Memorandum of Understanding for Employment of Richard Goldstein as Chairman and CEO of International Flavors & Fragrances, Inc.

  Memorandum of Understanding This Memorandum sets forth an outline of the terms of an Employment Contract pursuant to which International Flavors & Fragrances, Inc. ("IFF") will employ Richard Goldstein ("Executive") as its Chairman and CEO. I. Term: Five years from date first employed. II. Annual Compensation Salary: Not less than $900,000. Bonus: Based on performance. First year guarantee $590,000 (which represents 60% of salary), under plan to be adopted by IFF shareholders at annual meeting. No proration. Long Term Incentive: Based on performance. First year guarantee $720,000 (which represents 80% of salary), under plan to be adopted by IFF shareholders at annual meeting. No proration. Annual Stock Option First year 100,000 shares. Thereafter annual Grant: stock option grant of shares with Black-Scholes value of $590,000. First year grant will be made after IFF shareholders have approved new stock option plan at annual meeting. Expenses: $120,000 per year to cover incidental business related expenses. Benefits: Participate in IFF programs for its executives. IFF will provide Executive supplemental individual life insurance, group life insurance, long term disability, accidental death, etc. in order that total benefits provided to Executive by IFF will be equivalent to benefits provided to Executive by Unilever (Executive's current employer). III. Sign on Stock Option 500,000 shares. This grant will be made upon Grant: date of employment to the extent shares are available under existing stock option plan. Balance of grant will be made after IFF shareholders have approved new plan at annual meeting.  IV. Forfeiture Makeups: When Executive leaves Unilever, Executive will be required to give up certain grants. To keep Executive whole, IFF will provide the following: (a) Payment of $2,118,750, payable when Unilever would have made identical payments under Unilever's long term incentive plan. (b) Payment of $871,000 to compensate Executive for loss of ability to exercise "in the money" vested options which Unilever has the right to cancel. If Unilever permits exercise of these options, the amount would not be due from IFF. It is understood that, if this amount is due to Executive from IFF, Executive will have the right to take amount in IFF stock and/or cash. (c) Grant of stock option for 100,000 shares under new plan approved by IFF shareholders at annual meeting. This is to compensate executive for loss of his remaining Unilever stock options which are under water and unvested. V. Pension Make-up: In no event will Executive receive less pension on his retirement from IFF after five (5) years than he would have received had he stayed at Unilever for another five (5) years. If retirement from IFF occurs prior to five (5) years, the five (5) year pension credit will be calculated based on Executive's earnings at IFF and, before IFF, at Unilever during the five (5) years immediately preceding such retirement. VI. Severance: If Executive's employment is terminated prior to five (5) years by the Company "without cause" or by the Executive for "good reason": (a) Executive will receive salary, bonus and benefits for the remaining term of his employment contract, but not for less than two years. For example: Year of Period of Termination Receipt ----------- -------------------------- Year l 5 years Year 2 4 years Year 3 3 years Year 4 2 years} Payable under IFF  Year 5 2 years} normal severance policy (b) Sign on stock option grant will become/remain fully exercisable for its full term. (c) Pension benefit payable to Executive under Section V above will remain fully in force. If Executive's employment is terminated (i) after five (5) years or (ii) prior to five (5) years other than by the Company "without cause" or by the Executive for "good reason", any payments to Executive will be determined under then normal IFF policy. INTERNATIONAL FLAVORS & FRAGRANCES, INC. /s/ Richard Furlaud /s/ Richard Goldstein - ------------------------ ---------------------------------------- Richard Goldstein