax liabilities ($43.4) and other long-term liabilities ($3.1), based on their estimated fair values at the date of acquisition. None of the goodwill is deductible currently for income tax purposes.

The following table summarizes supplemental consolidated pro forma financial information as if the JRH acquisition had been completed on January 1, 2005:

(Unaudited)	Twelve Months Ended December 31, 2005
Net sales	$	1,690.0
Net income		268.6
Diluted net income per share	$	1.95

There were no significant acquisitions individually, or in the aggregate, in 2006 or 2007.

NOTE 3: ALLOWANCE FOR DOUBTFUL ACCOUNTS

Changes in the allowance for doubtful accounts for the years ended December 31, 2007, 2006 and 2005 are as follows:

	2007		2006		2005
Balance, beginning of year	$	4.7	$	5.8	$	4.9
Additions to reserves		0.5		0.7		2.0
Deductions from reserves		0.8		1.8		1.1
Balance, end of year	$	4.4	$	4.7	$	5.8

35

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

($ In Millions, Except Per Share Data)

NOTE 4: INVENTORIES

The principal categories of inventories at December 31, 2007 and 2006 are as follows:

	2007		2006
Finished goods	$	542.8	$	503.3
Work in process		29.1		26.1
Raw materials		81.7		66.6
Total	$	653.6	$	596.0

Inventories are valued at the lower of cost or market. Costs for 77% of inventories are determined using a weighted average actual cost method. Costs for 23% of inventories are determined using the last-in, first-out method. If the value of all chemical inventories had been determined using the weighted average actual cost method, inventories would have been $0.7, $0.4 and $0.3 higher than reported at December 31, 2007, 2006 and 2005, respectively.

NOTE 5: INTANGIBLE ASSETS

The Company’s amortizable and unamortizable intangible assets at December 31, 2007 and 2006 are as follows:

	Cost				Accumulated Amortization
	2007		2006		2007		2006
Amortizable intangible assets:
Patents	$	16.6	$	12.5	$	5.6	$	4.4
Licenses		19.1		14.4		4.6		3.2
Customer relationships		100.9		91.8		17.6		11.1
Technical knowledge		22.6		17.9		4.3		2.8
Other		12.7		13.1		11.0		9.9
Total amortizable intangible assets	$	171.9	$	149.7	$	43.1	$	31.4
Unamortizable intangible assets:
Goodwill	$	446.6	$	386.8	$	26.3	$	25.5
Trademarks and Trade names		15.9		15.3		7.8		7.6
Total unamortizable intangible assets	$	462.5	$	402.1	$	34.1	$	33.1

The purchase price paid in cash for acquired intangible assets is based upon their estimated fair values at the date of acquisition. The Company added $21.3 of acquired amortizable intangible assets during 2007, including adjustments for the finalization of the purchase accounting allocation of various insignificant acquisitions.

The Company recorded amortization expense of $11.7, $10.9 and $11.7, for the years ended December 31, 2007, 2006 and 2005, respectively, related to amortizable intangible assets with estimated useful lives ranging from one to twenty years using a straight-line method. The Company expects to record annual amortization expense for all intangible assets in a range from approximately $11.7 to $11.1 from 2008 through 2012.

Changes in net goodwill for the years ended December 31, 2007 and 2006 are as follows:

	2007		2006
Balance, beginning of year	$	361.3	$	336.4
Acquisitions		51.7		11.8
Impact of foreign exchange rates		7.3		13.1
Balance, end of year	$	420.3	$	361.3

36

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

($ In Millions, Except Per Share Data)

NOTE 6: NOTES PAYABLE

In March 2007, the Company entered into a $200.0 seven-year multi-currency European revolving credit facility with a syndicate of banks having a maturity date of March 13, 2014. The facility will be used for general purposes, including acquisitions, by the Company’s European operations. At December 31, 2007, borrowings outstanding in U.S. dollars (USD) were $56.5 at a weighted average interest rate of 3.19%. This facility contains financial covenants that require the maintenance of consolidated net worth of at least $750.0 and a consolidated ratio of debt to total capital of no more than 55.0%. The Company’s consolidated net worth and consolidated total debt as a percentage of total capitalization, as defined in the credit facility, were $1,434.6 and 27.3%, respectively, at December 31, 2007.

The Company has a $300.0 five-year revolving credit facility with a syndicate of banks having a maturity date of December 11, 2011. In October 2007, the Company exercised an option in the facility to extend the maturity of the facility for one year to December 11, 2012. The facility supports the Company’s commercial paper program. At December 31, 2007 and 2006, the Company did not have any borrowings outstanding under this facility. The syndicated facility contains financial covenants that require the maintenance of consolidated net worth of at least $750.0 and a ratio of consolidated debt to total capitalization of no more than 55%. The Company’s consolidated net worth and total consolidated debt as a percentage of total capitalization, as defined in the credit facility, were $1,434.6 and 27.3%, respectively, at December 31, 2007.

At December 31, 2007, $171.2 of commercial paper was outstanding with a weighted average interest rate of 4.26%. At December 31, 2006, $146.0 of commercial paper was outstanding with a weighted average interest rate of 5.32%.

Sigma-Aldrich Korea Limited has a short-term credit facility denominated in Korean Won expiring on March 10, 2008. The total commitment converted into U.S. Dollars (USD) was $21.4 at December 31, 2007. The borrowings bear interest based on the Korean market rate plus an incremental margin based upon the Company’s credit rating. At December 31, 2007, borrowings outstanding in USD were $11.8 at an average interest rate of 6.42%. At December 31, 2006, borrowings outstanding in USD were $18.4 at an average interest rate of 5.49%.

The Company has provided a guarantee for any outstanding borrowings from the short-term credit facility of the wholly-owned Korean subsidiary described in above. There are no existing events of default that would require the Company to honor this guarantee. The borrowings subject to this guarantee are reflected in the consolidated financial statements. The Company has other short-term credit facilities denominated in foreign currencies, excluding those mentioned above, with a total commitment converted into USD of $15.4 at December 31, 2007. Borrowings outstanding under the facilities were $1.8 and $6.7, with a weighted average interest rate of 1.4% and 0.8% at December 31, 2007 and 2006, respectively.

NOTE 7: LONG-TERM DEBT

Long-term debt consists of the following at December 31, 2007 and 2006:

	2007			2006
7.687% Senior Notes, due September 12, 2010	$	100.0		$	100.0
5.11% Senior Notes, due December 5, 2011		100.0			100.0
Medium-Term Notes, due February 23, 2008		90.0			120.0
Medium-Term Loans, due December 20, 2007		—			35.6
Other		7.0			0.2
Total		297.0			355.8
Less — Current maturities		(90.0	)		(17.9	)
	$	207.0		$	337.9

The Company, at its option, may redeem all or any portion of the $100.0 of 7.687% Senior Notes by notice to the holder and by paying a make whole amount to the holder as compensation for loss of future interest income. The 7.687% Senior Notes contain financial covenants that require the maintenance of consolidated net worth of at least $750.0, a ratio of consolidated debt to total capitalization of no more than 55% and an aggregate amount of all consolidated priority debt no more than 30% of consolidated net worth. Consolidated priority debt includes all unsecured debt of any subsidiary in which a majority of the voting shares are owned by the Company. The Company’s consolidated net worth, consolidated debt as a percentage of total capitalization and consolidated priority debt as a percentage of consolidated total net worth was, as defined in the 7.687% Senior Notes, $1,434.6, 27.3% and 5.1%, respectively, at December 31, 2007.

The Company, at its option, may redeem all or any portion of the $100.0 of 5.11% Senior Notes by notice to the holder and by paying a make whole amount to the holder as compensation for loss of future interest income. The 5.11% Senior Notes contain financial covenants that require a ratio of consolidated debt to total capitalization of no more than 60% and an aggregate amount of all consolidated priority debt no more than 30% of consolidated net worth. The Company’s consolidated debt as a percentage of total capitalization and consolidated priority debt as a percentage of total consolidated net worth was, as defined in the 5.11% Senior Notes, 25.0% and 4.6%, respectively, at December 31, 2007.

The Medium-Term Notes due February 23, 2008 were issued in February 2005 as a component of the $300.0 credit agreement entered into with a syndicate of banks to partially fund acquisitions and provide for working capital requirements. Borrowings outstanding under the three-year term were $90.0 and $120.0 at December 31, 2007 and 2006, respectively. The Company may pay off all or a portion of the term loans outstanding prior to maturity without penalty. Borrowings under the Medium-Term Notes bear interest at various rates, including London Interbank Offered Rate (LIBOR), or an alternative base rate plus, in each case, an incremental margin based on the Company’s credit ratings. At December 31, 2007, the weighted average interest rate on these notes was 5.41%. At December 31, 2006, the weighted average interest rate on these notes was 5.68%.

The Medium-Term Notes contain financial covenants that require the maintenance of consolidated net worth of at least $750.0 and a ratio of consolidated debt to total capitalization of no more than 55%. The Company’s consolidated net worth and consolidated total debt as a percentage of total capitalization, as defined in the credit facility, were $1,434.6 and 27.3%, respectively at December 31, 2007.

37

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

($ In Millions, Except Per Share Data)

NOTE 7: LONG-TERM DEBT (continued)

The Medium-Term Loans due December 20, 2007 were issued under the terms of a credit agreement dated December 15, 2005 between Sigma-Aldrich (Switzerland) Holding AG and a syndicate of banks at an aggregate principal amount not to exceed the Swiss local currency equivalent of $60.0. These loans were fully paid on August 21, 2007. Borrowings outstanding under this credit agreement at December 31, 2006 were $35.6 at a weighted average interest rate of 2.19%.

Total interest expense incurred on short-term and long-term debt, net of amounts capitalized, was $28.9, $31.4, and $21.6 in 2007, 2006, and 2005, respectively.

The fair value of long-term debt, including current maturities, was approximately $306.1 and $352.0 at December 31, 2007 and 2006, respectively, based upon a discounted cash flow analysis using current market interest rates.

NOTE 8: FINANCIAL DERIVATIVES AND RISK MANAGEMENT

The Company transacts business in many parts of the world and is subject to risks associated with changing foreign currency exchange rates. The Company’s objective is to minimize the impact of foreign currency exchange rate changes during the period of time between the original transaction date and its cash settlement. Accordingly, the Company enters into forward currency exchange contracts in order to stabilize the value of certain receivables and payables denominated in foreign currencies. The Company does not enter into foreign currency transactions for speculative trading purposes. The Company’s policy is to manage the risks associated with existing receivables, payables and commitments.

The principal forward currency exchange contracts are for the British pound, Euro, Swiss franc, Japanese yen and Canadian dollar. These contracts are recorded at fair value and are included in other current assets. Resulting gains and losses are recorded in selling, general and administrative expenses and are partially or completely offset by changes in the value of related exposures. The duration of the contracts typically does not exceed six months. The counterparties to the contracts are large, reputable commercial banks and, accordingly, the Company expects all counterparties to meet their obligations.

The notional amount, which approximates fair value, of open forward exchange contracts at December 31, 2007 and 2006 was $167.7 and $153.8, respectively.

NOTE 9: LEASE COMMITMENTS

The Company and its subsidiaries lease manufacturing, office and warehouse facilities and computer equipment under non-cancelable operating leases expiring at various dates. Rent charged to operations was $36.6, $32.9 and $31.8 in 2007, 2006 and 2005, respectively. Minimum rental commitments for non-cancelable leases in effect at December 31, 2007, are as follows:

2008	$	33.3
2009		27.7
2010		19.1
2011		13.5
2012		10.5
2013 and thereafter		10.3

38

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

($ In Millions, Except Per Share Data)

NOTE 10: INCOME TAXES

The components of income before income taxes consisted of the following for the years ended December 31:

	2007		2006		2005
United States operations	$	286.6	$	270.0	$	244.5
International operations		151.0		108.7		98.8
Total income before taxes	$	437.6	$	378.7	$	343.3

The provision for income taxes consists of the following for years ended December 31:

	2007			2006			2005
Current:
Federal	$	82.1		$	82.9		$	76.0
State and local		7.4			6.2			5.6
International		58.9			54.5			31.1
Total current		148.4			143.6			112.7
Deferred:
Federal		(13.8	)		(24.8	)		(15.1	)
State and local		(0.5	)		(1.1	)		(0.1	)
International		(7.6	)		(15.8	)		(12.5	)
Total deferred		(21.9	)		(41.7	)		(27.7	)
Provision for income taxes	$	126.5		$	101.9		$	85.0

The items accounting for the difference between income taxes computed at the U.S. federal statutory rate and the Company’s effective tax rate are as follows for years ended December 31:

	2007		2006		2005
Statutory tax rate	35.0	%	35.0	%	35.0	%
EIE benefit	—		(1.9	)	(2.3	)
U.S. manufacturing deduction	(2.1	)	(0.7	)	(0.4	)
State and local income taxes,net of federal benefit	1.0		0.8		0.4
Research and development credits	(0.8	)	(0.8	)	(0.8	)
International taxes	(4.9	)	(3.6	)	(6.1	)
Dividend repatriation	—		—		1.2
Tax audits and unrecognized tax positions	—		(2.3	)	(2.2	)
Other, net	0.7		0.4		—
Total effective tax rate	28.9	%	26.9	%	24.8	%

The Extraterritorial Income Exclusion (EIE) on the Company’s U.S. export sales which provided benefit in 2005 and 2006 was eliminated for 2007 as a result of the phase-out of this benefit in the American Jobs Creation Act of 2004 (AJCA). The increased U.S. manufacturing deduction benefit in 2007 is the result of the phase-in of the new benefit on U.S. manufacturing income provided in the AJCA. The international tax reductions in 2007, 2006 and 2005 were primarily the result of international restructurings.

The AJCA also provided a temporary incentive for U.S. multinationals to repatriate accumulated income earned outside the U.S. The Company repatriated $120.5 and recorded an income tax charge of $4.1 in 2005. This charge is reflected in the “Dividend repatriation” category.

The Company completed examinations of U.S. claims for the 1998-2001 tax years and an examination of its U.S. Federal returns for the 2003 and 2004 tax years by the Internal Revenue Service in 2005 and 2007, respectively, and reduced its unrecognized tax positions based on those settlements. As a result, benefits of approximately $4.5 million for 2007 and $11.3 million for 2005 were recognized and are reflected in the “Tax audits and unrecognized tax positions” category.

The Company reviews its potential tax liabilities and unrecognized tax positions for tax years subject to audits. Based upon these reviews, the Company determined that adjustments to tax expense were necessary. The net benefit/(cost) of approximately $(4.5), $8.8 and $(3.7) are reflected in “Tax audits and unrecognized tax positions” category for years ending December 31, 2007, 2006 and 2005, respectively.

Undistributed earnings of the Company’s international subsidiaries amounted to approximately $327 at December 31, 2007. Upon distribution of those earnings in the form of dividends or otherwise, the Company would be subject to both U.S. income taxes (subject to an adjustment for foreign tax credits) and withholding taxes payable to various foreign countries. The Company may periodically make distributions from its international subsidiaries to its U.S. parent. These distributions will only be made at such time that they are deemed to be tax efficient. The Company does not anticipate any significant increase to its U.S. tax liability above that which has been previously recorded.

Deferred income tax provisions reflect the effect of temporary differences between consolidated financial statement and tax reporting of income and expense items. The net deferred tax assets/liabilities at December 31, 2007 and 2006, respectively, result from the following temporary differences:

	2007			2006
Deferred tax assets:
Inventories	$	45.8		$	37.4
Net operating loss carryforwards		25.5			19.5
Post-retirement benefits and other employee benefits		32.8			23.9
Amortization		20.2			15.4
Pension benefits		3.4			10.8
Other		6.2			13.0
Total deferred tax assets		133.9			120.0
Deferred tax liabilities:
Property, plant and equipment		(72.2	)		(80.2	)
Total deferred tax liabilities		(72.2	)		(80.2	)
Net deferred tax assets (liabilities)	$	61.7		$	39.8

The net operating loss carryforwards relate to international operations. At December 31, 2007, $14.8 of these deferred tax assets expire in 2012 and the remainder of these assets have no expiration. The Company believes it will have sufficient taxable income to fully utilize the carryforwards prior to expiration.

Deferred tax assets and liabilities in the preceding table, netted by taxing jurisdiction, are included in the following captions in the Consolidated Balance Sheets at December 31, 2007 and 2006:

	2007			2006
Deferred tax assets	$	57.7		$	49.6
Other assets		54.4			43.1
Other accrued expenses		(8.1	)		(4.8	)
Deferred tax liabilities		(42.3	)		(48.1	)
Net deferred tax assets (liabilities)	$	61.7		$	39.8

39

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

($ In Millions, Except Per Share Data)

NOTE 10: INCOME TAXES (continued)

Uncertainty in Income Taxes

The Company adopted the provisions of FASB Interpretation No. 48, “Accounting for Uncertainty in Income Taxes, an interpretation of Statement of Financial Accounting Standard No. 109” (FIN 48) on January 1, 2007. As a result of adoption, the Company decreased its unrecognized tax positions by $3.5 with the offset to retained earnings resulting in a balance of $33.5 of unrecognized tax benefits in the consolidated financial statements as of January 1, 2007.

The Company and its subsidiaries file income tax returns for U.S. federal taxes, and for various state, local and international taxes, as applicable. The Company is no longer subject to U.S. federal income tax examination for years prior to 2005 and, with limited exceptions, for any state, local and international income tax examinations prior to 2003.

The Internal Revenue Service (IRS) commenced an examination of the Company’s U.S. federal income tax returns for 2003 and 2004, in June 2005. In May 2007, the Company received notification from the Congressional Joint Committee on Taxation that the examination results proposed by the IRS were accepted. As a result, the Company reduced its unrecognized tax benefits by $3.8 and reduced interest accrued net of tax by $0.7, which resulted in a $4.5 income tax benefit in the second quarter of 2007.

In late 2006, the German tax authorities commenced an examination of the Company’s German income tax returns for 2000-2004. As of December 31, 2007, no material adjustments to the returns had been proposed.

Additional liabilities for unrecognized tax benefits were established in 2007 that partially offset the income tax benefit described above.

The following table sets forth changes in our total gross unrecognized tax benefit liabilities, excluding interest and penalties, for the year ended December 31, 2007:

Balance, beginning of year	$	33.5
Tax positions related to current year:
Additions		4.4
Reductions		—
Tax positions related to prior year:
Additions		0.6
Reductions		(4.4	)
Settlements		—
Lapse in statutes of limitations		(2.0	)
Balance, end of year	$	32.1

Approximately $20.5 of the total gross unrecognized tax benefits reported, if recognized, would affect our effective tax rate in the future periods.

The Company believes it is reasonably possible that the unrecognized tax benefits at December 31, 2007 may decrease by approximately $5.0 to $6.0 due to the completion of examinations and the expiration of statutes in several jurisdictions within 12 months of December 31, 2007.

The Company recognizes interest accrued, net of tax, and penalties related to unrecognized tax benefits as components of our income tax provision as applicable. In 2007, the Company recognized $0.7 of interest expense, net of tax, in its consolidated statements of income. As of December 31, 2007, we have accrued $5.9 of interest, net of tax of $3.2, and $0.6 of penalties. Interest was computed on the difference between the tax provision recognized in accordance with FIN 48 and the amount reflected or expected to be reflected in the Company’s tax returns.

NOTE 11: CONTINGENT LIABILITIES AND COMMITMENTS

The Company is involved in legal proceedings generally incidental to its business, as described below:

Insurance and Other Contingent Liabilities and Commitments

The Company is a defendant in several lawsuits and claims related to the normal conduct of its business, including lawsuits and claims related to product liability and personal injury matters. The Company accrues for such liabilities when it is probable that future costs (including legal fees and expenses) will be incurred and such costs can be reasonably estimated. The Company has self-insured retention limits and has obtained insurance to provide coverage above the self-insured limits for product liability and personal injury claims, subject to certain limitations and exclusions. Reserves have been provided to cover expected payments for these self-insured amounts at December 31, 2007 and 2006.

In one group of lawsuits and claims, the Company, as well as others engaged in manufacturing and distributing similar products, is a defendant in multiple claims alleging injuries from exposure to various chemicals by a limited number of employees of one electronics manufacturer. These claims have been filed in three states. A global settlement has been reached for all cases, which will be submitted to the court for approval. The settlement is not significant to the Company’s consolidated financial statements.

In another group of lawsuits and claims, the Company provided a product for use in research activities in developing various vaccines at pharmaceutical companies. The Company, together with other manufacturers and distributors offering the same product and several pharmaceutical companies, has been named as a defendant and served in 294 lawsuits, of which 56 lawsuits have been dismissed to date. Several of the outstanding suits have been stayed by various state and federal courts pending a decision on coverage available under a federal government relief program. No definite date has been set for this decision.

In all cases, the Company believes its products in question were restricted to research use and that proper information for safe use of the products was provided to the customer.

A class action complaint was filed against a subsidiary of the Company in the Montgomery County, Ohio Court of Common Pleas related to a 2003 explosion in a column at the Company’s Isotec facility in Miamisburg, Ohio. The case was separated into the following four phases: phase one – existence of liability, phase two – quantification of any compensatory damages, phase three – existence of any punitive damages and phase four – quantification of any punitive damages. Class certification was granted to phases one, three and four, but denied to phase two. Compensatory damages for all plaintiffs must be established before the case can proceed to the punitive damages phases. The Company has accepted responsibility for phase one, existence of liability. The case is currently in the compensatory damages phase, where, because no class status exists, each plaintiff must individually establish actual damages. The initial phase two, compensatory damages trial, for 31 plaintiffs was completed on April 27, 2007 with a jury verdict establishing actual damages of approximately two hundred dollars per plaintiff. The plaintiffs filed an appeal staying further action on the case

40

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

($ In Millions, Except Per Share Data)

NOTE 11: CONTINGENT LIABILITIES AND COMMITMENTS (continued)

until the appeal has been resolved. The original appeal has been dismissed, but the plaintiffs are in the process of refiling their appeal. The Company continues to believe it has substantial legal defenses to the allegations, which it will vigorously assert.

The Company believes its reserves and insurance are sufficient to provide for claims outstanding at December 31, 2007. While the outcome of the current claims cannot be predicted with certainty, the possible outcome of the claims is reviewed at least quarterly and reserves adjusted as deemed appropriate based on these reviews. Based on current information available, the Company believes that the ultimate resolution of these matters will not have a material adverse effect on its consolidated financial condition, results of operations or liquidity. Future claims related to the use of these categories of products may not be covered in full by the Company’s insurance program.

At December 31, 2007, there were no other known contingent liabilities that management believes could have a material adverse effect on the Company’s consolidated financial condition or results of operations, nor were there any material commitments outside of the normal course of business. Material commitments in the normal course of business include notes payable, long-term debt, lease commitments and pension and other post-retirement benefit obligations which are disclosed in Note 6, Note 7, Note 9 and Note 14, respectively, to the consolidated financial statements for the year ended December 31, 2007.

NOTE 12: COMMON STOCK

The Company’s 2003 Long-Term Incentive Plan (2003 LTIP), permits the granting of incentive or nonqualified stock options as well as stock appreciation rights, performance shares, restricted stock and other stock-based awards. The 2003 LTIP permits the distribution of up to 11,000,000 shares of the Company’s common stock, subject to increase for any shares forfeited under the other plans after the effective date of the 2003 LTIP. Shares issued under the 2003 LTIP may be authorized and unissued shares or treasury shares. This plan permits the award of non-qualified stock options to those members of the Board of Directors who are not employees of the Company. Under this plan, a non-employee Director will receive an initial option to purchase 20,000 shares of common stock on the date of his or her initial election as a Director. Additional awards of options to purchase 10,000 shares are made to each eligible Director on the day after each annual shareholders’ meeting if the non-employee Director has served on the Board of Directors for at least six months. Under this plan, incentive stock options may only be granted to employees of the Company or its subsidiaries, and a participant may not hold incentive stock options with a fair market value, determined as of the grant date, in excess of $0.1 in the year in which they are first exercisable if this limitation is necessary to qualify the option as an incentive stock option. Incentive and nonqualified stock options may not have an option price of less than the fair market value of the shares at the date of the grant. Options generally become exercisable from three months to three years following the grant date and expire ten years after the grant date. Options granted in 2007 for 1,072,800 shares become exercisable over a three month to three year period following the grant date and expire ten years after the grant date. Including shares forfeited or swapped, 4,625,670 shares of the Company’s common stock remain to be awarded at December 31, 2007 under this plan.

The Company adopted the provisions of SFAS 123(R) on January 1, 2006 using the “modified prospective” method. As a result of using this method, the consolidated financial statements for the years ended December 31, 2007 and 2006 reflect the impact of SFAS 123(R), while the consolidated financial statements of previous years presented were not restated for such impact. Had expense for the Company’s stock-based compensation awards been determined based on the grant date fair value for 2005, consistent with the provisions of SFAS 123, the Company’s reported and pro-forma net income and net income per share for the year ended December 31, 2005, would have been as follows:

	2005
Net income – as reported	$	258.3
Pro-forma stock-based compensation expense, net of tax – as if grant date fair value had been applied to all stock-based payment awards		(9.6	)
Net income – pro-forma for stock-based compensation expense	$	248.7
Net income per share – Basic, as reported	$	1.90
Net income per share – Basic, pro-forma for stock-based compensation expense	$	1.83
Net income per share – Diluted, as reported	$	1.88
Net income per share – Diluted, pro-forma for stock-based compensation expense	$	1.81

41

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

($ In Millions, Except Per Share Data)

NOTE 12: COMMON STOCK (continued)

As of December 31, 2007, the Company expects $16.1 of unrecognized expense related to nonvested stock-based compensation arrangements granted to be incurred in future periods. This expense is expected to be recognized over a weighted average period of 1.3 years.

Stock-based compensation expense charged against income is included in selling, general and administrative expenses. The stock-based compensation expense, net of tax of $4.1 and $2.3 for the years ended December 31, 2007 and 2006 was $14.9 and $11.0, respectively.

Stock Options

The Company measures the total fair value of options on the grant date using the Black-Scholes option-pricing model. The Company then recognizes each grant’s total cost over the period that the options vest based on its calculated fair value. During the year ended December 31, 2007, the Company granted a total of 1,072,800 stock options under the 2003 LTIP.

The weighted-average assumptions under the Black-Scholes option-pricing model for stock option grants are as follows:

	2007		2006		2005
Expected term (years)	5.9		6.0		6.7
Expected volatility	25.12	%	27.84	%	28.50	%
Risk-free interest rate	4.68	%	5.01	%	3.96	%
Dividend yield	1.18	%	1.22	%	1.23	%

Expected term – The expected terms of the options represents the period of time between the grant date of the options and the time the options are either exercised or forfeited, including an estimate of future forfeitures for outstanding options. In accordance with Securities and Exchange Commission Staff Accounting Bulletin No. 107, the Company has used the “simplified” method for “plain vanilla” options to estimate the expected term of options granted. Expected volatility – The expected volatility is calculated based on an average of the historical volatility of the Company’s stock price for a period approximating the expected term.

Risk-free interest rate – The risk-free interest rates are based on the U.S. Treasury yield curve in effect at the time of grant and a maturity that approximates the expected term.

Dividend yield – The dividend yield is based on the Company’s authorized quarterly dividend, approved by the Board of Directors during the respective periods noted above, and the Company’s expectation for dividend yields over the expected term.

The following table presents activity for the Company’s stock option plans, including the 2003 LTIP, the Stock Option Plan of 2000, the 1998 Directors’ Non-Qualified Share Option Plan, the Share Option Plan of 1995 and the Stock Option Plan of 1987. A summary of the combined stock option activity and other data for the Company’s stock option plans for the year ended December 31, 2007 and 2006 are as follows:

	Number of Stock Options		Wtd. Avg. Exercise Price Per Share		Wtd. Avg. Remaining Contractual Life	Aggregate Intrinsic Value
Stock Options outstanding, January 1, 2007	7,727,140		$	25.99	—		—
Granted	1,072,800			41.81	—		—
Exercised	(1,432,782	)		23.35	—		—
Forfeited	(154,662	)		35.25	—		—
Stock Options outstanding, December 31, 2007	7,212,496		$	28.66	74.38 months	$	187.10
Stock Options exercisable at December 31, 2007	5,236,942		$	25.77	63.85 months	$	151.00

	Number of Stock Options		Wtd. Avg. Exercise Price Per Share		Wtd. Avg. Remaining Contractual Life	Aggregate Intrinsic Value
Stock Options outstanding, January 1, 2006	8,241,628		$	24.21	—		—
Granted	1,075,950			34.20	—		—
Exercised	(1,486,662	)		21.88	—		—
Forfeited	(103,776	)		28.26	—		—
Stock Options outstanding, December 31, 2006	7,727,140		$	25.99	77.10 months	$	99.40
Stock Options exercisable at December 31, 2006	5,681,177		$	24.18	67.50 months	$	83.40

The aggregate intrinsic value of options exercised during the year ended December 31, 2007, 2006 and 2005 was $31.9, $20.2 and $12.2, respectively. The weighted average grant date fair value of options granted during the year ended December 31, 2007, 2006 and 2005 was $12.58, $11.25 and $9.47, respectively.

42

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

($ In Millions, Except Per Share Data)

NOTE 12: COMMON STOCK (continued)

Performance Units

Performance Unit awards in the first quarter of 2007 and 2006 were 193,580 and 174,480 units, respectively. The Performance Units awarded in 2007 vest over a three-year performance period beginning January 1, 2007 and ending December 31, 2009. The Performance Units awarded in 2006 vest over a three-year performance period beginning January 1, 2006 and ending December 31, 2008. The actual Performance Units awarded will be determined at the end of the performance period with possible payouts ranging from 0% to 150% of the target amount based upon the achievement of specified performance criteria. One-half of the awards issued will be based upon the Company’s three-year average return on equity ratio calculation and one-half of the awards will be based upon the Company’s three-year average sales growth (adjusted for currency, but including acquisitions). Each Performance Unit paid will include one-half share of the Company’s common stock and the cash equivalent of one-half share of the Company’s common stock, except that the Company will direct that any fractional shares of stock be paid in cash. The value of the equity portion of a Performance Unit is equivalent to the closing market price of the Company’s stock on the grant date. The Company will expense the expected cost over the three-year vesting period. The remaining half of the Performance Unit, to be paid in cash, is valued at the closing market price of the Company’s stock at each quarter-end and ratably expensed during the remaining performance period. Therefore, the related stock-based compensation expense will fluctuate with the value of the Company’s stock. The expense for the entire number of Performance Units awarded is dependant upon the probability of achieving the specific financial targets and is recorded ratably over the three-year vesting period.

A summary of the Company’s nonvested Performance Units as of December 31, 2007 and 2006, and changes during the year then ended, is reflected in the table below. The Weighted Average Grant Date Fair Value includes both the fair value at grant date for the equity portion of the Performance Unit and the fair value of the cash portion of the Performance Unit.

	Number of Performance Units		Wtd. Avg. Grant Date Fair Value
Nonvested Performance Units outstanding, January 1, 2007	166,480		$	35.25
Granted	193,580			41.62
Forfeited (1)	(46,817	)		41.38
Nonvested Performance Units outstanding, December 31, 2007	313,243			46.00

(1) Includes the reduction to the number of units for the expected payout based on the specified performance criteria at the end of the performance period, December 31, 2008, for the 2006 awards at less than 100%.

	Number of Performance Units		Wtd. Avg. Grant Date Fair Value
Nonvested Performance Units outstanding, January 1, 2006	—		$	—
Granted	174,480			31.65
Forfeited	(8,000	)		33.26
Nonvested Performance Units outstanding, December 31, 2006	166,480			35.25

Stock Awards

On January 2, 2008, each non-employee Director received an additional 1,200 shares of Company stock. The stock award will be expensed in the first quarter of 2008 based on the fair market value of the Company’s common stock at December 31, 2007.

On January 2, 2007, each non-employee Director received an additional 1,200 shares of Company stock. The stock award was expensed in the first quarter of 2007 based on the fair market value of the Company's common stock at December 31, 2006.

On January 1, 2006, each non-employee Director received 1,200 shares of Company stock in lieu of an increase in Director fees. The stock award was expensed in the first quarter of 2006 based on the fair value of the Company’s common stock at December 31, 2005.

Common Stock Purchase Rights

The Company has outstanding one common share purchase right (a “Right”) for each outstanding share of common stock of the Company. Generally, if any person or group acquires 15% or more of the Company’s outstanding voting stock without prior written consent of the Company’s Board of Directors, these Rights become exercisable.

43

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

($ In Millions, Except Per Share Data)

NOTE 13: COMPANY OPERATIONS BY BUSINESS UNIT

The Company is organized into four business units featuring the Research units of Essentials, Specialties and Biotech and the Fine Chemicals unit, SAFC, to align the Company with the customers it serves. The business unit structure is the Company’s approach to serving customers and reporting sales rather than any internal division used to allocate resources. Net sales for the Company’s business units are as follows:

	2007		2006		2005
Research Essentials	$	388.0	$	355.3	$	341.0
Research Specialties		760.9		669.7		626.2
Research Biotech		299.3		276.8		262.0
Research Chemicals		1,448.2		1,301.8		1,229.2
SAFC		590.5		495.7		437.3
Total	$	2,038.7	$	1,797.5	$	1,666.5

The Company’s Chief Operating Decision Maker and Board of Directors review profit and loss information on a consolidated basis to assess performance, make overall operating decisions and make resource allocations. The Company’s business units are closely interrelated in their activities and share services such as order entry, billing, technical services, Internet, purchasing and inventory control and share production and distribution facilities. As a result, it is impractical and provides no value to allocate costs of these services to the business units. Additionally, the Company’s Chief Operating Decision Maker, Chief Financial Officer and Business Unit Presidents participate in compensation programs which reward performance based upon consolidated Company results for sales growth, operating income growth, return on equity and return on assets. Certain Business Unit Presidents also have a modest component of their compensation program based on their respective business unit sales growth in addition to consolidated sales growth. Based on these factors, the Company concludes that it operates in one segment.

Sales are attributed to countries based upon the location of product shipped. The United States sales to unaffiliated customers presented in the summary below include sales to international markets as follows:

Year	Amount		Year	Amount		Year	Amount
2007	$	30.5	2006	$	35.0	2005	$	31.2

Geographic financial information is as follows:

	2007		2006		2005
Net sales to unaffiliated customers:
United States	$	756.3	$	715.4	$	681.8
United Kingdom		212.7		187.6		184.6
Other International		1,069.7		894.5		800.1
Total	$	2,038.7	$	1,797.5	$	1,666.5
Long-lived assets at December 31:
United States	$	466.3	$	433.1	$	469.0
International		268.7		257.9		217.7
Total	$	735.0	$	691.0	$	686.7

NOTE 14: PENSION AND OTHER POST-RETIREMENT BENEFIT PLANS

The Company maintains several retirement plans covering substantially all U.S. employees and employees of certain international subsidiaries. Pension benefits are generally based on years of service and compensation. The Company also maintains post-retirement medical benefit plans covering some of its U.S. employees. Benefits are subject to deductibles, co-payment provisions and coordination with benefits available under Medicare. The Company has made a determination regarding the effects of the Medicare Prescription Drug, Improvement and Modernization Act of 2003 (the Act) that the prescription drug benefits it provides will be actuarially equivalent to the benefits provided under the Act. This determination was based on an analysis of the benefits and participant contributions for a particular participant group and comparing them to the benefits and contributions for the Medicare Part D standard benefit package. Retiree groups were assumed to be actuarially equivalent where the actuarial net value of the benefit/contribution package was greater than the Medicare Part D standard benefit package. The estimated benefit of the subsidy resulting from the Act has been incorporated as an actuarial gain into the measurement of the Plan obligation as of the November 30, 2006 measurement date and was updated as of the November 30, 2007 measurement date. The impact of the Act was not significant on the Company's post-retirement benefit expense in any year presented. The Company may amend any of the plans periodically to reflect legislative or other benefit changes.

44

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

($ In Millions, Except Per Share Data)

NOTE 14: PENSION AND OTHER POST-RETIREMENT BENEFIT PLANS (continued)

The following chart summarizes the Consolidated Balance Sheet impact, as well as the benefit obligations, assets and funded status of the pension and post-retirement medical benefit plans:

	Pension Plans												Post-Retirement Medical Benefit Plans
	United States						International
	2007			2006			2007			2006			2007			2006
Reconciliation of funded status of the plans and the amounts included in the Company’s Consolidated Balance Sheets at December 31:
Change in benefit obligations
Beginning obligations	$	95.8		$	89.7		$	173.2		$	135.9		$	40.6		$	41.0
Service cost		5.4			5.1			8.8			7.4			1.1			1.1
Interest cost		5.1			4.9			6.3			5.6			2.2			2.1
Plan participant contributions		—			—			2.4			2.2			0.7			0.4
Plan amendments		—			(.1	)		—			—			—			(6.8	)
Benefits and expenses paid		(5.6	)		(6.0	)		(3.7	)		(2.3	)		(3.4	)		(2.6	)
Net transfer in		—			—			—			4.3			—			—
Actuarial loss (gain)		(1.5	)		2.2			(10.2	)		5.8			(2.3	)		5.4
Exchange rate changes		—			—			9.9			14.3			—			—
Ending obligations	$	99.2		$	95.8		$	186.7		$	173.2		$	38.9		$	40.6
Changes in plans assets
Beginning fair value	$	93.7		$	85.2		$	145.6		$	116.2		$	—		$	—
Actual return on plan assets		7.4			12.0			5.3			10.6			—			—
Employer contributions		3.4			2.5			10.7			3.9			2.7			2.2
Plan participant contributions		—			—			2.4			2.2			0.7			0.4
Benefits and expenses paid		(5.6	)		(6.0	)		(3.7	)		(2.3	)		(3.4	)		(2.6	)
Acquisitions		—			—			—			2.9			—			—
Exchange rate changes		—			—			8.0			12.1			—			—
Ending fair value	$	98.9		$	93.7		$	168.3		$	145.6		$	—		$	—
Reconciliation of funded status
Funded status	$	(0.3	)	$	(2.1	)	$	(18.4	)	$	(27.6	)	$	(38.9	)	$	(40.6	)
Contributions and distributions made by Company from measurement date to fiscal year end		—			—			0.3			0.3			0.1			0.1
Net Consolidated Balance Sheet asset/(liability)	$	(0.3	)	$	(2.1	)	$	(18.1	)	$	(27.3	)	$	(38.8	)	$	(40.5	)
Amounts recognized in the Consolidated Balance Sheets:
For years after adoption of the funded status provisions of SFAS 158
Noncurrent assets	$	—		$	—		$	1.9		$	—		$	—		$	—
Current liabilities		—			—			(0.3	)		(0.2	)		(1.9	)		(2.0	)
Noncurrent liabilities		(0.3	)		(2.1	)		(19.7	)		(27.1	)		(36.9	)		(38.5	)
Net amount recognized	$	(0.3	)	$	(2.1	)	$	(18.1	)	$	(27.3	)	$	(38.8	)	$	(40.5	)
Reconciliation of amounts recognized in the Consolidated Balance Sheets
Initial net (obligation)	$	—		$	—		$	(0.3	)	$	(0.3	)	$	—		$	—
Prior service (cost) credit		(1.9	)		(2.3	)		(1.4	)		(1.5	)		9.6			10.6
Net (loss) gain		(22.3	)		(24.7	)		(21.7	)		(29.7	)		5.4			3.1
Accumulated other comprehensive (loss) income	$	(24.2	)	$	(27.0	)	$	(23.4	)	$	(31.5	)	$	15.0		$	13.7
Accumulated contributions in excess of net periodic benefit cost	$	23.9		$	24.9		$	5.3		$	4.2		$	(53.8	)	$	(54.2	)
Net amount surplus (deficit) recognized in statement of financial position	$	(0.3	)	$	(2.1	)	$	(18.1	)	$	(27.3	)	$	(38.8	)	$	(40.5	)

45

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

($ In Millions, Except Per Share Data)

NOTE 14: PENSION AND OTHER POST-RETIREMENT BENEFIT PLANS (continued)

	Pension Plans												Post-Retirement Medical Benefit Plans
	United States						International
	2007			2006			2007			2006			2007			2006
Changes recognized in other comprehensive income
Changes due to minimum liability and intangible asset recognition prior to adoption of SFAS 158
Decrease in additional minimum liability		n/a			—			n/a		$	(0.1	)		n/a			—
Decrease in intangible asset		n/a			—			n/a			0.4			n/a			—
Other comprehensive loss		n/a			—			n/a			0.3			n/a			—
Changes in plan assets and benefit obligations recognized in other comprehensive income
New prior service cost		—			n/a			—			n/a			—			n/a
Net loss (gain) arising during the year	$	(1.4	)		n/a		$	(7.8	)		n/a		$	(2.3	)		n/a
Effect of exchange rates on amounts included in AOCI		—			n/a			1.2			n/a			—			n/a
Amounts recognized as a component of net periodic benefit cost
Amortization, settlement or curtailment recognition of net transition asset (obligation)		—			n/a			—			n/a			—			n/a
Amortization or curtailment recognition of prior service credit (cost)		(0.4	)		n/a			(0.2	)		n/a			1.0			n/a
Amortization or settlement recognition of net gain (loss)		(1.0	)		n/a			(1.3	)		n/a			—			n/a
Total recognized in other comprehensive loss (income)		(2.8	)		n/a			(8.1	)		0.3			(1.3	)		—
Total recognized in net periodic benefit cost and other comprehensive loss (income)		1.7			5.1			0.9			7.9			1.0			2.0
Increase in accumulated other comprehensive (loss) income, (before taxes), to reflect the adoption of SFAS 158		n/a		$	(27.0	)		n/a		$	(30.7	)		n/a		$	13.7
Estimated amounts that will be amortized from accumulated other comprehensive income over the next fiscal year
Initial net (obligation)		—			—			—			—			—			—
Prior service (cost) credit	$	(0.4	)	$	(0.4	)	$	(0.3	)	$	(0.3	)	$	1.0		$	1.0
Net (loss) gain		(1.1	)		(1.0	)		(0.3	)		(1.2	)		0.1			—
Total estimated amortization	$	(1.5	)	$	(1.4	)	$	(0.6	)	$	(1.5	)	$	1.1		$	1.0

The components of the net periodic benefit costs are as follows:

	Pension Plans																		Post-Retirement Medical Benefit Plans
	United States									International
	2007			2006			2005			2007			2006			2005			2007			2006			2005
Service cost	$	5.4		$	5.1		$	4.6		$	8.8		$	7.4		$	6.6		$	1.1		$	1.1		$	1.0
Interest cost		5.1			4.9			4.6			6.3			5.6			5.5			2.2			2.1			2.1
Expected return on plan assets		(7.4	)		(6.8	)		(6.4	)		(7.6	)		(6.9	)		(5.4	)		—			—			—
Amortization		1.4			1.9			1.8			1.5			1.5			1.0			(1.0	)		(1.2	)		(0.9	)
Net periodic benefit cost	$	4.5		$	5.1		$	4.6		$	9.0		$	7.6		$	7.7		$	2.3		$	2.0		$	2.2

46

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

($ In Millions, Except Per Share Data)

NOTE 14: PENSION AND OTHER POST-RETIREMENT BENEFIT PLANS (continued)

The rate assumptions associated with the pension and post-retirement medical benefit plans to determine benefit obligations and additional year-end information are as follows:

	Pension Plans												Post-Retirement Medical Benefit Plans
	United States						International
	2007			2006			2007			2006			2007			2006
Assumptions to determine benefit obligations
Discount rate		6.30	%		5.55	%		4.35	%		3.60	%		6.45	%		5.55	%
Compensation rate increase		3.60	%		3.25	%		3.50	%		3.31	%		n/a			n/a
Measurement date		Nov-30			Nov-30			Nov-30			Nov-30			Nov-30			Nov-30
Additional year-end information
Accumulated benefit obligation	$	88.1		$	84.6		$	161.7		$	143.7			n/a			n/a
Plans with accumulated benefit obligations in excess of plan assets:
Projected benefit obligation	$	—		$	—		$	13.5		$	18.3			n/a			n/a
Accumulated benefit obligation		—			—			10.9			14.8			n/a			n/a
Fair value of plan assets		—			—			—			3.8			n/a			n/a
Plans with projected benefit obligations in excess of plan assets:
Projected benefit obligation	$	99.2		$	95.8		$	122.4		$	173.2		$	38.9		$	40.6
Fair value of plan assets		98.9			93.7			102.2			145.6			—			—

The rate assumptions associated with the pension and post-retirement medical benefit plans to determine periodic pension costs are as follows:

	Pension Plans												Post-Retirement Medical Benefit Plans
	United States						International
	2007		2006		2005		2007		2006		2005		2007		2006		2005
Discount rate	5.55	%	5.65	%	6.00	%	3.60	%	3.88	%	4.31	%	5.55	%	5.65/6.15	%(1)	6.00	%
Expected rate of return on plan assets	8.25	%	8.25	%	8.25	%	5.08	%	5.46	%	5.22	%	n/a		n/a		n/a
Compensation rate increase	3.25	%	3.25	%	3.50	%	3.31	%	3.48	%	3.48	%	n/a		n/a		n/a

(1) Due to plan changes, the Post-Retirement Medical Plan expense was remeasured at May 31, 2006, using a discount rate of 6.15%.

The expected employer contributions and benefit payments are shown in the following table for the pension and post-retirement medical benefit plans:

	Year Ending	Pension Plans				Post-Retirement Medical Benefit Plans(2)		Expected Medicare Subsidy Receipts
Cash Flows		United States		International
Ex pected employer contributions	2008	$	7.3	$	5.1	$	2.2		n/a
Ex pected benefit payments for fiscal year ending	2008		8.8		4.5		2.2	$	0.3
	2009		8.8		4.7		2.4		0.3
	2010		8.5		5.2		2.6		0.4
	2011		7.8		5.6		2.8		0.4
	2012		8.9		5.9		2.9		0.5
	Next 5 years		51.9		35.6		16.8		3.5

(2) Expected payments for Post-Retirement Medical Benefit Plans payments are shown net of the expected Medicare subsidy receipts.

The Pension Protection Act of 2006 (“PPA”) was effective on August 17, 2006. While the PPA will have some effect on specific plan provisions in our United States retirement program, its primary effect will be to change the minimum funding requirements for plan years beginning in 2008. Until relevant regulations are issued, the financial effect is uncertain. However, the changes in the timing and amount of our required contributions are not expected to be materially different than our current projections.

47

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

($ In Millions, Except Per Share Data)

NOTE 14: PENSION AND OTHER POST-RETIREMENT BENEFIT PLANS (continued)

Pension Plans

For determination of the discount rate, the present value of the cash flows as of the measurement date is determined using the spot rates from the Mercer Yield Curve, and based on the present values, a single equivalent discount rate is developed. This rate is the single uniform discount rate that, when applied to the same cash flows, results in the same present value of the cash flows as of the measurement date. The plans are assumed to continue in force for as long as the assets are expected to be invested. In estimating the expected long-term rate of return on assets, appropriate consideration is given to historical performance for the major asset classes held or anticipated to be held by the Plan and to current forecasts of future rates of return for those asset classes. Cash flow and expenses are taken into consideration to the extent that the expected return would be affected by them. Because assets are held in qualified trusts, expected returns are not reduced for taxes.

The assets of the pension plans are invested in institutionally acceptable investments to produce a diversified portfolio. The Company believes the investments are sufficiently diversified to maintain a reasonable level of risk without sacrificing return. Target asset allocations and weighted average asset allocations at November 30, 2007 are as follows:

	Target Allocations				Weighted Average Asset Allocations
	U.S. Plans		International Plans		U.S. Plans		International Plans
Equity Securities	70–85	%	39–50	%	78	%	47	%
Real Estate	—		6–12	%	—		9	%
Debt Securities	15–30	%	36–57	%	20	%	38	%
Other	0–10	%	0–10	%	2	%	6	%

The Company has engaged an Investment Manager and Trustee for the U.S. Plan that has the responsibility of selecting investment fund managers with demonstrated experience and expertise and funds with demonstrated historical performance meeting the Plan’s investment guidelines. The

Investment Manager considers both actively and passively managed investment strategies and allocates funds across the asset classes to develop an efficient investment structure.

The Trustees of the International Plans have engaged reputable institutions to invest the Plan’s assets in funds with demonstrated historical performance and manage the Plan’s assets in accordance with investment guidelines developed by the Trustees.

Post-Retirement Medical Benefit Plans

For determination of the discount rate, the present value of the cash flows as of the measurement date is determined using the spot rates from the Mercer Yield Curve, and based on the present values, a single equivalent discount rate is developed. This rate is the single uniform discount rate that, when applied to the same cash flows, results in the same present value of the cash flows as of the measurement date. Assumed health care cost trend rates have a significant effect on the amounts reported for the post-retirement medical benefit plans. Medical costs were assumed to increase at an annual rate of 11.0% in 2007, decreasing ratably to a growth rate of 5.0% in 2014 and remaining at 5.0% per year thereafter. The effects of a one-percentage point decrease in the assumed health care cost trend rates on the aggregate service and interest cost components and on the post-retirement benefit obligations are decreases of $0.1 and $1.0, respectively. The effects of a one-percentage point increase on the aggregate service and interest cost components and on the post-retirement benefit obligations are increases of $0.1 and $1.0, respectively. Benefits are funded as claims are paid.

401(k) Retirement Savings Plan

The Company’s 401(k) retirement savings plan provides retirement benefits to eligible U.S. employees in addition to those provided by the pension plan. The plan permits participants to voluntarily defer a portion of their compensation, subject to Internal Revenue Code limitations. The Company also contributes a fixed amount per year to the account of each eligible employee plus a percentage of the employee’s salary deferral. The Company’s policy is to fully fund this plan. The cost for this plan was $8.3, $7.7 and $7.1 for the years ended December 31, 2007, 2006 and 2005, respectively.

NOTE 15: EARNINGS PER SHARE

A reconciliation of basic and diluted earnings per share, together with the related shares outstanding for the years ended December 31 are as follows:

	2007		2006		2005
Net income available to common shareholders	$	311.1	$	276.8	$	258.3
Weighted average shares (in millions)
Basic shares		130.6		132.9		135.8
Effect of dilutive securities — options outstanding		2.5		2.0		1.7
Diluted shares		133.1		134.9		137.5
Net income per share — Basic	$	2.38	$	2.08	$	1.90
Net income per share — Diluted	$	2.34	$	2.05	$	1.88

48

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

($ In Millions, Except Per Share Data)

NOTE 16: SHARE REPURCHASES

At December 31, 2007 and December 31, 2006, the Company had repurchased a total of 84.0 million shares and 80.0 million shares, respectively. During 2006, the Company was authorized to increase its share repurchase program from 80.0 million to 90.0 million shares. There were 129.4 million shares outstanding as of December 31, 2007. The Company expects to acquire the remaining 6.0 million authorized shares, however, the timing of the repurchases and number of shares repurchased, if any, will depend upon market conditions and other factors.

NOTE 17: ACCUMULATED OTHER COMPREHENSIVE INCOME

Components of accumulated other comprehensive income, net of tax are as follows:

	Foreign Currency Translation Adjustment			Unrealized Gain on Securities			Pension and Post- Retirement Benefit Plans			Accumulated Other Comprehensive Income
Balance, December 31, 2004	$	129.7		$	—		$	(5.9	)	$	123.8
Current period change		(96.6	)		0.7			5.5			(90.4	)
Balance, December 31, 2005		33.1			0.7			(0.4	)		33.4
Current period change		75.6			3.4			(31.7	)		47.3
Balance, December 31, 2006		108.7			4.1			(32.1	)		80.7
Current period change		71.5			(0.7	)		8.4			79.2
Balance, December 31, 2007	$	180.2		$	3.4		$	(23.7	)	$	159.9

The 2007 activity for unrealized gain on securities is net of tax of $0.9. The 2007 pension and post-retirement benefit plans activity is net of tax of $3.8. Deferred taxes are not provided on foreign currency translation adjustment.

49

MANAGEMENT’S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING

Our management is responsible for establishing and maintaining adequate internal control over financial reporting (as defined in the Securities Exchange Act Rule 13a-15 (f)). Under the supervision and with the participation of our management, including our principal executive officer and our principal financial officer, we assessed the effectiveness of our internal control over financial reporting as of December 31, 2007. In making this assessment, our management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in the Internal Control-Integrated Framework. Our management has concluded that, as of December 31, 2007, our internal control over financial reporting is effective based on these criteria.

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To The Board of Directors and Stockholders

Sigma-Aldrich Corporation:

We have audited the accompanying consolidated balance sheets of Sigma-Aldrich Corporation and subsidiaries (the Company) as of December 31, 2007 and 2006, and the related consolidated statements of income, stockholders’ equity, and cash flows for each of the years in the three-year period ended December 31, 2007. We also have audited the Company’s internal control over financial reporting as of December 31, 2007, based on criteria established in Internal Control — Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). The Company’s management is responsible for these consolidated financial statements, for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management’s Report on Internal Control Over Financial Reporting. Our responsibility is to express an opinion on these consolidated financial statements and an opinion on the Company’s internal control over financial reporting based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (PCAOB) (United States). Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement and whether effective internal control over financial reporting was maintained in all material respects. Our audits of the consolidated financial statements included examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audits also included performing such other procedures as we considered necessary in the circumstances. We believe that our audits provide a reasonable basis for our opinions.

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of Sigma-Aldrich Corporation and subsidiaries as of December 31, 2007 and 2006, and the results of their operations and their cash flows for each of the years in the three-year period ended December 31, 2007, in conformity with accounting principles generally accepted in the United States of America. Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2007, based on criteria established in Internal Control — Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission.

As discussed in Note 1 to the consolidated financial statements, the Company adopted the recognition and disclosure provision as required by Statement of Financial Accounting Standards No. 158, Employers’ Accounting for Defined Benefit Pension and Other Postretirement Plans, as of December 31, 2006.

As discussed in Note 12 to the consolidated financial statements, effective January 1, 2006, the Company adopted the fair value method of accounting for stock-based compensation as required by Statement of Financial Accounting Standards No. 123 (Revised 2004), Share-Based Payment.

As discussed in Note 10 to the consolidated financial statements, effective January 1, 2007, the Company adopted Financial Accounting Standards Board Interpretation No. 48, Accounting for Uncertainty in Income Taxes, an interpretation of Statement of Financial Accounting Standard No. 109.

St. Louis, Missouri

February 25, 2008

50

EX-21

Exhibit 21

SIGMA-ALDRICH CORPORATION

SUBSIDIARIES

Sigma-Aldrich Corporation (Delaware), the Registrant:

1) Sigma-Aldrich Co. (Illinois)

(A) Sigma-Aldrich Israel, Ltd. (Israel)

(B) Aldrich Chemical Company, Inc. (Delaware)

(C) Sigma-Aldrich B.V. (Netherlands)

(1) Sigma-Aldrich Chemie Holding GmbH (Germany)

(a) Sigma-Aldrich Chemie GmbH (Germany)

(b) Sigma-Aldrich Produktions GmbH (Germany)

(c) Proligo International GmbH (Germany)

i. Proligo Biochemie GmbH (Germany)

a. Sigma-Aldrich Laborchemikalien GmbH (Germany)

ii. Proligo Singapore Pte. Ltd. (Singapore)

iii. Proligo Australia Pty. Ltd. (Australia)

(E) Sigma-Aldrich Chemie Verwaltungs GmbH (Germany)

(F) Sigma-Aldrich GrundsteucksVerwaltungs GmbH & Co. KG (Germany)¹

(G) Sigma-Aldrich Holding Sarl (France)²

(1) Aldrich Chemical Foreign Holding LLC³

(a) Sigma-Aldrich Chimie SNC (France)

i. Sigma-Aldrich Chimie S.a.rl. (France)

(2) Sigma Chemical Foreign Holding LLC³

(I) Supelco, Inc. (Delaware)

(1) Advanced Separation Technologies, Inc. (New Jersey)

(a) Advanced Separation Technologies Ltd. (UK)

(J) Sigma-Aldrich Biotechnology Holding Co., Inc. (Missouri)

(K) Sigma-Aldrich Biotechnology Investment LLC (Missouri)

(L) Sigma-Aldrich Biotechnology LP (Missouri)⁴

(M) Sigma-Genosys of Texas, Inc. (Texas)

(N) Sigma-Genosys Holdings LLC (Missouri)

(O) Sigma-Genosys LP (Texas)⁵

(P) Sigma-Aldrich Business Holdings, Inc. (Delaware)

(1) Sigma-Aldrich Research Biochemicals, Inc. (Massachusetts)

(Q) Sigma-Aldrich Lancaster, Inc. (Missouri)

(1) Techcare Systems, Inc. (California)

(R) KL Acquisition Corp (Missouri)

(1) Chemical Trade, Limited (Russia)

(2) MedChem, Limited (Russia)

(a) SAF-LAB (Russia)

(3) Sigma-Aldrich Rus (Russia)

(S) Sigma-Aldrich China, Inc. (Missouri)

(T) Sigma-Aldrich Logistik GmbH (Germany)

(U) Sigma-Aldrich Manufacturing, LLC (Missouri)

Exhibit 21 (continued)

2) Sigma-Aldrich, Inc. (Wisconsin)

3) Sigma-Aldrich Finance Co. (Missouri)

4) Sigma-Aldrich & Subs Foreign Sales Corporation (Barbados)

5) Sigma-Aldrich (Switzerland) Holding AG (Switzerland)

(A) Sigma-Aldrich Chemie GmbH (Switzerland)

(B) Sigma-Aldrich Production GmbH (Switzerland)

(1) Sigma-Aldrich GmbH (Switzerland)

(C) Sigma-Aldrich N.V./S.A. (Belgium)

(1) Sigma-Aldrich Chemie B.V. (Netherlands)

(D) Sigma-Aldrich Italia S.r.l. (Italy)

(1) Sigma-Aldrich S.r.l. (Italy)

(E) Sigma-Aldrich (Shanghai) Trading Co. Ltd. (China)

(F) Sigma-Aldrich Denmark A/S (Denmark)

(G) Sigma-Aldrich Finland Oy (Finland)

(H) Sigma-Aldrich Norway AS (Norway)

(I) Sigma-Aldrich Sweden AB (Sweden)

(J) Sigma-Aldrich Hong Kong Holding Limited (Hong Kong)

6) Sigma-Aldrich Company, Ltd. (UK)

(A) SAFC Biosciences Limited (UK)

(B) Pharmorphix Limited (UK)

(C) Epichem Group Ltd. (UK)

(1) SAFC Hitech Ltd. (UK)

(2) SAFC Hitech, Inc. (California)

(3) SAFC Hitech Taiwan Co., Ltd. (Taiwan)

(4) SAFC Hitech (Shanghai) Chemical Co. Ltd. (China)

(5) Epichem Korea Ltd. (South Korea)

7) Sigma-Aldrich Foreign Holding Co. (Missouri)

(A) Sigma-Aldrich Handels GmbH (Austria)

(B) Sigma-Aldrich spol.s.r.o. (Czech Republic)

(C) Sigma-Aldrich (O M) Ltd. (Greece)

(D) Sigma-Aldrich Kft (Hungary)

(E) Sigma-Aldrich Financial Services Limited (Ireland)

(F) Sigma-Aldrich Sp. z.o.o. (Poland)

(G) Sigma-Aldrich Quimica S.A. (Spain)

(H) Sigma-Aldrich de Argentina S.A. (Argentina)

(I) Sigma-Aldrich Pty., Limited (Australia)

(1) SAFC Biosciences Pty. Ltd. (Australia)

(J) Sigma-Aldrich Oceania Pty. Limited (Australia)

(K) Sigma-Aldrich Australia General Partnership (Australia)

(1) Sigma-Aldrich New Zealand Ltd. (New Zealand)

(L) Sigma-Aldrich Quimica Brasil Ltda. (Brazil)

(M) Sigma-Aldrich Canada Ltd. (Canada)

(N) Sigma-Aldrich Chemicals Private Ltd. (India)

(O) Sigma-Aldrich Japan KK (Japan)

(P) Sigma-Aldrich Holding Ltd. (Korea)

(1) Sigma-Aldrich Korea Ltd. (Korea)

(Q) Sigma-Aldrich Quimica S.A. de C.V. (Mexico)

(R) Sigma-Aldrich Pte. Ltd. (Singapore)

(1) Sigma-Aldrich (M) Sdn. Bhd. (Malaysia)

(S) Sigma-Aldrich Pty. Ltd. (South Africa)

(T) Silverberry Limited (Ireland)

(1) Shrawdine Limited (Ireland)

(a) Sigma-Aldrich Ireland Ltd. (Ireland)

i. SAFC Arklow Limited (Ireland)

8) Sigma-Aldrich Insurance Company Ltd. (Bermuda)

9) SAFC, Inc. (Wisconsin)

10) SAFC-JRH Holding Company, Inc. (Delaware)

(A) SAFC Biosciences, Inc. (Delaware)

11) SAFC Carlsbad, Inc. (California)

¹ Ownership interest in Sigma-Aldrich GrunsteucksVerwaltungs GmbH & Co. KG (Germany) is Sigma-Aldrich Co.- 95% and Sigma-Aldrich Chemie Verwaltungs GmbH- 5%

² Sigma-Aldrich (Switzerland) Holding AG owns 57.46% of Sigma-Aldrich Holding Sarl (France)

³ Ownership interest in Sigma-Aldrich Chimie SNC is Aldrich Chemical Foreign Holding LLC - 77% and Sigma Chemical Foreign Holding LLC- 23%

⁴ Ownership interest in Sigma-Aldrich Biotechnology LP is Sigma-Aldrich Biotechnology Investment LLC- 99% and Sigma-Aldrich Biotechnology Holding Co.- 1%

⁵ Ownership interest in Sigma-Genosys LP is Sigma-Genosys Holdings LLC- 99% and Sigma-Genosys of Texas, Inc.- 1%

EX-23

Exhibit 23

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

The Board of Directors

Sigma-Aldrich Corporation:

We consent to the incorporation by reference in the registration statement (No. 333-74163) on Form S-3 and registration statements (Nos. 333-49912, 33-24415, 33-62541, 333-64661, 333-30528 and 333-105033) on Form S-8 of Sigma-Aldrich Corporation (the Company) of our report dated February 25, 2008, with respect to the consolidated balance sheets of Sigma-Aldrich Corporation as of December 31, 2007 and 2006, and the related consolidated statements of income, stockholders’ equity, and cash flows for each of the years in the three-year period ended December 31, 2007 and the effectiveness of internal control over financial reporting as of December 31, 2007, which report appears in the December 31, 2007 annual report on Form 10-K of Sigma-Aldrich Corporation.

As discussed in Note 1 to the consolidated financial statements, the Company adopted the recognition and disclosure provision as required by Statement of Financial Accounting Standards No. 158, Employers’ Accounting for Defined Benefit Pension and Other Postretirement Plans, as of December 31, 2006.

As discussed in Note 12 to the consolidated financial statements, effective January 1, 2006 the Company adopted the fair value method of accounting for stock-based compensation as required by Statement of Financial Accounting Standards No. 123 (Revised 2004), Share-Based Payment.

As discussed in Note 10 to the consolidated financial statements, effective January 1, 2007, the Company adopted Financial Accounting Standards Board Interpretation No. 48, Accounting for Uncertainty in Income Taxes, an interpretation of Statement of Financial Accounting Standard No. 109.

St. Louis, Missouri

February 25, 2008

EX-31.1

Exhibit 31.1

CEO FORM 10-K CERTIFICATION

I, Jai P. Nagarkatti, certify that:

1. I have reviewed this annual report on Form 10-K of Sigma-Aldrich Corporation;

2. Based on my knowledge, this annual report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this annual report;

3. Based on my knowledge, the financial statements, and other financial information included in this annual report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this annual report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)), and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this annual report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this annual report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this annual report based on such evaluation; and

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: February 26, 2008

/s/ Jai P. Nagarkatti

Jai P. Nagarkatti

President and Chief Executive Officer

EX-31.2

Exhibit 31.2

CFO FORM 10-K CERTIFICATION

I, Michael R. Hogan, certify that:

1. I have reviewed this annual report on Form 10-K of Sigma-Aldrich Corporation;

2. Based on my knowledge, this annual report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this annual report;

3. Based on my knowledge, the financial statements, and other financial information included in this annual report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this annual report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)), and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this annual report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this annual report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this annual report based on such evaluation; and

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: February 26, 2008

/s/ Michael R. Hogan

Michael R. Hogan

Chief Administrative Officer and

Chief Financial Officer

EX-32.1

Exhibit 32.1

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the annual report of Sigma-Aldrich Corporation (the “Company”) on Form 10-K for the period ending December 31, 2007 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Jai P. Nagarkatti, Chief Executive Officer of the Company, certify, to the best of my knowledge, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that:

(1) The Report fully complies with the requirements of Section 13(a) or 1 5(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/ Jai P. Nagarkatti

Jai P. Nagarkatti

President and Chief Executive Officer

Sigma-Aldrich Corporation

February 26, 2008

EX-32.2

Exhibit 32.2

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the annual report of Sigma-Aldrich Corporation (the “Company”) on Form 10-K for the period ending December 31, 2007 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Michael R. Hogan, Chief Financial Officer of the Company, certify, to the best of my knowledge, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that:

(1) The Report fully complies with the requirements of Section 13(a) or 1 5(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/ Michael R. Hogan

Michael R. Hogan

Chief Administrative Officer and Chief Financial Officer

Sigma-Aldrich Corporation

February 26, 2008