ABOUT THE PROXY STATEMENTMATERIALS AND THE ANNUAL MEETING

ThisWhy am I receiving these proxy statement is furnishedmaterials?

We are providing these proxy materials in connection with the solicitation by the Company's Board of Directors (theof International Flavors & Fragrances Inc., a New York corporation (‘‘IFF,’’ the ‘‘Board’Company,’’ ‘‘we,’’ ‘‘us’’ or ‘‘our’’), of proxies to be used at theour 2007 Annual Meeting of Shareholders and at any adjournment or postponement. Shareholders are invited to attend the 2007 Annual Meeting, which will take place at 10:00 a.m. on Tuesday, May 8, 2007, and are requested to vote on the proposals described in this Proxy Statement.

The Notice of the Company to be held on May 9, 2006 or any postponements or adjournments (the ‘‘2006 Annual Meeting’’) at the principal executive office of the Company, 521 West 57th Street, New York, New York 10019. This proxy statement and theMeeting, Proxy Statement, form of proxy will beand voting instructions, together with our 2006 Annual Report, are being mailed to shareholders starting on or aboutaround March 24, 2006. Registered shareholders may also23, 2007.

What information is contained in these materials?

The information included in this Proxy Statement relates to proposals you will vote by telephone or through the Internet, by following the instructions on the proxy card. In addition to solicitation by mail, proxies may be solicited personally or by telephone, facsimile or electronic mail. The Company has retained Georgeson Shareholder to assist in proxy solicitation for a fee of $6,000. The cost of soliciting proxies will be borne by the Company. The Company will reimburse banks, brokers and other custodians, nominees and fiduciaries for their costs in sending proxy materials to the beneficial owners of Common Stock.

Any shareholder who signs and returns the enclosed form of proxy may revoke it at any time before it has been exercised by a written notice of revocation of that proxy or by submitting a new proxy bearing a later date, in each case received by the Secretary of the Company prior to the meeting, or by voting in person at the 2006 Annual Meeting. Attendance at the 20062007 Annual Meeting, will notthe voting process, the compensation of directors and our most highly paid executive officers in itself constitute revocation of a proxy.2006 and certain other information.

WhenWhy did I receive more than one record holderset of the Company's Common Stock shares the same address, the Companyproxy materials?

You may deliver only one annual report and onereceive multiple sets of proxy statement to that address unless the Company has received contrary instructions from one or more of those shareholders. Similarly, brokers and other intermediaries holdingmaterials if you hold your shares of IFF’s common stock in multiple accounts (such as through a brokerage account and an employee benefit plan). If you are a participant in the Company's Common StockCompany’s Retirement Investment Fund Plan (401(k)) and have common stock in ‘‘street name’’a plan account, the proxy also serves as voting instructions for more than one beneficial owner with the same address may deliver only one annual report and oneplan trustee. You should vote your shares as described in each proxy statement to that address if they have received consent from the beneficial ownersor instruction card you receive.

If you are a shareholder of the stock. The Company will deliver promptly upon written or oral request a separate copy of the annual report and proxy statement to any shareholder, including a beneficial owner of stock held in ‘‘street name,’’ at a shared address to which a single copy of either of those documents was delivered. To receive additional copies of the annual report and proxy statement,record, you may call or writecontact the Office of the Secretary, International Flavors & Fragrances Inc., 521 West 57th57^th Street, New York, New York 10019 (telephone: 212-765-5500). A copy of the annual report and proxy statement are also available through the Investor Relations link on the Company's website, www.iff.com. The information contained on the website is not incorporated by reference in or considered to be a part of this document.

You may also contact the Office of the Secretary of the Company at the address or telephone number above if you are a shareholder of record of the Company and you wish to receive a separate annual report and proxy statement in the future, or(212) 765-5500) if you are currently receiving multiple copies of the annual reportAnnual Report and proxy statementProxy Statement and want to request delivery of a single copy in the future. If your shares are held in ‘‘street name’’ and you want to increase or decrease the number of copies of the annual reportAnnual Report and proxy statementProxy Statement delivered to your household in the future, you should contact theyour broker, bank or other intermediarycustodian who holds the shares on your behalf.

TheWhat is the difference between a ‘‘shareholder of record’’ and a ‘‘street name’’ holder?

If your shares are registered directly in your name with IFF’s transfer agent, American Stock Transfer & Trust Company had outstanding(‘‘AST’’), you are considered a ‘‘shareholder of record’’ or a ‘‘registered shareholder’’ of those shares. In this case, your proxy materials have been sent to you directly by IFF.

If your shares are held in a stock brokerage account or by a bank, trust or other nominee or custodian, including shares you may own as a participant in the Company’s Retirement Investment Fund Plan (401(k)), you are considered the ‘‘beneficial owner’’ of those shares, which are held in ‘‘street name.’’ These proxy materials have been forwarded to you by your broker, bank, trustee or other holder who is considered the shareholder of record of those shares. As the beneficial owner, you have the right to direct your broker, bank, trustee or other holder of record as to how to vote your shares by using the instruction card included in the mailing or by following their instructions for voting by telephone or on the Internet.

Who is entitled to vote at the close2007 Annual Meeting?

IFF’s Board of business on February 28, 2006, 90,738,982 sharesDirectors has established March 15, 2007 as the record date for the 2007 Annual Meeting of Common Stock each entitled to one vote per share.Shareholders. Only shareholders of record at the close of business on March 21, 2006 will bethe record date are entitled to receive this notice and to vote at the 20062007 Annual Meeting. At the close of business on March 15, 2007, there were 89,201,987 outstanding shares of IFF’s common stock. Each share of common stock is entitled to one vote on each matter properly brought before the 2007 Annual Meeting.

SECURITY OWNERSHIP OF MANAGEMENT, DIRECTORS AND
CERTAIN OTHER PERSONSWhat will I vote on?

The following table sets forth certain information regardingThere are three proposals scheduled to be voted on at the 2007 Annual Meeting

	•	the election of nine members of the Board of Directors, each to hold office for a one-year term until the Annual Meeting in 2008;

	•	the ratification of PricewaterhouseCoopers LLP as our independent registered public accounting firm for 2007; and

	•	the reapproval of the business criteria used for setting performance goals under the 2000 Stock Award and Incentive Plan.

How many votes must be present to hold the 2007 Annual Meeting?

A ‘‘quorum’’ is necessary to hold the 2007 Annual Meeting. A quorum is established if the holders of a majority of the votes entitled to be cast by shareholders are present at the meeting, either in person or by proxy. Abstentions and broker non-votes are counted as present for purposes of determining a quorum, but are not counted for purposes of determining the approval of the proposals to be acted upon. Shares of common stock represented by executed proxies received by the Company will be counted for purposes of establishing a quorum at the meeting, regardless of how or whether such shares are voted on any specific proposal.

What are the voting recommendations of IFF’s Board of Directors?

IFF’s Board of Directors recommends that you vote your shares as follows:

	•	‘‘FOR’’ the election of each of the nine nominees to the Board;

	•	‘‘FOR’’ the ratification of the selection of PricewaterhouseCoopers LLP as IFF’s independent registered public accounting firm for 2007; and

	•	‘‘FOR’’ the reapproval of the business criteria used for setting performance goals under the 2000 Stock Award and Incentive Plan.

How do I vote?

You may vote in several different ways:

In person at the 2007 Annual Meeting

You may vote in person at the 2007 Annual Meeting. You may also be represented by another person at the meeting by executing a proxy properly designating that person. If you are the beneficial ownershipowner of shares held in ‘‘street name,’’ you must obtain a legal proxy from your broker, bank or other holder of record and present it to the inspectors of election with your ballot to be able to vote at the meeting.

By mail

You may vote by completing, signing, dating and returning the enclosed proxy card(s) in the postage-paid envelope we have provided.

By telephone

You may vote by calling one of the Company's Common Stocktelephone numbers on your proxy card. Please have your proxy card handy when you call and use any touch-tone phone to transmit your voting instructions.

By Internet

You may vote by using the Internet, www.proxyvote.com, to submit your voting instructions. You should have your proxy card handy when you go online. If you vote on the Internet, you may also request electronic delivery of future proxy materials.

Telephone and Internet voting for shareholders of record will be available until 11:59 PM Eastern Time on May 7, 2007. The availability of telephone and Internet voting for beneficial owners of shares held in ‘‘street name’’ will depend on your broker, bank or other holder of record. We recommend that you follow the voting instructions on the materials you receive. A mailed proxy must be received by May 7, 2007 in order to be voted at the Annual Meeting.

If you vote by telephone or by Internet, you do not have to return your proxy card or voting instruction card. However, even if you plan to attend the 2007 Annual Meeting, we recommend that you vote your shares in advance so that your vote will be counted if you later decide not to attend the meeting.

How can I change my vote?

If you are a shareholder of record, you may revoke your proxy before it is exercised by:

	•	Sending a written notice to the Office of the Secretary, International Flavors & Fragrances Inc., 521 West 57th Street, New York, New York 10019 stating that your proxy is revoked. The notice must be received prior to the 2007 Annual Meeting;

	•	Signing and dating a new, later-dated proxy card and sending it to the Office of the Secretary so that it is received prior to the 2007 Annual Meeting;

	•	Voting by telephone or using the Internet after the date of your proxy card and before the 2007 Annual Meeting; or

	•	Attending the 2007 Annual Meeting and voting in person by ballot. Your attendance at the 2007 Annual Meeting in person will not cause your previously granted proxy to be revoked unless you specifically so request or you vote by ballot at the meeting.

If you are a beneficial owner of shares held in ‘‘street name’’, you may submit new proxy voting instructions by contacting your bank, broker or other holder of record.

How are votes counted?

In the election of the directors, your vote may be cast ‘‘FOR’’ all of the nominees or your vote may be ‘‘WITHHELD’’ with respect to one or more of the nominees. For the other proposals, your vote may be cast ‘‘FOR’’, ‘‘AGAINST’’ or you may ‘‘ABSTAIN’’.

Under New York law, abstentions and broker non-votes, if any, will not be counted as votes cast, and therefore will have no effect on the outcome of February 28, 2006 by each directorthe matters to be voted on at the 2007 Annual Meeting.

All executed proxies will be voted in accordance with the voting instructions contained in those proxies. If you are a shareholder of record and nominee for director,you return your signed proxy card but do not indicate your voting preferences, the persons named in the Summary Compensation Tableproxy card will vote your shares represented by that proxy in accordance with the recommendation of our Board of Directors as described on page 7 under the heading ‘‘What are the voting recommendations of IFF’s Board of Directors?’’

Who will count the votes?

A representative from AST, IFF’s transfer agent, will tabulate the votes and serve as the Company’s inspector of election at the 2007 Annual Meeting.

What is an abstention?

An ‘‘abstention’’ is a properly signed proxy card which is marked ‘‘abstain’’ as to a particular matter.

What is a broker non-vote?

A ‘‘broker non-vote’’ occurs when a brokerage firm or other nominee holding shares for a beneficial owner does not vote on a particular proposal because the nominee does not have authority to vote on that particular proposal without receiving voting instructions from the beneficial owner. Under New York

Stock Exchange (‘‘NYSE’’) rules, certain proposals, such as the election of directors (Item 1 in this Proxy Statement) and the ratification of the selection of an independent registered public accounting firm (Item 2 in this Proxy Statement), are considered ‘‘routine’’ matters, and brokers generally may vote on behalf of beneficial owners who have not furnished voting instructions, subject to the rules of the NYSE concerning transmission of proxy statementmaterials to beneficial owners, and allsubject to any proxy voting policies and procedures of those brokerage firms. For ‘‘non-routine’’ proposals, brokers may not vote on the proposals unless they have received voting instructions from the beneficial owner, and to the extent that they have not received voting instructions, brokers report such number of shares as ‘‘non-votes’’.

How many votes are needed to approve the proposals?

A plurality of the votes cast is required for the election of directors. Pursuant to the law of the State of New York, IFF’s state of incorporation, only votes cast ‘‘FOR’’ the election of directors and executive officers aswill be counted in determining whether a group.

				Shares of Common Stock Beneficially Owned (1)				Rights to Acquire Beneficial Ownership of Shares of Common Stock (2)				Percent of Class
Margaret Hayes Adame					9,303				24,000				(3	)
Gunter Blobel					11,807				3,000				(3	)
J. Michael Cook					8,027				9,000				(3	)
James H. Dunsdon					16,150				92,750				(3	)
Peter A. Georgescu					17,655				15,000				(3	)
Richard A. Goldstein					411,492	(4)			1,081,000				1.63	%
Alexandra A. Herzan					1,272,561	(5)			3,000				1.41	%
D. Wayne Howard					8,220				215,000				(3	)
Henry W. Howell, Jr.					3,937				0				(3	)
Arthur C. Martinez					9,027				9,000				(3	)
Nicolas Mirzayantz					3,761				147,000				(3	)
Burton M. Tansky					5,022				1,000				(3	)
Douglas J. Wetmore					52,763				154,875				(3	)
All Directors and Executive Officers as a Group (25 persons)					1,889,335				2,242,624				4.44	%

Certain Other Ownersnominee for director has been elected. However, in January 2007, our Board of Directors revised our Corporate Governance Guidelines to provide that in an uncontested election, any nominee for director who receives a greater number of votes ‘‘WITHHELD’’ from his or her election than votes ‘‘FOR’’ such election must promptly offer his or her resignation. A description of the process that will be followed under our Corpor ate Governance Guidelines if such an event occurs is located in this Proxy Statement under the heading ‘‘Proposals Requiring Your Vote—Item 1—Election of Directors’’.

The following table sets forth information regardingaffirmative vote of a majority of the votes cast is required to ratify the selection of PricewaterhouseCoopers LLP (PwC) as the Company’s independent registered public accounting firm for 2007—and to reapprove the business criteria used for setting performance goals under the 2000 Stock Award and Incentive Plan.

Where can I find the voting results of the 2007 Annual Meeting?

IFF will announce preliminary voting results at the 2007 Annual Meeting and publish final results in our Quarterly Report on Form 10-Q for the 2007 second quarter.

Do I need an admission ticket to attend the 2007 Annual Meeting?

You will need an admission ticket or proof that you own IFF shares to enter the 2007 Annual Meeting. If you are a shareholder of record and plan to attend, please check the box on your proxy card to note that you will be attending the meeting. If you hold your shares in street name and plan to attend the meeting, you must bring evidence of your ownership of IFF stock, such as your bank or brokerage account statement, to be admitted. You may also request a ticket by writing to the Office of the Secretary, International Flavors & Fragrances Inc., at the address noted above. Evidence of your ownership, which you can obtain from your bank or broker, must accompany your letter. You must also present a form of personal photo identifi cation in order to be admitted to the meeting.

How do I obtain a separate set of proxy materials if I share an address with other shareholders?

When more than one shareholder of record of IFF’s common stock shares the same address, we may deliver only one Annual Report and one Proxy Statement to that address unless we have received contrary instructions from one or more of those shareholders. Similarly, brokers and other nominees holding shares of IFF’s common stock in ‘‘street name’’ for more than one beneficial owner with the same address may deliver only one Annual Report and one Proxy Statement to that address if they have received consent from those beneficial owners. We will deliver promptly upon written or oral request a separate copy of the Annual Report and Proxy Statement to any shareholder, including a beneficial owner of shar es held in ‘‘street name,’’ at a shared address to which a single copy of either of those documents was delivered. To receive additional copies of the Annual Report and Proxy Statement, or if you are a shareholder of record and would like to receive separate materials for future annual meetings, you may call or write the Office of the Secretary, International Flavors & Fragrances Inc., 521 West 57th Street,

New York, New York 10019 (telephone: 212-765-5500). If you are a beneficial owner of shares held in ‘‘street name’’ and would like to receive separate materials, you may contact your bank, broker or other holder of record.

Who pays for the cost of this proxy solicitation?

IFF will pay the entire cost of soliciting proxies. In addition to solicitation by mail, proxies may be solicited on the Company’s behalf by directors, officers or employees in person, by telephone, by facsimile or by electronic mail. The Company has retained Georgeson Inc. to assist in proxy solicitation for a fee of $6,000 plus expenses. The Company will reimburse banks, brokers and other custodians, nominees and fiduciaries for their costs in sending proxy materials to the beneficial owners of more than 5%the Company’s common stock.

Can I access the Notice of Annual Meeting, Proxy Statement and 2006 Annual Report on the Internet?

A copy of the Company's outstanding Common Stock asNotice of February 28,Annual Meeting, Proxy Statement and 2006 basedAnnual Report are available through the Investor Relations link on IFF’s website, www.iff.com. No other information contained on the website is incorporated by reference in or considered to be a part of this document.

How can I obtain a copy of IFF’s Annual Report on Form 10-K for the year ended December 31, 2006?

IFF will on a reviewrequest in writing provide without charge to each person from whom proxies are being solicited for the 2007 Annual Meeting a copy of filingsour Annual Report on Form 10-K for the year ended December 31, 2006 including the financial statements and any schedules, required to be filed with the Securities and Exchange Commission, (the "SEC"excluding exhibits. We may impose a reasonable fee for providing the exhibits to the Form 10-K. Requests should be made to Office of the Secretary, International Flavors & Fragrances Inc., 521 West 57th Street, New York, N.Y. 10019. IFF’s Annual Report on Form 10-K is also available free of charge through the Investor Relations link on our website, www.iff.com.

CORPORATE GOVERNANCE

Corporate Governance Guidelines

Our Board of Directors has responsibility for overseeing the management of the Company. The Board has adopted Corporate Governance Guidelines which summarize the practices the Board will follow with respect to Board membership and selection, responsibilities of directors, Board meetings, evaluation of the Chief Executive Officer (‘‘CEO’’), succession planning, Board committees and director compensation. In January 2007 the Nominating and Governance Committee and the Board reviewed and revised the Corporate Governance Guidelines. A copy of the Company’s Corporate Governance Guidelines is available through the Investor Relations link on the Company’s website, www.iff.com, and is available in print to any shareholder who requests it.

Board and Committee Memberships

Our Board has an Audit Committee, a Compensation Committee and a Nominating and Governance Committee, each of which operates under a written charter adopted by the Board. Each committee reviews its charter at least annually and recommends charter changes to the Board as appropriate. In December 2006, each of the Audit Committee and the Compensation Committee reviewed and revised its charter. In January 2007, the Nominating and Governance Committee reviewed and revised its charter. The revised charter of each committee was subsequently approved by the Board. Under the charter of each committee, the committee annually reviews the committee’s own performance. A current copy of each of the Audit Committee, Compensation Committ ee and Nominating and Governance Committee charters is available through the Investor Relations link on the Company’s website, www.iff.com. Each of these documents is also available in print to any shareholder who requests it.

In January 2007, the Board approved new members of the Board committees effective March 1, 2007. The table below provides current membership for each of the Board committees.

				NUMBER OF SHARES AND NATURE OF BENEFICIAL OWNERSHIP
NAME AND ADDRESS OF BENEFICIAL OWNER				SOLE VOTING POWER				SHARED VOTING POWER				SOLE INVESTMENT POWER				SHARED INVESTMENT POWER				PERCENT OF CLASS
American Century Companies, Inc.(6)					7,399,610				0				7,477,861				0				8.24	%
4500 Main Street
9th Floor
Kansas City, MO 64111
T. Rowe Price Associates, Inc.(7)					1,428,549				0				6,359,033				0				7.01	%
100 E. Pratt Street
Baltimore, MD 21202
J.P. Morgan Chase & Co.(8)					394,894				4,560,250				484,918				4,589,388				5.60	%
270 Park Avenue
New York, NY 10017
Henry P. van Ameringen(9)					2,381,953				2,405,829				2,381,953				2,405,829				5.28	%
509 Madison Avenue
New York, NY 10022
Pauline H. Van Dyke III(10)					129,426				5,010,175				129,426				5,010,175				5.66	%
111 East Kilbourn Avenue
19th Floor
Milwaukee, WI 53202
William D. Van Dyke III(11)					6,957				5,010,175				17,957				5,010,175				5.54	%
111 East Kilbourn Avenue
19th Floor
Milwaukee, WI 53202

(1)Name

This column includes share unit balances held in the IFF Stock Fund under the Company's Deferred

Audit

Compensation Plan and credited to participants' accounts (where applicable), and, with respect to executive officers, may include certain premium share units held under such plan which are subject to vesting and may be forfeitable if the participant's employment is terminated. The number of share units in the IFF Stock Fund was calculated for participants based on the closing market price of the Company's Common Stock on February 28, 2006.

Nominating & Governance

Lead Director

Margaret Hayes Adame

X

Robert M. Amen

Günter Blobel

X

J. Michael Cook

X (Chairman)

Peter A. Georgescu

X (Chairman)

Alexandra A. Herzan

X

Henry W. Howell, Jr.

X (Chairman)

Arthur C. Martinez

X

X

X

Burton M. Tansky

X

(2)	The shares listed in this column are those which the named person has (or will have within 60 days after February 28, 2006) the right to acquire by the exercise of stock options granted by the Company.X = Committee member

(3)	Less than 1%.

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

(5)

Mrs. Herzan is a director of the van Ameringen Foundation, Inc., which owns 509,991 shares, President and a director of the Lily Auchincloss Foundation, which owns 22,000 shares, a trustee and a beneficiary of a trust, which holds 736,946 shares, and a trustee and a beneficiary of a trust which owns 567 shares, all of which shares are included in Mrs. Herzan's ownership. Mrs. Herzan disclaims beneficial ownership of the shares owned by the van Ameringen Foundation, Inc. and the Lily Auchincloss Foundation.

(6)	As reported in Schedule 13G dated as of February 14, 2006. According to the Schedule 13G, as of December 31, 2005, American Century Investment Management, Inc. beneficially owned 7,477,861 shares, as to which it possessed sole voting power over 7,399,610 shares and sole dispositive power over 7,477,861 shares.

(7)	As reported in Schedule 13G dated as of February 14, 2006.

(8)	As reported in Schedule 13G/A dated as of January 11, 2006. The Company believes that a portion of the shares as to which J.P. Morgan Chase & Co. holds shared voting power and shared investment power is owned beneficially by a trust of which Mr. and Mrs. William D. Van Dyke, III and J. P. Morgan Chase are co-trustees.

(9)

As reported in Schedule 13D/A dated as of February 10, 2005 and based on other information available to the Company. The Company believes that the number of shares beneficially owned by Mr. van Ameringen includes 736,946 shares and 567 shares, respectively, held in trusts of which each of Mr. van Ameringen and Mrs. Herzan are trustees, and 509,991 shares owned by the van Ameringen Foundation, Inc. of which Mr. van Ameringen is an officer and director and Mrs. Herzan is a director.

(10)	As reported in Schedule 13G/A dated as of February 14, 2006. The Company believes that Mr. and Mrs. William Van Dyke, III share voting and investment power with respect to 5,010,175 shares and that a portion of such shares is owned beneficially by a trust of which Mr. and Mrs. William D. Van Dyke, III and J. P. Morgan Chase are co-trustees.

(11)	As reported in Schedule 13G/A dated as of February 14, 2006 and based on other information available to the Company. The Company believes that Mr. and Mrs. William Van Dyke, III share voting and investment power with respect to 5,010,175 shares and that a portion of such shares is owned beneficially by a trust of which Mr. and Mrs. William D. Van Dyke, III and J. P. Morgan Chase are co-trustees.

Audit Committee

Our Audit Committee oversees and reviews the Company’s financial reporting process and the integrity of the Company’s financial statements and financial reporting practices, the Company’s internal control environment, systems and performance, the audit process of the Company’s independent accountant and the qualifications, independence and performance of the independent accountant, the process and performance of the Company’s internal audit function and the procedures for monitoring compliance with laws and regulations and with the Company’s Code of Business Conduct and Ethics.

Our Board has determined that each of Mr. Howell and Mr. Martinez is an ‘‘audit committee financial expert’’ under applicable rules of the SEC and has accounting or related financial management expertise as required by applicable NYSE rules. The Board has also determined that all members of the Audit

ITEM 1. ELECTION OF DIRECTORSCommittee meet the financial literacy standards of the NYSE. None of our Audit Committee members currently serves on the audit committee of more than three public companies. The Audit Committee has established, together with members of the Company’s management, a hiring policy for employees or former employees of the Company’s independent accountant, consistent with the requirements of the NYSE. Under procedures adopted by the Audit Committee, the Audit Committee also reviews and pre-approves all audit and non-audit services performed by the Company’s independent accountant.

AtCompensation Committee

Our Compensation Committee is responsible for establishing executive officer compensation, for making recommendations to the meeting 8full Board concerning director compensation and for overseeing the compensation and benefit programs for other employees.

Processes and Procedures Regarding Compensation

Role of the Compensation Committee

Under our Compensation Committee’s charter, the Compensation Committee has responsibility to assist the Board in ensuring that long term and short term compensation provide performance incentives to management, and that compensation plans are appropriate and competitive and reflect the goals and performance of management and the Company. As discussed in more detail under the heading Compensation Discussion & Analysis beginning at page 36, the Compensation Committee considers, as appropriate and as contemplated by Company policies, plans and programs, Company-wide performance against applicable annual and long-term performance goals pre-established by the Compensation Committee. If the Compensation Committee deems it appr opriate, it may delegate any of its responsibilities to one or more Compensation Committee members or subcommittees.

The Compensation Committee works with the Board, the Nominating and Governance Committee and the Company’s senior management. The Compensation Committee establishes an annual schedule for matters to be considered by the Compensation Committee, including approval of our senior executives’ performance objectives and compensation actions. Recommendations from the Nominating and Governance Committee concerning the compensation and benefits of non-employee directors will be electedare reviewed and considered by the Compensation Committee before the Compensation Committee makes recommendations to the Board. The Compensation Committee also reviews and adopts, and where necessary or appropriate, recommends for Board and/or shareholder approv al, our compensation and benefits policies, plans and programs and amendments thereto, taking into account economic and business conditions, and comparative/competitive compensation and benefit performance levels. Eligible employees and the type, amount and timing of compensation and benefits under our compensation and benefits policies, plans and programs also are determined by the Compensation Committee. The Compensation Committee retains independent compensation consultants to assist in evaluating senior executive and non-employee director compensation. The Compensation Committee’s compensation consultant for 2006 was W.T. Haigh & Company.

Role of Compensation Consultants

As discussed in more detail in this Proxy Statement under the heading Compensation Discussion & Analysis—Role of Outside Advisors, the Compensation Committee directly engaged W.T. Haigh & Company as their independent expert compensation consultant to conduct a ‘‘benchmarking’’ survey in 2005. The Compensation Committee also directly engaged W.T. Haigh & Company for recommendations on executive and non-employee director compensation in 2005 and 2006. Our CEO and our Senior Vice President, Human Resources work with the Compensation Committee and the Committee’s compensation consultant. Management also retains its own outside compensation consultants. In 2006, management retained Steven Hall & Partners for advisory services in connection with executive compensation matters, including the Company’s post-employment benefits, and Buck Consultants for actuarial work, plan structure and similar services for the Company’s retirement plans. Our Nominating and Governance Committee reviews and considers the compensation and benefits of non-employee directors, and with the assistance of W.T. Haigh & Company, recommends changes that it deems appropriate to the Compensation Committee.

Role of Management

Our Compensation Committee relies on management for legal, tax, compliance, finance, human resource recommendations, data and analysis for the design and administration of the Company’s compensation, benefits and perquisite programs for our senior executives. The Compensation Committee combines this information with the recommendations and information from its independent compensation consultants.

Our CEO, Senior Vice President, Human Resources, Senior Vice President, General Counsel and Secretary and Vice President and Deputy General Counsel generally attend Compensation Committee meetings. Our CEO does not participate in making compensation decisions or setting performance goals for his own compensation. CEO performance and compensation are discussed in executive session, with advice and participation from an independent compensation consultant where and as requested by the Committee. Our CEO and Senior Vice President, Human Resources, actively participate in the performance and compensation discussions for our senior executives, including making recommendations to the Compensation Committee as to the amount and form of c ompensation, without the presence of any other members of senior management. Our CEO and Senior Vice President, Human Resources discuss the appropriate form and amount of non-employee director compensation with the Nominating and Governance Committee for consideration in preparing that Committee’s recommendation to the Compensation Committee.

Nominating & Governance Committee

Our Nominating and Governance Committee monitors Board composition and director qualification requirements, identifies qualified individuals to serve for the ensuing year and until their successors are elected and shall qualify. The shares of Common Stock represented by the proxies being solicited will be voted FOR the election of the 8 nominees listed below. If any of the nominees is unable to serve (which is not anticipated), the shares of Common Stock represented by the proxies being solicited will be voted for the balance of those named nominees and for any substitute nominees ason the Board, recommends to the Board a slate of Directors may recommend.

INFORMATION ABOUT NOMINEES

				Name				Age				Principal Occupation During Last Five Years and Other Directorships Held				Year First Became Director
				Margaret Hayes Adame					66			President, Fashion Group International, an international trade organization; Director, Movado Group, Inc.					1993
				Günter Blobel					69			Professor, Howard Hughes Medical Institute at The Rockefeller University, a research medical institution; Director, Nestle S.A.					2000
				J. Michael Cook					63			Chairman and Chief Executive Officer Emeritus, Deloitte & Touche LLP, an accounting firm; Director, The Dow Chemical Company, Comcast Corporation, Eli Lilly and Company					2000
				Peter A. Georgescu					67			Chairman and Chief Executive Officer Emeritus, Young & Rubicam Inc., an advertising agency; Director, Levi Strauss & Co., EMI Group PLC					1999

				Name				Age				Principal Occupation During Last Five Years and Other Directorships Held				Year First Became Director
				Alexandra A. Herzan					46			President and Director, Lily Auchincloss Foundation, Inc., a charitable foundation					2003
				Henry W. Howell, Jr.					64			Managing Director (until 2000), J.P. Morgan & Co., Inc., a financial services firm					2004
				Arthur C. Martinez					66			Chairman and Chief Executive Officer Emeritus, Sears, Roebuck and Co., a retailer; Director, PepsiCo, Inc., Liz Claiborne, Inc., IAC/InterActiveCorp; Member of the Supervisory Board, ABN AMRO Holding, N.V.					2000
				Burton M. Tansky					68			President and Chief Executive Officer since May 2001 and President and Chief Operating Officer prior thereto, The Neiman Marcus Group, Inc., a retailer; Director, The Neiman Marcus Group, Inc.					2003

All of the nominees are presently directors of the Company and all of the nominees were electedfor election by the shareholders at the Company's 2005 Annual Meetingannual meeting of Shareholders. Effectiveshareholders, reviews potential Board candidates, reviews management succession plans and monitors corporate governance issues.

Lead Director

The role of our Lead Director includes (i) presiding over meetings of non-employee directors and providing prompt feedback regarding those meetings to the Chairman and CEO, (ii) providing suggestions for Board meeting agendas, with the involvement of our Chairman and CEO and input from other directors, (iii) assuring that the Board and the Chairman and CEO understand each other’s views on all critical matters, (iv) monitoring significant issues occurring between Board meetings and assuring Board involvement when appropriate, (v) serving as a sounding board for our Chairman and CEO and (vi) ensuring, in consultation with our Chairman and CEO, the adequate and timely exchange of information and supporting data between the Comp any’s management and the Board.

During most of 2006, Annual Meeting, Richard A. Goldstein’s roleMr. Martinez served as Lead Director. From May 9, 2006 to June 30, 2006, when Mr. Amen was appointed Chairman and CEO, Mr. Martinez served as Interim Chairman and CEO. During that time, Mr. Howell served as Interim Lead Director. In 2006, Mr. Martinez, both while serving as Lead Director and while serving as Interim Chairman and CEO, chaired an ad hoc committee of the Board in connection with the search for a CEO.

Independence of Directors and Chief Executive Officer will cease,Committee Members and he is not standing for re-electionRelated Person Matters

The Board has affirmatively determined that each of Mmes. Adame and Herzan, Dr. Blobel and Messrs. Cook, Georgescu, Howell, Martinez and Tansky has no material relationship with the Company affecting his or her independence as a director.director and that each is ‘‘independent’’ within the meaning of the Board’s independence standards, which are the same categorical independence standards as established by the New York Stock Exchange (‘‘NYSE’’) in Section 303A.02 of the NYSE Listed Company Manual. In making each of these independence determinations, the Board considered and broadly assessed, from the standpoint of materiality and independence, all of the information provided by each di rector in response to detailed inquiries concerning his or her independence and any direct or indirect business, family, employment, transactional or other relationship or affiliation of such director with the Company. No significant relationships or transactions were disclosed in connection with the current independence

consideration and determinations. The Board has also determined that each member of the Audit Committee, Compensation Committee and Nominating and Governance Committee is independent under these independence standards and, with respect to each member of the Audit Committee, is also independent under the independence criteria required by the SEC for audit committee members and with respect to each member of the Compensation Committee, is an ‘‘outside director’’ pursuant to the criteria established by the Internal Revenue Service and is a ‘‘non-employee director’’ pursuant to criteria established by the SEC.

The Board has also determined the absence of any ‘‘related person transaction’’ since the beginning of 2006 involving any director, director nominee or executive officer of the Company, any known 5% shareholder of the Company or any immediate family member of any of the foregoing persons (together ‘‘related persons’’). A ‘‘related person transaction’’ generally means a transaction involving more than $120,000 in which the Company is a participant and in which a related person has a direct or indirect material interest under SEC rules.

In January 2007, the Board of Directors adopted a written policy for the review and the approval or ratification of any related person transaction. This policy is available through the Investor Relations link on the Company’s website, www.iff.com. The policy defines ‘‘related person’’ and ‘‘related person transaction’’ in a detailed manner. Under the policy, a related person transaction requires the approval or ratification of the Nominating and Governance Committee. The Audit Committee will be consulted if accounting issues are involved in the transaction. Under the policy, a related person transaction will only be approved or ratified if the Nominating and Governance Committee determines that it is being entered into in good faith and on fair and reasonable terms which are in the interest of the Company and its shareholders. No related person is to participate in the review of a transaction in which he or she may have an interest. In addition, except for non-discretionary contributions made pursuant to the Company’s matching contributions program, a charitable contribution by the Company to an organization in which a related person is known to be an officer, director or trustee will be subject to approval or ratification under the policy by the Nominating and Governance Committee. No transactions were required to have been reviewed and considered under this policy since its adoption.

Board and Committee Meetings

TheOur Board of Directors has responsibility for overseeing the management of the Company.held eight meetings during 2006. The Board has adopted Corporate Governance Guidelines which set forth the practices the Board will follow with respect to Board membership and selection, responsibilities of directors, Board meetings, evaluation of the chief executive officer, succession planning, Board committees and compensation. A copy of the Company's Corporate Governance Guidelines is available through the Investor Relations link on the Company's website, www.iff.com.

The Board has an Audit Committee a Compensation Committee and a Nominating and Governance Committee, each of which operates pursuant to a written charter adopted by the Board. Each committee

reviews its charter at least annually and recommends charter changes to the Board as appropriate. In December 2005, each of the Audit Committee andheld eight meetings, the Compensation Committee reviewed its respective charterheld nine meetings and determined that no changes would be necessary. In March 2006, the Nominating and Governance Committee reviewed its charterheld five meetings during 2006. Each of our directors attended at least 75% of the total meetings of the Board and Committees on which he or she served during 2006. All of our directors who were serving on the day of last year’s Annual Meeting attended that meeting. Under our Corporate Governance Guidelines, unless there are mitigating circumstances, such as medical, family or business emergencies, Board members should endeavor to participate (either in person or by telephone) in all Board meetings and determined that no changes would be necessary. A copyall Committee meetings of which the charter of each committeedir ector is available througha member and to attend the Investor Relations link on the Company's website, www.iff.com. Pursuant to the charter of each committee, each committee annually reviews the committee's own performance.

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

The Audit Committee, consisting of Mr. Cook, Chairman, Mrs. Adame, Mr. Howell and Mr. Martinez, oversees and reviews the Company's financial reporting process and the integrity of the Company's financial statements and financial reporting practices, the Company's internal control environment, systems and performance, the qualifications, independence and performance of the Company's independent accountant, the performance of the Company's internal audit staff, and the procedures for monitoring compliance with laws and regulations and with the Company's Code of Business Conduct and Ethics. The Board has determined that each of Mr. Cook, Mr. Howell and Mr. Martinez is an ‘‘audit committee financial expert’’ under applicable rules of the SEC and has accounting or related financial management expertise as required by applicable NYSE rules. The Board has also determined that all members of the Audit Committee meet the financial literacy standards of the NYSE and that the service by Mr. Martinez on the audit committee of more than three public companies does not impair his ability to serve effectively on the Company's Audit Committee. The Audit Committee has established, together with members of the Company's management, a hiring policy for employees or former employees of the Company's Independent Accountant, consistent with the requirements of the SEC and/or NYSE. Pursuant to procedures adopted by the Audit Committee, the Audit Committee also reviews and pre-approves all audit and non-audit services performed by PwC.

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

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

In November 2004, the Board appointed Mr. Martinez as Lead Director, and he continues to serve in that capacity.shareholders. The rolenon-management directors of the Lead Director includes (i) presiding overCompany meet in executive session, without the presence of any corporate officer or member of management, in conjunction with regular meetings of non-employee directors and providing prompt feedback regarding those meetings to the Chairman and Chief Executive Officer, (ii) providing suggestions for Board meeting agendas, with the involvement of the Chairman and Chief Executive Officer and input from other directors, (iii) assuring that the Board and the Chairman and Chief Executive Officer understand each other's views on all critical matters, (iv) monitoring significant issues occurring between Board meetings and assuring Board involvement when appropriate,

(v) serving as a sounding board for the Chairman and Chief Executive Officer and (vi) ensuring, in consultation with the Chairman and Chief Executive Officer, the adequate and timely flow of information responsive to the Board's needs.

InBoard. During 2006, the non-management directors met in executive session as part of every Board of Directors has also asked the Lead Director to assume the primary role on behalf of the Board in connection with the Chief Executive Officer's successor responsibilities and other relevant matters.meeting.

Shareholder Communications

Shareholders and other parties interested in communicating directly with the Lead Director, with the non-management directors as a group or with all directors as a group, may do so by writing to the Lead Director or the Non-Management Directors or the Board of Directors, in each case, c/o Secretary, International Flavors & Fragrances Inc., 521 West 57th Street, New York, New York 10019. The Nominating and Governance Committee has approved a process for handling letters received by the Company and addressed to the Lead Director, the non-management members of the Board or the entire Board. Under that process, the Secretary of the Company forwards to the Lead Director all correspondence received, without opening or screening.screening.

During 2005, the Board held eight meetings, the Audit Committee held eight meetings, the Compensation Committee held six meetings and the Nominating and Governance Committee held five meetings. During 2005, each director attended at least 75% of the total of the number of meetings held by the Board and the Committee(s) on which each such director served. All of the directors who were serving on the day of the Company's 2005 Annual Meeting of Shareholders attended that meeting. Pursuant to the Company's Corporate Governance Guidelines, unless there are mitigating circumstances, such as medical, family or business emergencies, Board members are to endeavor to participate (either in person or by telephone) in all Board meetings and all Committee meetings of which the director is a member and to attend the Company's annual meeting of shareholders. The non-management directors of the Company meet in executive session, without the presence of any corporate officer or member of management, in conjunction with regular meetings of the Board, and during 2005, the non-management directors met in executive session in conjunction with every Board meeting.

Directors' Compensation

At its meeting held on December 15, 2004, the Board of Directors determined, with the assistance of independent compensation consultants, to change certain elements of the compensation for directors who are not employees of the Company, with these changes having taken effect on the date of the Company's 2005 Annual Meeting, as follows:

	(a)	Each non-employee director receives an annual cash retainer of $50,000, an increase from the $30,000 each previously received.

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

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

	(d)	The Lead Director also receives an annual cash fee of $7,500.

	(e)	Non-employee directors continue to receive an annual grant, in October of each year, of 1,000 shares of Common Stock of the Company from a pool of shares authorized by the Board in September 2000. Non-employee directors continue to be required to defer their annual stock grant until they cease to serve as a director.

	(f)	Non-employee directors receive an annual grant, on the date of each annual meeting of

		shareholders, of 750 restricted stock units under the Company's 2000 Stock Award and Incentive Plan, which will vest on the third anniversary of the date of grant. The 2000 Stock Option Plan for Non-Employee Directors (the ‘‘2000 Directors' Plan’’) was amended to provide that, beginning in 2005, the automatic grant of stock options to non-employee directors under the 2000 Directors' Plan will be suspended until such time as the Board may determine to resume option grants.

	(g)	Non-employee Directors continue to be eligible to participate in the Company's Deferred Compensation Plan (‘‘DCP’’). A non-employee Director may defer all or a portion of his or her cash compensation, as well as any restricted stock units, subject to any changes necessitated by recent changes in the tax law.

At its meeting held on March 7, 2006, the Board of Directors determined, with the assistance of independent compensation consultants, to increase the Lead Director's annual cash fee from $7,500 to $25,000, with this change to take effect on the date of the 2006 Annual Meeting.

Directors who are employees of the Company do not receive any additional compensation for their service as a director.

In March 2003, the Board established minimum ownership requirements for all directors with respect to the Company's Common Stock. Each director is required to own shares whose market value equals seven times the director's annual retainer, which the director must acquire during his or her first five years of Board tenure (or within five years after the requirements were established or the director's annual retainer is revised). The 1,000-share annual stock grant is credited toward this obligation.

Directors who commenced service before May 14, 2003 may participate in the Director Charitable Contribution Program (the ‘‘DCCP’’). Under the DCCP, the Company purchases life insurance policies on the lives of participating directors and is the owner and sole beneficiary of the policies. After the death of a covered director, the Company will donate $500,000 of the proceeds to one or more qualifying charitable organizations designated by the director and $500,000 of the proceeds to The IFF Foundation. Individual directors derive no financial benefit from the DCCP since all tax deductions relating to the contributions accrue solely to the Company. Other than premiums, the DCCP should have no long-term cost to the Company. Directors first elected on or after May 14, 2003 do not participate in the DCCP. Those directors, together with all other directors, are eligible to participate in the Company's Matching Gift Program, under which The IFF Foundation matches, on a dollar for dollar basis up to a maximum of $10,000 per year, contributions to qualifying charitable organizations.

Director Candidates

TheOur Nominating and Governance Committee has established a policy regarding the consideration of director candidates, including thosecandidates recommended by shareholders. The Nominating and Governance Committee, together with other Board members, will from time to time as appropriate identify the need for new Board members. Particular proposedProposed director candidates who would satisfy the criteria set forthdescribed below and who otherwise qualify for membership on the Board are identified by the Nominating and Governance Committee. In identifying candidates, the Nominating and Governance Committee will seekseeks input and participation from other Board members and other appropriate sources to ensureso that all points of view can be considered and that the best possible candidatescandi dates can be identified. The Nominating and Governance Committee may also engage a search firm to assist it in identifying potential candidates.

Members of the Nominating and Governance Committee and other Board members, as appropriate, will interview selected director candidates, evaluate the director candidates and determine which candidates are to be recommended by the Nominating and Governance Committee to the Board.

Shareholders wishingUnder the Company’s policy regarding director candidates, if a shareholder wishes to submit a director candidate for consideration by the Nominating and Governance Committee, the shareholder must submit suchthat recommendation to the Nominating and Governance Committee, c/o the Secretary of the Company, in writing, not less than 150120 days nor more than 180150 days prior to the anniversary date of the immediately precedingprior year’s annual meeting of shareholders.meeting. The request must be accompanied by the same information concerning the director candidate and nominating shareholder as described in Section 33(a) of the Company'sCompany’s By-laws for shareholder nominations for director

to be presented at aan annual shareholders meeting. The Nominating and Governance CommitteeComm ittee may also request any additional background or other information from any director candidate or recommending shareholder as it may deem appropriate.

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

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

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

	•	Business or other relevant experience; and

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

Code of Business Conduct and Ethics

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

REPORT OF THEDIRECTORS’ COMPENSATION COMMITTEE

The Compensation CommitteeDuring 2006, compensation to our non-employee directors consisted of the following elements, which were approved by our Board (the ‘‘Compensation Committee’’) operates pursuant to a charter which giveswith the Compensation Committee responsibility with respect to theassistance of independent compensation and benefits of the Company's executive officers and other members of senior management. Theconsultants:

Annual Cash Compensation Committee's specific responsibilities include:

	•	reviewing and approving the Company's goals and objectives relevant to the Company's Chief Executive Officer's (‘‘CEO’’) compensation;Each non-employee director receives an annual cash retainer of $50,000.

	•	based on an evaluationThe Chairperson of the CEO's performance byAudit Committee receives an annual cash retainer of $15,000. The Chairpersons of the Compensation Committee and Nominating and Governance Committee in relation to those goals and objectives, determining the CEO's compensation level;each receive an annual cash retainer of $7,500.

	•	reviewingEach non-employee director receives a cash fee of $2,000 for each meeting of the Company's general compensationBoard attended. Each member of the Audit Committee receives a cash fee of $1,500 for each meeting of the Audit Committee attended. Members of the Compensation Committee and benefits policies, plansNominating and programs, including incentive compensation plans and equity-based plans;Governance Committee each receive a cash fee of $1,500 for each meeting of the respective Committee attended.

	•	overseeingEffective as of May 9, 2006, the administration and competitivenessLead Director receives an additional annual cash fee of such policies, plans and programs;$25,000. Previously this fee was $7,500.

Annual Equity Compensation

	•	In October of each year, each non-employee director receives an annual grant of 1,000 shares of our Common Stock from a pool of shares our Board authorized in September 2000. Each non-employee director is required to defer his or her annual stock grant until he or she ceases to serve as a director.

	•	uponOn the recommendationdate of each annual meeting of shareholders, each non-employee director receives an annual grant of 750 Restricted Stock Units (RSUs) under our 2000 Stock Award and Incentive Plan. These RSUs vest on the third anniversary of the date of grant, except that (a) if a non-employee director terminates service due to death or disability, vesting of RSUs will be accelerated and (b) the RSUs continue to vest if the director retires from service after age 62.

Participation in Company Deferred Compensation Plan

	•	Non-employee Directors are eligible to participate in our Deferred Compensation Plan (DCP). A non-employee Director may defer all or a portion of his or her cash compensation, as well as any RSUs, subject to any changes necessitated by recent changes in the tax law. Earnings on any deferrals into the interest bearing account of the DCP were not above market and thus are not included in the Director Compensation Table below. Additional details regarding our DCP are located in this Proxy Statement under the heading Non-Qualified Deferred Compensation at page 67. Non-employee directors are not entitled to matching contributions or the 25% premium on deferrals into our common stock fund described in that section.

Other Benefits

	•	We reimburse our non-employee directors for travel and lodging expenses incurred in connection with their attendance at Board and Committee meetings and our shareholder meetings.

	•	Each current and former director, including former employee directors, who began service as a director before May 14, 2003 is eligible to participate in our Director Charitable Contribution Program (DCCP). Under the DCCP, directors are paired together and the Company purchases $2,000,000 joint life insurance policies on the lives of each paired set of participating directors. The Company is the owner and sole beneficiary of the policies. After a covered director dies, the Company will donate $500,000 to one or more qualifying charitable organizations designated by the deceased director, and The IFF Foundation will donate an additional $500,000 in charitable contributions. Assuming no changes to current Federal tax laws relating to charitable contributions, and if certain other assumptions are met, the Company expects to be reim bursed for all of the premium costs paid by the Company and the after-tax cost of the Company’s anticipated charitable contributions pursuant to this program. Although individual directors

		derive no financial benefit from the DCCP since all tax deductions relating to the contributions accrue solely to the Company, the premiums the Company paid under this program are included in the All Other Compensation column of the 2006 Director Compensation Table at page 18. Directors first elected on or after May 14, 2003 do not participate in the DCCP.

	•	All current directors, including those who participate in our DCCP, are eligible to participate in our Matching Gift Program. Under this Program, The IFF Foundation matches, on a dollar for dollar basis, contributions to qualifying charitable organizations up to a maximum of $10,000 per year.

At its meeting held on March 6, 2007, our Board, with the assistance of independent compensation consultants, approved changes in the compensation to be paid to our non-employee directors, effective as of the date of our 2007 Annual Meeting, as follows:

•	Non-employee directors will no longer receive cash fees for each Board or Committee meeting attended.

•	Non-employee directors will no longer receive the annual grant of 1,000 shares of our Common Stock or the annual grant of 750 RSUs that they currently receive.

•

Each non-employee director will receive an annual cash retainer of $175,000. Of this amount, $75,000 will be paid in cash in November of each year, which represents an increase from the $50,000 cash retainer each currently receives, and $100,000 will be paid in RSUs issued under our 2000 Stock Award and Incentive Plan. The RSUs will be granted on the date of each annual meeting of shareholders and will cliff vest on the third anniversary of the grant date. The number of RSUs to be issued will be based on the closing market price of the Company’s common stock on the grant date. Once the RSUs vest, each non-employee director will be required to defer all of the vested RSUs under our Deferred Compensation Plan until he or she separates from service on our Board of Directors. Given that RSUs will be deferred until each director ’s separation from service and each director’s stock ownership will increase during his or her term of service, the minimum share ownership requirements that currently apply to directors will be eliminated.

•	The Chairperson of the Audit Committee will continue to receive an annual cash retainer of $15,000. The Chairpersons of the Compensation Committee and Nominating and Governance Committee will each receive an annual cash retainer of $10,000, an increase from the $7,500 each currently receives.

•	The Lead Director will receive an annual cash fee of $15,000, a decrease from the $25,000 he currently receives.

•	Non-employee directors will continue to be eligible to participate in our Deferred Compensation Plan.

The purpose of the changes is to simplify the structure of compensation for non-employee directors and to increase the longer term stock ownership by the non-employee directors. Directors who are employees of the Company do not receive any additional compensation for their service as a director.

Share Ownership Guidelines

The Board has established minimum ownership requirements for all non-employee directors with respect to the Company’s common stock. Each director is currently required to own shares whose market value equals seven times the director’s annual retainer, which the director must acquire during his or her first five years of Board tenure (or within five years after the requirements were established or the director’s annual retainer is revised). The 1,000 share annual stock grant is credited toward this obligation. The minimum share ownership requirements that currently apply to directors will be eliminated effective as of the 2007 Annual Meeting since each non-employee director will then be required to hold vested RSU s until he or she separates from service on the Company’s Board of Directors.

The following table details the compensation paid to or earned by our non-employee directors for the year ended December 31, 2006.

2006 DIRECTOR COMPENSATION

Name(1)			Fees Earned or Paid in Cash ($)(2)						Stock Awards ($)(3)(4)						Option Awards ($)(3)(5)						All Other Compensation ($)(6)						Total ($)
(a)			(b)						(c)						(d)						(g)						(h)
Margaret Hayes Adame				$	85,500					$	75,943					$	17,031					$	9,026					$	187,500
Gunter Blobel				$	64,000					$	75,943					$	17,031					$	78,190					$	235,164
J. Michael Cook				$	100,500					$	75,943					$	17,031					$	54,646					$	248,120
Peter A. Georgescu				$	94,500					$	75,943					$	17,031					$	16,701					$	204,175
Alexandra A. Herzan				$	81,000					$	54,762					$	17,031					$	6,000					$	158,793
Henry W. Howell, Jr. (7)				$	88,181					$	75,943					$	0					$	10,000					$	174,124
Burton M. Tansky				$	84,000					$	75,943					$	14,095					$	0					$	174,038

(1)	Compensation paid to our director Arthur C. Martinez, for his service as a non-employee director of the Company during 2006, and as our Interim Chairman and CEO reviewingfrom May 9, 2006 until June 30, 2006, is included in the Summary Compensation Table at page 51 and is not included in this table.

(2)	The amounts in this column include the following amounts deferred in 2006 under our Deferred Compensation Plan: Mr. Georgescu—$94,500; Mr. Howell—$88,181.

(3)

The amounts in the Stock Awards and Option Awards columns represent the dollar amount recognized for financial statement reporting purposes for the year ended December 31, 2006, in accordance with FAS 123(R) and thus may include amounts from awards granted in and prior to 2006. Although the number of RSU or option awards granted is the same for each serving director each year, the amounts in these columns may differ due to FAS 123(R) expense requirements. For example, as Mrs. Herzan has not reached retirement age, the amount included in the Stock Awards column is less for her than the amount included for other directors. Details on and assumptions used in calculating the cost of RSUs and options may be found in Note 12 to the Company’s audited financial statements for the year ended De cember 31, 2006 included in the Company’s Annual Report on Form 10-K filed with the SEC on February 23, 2007.

(4)

Each director received a grant on May 9, 2006 of 750 RSUs under our 2000 Stock Award and Incentive Plan with a grant date fair value of $27,000 per grant and a grant on October 2, 2006 of 1,000 shares of common stock that are required to be deferred, with a grant date fair value of $39,650 per grant, each computed in accordance with FAS 123(R). None of our Directors forfeited any RSUs or shares of deferred stock during 2006.

		On December 31, 2006, our directors held the following number of RSUs and shares of deferred common stock (including additional share units credited as a result of reinvestment of dividend equivalents): Mrs. Adame: 1,500 RSUs and 7,435 deferred stock shares, Dr. Blobel: 1,500 RSUs and 4,121 deferred stock shares, Mr. Cook: 1,500 RSUs and 7,153 deferred stock shares, Mr. Georgescu: 1,500 RSUs and 13,691 deferred stock shares, Mrs. Herzan: 1,500 RSUs and 4,121 deferred stock shares, Mr. Howell: 1,500 RSUs and 6,178 deferred stock shares, Mr. Tansky: 1,500 RSUs and 6,127

		deferred stock shares. The number of RSUs Mr. Martinez held on December 31, 2006 is set forth in the Outstanding Equity Awards at Fiscal Year-End table at page 61; he also held 7,153 deferred stock shares on that date. All of the deferred stock shares are included for each director in the Beneficial Ownership Table at page 20.

(5)

During 2006, 3,000 options granted to Mrs. Adame expired. There were no other forfeitures of options by our directors during 2006. On December 31, 2006, our directors held the following number of outstanding options: Mrs. Adame: 24,000 options, Dr. Blobel: 6,000 options, Mr. Cook: 12,000 options, Mr. Georgescu: 18,000 options, Mrs. Herzan: 6,000 options, Mr. Howell: 0 options, and Mr. Tansky: 3,000 options. The number of options Mr. Martinez held on December 31, 2006 is set forth in the Outstanding Equity Awards at Fiscal Year-End table at page 61. We did not grant any options to our directors in 2006.

(6)

Under the Company’s Director Charitable Contribution Program, the Company paid the following amount in premiums, which are included in this column: $9,026 for Mrs. Adame, $78,190 for Dr. Blobel, $49,646 for Mr. Cook and $16,701 for Mr. Georgescu. These amounts represent the proportionate amount assigned for each director’s paired life insurance policy under the DCCP, which may differ for each director based on insurance underwriting factors. The amount the Company paid under the Director Charitable Contribution Program for Richard A. Goldstein, our former Chairman and CEO, is reflected in the All Other Compensation column of the Summary Compensation Table at page 51. Additional details regarding this program may be found in this Proxy Statement under ‘‘Directors Com pensation—Other Benefits’’ at page 16.

		In addition during 2006, the Company made matching charitable contributions under the Company’s Matching Gift Program for director charitable contributions in the following amounts, which are also included in this column: Mr. Cook—$5,000, Mrs. Herzan—$6,000 and Mr. Howell—$10,000.

(7)	Mr. Howell served as our Lead Director and the Chairman of our Nominating and Governance Committee from May 9, 2006 until June 30, 2006.

SECURITIES OWNERSHIP OF MANAGEMENT, DIRECTORS
AND CERTAIN OTHER PERSONS

Beneficial Ownership Table

Directors and Executive Officers

The following table provides information regarding the beneficial ownership of our common stock as of February 19, 2007 by (i) each director and nominee for director, (ii) the persons named in the Summary Compensation Table and (iii) by all directors and executive officers as a group.

			Shares of Common Stock Beneficially Owned (1)						Rights to Acquire Beneficial Ownership of Shares of Common Stock (2)						Percent of Class
Margaret Hayes Adame					10,435						23,000							(3)
Robert M. Amen					35,517						0							(3)
Günter Blobel					12,871						5,000							(3)
J. Michael Cook					9,153						11,000							(3)
James H. Dunsdon					62,854						7,000							(3)
Peter A. Georgescu					21,321						17,000							(3)
Richard A. Goldstein					201,626	(4)					140,000							(3)
Alexandra A. Herzan					809,942	(5)					5,000							(3)
Henry W. Howell, Jr.					7,308						0							(3)
Arthur C. Martinez					10,153						11,000							(3)
Dennis M. Meany					25,007						19,000							(3)
Nicolas Mirzayantz					25,808						74,500							(3)
Burton M. Tansky					6,127						2,000							(3)
Douglas J. Wetmore					70,959						20,000							(3)
All Directors and Executive Officers as a Group (18 persons)					1,351,927						479,167						2.03	%

Certain Other Owners

The following table provides information regarding the beneficial ownership by each person or group known to hold more than 5% of the outstanding shares of our common stock as of February 19, 2007 based on a review of SEC filings.

			Number of Shares and Nature of Beneficial Ownership
Name and Address of Beneficial Owner			Sole Voting Power						Shared Voting Power						Sole Investment Power						Shared Investment Power						Percent of Class
T. Rowe Price Associates, Inc. (6) 100 E. Pratt Street Baltimore, MD 21202					1,458,070						0						6,244,054						0						6.96	%
Janus Capital Group (7) 151 Detroit Street Denver, CO 80206					0						4,849,703						0						4,849,703						5.40	%
Pauline H. Van Dyke III (8) 111 East Kilbourn Avenue 19th Floor Milwaukee, WI 53202					129,426						5,010,175						129,426						5,010,175						5.73	%
William D.Van Dyke III (8) 111 East Kilbourn Avenue 19th Floor Milwaukee, WI 53202					6,957						5,010,175						17,957						5,010,175						5.59	%

(1)

This column includes share unit balances held in the IFF Stock Fund under our Deferred Compensation Plan credited to participants’ accounts (where applicable) and, for executive officers may include certain premium share units held under that plan as well as unvested shares of Purchased Restricted Stock. Share units held in the IFF Stock Fund are subject to vesting and may be forfeitable if the participant’s employment is terminated.

(2)	The shares listed in this column are those which the named person has (or will have within 60 days after February 19, 2007) the right to acquire by the exercise of stock options or vesting of RSUs granted by the Company.

(3)	Less than 1%.

(4)

Based on a Form 4 filed with the SEC on May 5, 2006 and other information available to the Company. As reported in such Form 4, this number of shares includes 173,772 shares beneficially owned by Mr. Goldstein’s wife as to which Mr. Goldstein disclaims beneficial ownership. The number of shares also includes 14,180 shares that were issued to Mr. Goldstein from our Deferred Compensation Plan upon his retirement. The Company is not aware of whether Mr. Goldstein or his wife have disposed of any such shares or acquired any additional shares after May 5, 2006, other than 200,000 shares under his Performance Incentive Award, which were forfeited, and the 14,180 shares issued out of the Deferred Compensation Plan.

(5)

Mrs. Herzan is a director of the van Ameringen Foundation, Inc., which owns 274,673 shares, President and a director of the Lily Auchincloss Foundation, which owns 11,000 shares, a trustee and a beneficiary of a trust which holds 519,581 shares, and a trustee and a beneficiary of a trust which owns 567 shares, all of which shares are included in Mrs. Herzan’s ownership. Mrs. Herzan disclaims beneficial ownership of the shares owned by the van Ameringen Foundation, Inc. and the Lily Auchincloss Foundation.

(6)	As reported in Schedule 13G/A dated as of February 14, 2007.

(7)	As reported in Schedule 13G dated as of February 14, 2007.

(8)	As reported in Schedule 13G/A dated as of February 14, 2006. The Company believes that Mr. and Mrs. William Van Dyke, III share voting and investment power with respect to 5,010,175 shares and that a portion of such shares is owned beneficially by a trust of which Mr. and Mrs. William D. Van Dyke, III and J. P. Morgan Chase are co-trustees.

Section 16(a) Beneficial Ownership Reporting Compliance

Section 16(a) of the Securities Exchange Act of 1934 requires our directors and executive officers to file reports of their initial holdings of IFF common stock and any subsequent transactions in Company shares to the SEC and to provide the Company with copies of all such filings. The Company must report any failures to file by the required dates. Based on a review of our 2006 records we believe that our directors and officers who were subject to Section 16 met all applicable filing requirements, except a Form 4 reporting a grant of RSUs to Nicolas Mirzayantz was not timely filed due to an internal administrative oversight, but has since been filed.

Shareholders Proposals

In order for a shareholder proposal to be considered for inclusion in IFF’s proxy statement, notice of meeting and form of proxy for next year’s annual meeting of shareholders, the Secretary of the Company must receive the written proposal no later than November 24, 2007. Under Section 3 of the Company’s By-laws, in order for a shareholder to submit a proposal or to nominate any director at an annual meeting of shareholders, the shareholder must give written notice to the Secretary of the Company not less than 60 days nor more than 90 days prior to the anniversary date of this year’s annual meeting of shareholders. The notice must also meet all other requirements contained in the Company’s By-laws, including the requirement to contain specified information about the proposed business of the candidate and the shareholder making the proposal. If the next annual meeting is scheduled on a date that is not within 30 days before or after the anniversary date of this year’s annual meeting, the Secretary of the Company must receive the notice given by the shareholder not later than the close of business on the tenth day following the day on which the notice of the date of next year’s annual meeting is mailed or public disclosure of the date of next year’s annual meeting is made, whichever occurs first.

PROPOSALS REQUIRING YOUR VOTE

ITEM 1—ELECTION OF DIRECTORS

Information about Nominees

Our Board of Directors currently has nine members. Each of these Board members is standing for re-election, to hold office until the next annual meeting of shareholders. A plurality of votes cast is required for the election of directors.

Pursuant to the law of the State of New York, IFF’s state of incorporation, only votes cast ‘‘FOR’’ the election of directors will be counted in determining whether a nominee for director has been elected. However, our Corporate Governance Guidelines provide that in an uncontested election, any nominee for director who receives a greater number of votes ‘‘WITHHELD’’ from his or her election than votes ‘‘FOR’’ such election must promptly offer his or her resignation. The Nominating and Governance Committee of our Board of Directors will consider the resignation offer and make a recommendation to the Board. The Nominating and Governance Committee and the i ndependent directors on the Board will evaluate and determine whether to accept or reject the resignation based on the relevant facts and circumstances. Any director who so tenders a resignation will not participate in the deliberations of the Nominating and Governance Committee or of the independent directors. The Board of Directors will promptly disclose its decision and the basis for that decision in a filing with the Securities and Exchange Commission.

Each nominee elected as a director will continue in office until his or her successor has been elected and qualified, or until his or her earlier death, resignation or retirement. We expect each nominee for election as a director to be able to serve if elected. If any nominee is not able to serve (which is not anticipated), proxies will be voted in favor of the remainder of those nominated and may be voted for substitute nominees, unless the Board chooses to reduce the number of Directors serving on the Board.

The principal occupation and certain other information about the nominees are set forth on the following pages.

IFF’s Board of Directors recommends a vote FOR the election of these nominees as Directors.

INFORMATION ABOUT NOMINEES

			Name			Age						Principal Occupation During Last Five Years and Other Directorships Held			Year First Became Director
			Robert M. Amen					57				Chairman and Chief Executive Officer of the Company since July 2006; President (from 2003 until 2006) and Executive Vice President (prior thereto), International Paper Company, a paper and packaging company					2006
			Margaret Hayes Adame					67				President, Fashion Group International, an international trade organization; Director, Movado Group, Inc.					1993
			Günter Blobel					70				Professor, Howard Hughes Medical Institute at The Rockefeller University, a research medical institution; Director, Nestle S.A.					2000
			J. Michael Cook					64				Chairman and Chief Executive Officer Emeritus, Deloitte & Touche LLP, an accounting firm; Director, Comcast Corporation, Eli Lilly and Company					2000
			Peter A. Georgescu					68				Chairman and Chief Executive Officer Emeritus, Young & Rubicam Inc., an advertising agency; Director, Levi Strauss & Co., EMI Group PLC					1999

			Name			Age						Principal Occupation During Last Five Years and Other Directorships Held			Year First Became Director
			Alexandra A. Herzan					47				President and Director, Lily Auchincloss Foundation, Inc., a charitable foundation					2003
			Henry W. Howell, Jr.					65				Managing Director (until 2000), J.P. Morgan & Co., Inc., a financial services firm					2004
			Arthur C. Martinez					67				Interim Chairman and Chief Executive Officer of the Company from May 9, 2006 until June 30, 2006; Chairman and Chief Executive Officer Emeritus, Sears, Roebuck and Co., a retailer; Director, PepsiCo, Inc., Liz Claiborne, Inc., IAC/InterActiveCorp; Chairman of the Supervisory Board, ABN AMRO Holding, N.V.					2000
			Burton M. Tansky					69				President and Chief Executive Officer since May 2001 and President and Chief Operating Officer prior thereto, The Neiman Marcus Group, Inc., a retailer; Director, The Neiman Marcus Group, Inc.					2003

ITEM 2—RATIFICATION OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

The Audit Committee has selected PricewaterhouseCoopers LLP as the Company’s independent registered public accounting firm for 2007, and the Board of Directors has directed that our management submit that selection for ratification by our shareholders at the 2007 Annual Meeting. Although ratification is not required by our By-laws or otherwise, we are submitting the selection of PricewaterhouseCoopers LLP to our shareholders for ratification as a matter of good corporate governance. If shareholders fail to ratify the selection, the Audit Committee will reconsider whether or not to continue to retain that firm.

Representatives of PricewaterhouseCoopers LLP are expected to attend the 2007 Annual Meeting, where they will be available to respond to questions and, if they desire, to make a statement.

IFF’s Board of Directors recommends a vote FOR the ratification of the Audit Committee’s selection of PricewaterhouseCoopers LLP as the Company’s Independent Registered Public Accounting Firm for 2007.

Principal Accountant Fees and Services

The following table provides detail about fees for professional services rendered by PricewaterhouseCoopers LLP for the years ended December 31, 2006 and December 31, 2005.

			2006						2005
Audit Fees (1)					3,753,800					$	3,533,700
Audit-Related Fees (2)					162,000					$	155,800
Tax Fees (3)					1,922,600					$	2,366,700
All Other Fees (4)					14,100					$	32,500
Total					5,852,500					$	6,088,700

(1)

Audit Fees were for professional services rendered for audits of the Company’s consolidated financial statements and statutory and subsidiary audits, consents and review of reports filed with the SEC. Audit Fees also included the fees associated with an annual audit of the Company’s internal control over financial reporting, as required by Section 404 of the Sarbanes-Oxley Act of 2002, integrated with the audit of the Company’s annual financial statements.

(2)	Audit-Related Fees were for assurance and related services for employee benefit plan audits, attestation services that are not required by statute or regulation and consultations concerning financial accounting and reporting standards.

(3)	Tax Fees were for services related to tax compliance, including the preparation of tax returns and claims for refund, and tax planning and tax advice, including assistance with and representation in tax audits and appeals, tax services for employee benefit plans and expatriate tax compliance services.

(4)	All Other Fees were for software licenses and other professional services.

Audit Committee Pre-Approval Policies and Procedures

The Audit Committee’s policy is to pre-approve all audit and non-audit services, including audit services, audit-related services, tax services and other permitted non-audit services, to be provided by the independent registered public accounting firm to the Company. In accordance with the policy, the Audit Committee regularly reviews and receives updates on specific services provided by the independent registered public accounting firm, and the Company’s management may present additional services for approval.

All services rendered by PricewaterhouseCoopers LLP to the Company are permissible under applicable laws and regulations. During 2006, all services performed by PricewaterhouseCoopers LLP were approved in advance by the Audit Committee in accordance with the pre-approval policy.

AUDIT COMMITTEE REPORT

The Audit Committee (‘‘we’’, ‘‘us’’ or the ‘‘Committee’’) oversees the Company’s financial reporting process on behalf of the Board of Directors. Management has the primary responsibility for the financial statements and the reporting process, including the systems of internal control over financial reporting and disclosure controls designed to ensure compliance with accounting standards and applicable laws and regulations.

The Company’s independent auditors, PricewaterhouseCoopers LLP (‘‘PwC’’), report directly to us. We have sole authority to appoint, oversee, evaluate and discharge the independent auditors and to approve the fees paid by the Company for their services. PwC annually performs an independent audit of the consolidated financial statements and expresses an opinion on the conformity of those financial statements with U.S. generally accepted accounting principles and the effectiveness of the Company’s internal control over financial reporting. PwC also conducts quarterly reviews of the Company’s financial statements.

We review with PwC the scope of its services, the results of its audits and reviews, its evaluation of the Company’s internal control over financial reporting, and the overall quality of the Company’s financial reporting. We meet regularly with PwC, and separately with the Company’s Internal Audit Coordinator, without management present. We also meet regularly with management without PwC present, and we discuss management’s evaluation of PwC’s performance.

For 2006, we have reviewed and discussed the Company’s audited financial statements with management and PwC. We have reviewed and discussed with management its process for preparing its report on its assessment of the Company’s internal control over financial reporting, and at regular intervals we received updates on the status of this process and actions taken by management to respond to issues and deficiencies identified. We discussed with PwC its audit of internal control over financial reporting and its attestation report on management’s assessment of the effectiveness of internal control over financial reporting. We discussed with PwC and the Company’s Internal Audit Coordinator the overall scope and p lans for their respective audits.

We have reviewed with PwC its judgments about the quality of the Company’s accounting principles as applied in the Company’s financial reporting and other matters as are required to be discussed with us under generally accepted auditing standards of the Public Company Accounting Oversight Board (United States), including those described in Statement of Auditing Standards (SAS) No. 61 (Communication with Audit Committees), as amended. We also received from PwC and discussed with PWC its written disclosures and the letter regarding its independence from management and the Company as required by Independence Standards Board Standard No. 1 (Independence Discussions with Audit Committees). We concluded that PwC’s inde pendence was not compromised by the non-audit services provided by PwC, the majority of which consisted of routine tax services.

In reliance on the reviews and discussions referred to above, we recommended to the Board (and the Board subsequently approved our recommendation) that the audited financial statements be included in the Annual Report on Form 10-K for the year ended December 31, 2006 for filing with the SEC. We also evaluated and selected PwC as the Company’s independent auditors for 2007, which the shareholders will be asked to ratify at the 2007 Annual Meeting of Shareholders.

Audit Committee

J. Michael Cook (Chairman and member until March 1, 2007)

Henry W. Howell, Jr. (Chairman since March 1, 2007)

Margaret Hayes Adame Arthur C. Martinez

ITEM 3—REAPPROVAL OF THE BUSINESS CRITERIA USED FOR SETTING PERFORMANCE GOALS UNDER THE 2000 STOCK AWARD AND INCENTIVE PLAN

Introduction

At the 2007 Annual Meeting, we will ask shareholders to reapprove the business criteria that may be used in setting performance goals for certain performance-based awards under our 2000 Stock Award and Incentive Plan, as amended and restated (the ‘‘2000 Plan’’). IFF shareholders originally approved the 2000 Plan in 2000, and approved an amendment and restatement of the 2000 Plan in 2002.

We are seeking reapproval of the 2000 Plan’s business criteria used in setting performance goals so that IFF can continue to claim tax deductions for compensation resulting from performance-based awards, without these deductions being limited by Section 162(m) of the Internal Revenue Code (the ‘‘Code’’). Section 162(m) limits our ability to claim tax deductions for compensation to our most senior executive officers in excess of $1 million per year, unless the compensation is paid based on achievement of performance goals that are set using shareholder-approved business criteria.

Reapproval by shareholders of the 2000 Plan’s business criteria for performance goals will not increase the number of shares available for options and equity awards, and will not raise any other limitation on the amount of awards that may be granted under the 2000 Plan.

Business Criteria Used in Setting Performance Goals Under the 2000 Plan

The 2000 Plan authorizes the grant of performance-based awards. The Board and the Compensation Committee (the ‘‘Committee’’) intend that these awards be fully tax deductible by IFF. Performance awards include cash-denominated awards, including annual incentive awards, and awards that will result in the delivery of IFF shares if specified performance goals have been achieved.

Performance-based awards require satisfaction of pre-established performance goals, consisting of one or more business criteria and a targeted performance level with respect to such criteria, as a condition to the awards being granted or becoming exercisable or settleable. Performance may be measured over a period of any length specified by the Committee. Under the 2000 Plan, if a performance-based award is intended to qualify under Code Section 162(m), the business criteria used by the Committee in establishing performance goals must be selected from among the following:

	•	net sales

	•	earnings from operations

	•	earnings before or after taxes or earnings before or after interest, depreciation, amortization, or extraordinary or special items

	•	net income or net income per common share (basic or diluted)

	•	return on assets (gross or net), return on investment, return on capital, or return on equity

	•	cash flow, free cash flow, cash flow return on investment (discounted or otherwise), net cash provided by operations, or cash flow in excess of cost of capital

	•	economic value created

	•	operating margin or profit margin

	•	stock price or total shareholder return

	•	dividend payout as a percentage of net income

	•	strategic business criteria, consisting of one or more objectives based on meeting specified market penetration, geographic business expansion goals, cost targets, customer satisfaction, employee satisfaction, management of employment practices and employee benefits, supervision of litigation and information technology, and goals relating to acquisitions or divestitures of subsidiaries, affiliates or joint ventures.

The Committee retains discretion to set the level of performance for a given business criteria that will result in the earning of a specified amount of cash or shares under a performance award. These goals may be set with fixed, quantitative targets, targets relative to our past performance, or targets compared to the performance of other companies, such as a published or special index or a group of companies selected by the Committee for comparison. In setting a performance goal, the Committee may specify that these performance measures will be determined before payment of bonuses, capital charges, non-recurring or extraordinary income or expense, or other financial and general and administrative expenses for the performance peri od.

Reason for Shareholder Approval of this Proposal

Code Section 162(m) limits the deductions a publicly held company can claim for compensation in excess of $1 million in a given year paid to the CEO and the four other most highly compensated executive officers serving on the last day of the fiscal year (generally referred to as the ‘‘named executive officers’’). ‘‘Performance-based’’ compensation that meets certain requirements is not counted against the $1 million deductibility cap, and therefore remains fully deductible. Shareholder approval of business criteria used in setting performance goals permits qualification of performance awards for full tax deductibility for a period of five years under Section 162(m).

Under Code Section 162(m) and IRS regulations, IFF shareholders must reapprove the business criteria used in setting performance goals in order that performance awards authorized after our 2007 Annual Meeting and using these business criteria will qualify for tax deductibility without limitation. However, the 2000 Plan authorizes certain awards that can qualify as performance-based compensation under Code Section 162(m) without the need for the performance goals to be reapproved by shareholders. These include stock options and stock appreciation rights that provide compensation based on increases in the market price of IFF stock from the date of grant, and annual incentive awards based on a defined ‘‘annual incentive p ool’’ based on pretax consolidated earnings, discussed in more detail below. The prior approval of the terms of these awards under the 2000 Plan meets the requirements of Section 162(m), so such awards will remain authorized under the 2000 Plan without regard to the outcome of the vote on the current proposal.

Vote Required for Approval

Reapproval of the business criteria used for performance goals under the 2000 Plan will require the affirmative vote of a majority of the votes cast at the Annual Meeting by the holders of shares entitled to vote on the matter. The Board considers reapproval of such business criteria, to preserve our ability to fully claim tax deductions, to be in the best interests of IFF and our shareholders, and therefore recommends that the shareholders vote to approve this proposal at the 2007 Annual Meeting.

Description of the 2000 Plan

The following is a brief description of the material features of the 2000 Plan. This description, including information summarized above, is qualified in its entirety by reference to the 2000 Plan, which was filed electronically with the Securities and Exchange Commission as an appendix to this Proxy Statement, but is not included in the printed version of this Proxy Statement. A copy of the 2000 Plan is available from the Office of the Secretary, International Flavors & Fragrances Inc., 521 West 57th Street, New York, N.Y. 10019.

Purpose of the 2000 Plan.    In the view of the Board and Committee, the 2000 Plan helps IFF:

	•	Attract, retain, motivate and reward officers, employees, directors, consultants and advisors to IFF and its subsidiaries and affiliates.

	•	Strengthen our capability to develop, maintain and direct a competent management team.

	•	Provide equitable and competitive compensation opportunities.

	•	Recognize individual contributions and reward achievement of our goals.

	•	Promote creation of long-term value for shareholders by closely aligning the interests of participants with the interests of shareholders.

The Board and the Committee believe that awards linked to common stock and awards with terms tied to our performance can provide incentives for the achievement of important performance objectives and promote the long-term success of IFF.

Overview of 2000 Plan Awards.    The 2000 Plan authorizes a broad range of awards, including:

	•	stock options

	•	stock appreciation rights (‘‘SARs’’)

	•	restricted stock, a grant of actual shares subject to a risk of forfeiture and restrictions on transfer

	•	deferred stock, a contractual commitment to deliver shares at a future date, which may or may not be subject to a risk of forfeiture (forfeitable deferred stock is sometimes called ‘‘restricted stock units’’)

	•	other awards based on common stock

	•	dividend equivalents

	•	performance shares or other stock-based performance awards (these include deferred stock or restricted stock awards that may be earned by achieving specific performance objectives)

	•	cash-based performance awards tied to achievement of specific performance objectives, including annual incentive awards

	•	shares issuable in lieu of rights to cash compensation.

Restriction on Repricing and Loans.    The 2000 Plan includes a restriction providing that, without shareholder approval, we will not amend or replace options or SARs previously granted under the Plan in a transaction that constitutes a ‘‘repricing.’’ For this purpose, a ‘‘repricing’’ is defined as amending the terms of an option or SAR after it is granted to lower its exercise price, any other action that is treated as a repricing under generally accepted accounting principles, or canceling an option at a time when its strike price is equal to or greater than the fair market value of the underlying stock in exchange for another option, SAR, restricted stock, other equity, or cash or other property unless the cancellation and exchange occurs in connection with a merger, acquisition, spin-off or other similar corporate transaction. Adjustments to the exercise price or number of shar es subject to an option or SAR to reflect the effects of a stock split or other extraordinary corporate transaction will not constitute a ‘‘repricing.’’

The 2000 Plan does not authorize loans to participants.

Shares Available under the 2000 Plan.    As stated above, this proposal would not change the number of shares available for awards under the 2000 Plan.

As of February 28, 2007, 6,086,798 shares are reserved and available for delivery to participants under the 2000 Plan, which includes 3,677,788 shares subject to outstanding options, restricted stock, and other types of equity awards. Shares that remained available under the 1997 Employee Stock Option Plan at March 12, 2002, and shares that thereafter are recaptured from outstanding awards under that plan are or will be included in shares available under the 2000 Plan. Shares used for awards that we assume in an acquisition do not count against the shares reserved under the 2000 Plan.

The 2000 Plan limits the number of shares that may be delivered in connection with awards other than options and SARs (for example, as restricted stock) to a maximum of 30% of the shares reserved under the 2000 Plan.

Only the number of shares actually delivered to participants in connection with an award after all restrictions have lapsed are counted against the number of shares reserved under the 2000 Plan. Thus, shares remain available for new awards if an award expires or is forfeited, canceled or settled in cash, if shares are withheld or separately surrendered to pay the exercise price of an option or to satisfy tax withholding obligations relating to an award, if fewer shares are delivered upon exercise of an SAR than the number of shares covered by the SAR, or if shares that had been issued as restricted stock are forfeited. These same counting rules apply to outstanding options under the 1997 Employee Stock Option Plan, so that shares may be recaptured from such awards. Shares delivered under the 2000 Plan may be either newly issued or treasury shares.

Information on the total number of shares available under our existing equity compensation plans and unissued shares deliverable under outstanding awards as of the end of the last fiscal year is presented below under ‘‘Equity Compensation Plans.’’ Based on our equity award plans in effect and outstanding awards at February 28, 2007, the total number of shares subject to outstanding awards and available for future awards under the 2000 Plan and other continuing equity compensation plans is as follows:

Shares subject to outstanding awards					4,546,053
Shares available for future equity awards (Note: this proposal does not add shares to any plan)					3,101,431
Total shares					7,647,484
Percentage of outstanding shares*					8.5	%*

*	Outstanding shares (the denominator in this calculation) includes all Common Stock outstanding at February 28, 2007 and does not include issuance of unissued shares reserved for outstanding or future awards under the existing equity compensation plans.

On February 28, 2007, the last reported sale price of IFF’s Common Stock in composite transactions for New York Stock Exchange-listed securities was $46.80 per share.

Per-Person Award Limitations.    The 2000 Plan includes a limitation on the amount of awards that may be granted to any one participant in a given year in order to qualify awards as ‘‘performance-based’’ compensation not subject to the limitation on deductibility under Code Section 162(m). Under this annual per-person limitation, no participant may in any year be granted share-denominated awards under the 2000 Plan relating to more than his or her ‘‘Annual Limit.’’ The Annual Limit equals two million shares plus the amount of the participant’s unused Annual Limit relating to share-based awards as of the close of the previous year, subject to adjustment for splits and other extraordinary corporate events. In the case of cash-denominated awards, the 2000 Plan limits the annual incentive award that may be earned by a participant in a given year based on the annual incentive pool to a maximum of 50% of pool, and limits other types of performance awards that may be earned by a participant to the participant’s defined Annual Limit, which for this purpose equals $6 million plus the amount of the participant’s unused cash Annual Limit as of the close of the previous year. The per-person limit for cash-denominated performance awards does not operate to limit the amount of share-based awards, and vice versa. These limits apply only to awards under the 2000 Plan, and do not limit our ability to enter into compensation arrangements outside of the 2000 Plan.

Adjustments.    Adjustments to the number and kind of shares subject to the share limitations and specified in the share-based Annual Limit are authorized in the event of a large, special and non-recurring dividend or distribution, recapitalization, stock split, stock dividend, reorganization, business combination, or other similar corporate transaction, equity restructuring as defined under applicable accounting rules, or other similar event affecting the common stock. We are also obligated to adjust outstanding awards upon the occurrence of these types of events to preserve, without enlarging, the rights of Plan participants with respect to their awards. The Committee may adjust performance conditions and other terms of awards in response to these kinds of events or to changes in applicable laws, regulations, or accounting principles, except that adjustments to awards intended to qualify as ‘‘performance-based&rsqu o;’ generally must conform to requirements imposed by Section 162(m).

Eligibility.    Executive officers and other employees of IFF and its subsidiaries, and non-employee directors, consultants and others who provide substantial services to us, are eligible to be granted awards under the 2000 Plan. In addition, any person who has been offered employment by us may be granted awards, but such prospective grantee may not receive any payment or exercise any right relating to the award until he or she has commenced employment or the providing of services. As of February 28, 2007, approximately 5,300 persons would be potentially eligible for awards under the 2000 Plan. Awards currently outstanding under the 2000 Plan are held by a total of 691 current and former IFF employees as of February 28, 2007.

Administration.    The Committee will administer the 2000 Plan, except that the Board may itself act to administer the Plan. The Board must perform the functions of the Committee for purposes of granting awards to non-employee directors. (References to the ‘‘Committee’’ here mean the Committee or the full Board exercising authority with respect to a given award.) Subject to the terms and conditions of the 2000 Plan, the Committee is authorized to select participants, determine the type and number of awards to be granted and the number of shares to which awards will relate or the amount of a performance award, specify times at which awards will be exercisable or settled, including performance conditions that may be required as a condition thereof, set other terms and conditions of such awards, prescribe forms of award agreements, interpret and specify rules and regulations relating to the 2000 Plan, and ma ke all other determinations which may be necessary or advisable for the administration of the 2000 Plan. Nothing in the 2000 Plan precludes the Committee from authorizing payment of other compensation, including bonuses based upon performance, to officers and employees, including the executive officers, outside of the 2000 Plan. The 2000 Plan authorizes the Committee to delegate authority to executive officers to the extent permitted by applicable law, but such delegation will not authorize grants of awards to executive officers without direct participation by the Committee. The 2000 Plan provides that members of the Committee and the Board shall not be personally liable, and shall be fully indemnified, in connection with any action, determination, or interpretation taken or made in good faith under the Plan.

Stock Options and SARs.    The Committee is authorized to grant stock options, including both incentive stock options (‘‘ISOs’’), which can result in potentially favorable tax treatment to the participant, and non-qualified stock options. SARs may also be granted, entitling the participant to receive the excess of the fair market value of a share on the date of exercise over the SAR’s designated ‘‘base price.’’ The exercise price of an option and the base price of an SAR are determined by the Committee, but generally may not be less than the fair market value of the underlying shares on the date of grant. The maximum term of each option or SAR, the times at which each option or SAR will be exercisable, and provisions requiring forfeiture of unexercised options at or following termination of employment or upon the occurrence of other events generally are fixed by the Committee , subject to a restriction that the maximum term of each option or SAR will be ten years. Subject to this limit, the times at which each option or SAR will be exercisable and provisions requiring forfeiture of unexercised options and SARs (and in some cases gains realized upon an earlier exercise) at or following termination of employment or upon the occurrence of other events generally are fixed by the Committee. Options may be exercised by payment of the exercise price in cash, shares having a fair market value equal to the exercise price or surrender of outstanding awards or other property having a fair market value equal to the exercise price. These exercise methods may include withholding of option shares to pay the exercise price if that would not result in additional accounting expense. We permit broker-assisted cashless exercises under the 2000 Plan. We may impose limits on any of these methods of exercise and settlement and implement other methods, for both options and SARs. SARs may be exercisable for shares or for cash, as determined by the Committee.

Restricted and Deferred Stock/Restricted Stock Units.    The Committee is authorized to grant restricted stock and deferred stock. Prior to the end of the restricted period, shares granted as restricted stock may not be sold, and will be forfeited in the event of termination of employment in specified circumstances. The Committee will establish the length of the restricted period for awards of restricted stock, but restricted stock must vest over a minimum period of one year except in the case of the participant’s death, disability or retirement, a change in control of IFF, or other special circumstances. Aside from the risk of forfeiture and non-transferability, an award of restricted stock entitles the participant to the rights of a shareholder of IFF, including the right to vote the shares and to receive dividends, which dividends could be either forfeitable or non-forfeitable. Any of these rights may be limited by the Committee.

Deferred stock gives a participant the right to receive shares at the end of a specified deferral period. Deferred stock subject to forfeiture conditions may be denominated as an award of ‘‘restricted stock units.’’ The Committee will establish any vesting requirements for deferred stock/restricted stock units granted for continuing services. One advantage of restricted stock units, as compared to restricted stock, is that the period during which the award is deferred as to settlement can be extended past the date the award becomes non-forfeitable, so the Committee can require or permit a participant to continue to hold

an interest tied to Common Stock on a tax-deferred basis. Prior to settlement, deferred stock awards, including restricted stock units, carry no voting or dividend rights or other rights associated with stock ownership, but the Committee may choose to authorize payment of dividend equivalents, which may be forfeitable or non-forfeitable, in connection with these awards. Under the 2000 Plan, we have granted awards of this type without dividend equivalent rights with respect to dividends paid while the award is subject to a risk of forfeiture.

Other Stock-Based Awards, Stock Bonus Awards, and Awards in Lieu of Other Obligations.    The 2000 Plan authorizes the Committee to grant awards that are denominated or payable in, valued in whole or in part by reference to, or otherwise based on or related to common stock. The Committee will determine the terms and conditions of such awards, including the consideration to be paid to exercise awards in the nature of purchase rights, the periods during which awards will be outstanding, and any forfeiture conditions and restrictions on awards. In addition, the Committee is authorized to grant shares as a bonus free of restrictions, or to grant shares or other awards in lieu of obligations under other plans or compensatory arrangements, subject to such terms as the Committee may specify.

Performance-Based Awards.    As discussed above, the Committee may grant performance awards that enable participants to earn shares or cash by achievement of pre-established performance goals. Performance goals and related terms of these awards are discussed above under the caption ‘‘Business Criteria Used in Setting Performance Goals Under the 2000 Plan.’’ Performance awards include annual incentive awards, which are cash-denominated awards earned by achievement of performance objectives during a specified period of up to one year. The performance goals may be based on one or more of the business criteria discussed above. Either together with or as an alternative to using those business criteria, the Committee may determine that annual incentive awards will be earned only if and to the extent an annual incentive pool becomes funded, on a hypothetical basis. In that event, the annual incentive pool for ea ch fiscal year will equal 10% of the amount by which the pretax consolidated earnings exceed 20% of net capital for that year, except this funding will in no event exceed 10% of the amount of cash dividends paid by us during the year. For this purpose, pretax consolidated earnings for a fiscal year means (i) our consolidated net earnings for the year before extraordinary items and before the cumulative effect of accounting changes, plus (ii) the amount provided for all income taxes for the year, plus (iii) the amount of the annual incentive pool for the year. ‘‘Net capital’’ for any year means the arithmetic average of the amounts of our consolidated capital and surplus as at the beginning and the end of such year, before extraordinary items and before the cumulative effect of accounting changes. The Committee generally must establish the terms of annual incentive awards no later than 90 days after the beginning of the year.

Business Protection Provisions.    A participant generally will forfeit an award under the 2000 Plan and certain gains resulting from awards if he or she has taken certain actions harmful to IFF. These forfeitures will be triggered if we file financial statements that are in error and must be corrected by a restatement, where the filing resulted from misconduct caused by the participant or which the participant failed to prevent through gross negligence. Forfeitures will apply to: (a) annual incentive awards and other performance awards that the participant earned by performance during the period covered by the erroneous financial report and during the 12-month period following the filing of such report, (b) any award granted during the 12 months after the filing of the erroneous report and during any additional period until the restatement is filed, and (c) any profits realized from the sale, during the 12-month period followin g such erroneous filing, of shares resulting from awards, with profits measured by the increase in market price after the filing of the erroneous report. These forfeitures will apply to awards granted after March 2007, but the Committee may require as a condition of any new grant that a participant agree that the forfeitures also will apply to earlier granted awards. The 2000 Plan also provides for forfeiture of awards and award gains if a participant fails to comply with conditions relating to non-competition, non-solicitation, confidentiality, non-disparagement and other requirements for the protection of our business, including during specified periods following termination. These conditions apply to all awards, unless otherwise determined by the Committee.

Other Terms of Awards.    Awards may be settled in cash, shares, other awards or other property, in the discretion of the Committee. The Committee may require or permit participants to defer the settlement of all or part of an award, in accordance with such terms and conditions as the Committee may establish, including payment or crediting of interest or dividend equivalents on any deferred amounts. The

Committee is authorized to place cash, shares or other property in trusts or make other arrangements to provide for payment of our obligations under the 2000 Plan. The Committee may condition awards on the payment of taxes, and may provide for mandatory withholding of a portion of the shares or other property to be distributed in order to satisfy tax withholding obligations, or may permit a participant to elect to satisfy these tax obligations by having us withhold shares. Awards granted under the Plan generally may not be pledged or otherwise encumbered and are not transferable except by will or by the laws of descent and distribution, or to a designated beneficiary upon the participant’s death, except that the Committee may permit transfers of awards other than incentive stock options on a case-by-case basis. Such transfers would be permitted for estate-planning purposes and not for value to third parties.

The 2000 Plan authorizes the Committee to provide for forfeiture of awards and award gains in the event a participant fails to comply with conditions relating to non-competition, non-solicitation, confidentiality, non-disparagement and other requirements for the protection of the our business. Awards under the 2000 Plan may be granted without a requirement that the participant pay consideration in the form of cash or property for the grant (as distinguished from the exercise), except to the extent required by law. Subject to the requirement in the 2000 Plan that a ‘‘repricing’’ be approved by shareholders, the Committee may grant awards in substitution for, exchange for or as a buyout of other awards under the 2000 Plan, awards under our other plans, or other rights to payment from us, and may exchange or buy out outstanding awards for cash or other property. The Committee also may grant awards in addition to and in tandem with other awards or rights. In granting a new award, the Committee may determine that the in-the-money value or fair value of any surrendered award may be applied to reduce the purchase price of any new award, subject to the 2000 Plan’s requirement that repricing transactions must be approved by shareholders.

Dividend Equivalents.    The Committee may grant dividend equivalents. These are rights to receive payments equal in value to the amount of dividends paid on a specified number of shares of Common Stock while an award is outstanding. These amounts may be in the form of cash or rights to receive additional awards or additional shares of Common Stock having a value equal to the cash amount. The awards may be granted on a stand-alone basis or in conjunction with another award, and the Committee may specify whether the dividend equivalents will be forfeitable or non-forfeitable.

Vesting, Forfeitures, and Related Award Terms.    The Committee will determine the vesting schedule of options, restricted stock and other awards, the circumstances resulting in forfeiture of awards, the post-termination exercise periods of options and similar awards, and the events resulting in acceleration of the right to exercise and the lapse of restrictions, or the expiration of any deferral period, on any award.

Change in Control.     The 2000 Plan provides that, in the event of a Change in Control of IFF, outstanding awards will immediately vest and be fully exercisable, any restrictions, deferral of settlement and forfeiture conditions of such awards will lapse, and goals relating to performance-based awards will be deemed met or exceeded to the extent specified in the performance-award documents. A Change in Control means generally (i) any person or group acquires voting securities and as a result is a beneficial owner of 40% or more of the voting power of our voting securities (excluding certain existing shareholders), (ii) a change in the Board’s membership such that the members serving as of September 2000, or those elected or nominated with the approval of two-thirds of the those members and successors elected or nominated by them cease to represent a majority of the Board, (iii) certain mergers or consolidations substanti ally reducing the percentage of voting power held by shareholders prior to such transactions or changing a majority of the membership of the Board, or (iv) shareholder approval of a sale or liquidation of all or substantially all of our assets. The distribution of awards upon a Change in Control may be limited by applicable restrictions under Code Section 409A.

Amendment and Termination of the 2000 Plan.    The Board may amend, alter, suspend, discontinue, or terminate the 2000 Plan or the Committee’s authority to grant awards thereunder without shareholder approval, except as required by law or regulation or under the Listed Company Manual of the New York Stock Exchange. New York Stock Exchange rules require shareholder approval of any material amendment to plans such as the 2000 Plan. Under these rules, however, shareholder approval will not necessarily be required for all amendments which might increase the cost of the 2000 Plan or broaden eligibility. Outstanding awards may be amended, but the Committee cannot modify or waive award terms

that are mandatory under the 2000 Plan. Unless earlier terminated, the 2000 Plan will terminate at such time when no shares remain available and we have no further rights or obligations with respect to any outstanding award.

U.S. Federal Income Tax Implications of the 2000 Plan

We believe that under current law the following U.S. Federal income tax consequences generally would arise with respect to awards under the 2000 Plan.

Options and SARs that are not deemed to be deferral arrangements under Code Section 409A would have the following tax consequences: The grant of an option or a SAR will create no federal income tax consequences for the participant or IFF. A participant will not have taxable income upon exercising an option that is an ISO, except that the alternative minimum tax may apply. Upon exercising an option that is not an ISO, the participant generally must recognize ordinary income equal to the difference between the exercise price and the fair market value of the freely transferable or non-forfeitable shares acquired on the date of exercise. Upon exercising an SAR, the participant must generally recognize ordinary income equal to the cash or the fair market value of the shares received.

Upon a disposition of shares acquired upon exercise of an ISO before the end of the applicable ISO holding periods, the participant must generally recognize ordinary income equal to the lesser of (i) the fair market value of the ISO shares at the date of exercise minus the exercise price or (ii) the amount realized upon the disposition of the ISO shares minus the exercise price. Otherwise, a participant’s sale of shares acquired by exercise of any option generally will result in short-term or long-term capital gain or loss measured by the difference between the sale price and the participant’s tax ‘‘basis’’ in such shares. The tax ‘‘basis’’ normally is the exerc ise price plus any amount he or she recognized as ordinary income in connection with the option’s exercise. A participant’s sale of shares acquired by exercise of an SAR generally will result in short-term or long-term capital gain or loss measured by the difference between the sale price and the tax ‘‘basis’’ in the shares, which normally is the amount he or she recognized as ordinary income in connection with the SAR’s exercise.

We normally can claim a tax deduction equal to the amount recognized as ordinary income by a participant in connection with the exercise of an option or SAR, but no tax deduction relating to a participant’s capital gains. Accordingly, we will not be entitled to any tax deduction with respect to an ISO if the participant holds the shares for the applicable ISO holding periods prior to selling the shares.

Awards other than options and SARs that result in a transfer to the participant of cash or shares or other property generally will be structured under the 2000 Plan to meet applicable requirements under Code Section 409A. If no restriction on transferability or substantial risk of forfeiture applies to amounts distributed to a participant, the participant generally must recognize ordinary income equal to the cash or the fair market value of shares actually received. Thus, for example, if we grant an award of restricted stock units that has vested but as to which the receipt of shares or cash has been validly deferred, the participant should not become subject to income tax until the time at which shares or cash are actually distri buted, and we will become entitled to claim a tax deduction at that time.

On the other hand, if a restriction on transferability and substantial risk of forfeiture applies to shares or other property actually distributed to a participant under an award (such as, for example, a grant of restricted stock), the participant generally must recognize ordinary income equal to the fair market value of the transferred amounts at the earliest time either the transferability restriction or risk of forfeiture lapses. In all cases, we can claim a tax deduction in an amount equal to the ordinary income recognized by the participant, except as discussed below. A participant may elect to be taxed at the time of grant of restricted stock or other property rather than upon lapse of restrictions on transferability or the risk of forfeiture, but if the participant subsequently forfeits such shares or property he or she would not be entitled to any tax deduction, including as a capital loss, for the value of the shares or property on which he or she previously paid tax.

Any award that is deemed to be a deferral arrangement (excluding certain exempted short-term deferrals) will be subject to Code Section 409A. Participant elections to defer compensation under such awards and as to the timing of distributions relating to such awards must meet requirements under Section 409A in order for income taxation to be deferred upon vesting of the award and tax penalties avoided by the participant.

Some options and SARs may be subject to Code Section 409A, which regulates deferral arrangements. In such case, the distribution to the participant of shares or cash relating to the award would have to be restricted in order for the participant not to be subject to tax and a tax penalty at the time of vesting. In particular, the participant’s discretionary exercise of the option or SAR could not be permitted over a period extending more than a year in most cases. If the distribution and other award terms meet applicable requirements under Section 409A, the participant would realize ordinary income at the time of distribution of shares or cash rather than exercise, with the amount of ordinary income equal to the distribution date value of the shares or cash less any exercise price actually paid. We would not be entitled to a tax deduction at the time of exercise, but would become entitled to a tax deduction at the time shares are delivered at the end of the deferral period.

As discussed above, compensation that qualifies as ‘‘performance-based’’ compensation is excluded from the $1 million deductibility cap of Internal Revenue Code Section 162(m), and therefore remains fully deductible by the company that pays it. Under the 2000 Plan, options and SARs granted with an exercise price or base price at least equal to 100% of fair market value of the underlying stock at the date of grant, performance awards to employees the Committee expects to be named executive officers at the time compensation is received, and certain other awards which are conditioned upon achievement of performance goals are intended to qualify as such ‘‘performance-based’’ co mpensation. A number of requirements must be met in order for particular compensation to so qualify, however, so there can be no assurance that such compensation under the 2000 Plan will be fully deductible under all circumstances. In addition, other awards under the 2000 Plan, such as non-performance-based restricted stock and restricted stock units, generally will not so qualify, so that compensation paid to named executive officers in connection with such awards may, to the extent it and other compensation subject to Section 162(m)’s deductibility cap exceed $1 million in a given year, not be deductible by IFF as a result of Section 162(m). Compensation to certain employees resulting from vesting of awards in connection with a change in control or termination following a change in control also may be non-deductible under Code Sections 4999 and 280G.

The foregoing provides only a general description of the application of federal income tax laws to certain awards under the 2000 Plan. This discussion is intended for the information of shareholders considering how to vote at the Annual Meeting and not as tax guidance to participants in the 2000 Plan, as the consequences may vary with the types of awards made, the identity of the recipients and the method of payment or settlement. Different tax rules may apply, including in the case of variations in transactions that are permitted under the 2000 Plan (such as payment of the exercise price of an option by surrender of previously acquired shares). The summary does not address in any detail the effects of other federal taxes (includi ng possible ‘‘golden parachute’’ excise taxes) or taxes imposed under state, local or foreign tax laws.

New Plan Benefits Under the 2000 Plan

The type, number, recipients and other terms of future awards cannot be determined at this time since future awards under the 2000 Plan will be granted in the discretion of the Committee. Information regarding our recent practices with respect to annual and long-term incentive awards and stock-based compensation under existing plans is presented in the ‘‘Summary Compensation Table’’ and these related tables: ‘‘Grants of Plan-Based Awards,’’ ‘‘Outstanding Equity Awards at Fiscal Year-End,’’ and ‘‘Options Exercised and Stock Vested,’’ elsewhere in this Proxy Statement, and in our financial statements for the fiscal year ended December 31 , 2006, in the Annual Report which accompanies this Proxy Statement. If shareholders decline to reapprove the business criteria used in setting performance goals for performance awards under the 2000 Plan, we will not thereafter authorize new performance awards under Section 7(b) of the 2000 Plan.

IFF’s Board of Directors considers reapproval of the business criteria used for performance goals under the 2000 Plan to be in the best interests of IFF and our shareholders and therefore recommends that shareholders vote FOR approval of this proposal at the 2007 Annual Meeting.

EXECUTIVE COMPENSATION

COMPENSATION DISCUSSION & ANALYSIS

Organization of Information

This Compensation Discussion & Analysis (‘‘CD&A’’) provides an overview of our executive compensation philosophy and programs. It highlights information on the compensation of our named executive officers which is included in the compensation tables accompanying this CD&A. The CD&A includes the following sections:

	•	Executive Compensation Philosophy:

	•	Objectives

	•	Compensation Elements and Targeted Mix

	•	Principles for Setting Compensation Levels

	•	Benchmarking

	•	Role of Outside Advisors

	•	Program Components and Policies:

	•	Salary Plan

	•	Annual Incentive Plan (‘‘AIP’’)

	•	Long-Term Incentive Plan (‘‘LTIP’’)

	•	Equity Choice Program

	•	Other Equity Grants

	•	Supplemental Retirement Plan (‘‘SRP’’)

	•	Deferred Compensation Plan (‘‘DCP’’)

	•	Perquisite Program

	•	Executive Separation Policy (‘‘ESP’’)

	•	Mr. Goldstein’s Retirement as Chairman and CEO

	•	Mr. Martinez’s Appointment as Interim CEO

	•	Mr. Amen’s Election as Chairman and CEO

	•	Tax Deductibility

	•	Stock Ownership and Share Retention Policy

Executive Compensation Philosophy

Objectives

In 2005, we modified our executive compensation philosophy and adopted a framework to evaluate our executive compensation actions. This framework, which applied during 2006, identifies our six objectives for the design and administration of our executive compensation programs:

	1.	Align executive interests with shareholder interests

	2.	Motivate and reward achievement of both annual and longer term business goals and strategic objectives

	3.	Attract, retain and develop individuals critical to our success

	4.	Reinforce performance by variable ‘‘at risk’’ incentives based on our desired business goals

	5.	Reinforce Company values

	6.	Provide total compensation opportunities at competitive levels and establish our benchmarks in line with the performance we want our executives to achieve.

We believe that executive compensation should:

	•	be tied to overall Company performance

	•	reflect each executive’s level of responsibility

	•	vary based on individual performance and contribution

	•	include a significant equity component

We design our performance goals to be ‘‘stretch’’ but achievable, to reinforce each executive’s role in driving Company performance, and to motivate our executives to manage effectively over the long term.

We also believe that executives should own a significant amount of Company stock because we want our executives to share the same investment risk as our shareholders based on our performance.

Compensation Elements and Targeted Mix

The Compensation Committee of our Board of Directors (the ‘‘Compensation Committee’’) reviews and approves all of our compensation policies for our executive officers and other members of senior management. Our executive compensation program includes the following elements.

Direct pay:

	•	Base salary

	•	Annual Incentive Plan award (‘‘AIP’’)

	•	Long-Term Incentive Plan award (‘‘LTIP’’)

	•	Equity Choice Program

Indirect pay:

	•	Benefits (broad-based benefit programs)

	•	Supplemental Retirement Plan (‘‘SRP’’) and Deferred Compensation Plan (‘‘DCP’’)

	•	Personal benefits (our perquisite program)

Direct Pay

We structure the direct pay mix for our senior executives to include variable compensation components that are based on performance. We allocate a substantial portion of variable compensation in the form of annual and long term incentive pay, which results in a potentially significant variation in pay from year to year based on our results and performance. This structure reflects the significant impact our executives have on our success.

For our CEO, at target levels, approximately 18% of direct pay is targeted to base salary, 21% to annual incentive and 61% to long term equity and non-equity incentive pay. For our prior CEO, at target levels, approximately 22% of direct pay was targeted to base salary, 26% to annual incentive and 52% to long term equity and non-equity incentive pay. For the other named executive officers who are employed by us, the percentage of direct pay targeted to base salary is approximately 32%, annual incentive is approximately 22% and long term equity and non-equity incentive is approximately 46%.

Indirect Pay

Our executives participate in IFF sponsored benefit programs, many of which are broadly available to our employees. We also maintain other benefit and perquisite programs designed for our senior executives that our independent compensation consultant has opined are in line with market practice. The value from these programs represents a small percentage of overall executive compensation.

Principles for Setting Compensation Levels

We use a global grading structure for our executives, with compensation ranges for each grade. Executives are placed in a particular grade based on internal factors (including scope of responsibilities and job complexity) and an external market evaluation. The market evaluation is based on published survey information and a review of like positions within select peer groups. This is known as ‘‘market benchmarking’’. This benchmarking also provides information that we use in internal pay review among positions and grade levels.

The compensation decisions our Compensation Committee makes each year take into account the compensation range for each executive’s grade. Our actual determinations within the range are based on the executive’s performance relative to job responsibilities and objectives, the executive’s contribution relative to overall Company performance and the relative position of the executive’s base salary and total compensation against the benchmark. We also use benchmarking to help us determine the appropriate mix of compensation (that is, to determine the appropriate allocation among base salary, annual incentive and long term incentive compensation) in order (i) to maintain a competitive compensation program and (i i) to provide appropriate incentive to achieve the financial results we believe our shareholders expect.

We periodically review and update our job positions and we typically update the external market and peer group data at least every two years.

The Compensation Committee uses its benchmarking data when it sets the executives’ fixed compensation and target values for equity and non-equity incentive compensation each year. The Compensation Committee does not take into account actual or potential gains from short term or long term incentive awards or from equity awards in establishing other elements of executive compensation (e.g., equity award values or level of retirement benefits).

In the event relevant performance measures on which incentive payments are based are subsequently restated or otherwise adjusted in a manner that would reduce the size of a payment, the Compensation Committee would consider recovering or adjusting these payments, as appropriate.

Benchmarking

Defining a single and appropriate peer group for our market benchmarking is a challenge because there are few publicly traded competitors. Our industry is highly fragmented, both geographically and across product lines. Accordingly, the Compensation Committee, with assistance from its independent compensation consultant, identified two separate and distinct peer groups, and other data sources, to accomplish our market benchmarking. The Compensation Committee considers the following criteria in identifying our executive compensation peer groups:

	•	Comparable in size (based on revenue and market capitalization)

	•	Operations with significant international presence

	•	US publicly traded companies, which permit access to comparative compensation data

	•	Comparable in-house research and development capabilities

	•	Growth orientation, with positive sales and earnings growth

	•	Competitors for executive talent

	•	Progressive companies with positive reputations

The peer groups, which consist of the following members, represent two market segments: (1) consumer product companies and (2) specialty chemical and flavoring companies.

Consumer Product Peer Group			Specialty Chemical & Flavoring Peer Group
Alberto-Culver			Albemarle
Allergan			Arch Chemicals
Bausch & Lomb			Cabot
Blyth			Corn Products
Church & Dwight			Cytec Industries
Clorox			Ecolab
Del Monte Foods			Engelhard
Elizabeth Arden			Ferro
Estee Lauder			FMC
Hershey			HB Fuller
Hormel Foods			Lubrizol
Lancaster Colony			PolyOne
McCormick			RPM
Nu Skin Enterprises			Sensient
Ralcorp			Sigma-Aldrich
Revlon			Valspar
Smuckers
Spectrum Brands
UST
Wrigley

The Compensation Committee last reviewed our executive compensation peer groups in 2005. At that time, IFF was approximately at the median of both peer groups in terms of revenue and market capitalization. The peer groups and other data sources provided by its consultant and our human resources management are used for compensation benchmarking for all named executive officer positions.

Our peer groups for compensation benchmarking are different from the peer group used in our financial performance graph included in our Annual Report on Form 10-K. Both the compensation and financial peer groups include companies that are international in scope and representative of the customer groups to which we sell our products. However, the financial performance peer group includes companies that exceed the size criteria identified for our compensation peer groups. The Compensation Committee believes that comparably sized companies for the compensation peer groups better reflect the competition we face for executive talent.

The Compensation Committee also uses the Towers Perrin Executive Compensation Database and general industry and local market data as market sources for compensation comparisons.

The Compensation Committee does not apply a specific weighting to each data source when making compensation comparisons. With the help of independent outside consultants, the Compensation Committee develops a ‘‘market consensus’’ for each executive position and considers each of the data sources. The Compensation Committee attempts to use a consistent set of peer companies, survey sources and approach to market analysis year to year in making its compensation decisions.

The Compensation Committee targets total direct pay for executives in the 60^th-65^th percentile range of the market. Actual compensation versus target varies principally based on Company financial performance.

Role of Outside Advisors

The Compensation Committee retains independent expert consultants for recommendations on executive compensation. In 2005 and 2006, the Compensation Committee retained W.T. Haigh & Company to review our executive compensation philosophy and programs and to recommend potential changes. As a result of this review, the Compensation Committee:

	•	developed the above criteria for the compensation peer groups and approved the inclusion of the companies in both peer groups

	•	adopted the executive compensation philosophy framework

	•	conducted total compensation market reviews for 27 executive positions

	•	adopted the new Equity Choice Program

The Compensation Committee also consulted W.T. Haigh & Company in 2006 regarding the compensation paid to our interim CEO and the compensation arrangements for our new Chairman and CEO.

W.T. Haigh & Company works closely with our management as part of that firm’s engagement by the Compensation Committee to gain an understanding of our executive compensation programs and our management structure and make-up. To date, W.T. Haigh & Company has worked exclusively on executive compensation initiatives on behalf of the Compensation Committee and does not have other consulting arrangements with the Company.

The Company retains Steven Hall & Partners for advisory services concerning compensation plan documents and Buck Consultants for actuarial work and other services relating to the Company’s retirement plans and other post-employment benefits.

Company management also uses other compensation firms from time to time to obtain compensation market data and marketplace trends.

Our CEO and our Senior Vice President, Human Resources also work extensively with the Compensation Committee and with W. T. Haigh & Company on executive compensation matters, including recommendations concerning:

	•	direct pay levels

	•	incentive criteria and target levels

	•	placement of executives within salary grades

	•	individual executive compensation arrangements or adjustments

	•	executive separation policies

	•	operation of specific incentive plans

	•	perquisites

Our CEO does not participate in either making compensation decisions or setting performance goals for his own compensation.

Program Components and Policies

Salary Plan

The Compensation Committee reviews the salaries of our CEO and other named executive officers annually, as well as at the time of promotions or other changes in responsibilities. Salary increases are generally based on each executive’s performance and contribution to the achievement of specific financial goals. The leading factor in determining initial salary and increases in salary for senior executives is benchmarking against our peer groups. The salaries of our named executive officers generally do not change substantially year to year, except to reflect changes in market benchmarking or when an executive officer assumes a larger or different role. The Compensation Committee’s general philosophy is to establish name d executive officer base salaries in a range of approximately 10 percent above or below market target; the 2006 named executive officer base salaries are all within this range.

2006 named executive officers salary increases were in the 0-16.0% range and in aggregate were consistent with our overall Board-approved budget. In 2006, no salary increases were given to Douglas J. Wetmore and Nicolas Mirzayantz because they were well placed within the market consensus for their respective positions. In 2006, the Compensation Committee increased the base salaries of James Dunsdon, who was Chief Operating Officer (and who is now our Senior Vice President and Transition Leader), and Dennis M. Meany, Senior Vice President, General Counsel and Secretary, by 15.9% and 16.0%, respectively, to reflect competitive market conditions based on the market consensus developed using information from our peer groups and the To wers Perrin Executive Compensation Database.

Annual Incentive Plan (‘‘AIP’’)

Each named executive officer has an annual incentive award target stated as a percentage of base salary. The AIP target is earned based on the achievement of specific quantitative corporate performance goals. For some executive officers, however, the goals also include ‘‘regional’’ and/or ‘‘category’’ goals which are derived from our overall corporate goals. Regional goals are generally based on the major geographical segments of our business. Category goals are generally based on a business sector such as Fine Fragrances or Flavors.

Each executive has a range of potential awards which can be above, at and below target levels. Performance targets for executives are established by the Compensation Committee by the end of March each year.

The amount paid to each executive following the end of the year depends on the performance achieved against the goals. Failure to meet a threshold level of performance results in no AIP award for that year. For example, in 2005 corporate performance did not reach the threshold performance goals under the AIP. As a result, executives whose AIP target was tied solely to corporate performance objectives did not earn AIP awards for 2005.

For 2006, the corporate performance criteria were sales growth and operating profit as a percent of sales. This was consistent with prior years. These criteria are key measures for evaluating our annual progress against our long term corporate strategic plan of winning new business with major customers and increasing profits in targeted geographic areas or business categories. The specific targets established for each of these criteria were based on growth over 2005 achieved levels and are consistent with the Company’s strategic goals of growing local currency sales by 4+% per year, improving operating margins to 18+% of sales by the end of 2009 and growing earnings per share on average by 10+% per year. The targets related to each of the two criteria were assigned 50% weight in determining total AIP, and threshold achievement was set at 70% of target, and maximum achievement was set at 130% of target.

For 2006 the AIP target participation rate established at the start of the year for our CEO was 120% of salary. The Compensation Committee adjusted the AIP target participation rates of other executive officers as follows:

	•	Chief Operating Officer – increased from 75% to 90% of base salary

	•	Senior Vice Presidents – increased from 45-50% to 60% of base salary

The Compensation Committee considered these new participation rates to be consistent with its benchmarking and important to provide added ‘‘at risk’’ incentive opportunities to achieve superior Company performance.

The AIP payout for 2006 for the named executive officer group, based on the actual achievement of quantitative objectives, as well as the range of potential awards and related performance objectives for the CEO and the other named executive officers, is discussed in greater detail in conjunction with the Grants of Plan-Based Awards Table at page 56. The 2006 AIP payout represents an improvement over the prior year due to achievement against pre-set performance goals.

For 2007, the Compensation Committee adjusted the AIP performance criteria. The corporate financial performance criteria for 2007, which remain consistent with the Company’s strategic goals, are increases in sales, earnings before interest and taxes and return on invested capital. The Compensation Committee also established non-financial strategic goals for 2007 related to:

	•	customers, including sales growth with target customers and annualimproving customer satisfaction, service performance and long-term incentive compensationproduct quality

	•	people, including managing and equity-based compensationdeveloping our workforce

	•	innovation, including new product growth and research and development innovation.

The Compensation Committee also adjusted the maximum AIP payout from 150% to 200% based on the consultant’s report of benchmarking data.

The Compensation Committee believes that these new 2007 AIP criteria are important keys to drive both short and long term Company performance and shareholder value.

Long-Term Incentive Plan (‘‘LTIP’’)

Each executive officer has an award target for a 3-year performance cycle based on the achievement against quantitative corporate performance goals. The Compensation Committee develops and approves the performance goals at the beginning of each performance cycle.

A new 3-year performance cycle starts each year:

	•	to provide a regular opportunity to re-evaluate long term measures;

	•	to align goals with the executive officers and other members of senior management;strategic planning process; and

	•	considering recommendations from the Nominatingto reflect changes in our business priorities and Governance Committee regarding the compensation of non-employee directors.market factors.

For the 2006-2008 performance cycle, the LTIP performance objectives or criteria were compound earnings per share growth over the 3-year period and return on invested capital.¹    This was consistent with prior cycles, including the 2005-2007 cycle. These criteria are key measures for evaluating the management team’s progress in improving shareholder value. The specific target established for earnings per share is consistent with the Company’s strategic goal of growing earnings per share on average by 10+% per year. Each of the two criteria was assigned 50% weight in determining total LTIP, and the threshold achievement was set at 70% of target, and maximum ach ievement was set at 130% of target.

For the 2006-2008 performance cycle, the LTIP award target for our former CEO was set at 120% of base salary and for other named executive officers at 60%-80% of base salary. Mr. Amen’s LTIP target was set at a higher level (200%) than his CEO predecessor to reflect market consensus based on the Compensation Committee’s review of its consultant’s benchmarking data and the advice of its consultant. 50% of the LTIP award earned for the 2006-2008 LTIP cycle will be paid in Company stock to promote executive stock ownership and to align our executive’s investment in our Company with our shareholders.

The LTIP payout for the 2004-2006 cycle for the named executive officer group, based on the actual achievement of quantitative objectives, is discussed in greater detail in conjunction with the Grants of Plan-Based Awards Table at page 56. The payout for the 2004-2006 LTIP cycle represents an improvement over the prior year due to improved financial achievements against pre-set performance objectives.

The Compensation Committee is authorized to retain as it deems appropriateperiodically reviews and adjusts the mix between short term and long term incentive compensation opportunities and between cash and non-cash opportunities based on (1) benchmarking and other external data, (2) recommendations from its independent compensation consultants to assist it in carrying out its duties.

Compensation Programconsultant and (3) recommendations from our CEO and Senior Vice President, Human Resources.

For 2005,2007, the Company continuedCompensation Committee adjusted the LTIP performance criteria. For the 2007-2009 cycle, these criteria are:

	•	improvements in earnings per share (50%)

	•	Total Shareholder Return relative to the S&P 500 (50%)

The target level of these financial measures: (i) are based on our Board’s approved financial expectations, and (ii) are stretch, but achievable.

The Compensation Committee continues to operate under its comprehensive Executive Compensation Program coveringbelieve that growth in earnings per share is a key indicator for measuring improvement in our long term shareholder value. The target for this criteria remains consistent with the Company's executive officers and senior management (the ‘‘Program’’). The Program consistsCompany’s strategic goals. Additionally, we believe that total return to our shareholders versus other equity choices shareholders may have is another good indicator of a Salary Plan (‘‘SP’’), an Annual Incentive Plan (‘‘AIP’’), a Long-Term Incentive Plan (‘‘LTIP’’), a Stock Award Program (‘‘SAP’’), a perquisites program and the Company's Executive Separation Policy (‘‘ESP’’). The AIP, LTIP and SAP areour overall long term performance. Given that we have inserted return on invested capital measures into our annual incentive criteria, we believe this measure should not be part of and administeredthe long term criteria.

1	Return on invested capital is net income (excluding restructuring charges) for the 3 year period divided by average invested capital over the same period. Average invested capital equals shareholders’ equity plus debt.

Equity Choice Program

In 2006, the Compensation Committee created our new Equity Choice Program under theour 2000 Stock Award and Incentive Plan (theto increase the equity component of our long term incentive program and to facilitate stock ownership by our executives. The Compensation Committee strongly believes that providing a significant long-term equity incentive opportunity ties directly to its goal of creating increased shareholder value. Approximately 50% of each executive’s annual long term incentive award value is targeted to be delivered through the Equity Choice Program. The other 50% is targeted to be delivered under the LTIP program.

The Equity Choice Program is designed to address different career stages, financial situations and risk profiles of our executives. The program gives the executives a choice as to how they receive their equity awards. Equity choice is a relatively new concept and we believe that it provides an attractive recruiting, motivation and retention tool for executive talent. The Equity Choice Program encourages stock ownership and real investment in our Company. The program, combined with our share retention policy, improves the alignment of our executives’ investment in our Company with that of our shareholders.

The Company offers the following equity opportunities to eligible participants, including our NEOs, under the program:

	•	Purchased restricted stock (PRS), at a 50% price discount

	•	Stock settled appreciation rights (SSARs)

	•	Restricted stock units (RSUs)

PRS and SSARs were added as an equity opportunity in 2006 as part of the choice program. PRS is Company stock that is purchased at a significant discount (50% of fair market value at the grant date) and vests 3 years from the grant date. Executives fund the purchase of PRS from their own financial resources. Executives have the rights of shareholders (such as voting and non-preferential dividend rights on PRS) during the 3-year restricted period. SSARs provide upside potential and alignment with shareholders because SSARs have no value if the stock price stays the same or goes down.

The grant opportunities are ‘‘2000 SAIP’risk adjusted’’) to reflect the varying degree of risk with each form. RSUs are valued to reflect that they continue to have value even when our stock price stays the same or declines. RSUs also do not require a cash investment by the executive. PRS is valued to reflect the actual up-front purchase of the stock (at 50% discount). Before its introduction, the Program was extensively benchmarked, with the assistance of an independent compensation consultant retainedThe risk adjustments approved by the Compensation Committee against confidential external marketplace data,for 2006 were:

	•	PRS: 120%

	•	SSARs: 100%

	•	RSUs: 60%

Under our Equity Choice Program, eligible participants (including our NEOs) are granted annual equity awards up to a certain dollar value depending on the participant’s grade level. Choice award values allocated to each executive are dollar denominated and all positions, including thoseare converted to actual shares or units on the grant date based on each executive’s election. Executives elect to receive their choice award in increments of 10% across the three forms of equity opportunity. RSUs have a 50% maximum value allocation. The choice award value is then risk adjusted up or down based on the executive’s choice. For example, if an executive’s choice award value is $100,000 and he or she elects 100% of the CEOaward in PRS, then the va lue used for share election at the grant date is $120,000 ($100,000 choice award value x 120% PRS adjustment factor.) The executives’ elections are required to be made in advance of the grant date, and once an election is made it may not be changed prior to the Company's othergrant date.

The Compensation Committee approved the choice award values allocated to each executive officersat its regularly scheduled meeting on March 7, 2006 and membersapproved the grants to be made on May 9, 2006. In addition, the Compensation Committee approved the choice award value for Mr. Amen on June 27, 2006 as part of senior management,his employment agreement and approved the grant to be made on July 25, 2006.

All 2006 choice awards cliff vest three years from the grant date, and SSARs expire seven years from the grant date.

The standard Equity Choice Program award values by grade were internally valued as determined by deriving the value of previous fixed equity award guidelines and then reducing these values by approximately 10%. This reduction was done in order to create a CEO pool to allow the CEO to recommend to the Compensation Committee increases in awards to certain executives to recognize exceptional contribution or for specific retention purposes. For 2006, the total dollar value for the NEO choice awards were:

NEO			Total Dollar Value
Robert M. Amen			$1,500,000
Douglas J. Wetmore			$450,000
James H. Dunsdon			$500,000
Nicolas Mirzayantz			$450,000
Dennis M. Meany			$300,000

The grants to each named executive officer under the program are identified in the Grants of Plan-Based Awards Table at page 56. Based on our former CEO’s recommendation to the Compensation Committee, we granted each of Mr. Wetmore and Mr. Mirzayantz an increase of $150,000 from the standard choice award value for each of their scoperespective positions for retention purposes during a period of responsibilities withinannounced CEO transition.

Prior to the Company. Equity Choice Program, the Compensation Committee granted performance-based RSUs to senior executives in May 2004 and March 2005. Non-performance-based RSUs were the principal element of our equity compensation in this period for eligible, non-executive U.S.-based employees and a majority of eligible overseas employees. We believed these restricted stock unit awards were a better way to provide equity compensation to our employees and provided more predictable long term rewards than stock options. The Compensation Committee also considered accounting (including FAS 123R) and tax issues when it changed to RSUs as the principal form of equity compensation. The performance-based RSUs were granted annually to our execut ive officers (other than new hires or promotions) on the date of regularly scheduled Compensation Committee meetings.

Other Equity Grants

Due to the exceptional performance of fine fragrances in 2005, the Compensation Committee made a special grant of 3,000 RSUs to Mr. Mirzayantz on May 9, 2006, which vest on the third anniversary of the grant date. It also granted SSARs to Mr. Amen on July 1, 2006 pursuant to his employment agreement.

In benchmarking Company positions against external marketplace data,light of widespread coverage in the independent compensation consultant compared total remunerationmedia and elsewhere concerning the backdating of stock options and similar improprieties at positions within the Company with total remuneration of similar positions atother public companies, the independent compensation consultant chose as being representativeAudit Committee of our Board of Directors conducted a review of the market in which the Company competes for executive talent.Company’s practices with respect to granting equity-based compensation. The group selected, which is comprised of consumer products and specialty chemical companies,Audit Committee’s review was determined by the independent compensation consultant as being a more representative group for purposes of this comparison than the peer group of companies set forth in the Company's performance graph at page 29 below. The external survey data are reviewed and updated every other year, and the internal valuation of positions is reviewed and updated periodically. In respect of 2005, external survey data for each executive position were updated and reviewed by the independent compensation consultant. An internal valuation of positions was also conducted with the assistance of outside counsel. The review uncovered a small number of immaterial procedural flaws associated with option grants, but no evidence of impropriety or manipulative practices. The Audit Committee found that currently outstanding options to purchase a total of 48,000 shares of common stock held by four employees were not properly approved in accordance with the independent compensation consultant.req uirements of the applicable stock option plans. The AIP, the LTIP and the SAP are designedlack of authority was due to reward employees basedprocedural flaws rather than wrongdoing on the successpart of the affected employees or any other Company under specific financial measures, including revenue growth, increases in operating profit and earnings per share andpersonnel. Accordingly, on December 18, 2006 the return on invested capital of the Company. The Compensation Committee targets total remuneration for positions within the Company in the range of the 60^th to the 65^th percentile of the comparable positions in the selected group of representative companies. The total remuneration of the CEO in 2005 was at the 44^th percentile for his position in the group of representative companies.

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

Under the AIP, each executive officer, including the CEO, has an annual incentive award target based on the achievement of specific quantitative corporate and, with respect to certain executive officers, derivative regional and/or category performance goals, which are determined no later than March of each year by the Compensation Committee. For 2005, the corporate objectives related to increases in revenue and improvements in operating profit as a percentage of sales. Each executive officer has a range of potential awards, both above and below target, which are specified each year when the quantitative performance goals are established. The amount paid to each executive officer, including the CEO, following the end of the year depends on the extent to which the performance goals are achieved. Failure to meet threshold performance, based on the performance goals, results in no AIP award to any executive officer for that year.

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

Under the SAP, each executive officer, including the CEO, has an annual target award and a range of equity awards both above and below that target. The amount of an executive officer's target award is based on the scope of his or her position, individual performance, and ability to drive enhanced long-term shareholder value. The range of potential equity awards is related to achievement of quantitative performance goals established in March of each year. Failure to meet threshold performance results in no equity award for that year. The Compensation Committee sets the terms of equity awards, including vesting, any performance requirements and the expiration date (which, under the 2000 SAIP, may not be greater than ten years after the grant date).options were cancelled. The Compensation Committee determined, that equity compensation grants in 2005 would be indue to the formlack of wrongdoing by the affected employees, to grant restricted stock units (RSUs) with 3 year cliff vesting in an amount equal to the difference between the exercise price of the relevant options and $48.80, the New York Stock Exchange closing price for the Company’s common stock on December 18, 2006. The affected employees include three named executive officers who received the following grants in respect of cancelled options with the following terms: (i) Douglas J. Wetmore, Chief Financial Officer, 9,703 RSUs in respect of options to purchase 25,000 shares at $29.86 per share granted on March 11, 2003; (ii) James H. Dunsdon, Senior Vice President, Chief Transition Officer, 3,881 RSUs in respect of options to purchase 10,000 shares at $29.86 per share granted on March 11, 2003; and

(iii) Nicolas Mirzayantz, Group President, Fragrances, 1,231 RSUs in respect of options to purchase 3,000 shares at $28.77 per share granted on January 28, 2002. In addition, an employee who is not an officer of the Company received 3,926 RSUs in respect of options to purchase 10,000 shares at $29.64 per share granted on November 13, 2001.

Supplemental Retirement Plan (‘‘SRP’’)

The retirement benefits under our tax-qualified defined benefit pension plan may be limited for our executives under IRS rules covering tax-qualified retirement plans. A non-qualified supplemental retirement plan (SRP) was established to pay that part of an executive’s retirement benefit that, because of the IRS limitations, cannot be paid under the tax-qualified pension plan. Benefits are calculated under the SRP in the same manner as the tax-qualified pension plan. The Compensation Committee believes that the full retirement benefit earned by an executive under our retirement benefit formula should be paid without reduction and that such restricted stock units would include performance conditions,a supplemental plan is common in additionthe industry and important for the attraction and retentio n of our senior executives.

We do not have a policy regarding the crediting of additional years of service under our SRP. However, on a case-by-case negotiated basis, from time to time, restrictions,executives may be credited with additional years of service.

Deferred Compensation Plan (‘‘DCP’’)

We offer to U.S.-based executives an opportunity to participate in our Deferred Compensation Plan (DCP), as a cost-effective benefit that enhances the competitiveness of our compensation program. The DCP provides participants with a way to delay receipt of income and thus income taxation until a future date. While deferred, the amount of compensation is not reduced by income taxes, and the executive can choose to have this ‘‘pre-tax’’ amount deemed invested in one or more notional investments that generally track investment funds offered under our Retirement Investment Fund Plan, which is our 401(k) plan. Although the executive will eventually owe income taxes on any amounts distributed from the DCP, the ab ility to invest on a ‘‘pre-tax’’ basis allows for a higher ultimate after-tax return. By providing a wealth-building opportunity through the DCP, we are better able to attract and retain executives at IFF.

Through the DCP, we also provide matching contributions to executives that would be made under our 401(k) plan but for limitations under U.S. tax law. We also use the DCP to encourage executives to acquire deferred IFF stock that is economically equivalent to ownership of our stock but is on a tax-deferred basis. If an executive officerselects to defer receipt of cash compensation and senior management.invests it in credits of deferred Company stock under the DCP, we credit an additional 25% of the amount deferred in the executive’s deferred Company stock account contingent on the executive remaining employed by the Company for the full calendar year following the year when such credit is made. We do this to encourage executives to be long term owners of a significant equity stake in IFF, to foster an entrepreneurial culture, a close alignment between the interests of executives and those of shareholders and a deeper commitment to IFF.

IFF’s costs in offering the DCP consist of time-value of money costs, the cost of the matching contribution that supplements the 401(k) plan, the 25% premium for cash deferrals into deferred stock and administrative costs. The time-value of money cost results from the delay in the time at which we can take tax deductions for compensation payable to a participating executive. If notional investments within the DCP increase in value, the amount of our payment obligation will increase. This treatment limits our costs to the time-value of money cost resulting from our paying income tax on the returns of our direct investments earlier than the time at which we are able to claim tax deductions by paying out the deferred compensati on. Our supplemental matching contributions and premiums on cash deferrals into deferred stock for named executives are reflected in the Summary Compensation Table at page 51.

Perquisite Program

The perquisites program offers non-monetary benefits that are competitive and consistent with the marketplace. Under the perquisites program each executive officer receivesexecutives are eligible to receive a series of benefits which includes someincluding:

	•	Company car or car allowance: The CEO and the other named executive officers are eligible to obtain a Company provided automobile once every 3 years. Other senior executives are eligible to be provided a Company leased car chosen from a selector list or a car allowance.

	•	Annual physical exam (once every 12 months)

	•	Financial counseling (up to $10,000 per year)

	•	Tax preparation and estate planning (up to $4,000 over a 3 year period)

	•	Health club membership (up to $3,000 annually)

As part of the following:his employment agreement Mr. Amen receives a Company-provided automobile,$25,000 annual physical examination, club membership and annualallowance for financial andplanning, tax counselingpreparation and estate planning assistance.services rather than the above limits. The fullCompany also pays Mr. Amen’s dues for a luncheon club in Manhattan and provides a car and driver for him.

The value of all perquisites (other than the annual physical examination) is reported as income to the individual and accordingly is subjected to tax.

The Company has a Board-approved comprehensive Deferred Compensation Plan (the ‘‘DCP’’). The DCP allows certain United States-based employees, includingCommittee believes that the CEO and the other United States-based executive officers, to defer, either for a specified numbertotal value of years or until retirement or termination of employment, salary, annual and long-term incentive awards and, under certain circumstances, profits from the exercise of stock options. Participating employees may have changesour perquisites program is reasonable. Additional details concerning perquisites are included in the valuefootnotes to the All Other Compensation Table at page 54.

Executive Separation Policy (‘‘ESP’’)

We provide severance and other benefits under our Executive Separation Policy (ESP) to senior executives whose employment is terminated not for cause and not due to a voluntary termination. This employment policy helps us in competing with other companies in recruiting and retaining qualified executives. When recruiting an executive from another company, the executive in most cases will seek contract terms that provide compensation if his or her employment is terminated by us in cases in which the executive has not engaged in misconduct. We provide such separation pay and benefits on the condition that the departed executive not compete with us, solicit our customers and employees, or take other actions that harm our business for specified periods following termination. In addition, having pre-set terms governing the executive’s separation from service tends to reduce the time and effort needed to negotiate individual termination agreements, and promotes more uniform and fair treatment of their deferred compensation measured, at their election, byexecutives. We believe that the market performanceESP provides a level of separation pay and benefits that is within a varietyrange of equitycompetitive practice of companies of the size and debt mutual funds offered by The Vanguard Group, which administers the DCP, or by changes in the valuecharacter of Company Common Stock, or they may have amounts credited to their DCP accounts earn interest at an interest rate which is established each year byIFF.

In line with what the Compensation Committee believes (with the assistance of its consultants) is competitive practice, we provide a higher level of severance payments and whichbenefits if the executive were to be terminated without cause or elects to terminate employment with good reason within two years after a change in control. These protections provide a number of important benefits. If a change in control event is applicabledeveloping, executives who lack these assurances may act to all DCP participants. With respectprotect their own interests by seeking employment elsewhere. Change in control transactions take time to 2005,unfold, and a stable management team will help to preserve our operations either by preserving the sale value of IFF or, if no transaction is consummated, b y ensuring that our business will continue without undue disruption. In addition, having change in control protections in place encourages management to consider, on an on-going basis. whether a strategic transaction might be advantageous to our shareholders—even a transaction that would yield control of IFF to a third party and result in job loss to the executive. We provide for acceleration of vesting of equity awards upon the occurrence of a change in control, without regard to whether the executive will be terminated. In this way, executives can realize value from their equity awards in the same way as shareholders in connection with the change in control transaction, and thus these terms encourage executives to consider and support transactions that might benefit shareholders.

Some aspects of change in control protections can be expensive, particularly payments that offset the adverse tax consequences to the executive if the U.S. golden parachute excise tax is triggered. Our Compensation Committee established anintends that the total cost of change in control compensation to the executive group, including the named executives and additional executives covered by the ESP, would not exceed levels that are typical in acquisitions of large publicly held companies and represent a reasonable cost to bear for the benefits to IFF and its shareholders resulting from having change in control protective provisions in place for executives.

Additional details regarding our ESP are included under the heading Termination of Employment and Change in Control Arrangements at page 68.

Executive Death Benefit Plan

The Company’s Executive Death Benefit Plan provides participants with a pre-retirement death benefit equal to the excess of twice the participant’s annual base salary (excluding bonus and other forms of compensation) above the death benefit provided by the Company’s basic group term life insurance plan for employees and retirees (the ‘‘Basic Plan’’), less $50,000 of group coverage. The plan also provides a death benefit post-retirement, or pre-retirement after attainment of age 70, equal to twice the participant’s base salary (excluding bonus and other forms of compensation) for the year in which the participant retires or reaches the age of 70, assuming the participant was an execut ive officer, less $12,500 of group coverage for retired participants and less $50,000 for senior participants (those who have attained the age of 70 and remain employed with the Company).

Mr. Goldstein’s Retirement as CEO in May 2006

Richard Goldstein retired as our Chairman and CEO on May 9, 2006. On his retirement he became entitled to the following compensation and benefits. Payments and benefits discussed below were consistent with the ESP and with his original Memorandum of Understanding (MOU) when he was hired by us.

	•	Cash severance of $1,533,933, which is equal to his annual salary plus his average AIP award over the prior 3 years.

	•	2006 AIP bonus based on actual 2006 Company results. This payment is prorated based on days worked.

	•	Stock options may be exercised and RSUs vest as follows (all consistent with the terms of the ESP):

Options
Grant Date			Number of Shares						Options Exercisable Until
June 1, 2000					500,000				June 1, 2010
June 1, 2000					200,000				August 9, 2006
May 16, 2001					101,000				May 16, 2011
May 7, 2002					140,000				May 7, 2012
March 11, 2003					140,000				March 11, 2013

Restricted Stock Units
Grant Date			Number of Shares						Vesting Date
May 11, 2004					42,536				May 11, 2007
March 8, 2005					9,450				March 8, 2008

	•	LTIP awards under the 2004-2006 and 2005-2007 cycles will be paid based on actual Company results for each cycle. Any payments will be prorated based on days worked.

	•	Vesting of shares under the Performance Incentive Award established for Mr. Goldstein by the Compensation Committee in 2002. The amount was based on total shareholder return through his retirement date on May 9, 2006 compared to a group of 21 other comparative companies. As the performance criteria were not satisfied, no shares vested.

	•	His accrued benefits under the deferred compensation plan and qualified and non-qualified pension plans.

	•	A lump sum of $3,016,014 pursuant to his original 2000 MOU. This payment represents a ‘‘make-up’’ in his IFF retirement benefit based on the retirement benefit he would have earned with his prior employer.

	•	Retiree life insurance coverage with a death benefit equal to $1,150,000.

	•	Continuation of medical health coverage for Mr. Goldstein and his wife until age 65 at Company cost on the same basis as for active executives. Following age 65, he and his wife receive retiree medical coverage which is secondary to Medicare.

	•	Reimbursement up to $25,000 of financial and tax planning expenses incurred in the year following retirement.

Mr. Goldstein was also reimbursed $40,000 for legal and professional fees for the negotiation and documentation of his retirement agreement.

Mr. Martinez’s Appointment as Interim CEO in May 2006

On May 9, 2006 our Board appointed our Lead Director, Arthur C. Martinez, as Interim CEO upon Mr. Goldstein’s retirement. Mr. Martinez continued as Interim CEO until June 30, 2006, when Mr. Amen was elected as the new Chairman and CEO. During the period he served as Interim CEO, Mr. Martinez did not serve as Lead Director or as a member of the Audit, Compensation or Nominating and Governance Committees.

The Compensation Committee, after reviewing information on compensation paid by comparable public companies for an interim CEO and consulting with the Committee’s independent compensation consultant, determined that the appropriate compensation for Mr. Martinez’ responsibilities during this period was approximately $375,000. The Compensation Committee also believed that it was important to provide this compensation in the form of an equity award rather than cash because it better aligned Mr. Martinez’s interest ratewith shareholders. As a result, Mr. Martinez was awarded 10,638 RSUs on July 25, 2006, which vest one year from the grant date.

Election of 5.52%. The DCP provides participating employeesRobert M. Amen as Chairman and CEO

Our Board elected Robert M. Amen as its Chairman and the Company’s Chief Executive Officer on July 1, 2006.

We entered into an employment agreement with an incentiveMr. Amen in connection with his hire. Under this agreement, Mr. Amen’s employment term continues for four years. Either we or Mr. Amen may terminate the agreement on or after the fourth anniversary of the agreement by giving one year’s notice. Thereafter, Mr. Amen’s employment is covered by established Company policies and programs. Mr. Amen is entitled to deferthe following compensation into the Company's Common Stock by granting them a 25% premium, credited in Common Stock, on all compensation deferred into that stock. Restricted stock units granted under the 2000 SAIP mayagreement:

	•	Base salary of $1,000,000 per annum. This will be reviewed annually.

	•	A target AIP participation rate of 120% of his base salary. He will have a potential maximum annual bonus of at least 180% of his base salary. A portion of Mr. Amen’s annual bonus for 2006 was guaranteed although this portion was subsequently earned based on performance.

	•	An LTIP target of $2,000,000. The three year LTIP cycle ending 2006 was guaranteed and paid on a prorated basis and the three year cycle ending 2007 will be paid on a pro rated basis with no guaranteed minimum.

	•	An equity incentive award made in July 2006 under the Equity Choice Program at a value of $1,500,000. This value was allocated by Mr. Amen to the various equity incentive award alternatives under the program.

	•	An employment inducement award of 150,000 SSARs. The SSARs were granted at an exercise price equal to the fair market value of the Company’s stock on the grant date and vest on the third anniversary of the grant date.

Mr. Amen also be deferred, although noparticipates in the Company’s Executive Death Benefit Plan described above, pursuant to which the Company has purchased, and pays the entire premium is addedon, a split dollar insurance policy on the life of Mr. Amen. The plan provides a pre-retirement death benefit to any such deferral.Mr. Amen equal to twice his annual base salary (excluding bonus and other forms of compensation), less $50,000 of group coverage, or a post-retirement death benefit equal to twice his final base salary (excluding bonus and other forms of compensation), less $12,500 of group coverage.

Mr. Amen’s employment agreement also grants him certain rights upon termination of his employment. These rights are described under the heading Termination of Employment and Change in Control Arrangements at page 68.

Our Compensation Committee reviewed and approved the employment agreement negotiated with Mr. Amen. W.T. Haigh & Company, the Committee’s independent outside consultant, helped the Committee structure competitive compensation parameters for the CEO position for IFF. In doing so, the compensation consultant considered data from our peer groups and other data sources in order to design a package to attract a high caliber candidate to the position.

Tax Deductibility

The Company'sCompensation Committee’s general policy has been, and will continue to be,is to structure executive compensation to be tax deductible under applicable law.deductible. The CompanyCompensation Committee also believes however, that under some circumstances, such as to attract or retain key executives or to recognize outstanding performance, it may be in the best interests of the Company and its shareholdersimportant to compensate certainone or more key executives in excess ofabove tax deductible limits.

2005 Compensation of Executive Officers

The basic components of the Company'sIn 2006, all named executive officer compensation in 2005 were annual salaries, restricted stock units, annual incentive compensationwas tax deductible.

Stock Ownership and long-term incentive compensation.Share Retention Policy

Salaries

In March 2005, Mr. Goldstein recommendedBeginning January 1, 2004, pursuant to the Compensation Committee the annual salaries for 2005 for executive officers other than himself, which recommendations referencedour Share Retention Policy, executives must retain a report by an independent compensation consultant concerning competitive market compensation for relevant executive positions. The Compensation Committee considered the recommendations and discussed them with Mr. Goldstein and the independent compensation consultant, and recommended to the Board annual salaries for those executive officers, which reviewed and approved such salaries. The approved salaries became effective on April 1, 2005 for the following 12-month period. In making its recommendations, the Compensation Committee relied on information provided by Mr. Goldstein, based on his firsthand knowledgeportion of the performance of each executive officer against financial and non-financial goals and responsibilities and his or her contribution to theany Company and to his or her respective area of concentration. The Compensation Committee also considered comparative compensation levels for similar positions in its selected group of representative companies. The Compensation Committee concluded, and the Board agreed, that the Company's interests were best served by a flexible policy that allowed the Compensation Committee and the Board to fix 2005 annual salaries after considering and evaluating the factors enumerated above.shares received through Company equity award plans.

The Compensation Committee, following and based on a performance reviewrequired share retention is 50%-75% of Mr. Goldstein conducted by the Nominating and Governance Committee in relation to the Company’s performance and Mr. Goldstein’s individual performance against financial and non-financial objectives, along with his relative position compared to the selected group of representative companies and the portion of his total remuneration which was tied to the achievement of performance goals, determined the 2005 annual base salary for Mr. Goldstein. This determination was that his base salary remain the same as in the prior year in order to maintain the substantial portion of his total remuneration which is tied to incentive performance in leading the Company. The Compensation Committee determined that each element and the aggregate of Mr. Goldstein’s compensation in 2005 was fair and reasonable and within the range of compensation for chief executive officers of companies comparable to the Company.

Stock Award Program

During the first quarter of 2005, the Compensation Committee established 2005 restricted stock unit award targetsnet gain shares for the CEO and each of the other executive officers under the Company's SAP. The Compensation Committee reviewed and approved the recommendations of the CEO for 2005 awards under the SAP for each executive officer other than the CEO, including the CEO's recommendation that awards under the SAP to certain executive officers be above their restricted stock unit award targets, and determined the award for Mr. Goldstein. For 2005, certain executive officers, other than Mr. Goldstein, received an award that was between 63% and 110% higher than his or her standard restricted stock unit grant under the SAP. The Compensation Committee made these greater than standard awards to provide them with further incentive to increase shareholder value and to reward these executive officers for outstanding individual performance. Other executive officers received their standard restricted stock unit

grant. The Compensation Committee made all grants other than to Mr. Goldstein after considering the recommendations of Mr. Goldstein. Mr. Goldstein's restricted stock unit grant was made based on the recommendation of the independent compensation consultant and had a target value of $1,291,500. The Compensation Committee established specific quantitative, Company-wide performance vesting criteria for restricted stock unit awards to Mr. Goldstein and for each of the othernamed executive officers and 25%-50% for other designated senior managementexecutives. ‘‘Net gain shares’’ are the shares remaining from a stock option or SSAR exercise after payment of the Company. In addition, a three-year time vesting restriction also applies to all such awards.

During 2003,exercise price and taxes, or the Compensation Committee adopted Share Retention Guidelines applicable to executive officers and other membersshares remaining after payment of senior management, requiring them, effective from January 1, 2004, and upon exercising stock options or realizing Company stock due totaxes on the vesting of restricted stock or restricted stock units, to retain a specified portion of theunits. Beginning January 1, 2007, any Company shares realized after payment ofsold by an executive to fund PRS purchases under the exercise price and income taxes relatedEquity Choice Program will not be subject to the exercise. A covered individual would beshare retention requirement.

Once an executive reaches a targeted ownership level of our common stock, he or she is exempt from further share retention requirements provided such targeted ownership level is maintained. The targeted ownership levels are based on the requirement if the individual ownsvalue of Company shares of Common Stock having a value equal to a specified multiple of that individual'sand are five times base salary dependingfor the CEO, three to four times base salary for other named executive officers and one to three times base salary for other senior executives. If an executive does not satisfy the share retention requirements, he or she may not be granted additional equity awards.

At year end 2006, all named executive officers were subject to continued share retention requirements other than the CFO who had satisfied the targeted ownership level.

Additional detail regarding ownership of our common stock by our executives is included in the Beneficial Ownership Table on the individual's grade level with the Company. page 20.

COMPENSATION COMMITTEE REPORT

The Compensation Committee adopted this requirement(‘‘we’’ or the ‘‘Committee’’) assists the Board in orderensuring that a proper system of long-term and short-term compensation is in place to further align the interests of the Company's executive officersprovide performance-oriented incentives to management, and senior management with shareholders. The Compensation Committee monitored compliance with these Guidelines during 2005.

For 2005, the specific quantitative corporate performance level achieved for restricted stock units was 30% of target. Therefore, restricted stock unit awards to Mr. Goldstein and each of the other executive officers subject to performance as well as time vesting, were reduced to reflect 30% of the restricted stock units awarded. Such restricted stock units will vest in March 2008.

Incentive Compensation

During the first quarter of 2005 the Compensation Committee established the specific quantitative corporate performance criteria and award targets for Mr. Goldstein and for each of the other executive officers for (i) 2005 under the AIP and (ii) the 2005-2007 cycle under the Company's LTIP. In January 2006, the Compensation Committee also certified the level of achievement of the pre-established corporate performance goals under the AIP for 2005 and LTIP for the 2003-2005 performance cycle and determined the level of incentivethat compensation under each of those plans based on those achievements.

For 2005, the specific quantitative corporate performance level achieved did not reach threshold performance under the established AIP goals. Therefore no annual incentive award was earned by those executive officers, including Mr. Goldstein, whose annual incentive award was based solely on corporate performance. Other executive officers, whose annual incentive award was based on a mix of corporate performance and regional and/or functional performance goals, received annual incentive compensation for 2005 between 24.3% and 37.5% of his target incentive compensation for the year.

All of the Company's executive officers participate in the LTIP, although all were not eligible in 2003 as is required to receive payment for the 2003-2005 cycle. For the 2003-2005 cycle, the Company achieved in the aggregate 45.5% of the corporate performance goals, as a result of which each eligible executive officer, including Mr. Goldstein, received for 2003-2005 long-term incentive compensation equal to 45.5% of his or her target incentive compensation for the cycle.

*                                        *                                        *

In summary, the Compensation Committee believes the Company has anare appropriate and competitive and properly reflect the Company’s objectives and performance.

In fulfilling our responsibilities, we conduct or authorize studies and surveys on compensation policy, which is designedpractices in relevant industries to attractmaintain the Company’s competitiveness and ability to recruit and to retain highly qualified executive officers and motivate them to create and enhance shareholder value. The Company's compensation policy soundly balances base salary, annual and long-term cash incentives, and restricted stock units for the CEO and executive officers. The Compensation Committee,personnel. At least every two years, with the assistance of an experienced independent compensation consultant, periodically reviews bothwe conduct a survey of comparative/competitive executive officer compensation. We meet regularly in executive session, without Company management present.

We are authorized to retain compensation levels forconsultants or advisors to assist us in evaluating CEO, senior executive and outside director compensation. We also have the CEOsole authority to retain and to terminate any such consultants or advisors, including the sole authority to approve their fees and other executive officersretention terms.

We have reviewed and discussed with management the appropriate balance amongCompensation Discussion and Analysis included in this proxy statement. Based on those reviews and discussions, we recommended to the various components. This review is designed to assureBoard that the Company's compensation program remains competitiveCompensation Discussion and enablesAnalysis be included in this Proxy Statement for filing with the Company to attract and retain high quality executives.SEC.

Compensation Committee

Peter A. Georgescu (Chairman and member until ChairmanMarch 1, 2007)

J. Michael Cook (Chairman and member since March 1, 2007)

Alexandra A. Herzan Arthur C. Martinez (member until May 9, 2006) Burton M. Tansky

SUMMARY COMPENSATION TABLECompensation Committee Interlocks and Insider Participation

None of the members of the Compensation Committee was at any time during 2006 an officer or employee of the Company. No executive officer of the Company serves as a member of the board of directors or compensation committee of any other entity that has one or more executive officers serving as a member of our Board of Directors or Compensation Committee.

Summary Compensation Table

The following table sets forth information for 2005, 2004 and 2003 relating to theSummary Compensation Table details compensation of the Chairman and Chief Executive Officer, and each of the other four most highly compensated executive officers of the Company who were serving at December 31, 2005.during 2006.

SUMMARY COMPENSATION TABLE

				Annual Compensation																Long Term Compensation
																				Awards								Payouts
(a)				(b)				(c)				(d)				(e)				(f)				(g)				(h)				(i)
Name and Principal Position				Year				Salary ($)				Bonus ($)(1)				Other Annual Compensation ($)(2)				Restricted Stock $(3)(4)				Securities Underlying Options (#)				LTIP Payouts ($)(5)				All Other Compensation ($)(6)
Richard A. Goldstein*					2005				1,120,000				0				59,849				398,034				0				546,000				5,178,823	(7)
Chairman and Chief					2004				1,120,000				933,800				70,700				1,488,760				0				1,751,040				38,883
Executive Officer					2003				1,120,000				308,000				74,354				0				140,000				2,682,433				742,495	(8)
James H. Dunsdon					2005				513,125				0				19,169				170,586				0				81,900				51,077
Chief Operating Officer					2004				415,000				231,015				14,343				696,745				0				237,120				42,234
					2003				353,399				24,750				10,673				0				35,000				476,583				35,785
D. Wayne Howard**					2005				474,150				0				25,836				142,155				0				133,383				2,389,995	(9)
Executive Vice President,					2004				459,250				184,892				24,607				531,720				0				417,331				19,455
Global Operations					2003				448,250				74,415				16,131				0				50,000				715,429				22,650
Douglas J. Wetmore					2005				459,000				0				21,805				99,824				0				119,028				57,772
Senior Vice President					2004				444,250				149,075				17,111				465,780				0				372,096				116,171
and Chief Financial Officer					2003				433,250				59,950				15,681				0				70,000				684,950				21,307
Nicolas Mirzayantz					2005				392,250				58,050				18,172				99,824				0				81,900				12,285
Senior Vice President,					2004				368,112				186,345				20,130				372,190				0				255,360				11,670
Fine Fragrances and     Beauty Care, and Regional    Manager, North America					2003				357,500				24,750				17,872				0				35,000				573,563				10,908

Name and Principal Position			Year						Salary ($)						Bonus ($)							Stock Awards ($)						Option Awards ($)						Non-Equity Incentive Plan Compensation ($)						Change in Pension Value and Nonqualified Deferred Compensation Earnings ($)						All Other Compensation ($)						Total ($)
(a)			(b)						(c)(1)						(d)							(e)(2)(3)						(f)(2)(4)						(g)(5)						(h)(6)						(i)(7)						(j)
Robert M. Amen					2006						500,000						935,766	(8	)					130,705						257,882						75,900						0						113,199						2,013,452
Chairman and Chief Executive Officer (since July 1, 2006)
Arthur C. Martinez					2006						0						0							450,932						17,031						0						0						101,918(9	)					569,881
Former Interim Chairman and Interim Chief Executive Officer (from May 9, 2006 until June 30, 2006)
Richard A. Goldstein					2006						403,486						0							628,931						70,351						1,578,983						251,974						4,840,772	(10)					7,774,497
Former Chairman and Chief Executive Officer (until May 9, 2006)
Douglas J. Wetmore					2006						463,000						0							310,540						22,613						578,728						52,701						103,338						1,530,920
Senior Vice President and Chief Financial Officer
James H. Dunsdon					2006						579,375						0							414,206						12,562						846,150						538,440						123,078						2,513,811
Senior Vice President and Transition Leader
Nicolas Mirzayantz					2006						400,000						0							239,520						59,346						491,744						35,194						48,286						1,274,090
Group President, Fragrances
Dennis M. Meany					2006						386,250						0							234,927						6,030						448,740						93,366						78,005						1,247,318
Senior Vice President, General Counsel and Secretary

*	Will cease as Chairman and Chief Executive Officer on May 9, 2006.

**	Ceased as executive officer effective December 31, 2005.

(1)	PaidThe amounts in this column include the following amounts deferred:

		Mr. Amen: $36,667 deferred under the Company's AIP. Under the AIP, each named executive officer had an award target for 2005 based on the achievement of specific quantitative corporate performance goals,DCP and Mr. Mirzayantz had an award target for 2005 which was also based on the achievement of specific derivative quantitative regional and category goals. All of these performance goals were established by the Compensation Committee of the Board at the beginning of 2005. For 2005, the corporate performance goals related to increases in revenue and operating profit as a percentage of sales. For 2005, the Company did not achieve the corporate performance goals$2,400 deferred under the AIP, as a result of which each named executive officer other than Retirement Investment Fund Plan (401(k))

		Mr. Mirzayantz did not receive any annual incentive compensation. For 2005, the Company achieved in the aggregate 0% of the regional goals and 129% of the category goalsGoldstein: $46,833 deferred under the AIP for DCP and $20,000 deferred under the Retirement Investment Fund Plan (401(k))

		Mr. Mirzayantz, as a result of which Wetmore: $46,300 deferred under the DCP and $15,000 deferred under the Retirement Investment Fund Plan (401(k))

		Mr. Mirzayantz received annual incentive compensation equal to 32.3% of his target incentive compensation forDunsdon: $191,194 deferred under the year.DCP and $20,000 deferred under the Retirement Investment Fund Plan (401(k))

		Mr. Mirzayantz: $24,000 deferred under the DCP and $15,000 deferred under the Retirement Investment Fund Plan (401(k))

		Mr. Meany: $77,250 deferred under the DCP and $20,000 deferred under the Retirement Investment Fund Plan (401(k))

(2)

IncludesThe amounts in respectthe Stock Awards and Option Awards columns represent the dollar amount of (a)compensation cost recognized for financial statement reporting purposes for the personal usefiscal year ended December 31, 2006, in accordance with FAS 123(R) and thus may include amounts from awards granted in and prior to 2006. Details on and assumptions used in calculating the cost of automobiles provided byRSUs, PRS, SSARs and options may be found in Note 12 to the CompanyCompany’s audited financial statements for the fiscal year ended December 31, 2006 included in 2005: Mr. Goldstein—$19,801, Mr. Dunsdon—$10,787, Mr. Howard—$18,836, Mr. Wetmore— $18,805, Mr. Mirzayantz—$6,776; in 2004: Mr. Goldstein—$19,636, Mr. Dunsdon—$6,235, Mr. Howard—$17,607, Mr. Wetmore—$13,611, Mr. Mirzayantz—$8,897; in 2003: Mr. Goldstein— $14,250, Mr. Dunsdon—$2,830, Mr. Howard—$8,631, Mr. Wetmore—$12,181, Mr. Mirzayantz— $7,072; (b) financial planning services in 2005: Mr. Goldstein—$19,155, Mr. Dunsdon—$8,382, Mr. Howard—$4,000, Mr. Mirzayantz—$8,396; in 2004: Mr. Goldstein—$20,377, Mr. Dunsdon—

$8,108, Mr. Howard—$4,000, Mr. Mirzayantz—$8,233; in 2003: Mr. Goldstein—$37,458, Mr. Dunsdon—$7,843, Mr. Howard—$4,500, Mr. Mirzayantz—$7,800; (c) club memberships in 2005: Mr. Goldstein—$20,893, Mr. Howard—$3,000, Mr. Wetmore—$3,000, Mr. Mirzayantz—$3,000; in 2004: Mr. Goldstein— $30,687, Mr. Howard—$3,000, Mr. Wetmore—$3,500, Mr. Mirzayantz—$3,000; in 2003: Mr. Goldstein—$22,646, Mr. Howard—$3,000, Mr. Wetmore—$3,500, Mr. Mirzayantz—$3,000.the Company’s Annual Report on Form 10-K filed with the SEC on February 23, 2007.

(3)

On March 8, 2005 eachThe following named executive officerofficers paid the following amounts for shares of PRS in fiscal year 2006, which in each case was granted an award50% of Restricted Stock Units (‘‘RSUs’’) containing corporate performance criteria, in addition to time restrictions. The performance criteria related to earnings per share achieved in 2005 and returnthe closing stock price on invested capital achieved in 2005. At its meeting held on January 23,the date of grant:

		Mr. Amen: $599,990 for 34,042 shares. Mr. Wetmore: $540,000 for 30,000 shares. Mr. Dunsdon: $540,000 for 30,000 shares. Mr. Mirzayantz: $270,000 for 15,000 shares. Mr. Meany: $360,000 for 20,000 shares.

		None of our named executive officers forfeited any shares of PRS or RSUs during 2006, except that the Compensation Committee determined the extent to which the corporate performance criteria were satisfied and approved the finalfollowing number of RSUs awarded to each executive officer; each executive officer received 30% of the RSUs originally granted to him. The dollar value ofperformance-based RSUs granted in 2005 is based onwere cancelled due to the final number of RSUs awarded to each executive officer. The RSUs awarded remain subject to time restrictions. Based on the closing pricefailure of the Company's Common Stock on December 30, 2005,performance conditions to be satisfied: Mr. Goldstein – 22,050, Mr. Wetmore – 5,530, Mr. Dunsdon – 9,450, Mr. Mirzayantz – 5,530 and taking into account the final number of RSUs awarded to each executive officer based on the extent of achievement of the 2005 corporate performance criteria, the total dollar value of RSUs (and the total number of RSUs) held on that date (including RSUs granted in 2004) were as follows: Mr. Goldstein—$1,741,531 (51,986 RSUs), Mr. Dunsdon—$777,301 (23,203 RSUs), Mr. Howard—$621,995 (18,567 RSUs), Mr. Wetmore—$525,213 (15,678 RSUs), Mr. Mirzayantz—$435,634 (13,004 RSUs).Meany – 5,530.

(4)

Excludes unvested premium share units inDuring 2006, the IFF Stock Fund creditedfollowing number of options expired: Mr. Wetmore – 6,000 options and Nicolas Mirzayantz – 5,000 options. In addition, the following number of options were cancelled due to immaterial procedural flaws associated with the accountsgrants of thethese options: Mr. Wetmore – 25,000 options, Mr. Dundson – 10,000 options and Mr. Mirzayantz – 3,000 options. There were no other forfeitures of options by our named executive officers who participate in the DCP. Based on the closing price of the Company's Common Stock on December 30, 2005, the aggregate number and dollar value of unvested premium share units in the IFF Stock Fund credited to such accounts was: Mr. Dunsdon—1,657 shares or $55,510, Mr. Howard—460 shares or $15,410, Mr. Wetmore—2,867 shares or $96,045. Such premium share units are subject to forfeiture. Except for such premium share units, the performance incentive award held by Mr. Goldstein and the RSUs described above, no other named executive officer holds restricted stock.officers.

(5)	PaidThe amounts in this column include the following amounts under the Company's LTIP. UnderAIP and the LTIP:

	Mr. Amen:	$75,900 under the AIP. For Mr. Amen, this amount represents the portion of his AIP award that was not guaranteed.

	Mr. Goldstein:	$535,091 under the AIP. $1,043,892 under the 2004-2006 LTIP each executive officer had an award target for the 2003-2005 performance cyclecycle. These amounts were pro-rated based on the achievementnumber of specific quantitative corporate performance goals, which were established bydays worked during the Compensation Committee at the beginning of the cycle. For the 2003-2005 cycle, these objectives related to improvements in earnings per share and return on invested capital. For the 2003-2005 performance cycle, the Company achieved in the aggregate 45.5% of the corporate performance goalsperiod.

	Mr. Wetmore:	$312,942 under the AIP. $265,786 under the 2004-2006 LTIP as a resultcycle.

	Mr. Dunsdon:	$608,310 under the AIP. $237,840 under the 2004-2006 LTIP cycle.

	Mr. Mirzayantz:	$308,904 under the AIP, of which each executive officer received long-term incentive compensation equal to 45.5%a total of his or her target incentive compensation for the cycle. Awards$18,534 was deferred under the LTIP are made in cash, but executive officers may elect to defer LTIP awardsDCP. $182,840 under the Company's2004-2006 LTIP cycle, of which a total of $36,568 was deferred under the DCP.

	Mr. Meany:	$270,360 under the AIP. $178,380 under the 2004-2006 LTIP cycle.

(6)

IncludesThe amounts in this column represent the followingaggregate change in the actuarial present value of the named executive officer’s accumulated benefit under our U.S. Pension Plan (our qualified defined benefit plan), our Supplemental Retirement Plan (our non-qualified defined benefit plan) and for Mr. Dunsdon, the BBA U.K. Pension Scheme. Earnings in the interest bearing account in the DCP were not above-market and are thus not included.

(7)	Details of the amounts set forth in this column are included in the All Other Compensation Table at page 54 and footnotes (9) and (10) below.

(8)	This amount is the total bonus guaranteed to Mr. Amen under his employment agreement, and

	includes $600,000, one-half of his target AIP bonus for 2006, and $335,766, a pro-rata portion of his target LTIP bonus for the 2004-2006 LTIP cycle, based on the number of days (184) he was employed during that cycle.

(9)	In addition to the amount included in the All Other Compensation Table for Mr. Martinez, this amount includes $99,198 paid to Mr. Martinez for meeting fees and retainers for his service as a non-employee director of the Company and $10,000 for a contribution made under the Company’s charitable gift matching program.

(10)

For Mr. Goldstein, the amount in the All Other Compensation column includes, in addition to the amounts reflected in the All Other Compensation table (see footnote (7) above), $4,614,948, which is the amount paid by the Company under the terms of Mr. Goldstein’s retirement agreement, including (i) $1,533,933 in severance pay, (ii) $ 3,016,014 as a lump sum payment for a pension plan make-up, (iii) $40,000 in legal fees and (iv) $25,000 in financial and tax planning expenses. Additional details concerning future payments that may be made to Mr. Goldstein are included under the heading Termination of Employment and Change of Control Arrangements—Other Separation Arrangements—Mr. Goldstein at page 74.

2006 ALL OTHER COMPENSATION

			Dividends on stock awards(1)						Company Match to Defined Contribution Plans(2)						Auto(3)						Club memberships						Financial/ estate planning						Life Insurance/ Executive Death Benefit Program(4)						Annual Physical Examination						Personal Travel and Entertainment Tickets(5)						Total
Robert M. Amen				$	6,298					$	11,567					$	3,696					$	0					$	0					$	91,638					$	0					$	0					$	113,199
Arthur C. Martinez				$	0					$	0					$	0					$	0					$	0					$	0					$	0					$	2,720					$	2,720
Richard A. Goldstein				$	74,000					$	12,844					$	46,301					$	19,743					$	18,460					$	34,371					$	0					$	20,105					$	225,824
Douglas J. Wetmore				$	11,100					$	57,044					$	19,774					$	3,000					$	0					$	12,420					$	0					$	0					$	103,338
James H. Dunsdon				$	11,100					$	55,252					$	14,823					$	0					$	11,639					$	28,242					$	2,022					$	0					$	123,078
Nicolas Mirzayantz				$	5,550					$	12,000					$	13,437					$	0					$	11,385					$	5,914					$	0					$	0					$	48,286
Dennis M. Meany				$	7,400					$	21,617					$	16,091					$	3,000					$	11,428					$	16,459					$	2,010					$	0					$	78,005

(1)	The amounts in this column are the total dollar value of dividends paid during 2006 on shares of PRS. For Mr. Goldstein, the amount also includes dividends paid during 2006 on a Performance Incentive Award.

(2)

The amounts in this column include (i) amounts matched by the Company under the Company’s Retirement Investment Fund Plan (401(k)), (ii) amounts matched or set aside by the Company under the Company's Retirement Investment Fund Plan (401k), a defined contributionCompany’s DCP (which are matching contributions that would otherwise be made under our 401(k) plan but for limitations under U.S. tax law) and the DCP (including(iii) the dollar amount, on the date of contribution,value of premium shares credited to the accounts of participants in the DCP),DCP who elect to defer their cash compensation into the IFF Share Fund. The premium shares may be forfeited if the executive does not remain employed by the Company for 2005: Mr. Goldstein—$30,000, Mr. Dunsdon—$48,842, Mr. Howard —$26,764, Mr. Wetmore—$56,870, Mr. Mirzayantz—$11,768;the full calendar year following such credit. Dividend equivalents are credited on shares (including premium shares) held in accounts of participants who defer into the IFF Share Fund, which are not i ncluded in the amounts in this column.

(3)

The amounts in this column are amounts for 2004: Mr. Goldstein—$32,350, Mr. Dunsdon—$40,957, Mr. Howard—$18,518, Mr. Wetmore—$115,382, Mr. Mirzayantz—$11,228;the personal use of automobiles provided by the Company and, for 2003: Mr. Goldstein—$30,375, Mr. Dunsdon—$34,632, Mr. Howard—$21,832, Mr. Wetmore —$20,568, Mr. Mirzayantz—$10,500. Also includesMessrs. Goldstein and Amen, the followingamount attributable to personal use of the Company driver. The value of personal use of automobiles provided by the Company was determined by using standard IRS vehicle value tables and multiplying that value by the percent of personal use. The value of fuel was determined by multiplying the overall fuel cost by the percent of personal use. In both cases personal use percents were determined on a mileage basis. The value of personal use of the Company driver was determined by multiplying the estimated percent of such personal use by the driver’s pay.

(4)

The amounts paid in respect ofthis column are costs to the Company for life insurance coverage under the Company'sCompany’s Executive Death Benefit Program: for 2005: Mr. Goldstein—$8,256, Mr. Dunsdon—$2,236, Mr. Howard—$1,070, Mr. Wetmore—$902, Mr. Mirzayantz —$518; for 2004: Mr. Goldstein—$6,533, Mr. Dunsdon—$1,277, Mr. Howard—$937, Mr. Wetmore —$789, Mr. Mirzayantz—$442; for 2003: Mr. Goldstein—$5,870, Mr. Dunsdon—$1,153, Mr. Howard —$818, Mr. Wetmore—$740, Mr. Mirzayantz—$409.Program. No participant in this Program has or will have any interest in the cash surrender value of the underlying insurance policy. For Mr. Goldstein the amount also includes $23,686 for his participation in the Director Charitable Contribution Program. More information regarding the Company’s Director Charitable Contribution Program is provided under the heading Directors’ Compensation at page 16.

(5)	The amounts in this column are for personal travel (hotel and airfare) at cost and theater and entertainment tickets at cost.

Employment Agreements or Arrangements

Mr. Amen

On June 28, 2006, we entered into an agreement with Mr. Amen, effective July 1, 2006, regarding the terms of his employment. Details regarding Mr. Amen’s agreement are included in the Compensation Discussion & Analysis at page 48.

Mr. Martinez

The Compensation Committee, with the assistance of its independent compensation consultant, granted 10,638 RSUs to Arthur C. Martinez for his services as Interim CEO during the period from May 9, 2006 until June 30, 2006. The Board granted this RSU award equal in value to approximately $375,000 based on the closing price of our common stock on the grant date. The RSUs, which were granted under our 2000 Stock Award and Incentive Plan, will vest one year from the grant date.

Mr. Goldstein

Mr. Goldstein retired on May 9, 2006, the date of our 2006 Annual Meeting. Details regarding Mr. Goldstein’s retirement agreement are included in the Compensation Discussion & Analysis at page 47.

In connection with Mr. Goldstein’s initial appointment as our Chairman and CEO in June 2000, we entered into a five year Memorandum of Understanding (MOU) detailing the terms of Mr. Goldstein’s employment. This MOU expired on June 1, 2005, although Mr. Goldstein continued as our Chairman and CEO after that date generally in accordance with the terms of the MOU and until the date of his retirement.

On August 1, 2002, our Board granted Mr. Goldstein a Performance Incentive Award of 200,000 shares of our common stock under our 2000 Stock Award and Incentive Plan. This award had three performance/vesting periods, commencing August 1, 2002 and ending July 31, 2005, July 31, 2006 and July 31, 2007. Mr. Goldstein would have been eligible to earn an award of shares of our common stock under the award if certain performance conditions for total shareholder return had been satisfied, and if he had continued to serve as CEO through the end of the applicable performance/vesting period. Based on our total shareholder return during the performance periods and due to Mr. Goldstein’s retirement, Mr. Goldstein did not ea rn any shares under the award and forfeited the award at the time of his retirement. Before he forfeited the award, Mr. Goldstein had voting rights over and received dividends on the shares subject to the award. Dividends paid to Mr. Goldstein on those shares during 2006 are included in the All Other Compensation Table at page 54.

Grants of Plan-Based Awards

The following table provides information regarding grants of plan-based awards to our named executive officers during 2006.

GRANTS OF PLAN-BASED AWARDS IN 2006

Name			Grant Date (1)						Date of Compensation Committee Approval						Estimated Future Payouts Under Non-Equity Incentive Plan Awards																		Estimated Future Payouts Under Equity Incentive Plan Awards (2)																		All Other Stock Awards: Number of Shares of Stock or Units (#)(3)						All Other Option Awards: Number of Securities Underlying Options (#)(4)						Exercise or Base Price of Option Awards ($/Sh)(5)						Grant Date Fair Value of Stock and Option Awards ($)(6)
(a)			(b)												Threshold ($) (c)						Target ($) (d)						Maximum ($) (e)						Threshold ($) (f)						Target ($) (g)						Maximum ($) (h)						(i)						(j)						(k)						(l)
Robert M. Amen					7/1/2006						6/26/2006						0						0						300,000	(7)(8)					—						—						—						—						—						—						—
					7/1/2006						6/26/2006						0						0						167,883	(9)					—						—						—						—						—						—						—
					7/1/2006						6/26/2006						250,000						1,000,000						1,500,000	(10)					—						—						—						—						—						—						—
					7/1/2006						6/26/2006						250,000						1,000,000						1,500,000	(11)					250,000						1,000,000						1,500,000						—						—						—						—
					7/1/2006						6/26/2006						—						—						—						—						—						—						—						150,000					$	35.24						1,162,500
					7/25/2006						6/26/2006						—						—						—						—						—						—						8,510	(12)					—						—						299,978
					7/25/2006						6/26/2006						—						—						—						—						—						—						—						56,737					$	35.25						438,010
					7/25/2006						6/26/2006						—						—						—						—						—						—						34,042	(13)					—						—						599,990
Arthur C. Martinez					5/9/2006						12/15/2004	(14)					—						—						—						—						—						—						750	(12)					—						—						27,000
					7/25/2006						7/25/2006						—						—						—						—						—						—						10,638	(12)					—						—						374,990
					10/2/2006												—						—						—						—						—						—						1,000	(15)					—						—						39,650
Richard A. Goldstein					3/7/2006						3/7/2006						118,751						475,003						712,504	(16)					—						—						—						—						—						—						—
Douglas J. Wetmore					3/7/2006						3/7/2006						69,450						277,800						416,700	(8)					—						—						—						—						—						—						—
					3/7/2006						3/7/2006						34,725						138,900						208,350	(11)					34,725						138,900						208,350						—						—						—						—
					5/9/2006						3/7/2006						—						—						—						—						—						—						30,000	(13)					—						—						540,000
					12/18/2006						12/18/2006						—						—						—						—						—						—						9,703	(12)					—						—						473,506
James H. Dunsdon					3/7/2006						3/7/2006						135,000						540,000						810,000	(8)					—						—						—						—						—						—						—
					3/7/2006						3/7/2006						60,000						240,000						360,000	(11)					60,000						240,000						360,000						—						—						—						—
					5/9/2006						3/7/2006						—						—						—						—						—						—						833	(12)					—						—						29,988
					5/9/2006						3/7/2006						—						—						—						—						—						—						30,000	(13)					—						—						540,000
					12/18/2006						12/18/2006						—						—						—						—						—						—						3,881	(12)					—						—						189,393
Nicolas Mirzayantz					3/7/2006						3/7/2006						60,000						240,000						360,000	(8)					—						—						—						—						—						—						—
					3/7/2006						3/7/2006						30,000						120,000						180,000	(11)					30,000						120,000						180,000						—						—						—						—
					5/9/2006						3/7/2006						—						—						—						—						—						—						3,000	(12)					—						—						108,000
					5/9/2006						3/7/2006						—						—						—						—						—						—												25,000					$	36.00						193,750
					5/9/2006						3/7/2006						—						—						—						—						—						—						15,000	(13)					—						—						270,000
					12/18/2006						12/18/2006						—						—						—						—						—						—						1,231	(12)					—						—						60,073
Dennis M. Meany					3/7/2006						3/7/2006						60,000						240,000						360,000	(8)					—						—						—						—						—						—						—
					3/7/2006						3/7/2006						30,000						120,000						180,000	(11)					30,000						120,000						180,000						—						—						—						—
					5/9/2006						3/7/2006						—						—						—						—						—						—						20,000	(13)					—						—						360,000

(1)

Except for the grant of 1,000 shares to Mr. Martinez, we made all grants described in this table under our 2000 Stock Award and Incentive Plan. The 1,000 share grant to Mr. Martinez was made under a pool of shares authorized by the Board in September 2000. The material terms of awards are described in the Compensation Discussion & Analysis at page 41 and on and in Directors’ Compensation-Annual Equity Compensation at page 16.

(2)

The amounts in columns (f), (g) and (h) are the threshold, target and maximum dollar value of the 50% portion of our 2006-2008 LTIP cycle that would be payable in stock if the performance conditions are satisfied. The number of shares will not be known until the end of the three-year performance period and there is no grant date fair value of these shares. The performance conditions applicable to the LTIP are described in the Compensation Discussion & Analysis at page 42.

(3)	The amounts in this column represent the number of RSUs and shares of PRS, as well as, in the case of Mr. Martinez, the automatic 1,000 share grant awarded on an annual basis to our non-employee directors.

(4)	The amounts in this column are the number of SSARs granted in 2006. We did not grant any options to our named executive officers in 2006.

(5)	The amounts in this column are the exercise prices of SSARs granted, which are the fair market value of a share of our Common Stock on the date of grant.

(6)	The amounts in this column represent the grant date fair value in accordance with FAS 123(R).

(7)

In addition toIf the amounts described in note (6) above, includes $5,140,567 currently estimated to be paid or payable through 2008Company did not exceed target performance levels, Mr. Amen would not have received any additional compensation under the termsAIP above the $600,000 award guaranteed under his employment agreement, which is reflected in the bonus column of a proposed separation arrangement with Mr. Goldstein. See ‘‘Employment Contracts and Termination of Employment and Change-in Control Arrangements’’the Summary Compensation Table at page 20.51. Because the Company achieved 112.65% of its target performance levels, Mr. Amen received the award reflected in the non-equity incentive award column of the Summary Compensation Table.

(8)

In addition toThe amounts in columns (c), (d) and (e) are the amounts described in note (6) above, includes $706,250 paid to Mr. Goldstein pursuant tothreshold, target and maximum dollar values under our 2006 AIP if the MOU in respectperformance conditions had been satisfied. The percentage of long term incentive paymentseach executive’s target award that he forfeited by leaving his prior employer. See ‘‘Employment Contracts and Termination of Employment and Change-in-Control Arrangements’’was actually achieved is discussed under Non-Equity Incentive Plans Awards at page 20.58. The amount actually paid in 2007 based on 2006 performance is included in the Non-Equity Incentive Plan Compensation column of the Summary Compensation Table at page 51.

(9)

In additionThe Company did not exceed target performance levels. As a result, Mr. Amen, pursuant to his employment agreement, received a guaranteed payment under the 2004-2006 LTIP Cycle of $335,766, which was equal to his pro-rata 2004-2006 LTIP target based on the number of days employed during the cycle. This guaranteed payment is included in the Bonus column of the Summary Compensation Table at page 51.

(10)

The amounts in columns (c), (d) and (e) are the threshold, target and maximum amounts of the 2005-2007 LTIP that would be payable to Mr. Amen if the performance conditions are satisfied, based on the number of days Mr. Amen would be employed during the cycle. The performance conditions applicable to the amounts2005-2007 LTIP cycle are described in note (6) above, includes $2,362,160our Current Report on Form 8-K filed with the SEC on March 8, 2007.

(11)

The amounts in these three columns are the threshold, target and maximum amounts of the 50% portion of our 2006-2008 LTIP cycle that would be payable in cash if the performance conditions are satisfied. The amounts actually paid or payable through 2008in 2007 under our 2004-2006 LTIP are included in the terms of a separation agreement with Mr. Howard. See ‘‘Employment Contracts and Termination of Employment and Change-in Control Arrangements’’Summary Compensation Table at page 20.51. The performance conditions applicable to the LTIP are described in the Compensation Discussion & Analysis at page 42.

(12)	This amount is the number of RSUs. Dividends are not paid on RSUs.

(13)	This amount is the number of shares of PRS. Non-preferential dividends are paid on PRS. Footnote (3) to the Summary Compensation Table lists the dollar amount of consideration paid by our named executive officers for these PRS awards.

(14)	This date is the date our Board first determined that each non-employee director would receive an annual grant of 750 RSUs on the date of each annual meeting of shareholders.

(15)	This amount is the 1,000 shares automatically granted annually to non-employee directors under a pool of shares authorized by the Board in September 2000, which shares are required to be deferred.

(16)

The amounts in columns (c), (d) and (e) are the threshold, target and maximum dollar values under our 2006 AIP for the number of days Mr. Goldstein was employed by the Company during 2006, if the performance conditions had been satisfied. The amount actually paid in 2007 based on 2006 performance is included in the Non-Equity Incentive Plan Compensation column of the Summary Compensation Table at page 51.

OPTION/SAR GRANTS IN 2005Equity Awards

No options or stock appreciation rights (‘‘SAR’s’’) were granted to the persons namedEquity Choice Program

As described in greater detail in the Summary Compensation Discussion and Analysis at page 43 of this Proxy Statement, in early 2006, following the Compensation Committee’s recommendation and with the assistance of the Committee’s independent compensation consultant, our Board approved our Equity Choice Program as a long term incentive program for our senior management. The Compensation Committee made the initial awards under this program, based on participant elections, on May 9, 2006, the date of our 2006 Annual Meeting. The Compensation Committee also made an award to Mr. Amen under this program on July 25, 2006. Under this program, dividends are paid on shares of PRS at the same rate paid to our shareholders.

A discussion of the terms and the total dollar value of awards granted in 2006 to our named executive officers under our Equity Choice Program is included in the Compensation Discussion & Analysis at page 43. The number of shares under those awards is included in the Grants of Plan-Based Awards table above and the Outstanding Equity Awards at Fiscal Year-End table at page 61.

Other Equity Grants

Details regarding other equity award grants reflected in the Grants of Plan Based Award Table made to certain named executive officers are included in 2005.the Compensation Discussion & Analysis under the headings Other Equity Grants, at page 44, Mr. Martinez’s Appointment as Interim CEO in May 2006 at page 48 and the Election of Robert M. Amen as Chairman and CEO at page 48.

Non-Equity Incentive Plan Awards

Annual Incentive Plan (AIP)

Our Compensation Committee established all performance goals under our AIP at the beginning of 2006. Each named executive officer had an award target for 2006 which was set as a percentage of base salary and which was based on the achievement of specific quantitative corporate performance goals. In the case of Mr. Mirzayantz, the award target also comprised specific derivative quantitative regional and/or category goals. For 2006, the corporate performance goals related to increases in revenue and operating profit as a percentage of sales. For 2006, we achieved 112.65% of the corporate performance goals under the AIP and, as a result, each named executive officer other than Mr. Mirzayantz, received 112.65% of his or her target i ncentive compensation for the year. For 2006, we achieved 139.54% of the North America regional goals and 150.0% of the Fine Fragrance category goals for Mr. Mirzayantz, and therefore he received 128.71% of his target incentive compensation for the year.

Long Term Incentive Plan (LTIP)

Under our LTIP, each executive officer had an award target for the 2004-2006 performance cycle based on achieving specific quantitative corporate performance goals which the Compensation Committee established at the beginning of the cycle. For the 2004-2006 cycle, these objectives related to improvements in earnings per share and return on invested capital. For the 2004-2006 performance cycle, we achieved 99.1% of the corporate performance goals. Each executive officer therefore received 99.1% of his or her target incentive compensation for the cycle.

Additional details regarding our Annual Incentive Plan and Long Term Incentive Plan are included in the Compensation Discussion and Analysis at pages 41 and 42.

AGGREGATED OPTION EXERCISES IN 2005 AND OPTIONS/SAR VALUES AT DECEMBER 31, 2005Equity Compensation Plans

The following table provides information as to options exercised in 2005 by each of the persons named in the Summary Compensation Table and the value of options held by each such person at December 31, 2005 measured in terms of the closing price of the Common Stock on December 31, 2005. No SARs are outstanding.

Name

Shares Acquired on Exercise (#)

Value Realized ($)

Number of Securities Underlying Unexercised Options at FY End (#) Exercisable/Unexercisable

Value of Unexercised In the Money Options at FY End ($) Exercisable/Unexercisable

R.A. Goldstein

0

0

1,034,333/46,667

1,081,332/169,868

J. Dunsdon

0

0

81,083/11,667

371,664/42,468

D.W. Howard

0

0

208,333/16,667

1,014,482/60,668

D.J. Wetmore

0

0

131,542/23,333

126,988/84,932

N. Mirzayantz

0

0

135,333/11,667

332,882/42,468

EQUITY COMPENSATION PLANS

The following table provides information about the Company's Common Stock thatregarding our common stock which may be issued upon the exercise of options or vesting of restricted stock units or deferred stock under all of the Company'sour equity compensation plans as of December 31, 2005.2006.

Plan Category	Plan Category			Number of securities to be issued upon exercise of outstanding options, warrants and rights				Weighted-average exercise price of outstanding options, warrants and rights				Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a))					Number of securities to be issued upon exercise of outstanding options, warrants and rights (a)						Weighted-average exercise price of outstanding options, warrants and rights (b)						Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a)) (c)
				(a)				(b)				(c)
Equity compensation plans approved by security holders (1)	Equity compensation plans approved by security holders (1)			6,576,342(2)				$28.39(3)				7,664,336(4)							4,499,662	(2)				$	34.21	(3)					2,763,399	(4)
Equity compensation plans not approved by security holders (5)	Equity compensation plans not approved by security holders (5)			1,091,313(6)				$28.57(3)				4,330,124(7)							465,551	(6)				$	29.43	(3)					4,326,706	(7)
Total	Total			7,667,655				$28.42(3)				11,994,460							4,965,213					$	33.76	(3)					7,090,105

(1)

Represents the 2000 SAIP,Stock Award and Incentive Plan, the 2000 Stock Option Plan for Non-Employee Directors, the 1997 Employee Stock Option Plan, the Employee Stock Option Plan of 1992 and the 1990 Stock Option Plan for Non-Employee Directors, the Employee Stock Option Plan of 1988 and the Global Employee Stock Purchase Plan ("GESPP").Directors. Also includes the 1997 Employee Stock Option Plan for The Netherlands the Employee Stock Option Plan of 1992 for The Netherlands and the Employee Stock Option Plan of 19881992 for The Netherlands, each of which forms a subpart of and as to which shares are issuable under the 1997 Employee Stock Option Plan and the Employee Stock Option Plan of 1992, and the Employee Stock Option Plan of 1988, respectively. The 2000 SAIPStock Award and Incentive Plan provides for the award of stock options, restricted stock unitsRSUs and other equity-based awards.

(2)

Excludes the Performance Incentive Award of 200,000 shares of restricted Common Stock granted to Mr. Goldstein, Chairman and Chief Executive Officer, on August 1, 2002. See "Employment Contracts and Termination of Employment and Change-in-Control Arrangements" at page 20. Also excludes 4,295,303 shares remaining available for issuance under the GESPP. Includes a total of 927,9191,346,120 outstanding and unvested RSU'sRSUs and shares of PRS under the 2000 SAIP.Stock Award and Incentive Plan.

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

(4)	Includes 4,295,303 shares available for future issuance under the GESPP. Does not include 1,117,375404,500 options outstanding as of December 31, 20052006 under the 1997 Employee Stock Option

Plan (including the 1997 Employee Stock Option Plan for The Netherlands). Pursuant to approval ofAs approved by shareholders at the Annual Meeting held on May 7, 2002, shares authorized under the 1997 Employee Stock Option Plan, but not used thereunderunder that plan for any reason, are added to shares available for awards under the 2000 SAIP.Stock Award and Incentive Plan. As a result, any outstanding options under the 1997 Employee Stock Option Plan that are cancelled will become available for grant under the 2000 SAIP.Stock Award and Incentive Plan.

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

(6)	Excludes shares of the Company's Common StockCompany’s common stock credited to participant'sparticipant’s accounts as of December 31, 20052006 and issuable under the DCP. Also excludes deferred annual awards of 1,000 shares each made to non-employee directors.

(7)	Includes 3,984,5393,954,285 shares remaining available for issuance under the DCP and 51,75043,750 shares remaining available for issuance from the pool of shares to be used for annual awards of 1,000 shares to each non-employee director.

2000 Supplemental Stock Award Plan and Directors'Directors’ Annual Stock Award Pool

On November 14, 2000, the Company'sour Board of Directors approved the 2000 Supplemental Stock Award Plan. Under applicable NYSE rules, the 2000 Supplemental Planthis plan did not require approval by shareholders. The 2000 Supplemental Stock Award Plan is a stock-based incentive plan designed to attract, retain, motivate and reward employees and certain other persons who provide substantial services to the Company, but excludingCompany. This plan excludes all of our executive

officers and directors of the Company.directors. Under the 2000 Supplemental Plan,this plan, eligible participants may be granted nonqualified stock options, stock appreciation rights, restricted stock, deferred stock, stock granted as a bonus or in lieu of another award, dividend equivalents,and other stock based awards or conditional rights to receive stock or other awards (performance awards) (collectively, ‘‘Awards’’) under terms and conditions that are identical to those under the Company'sour shareholder-approved 2000 SAIP. Unlike under the 2000 SAIP, however, no cashStock Award and Incentive Plan. The total shares originally reserved for awards may be granted under the 2000 Supplemental Plan. The total number of shares of the Company's Common Stock reserved for Awards under the 2000 SupplementalAward Plan is 4,500,000 of which awas 4,500,000. A total of 1,091,313463,154 options and 2,397 restricted stock units were outstanding under that plan as of December 31, 20052006 and 293,835328,671 shares remained available for grantfuture awards as of that date.

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

EMPLOYMENT CONTRACTS AND TERMINATION OF EMPLOYMENT AND
CHANGE-IN-CONTROL ARRANGEMENTSOutstanding Equity Awards at Fiscal Year-End

In connection with Mr. Goldstein's appointment as Chairman and Chief Executive Officer of the Company in June 2000, the Company negotiated with Mr. Goldstein, and the Board approved, a five-year Memorandum of Understanding (‘‘MOU’’) setting forth the terms of Mr. Goldstein's employmentThe following table provides information regarding outstanding equity awards held by the Company. The principal terms of the MOU were:

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

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

(c)   For 2000 Mr. Goldstein was guaranteed and received an annual incentive compensation award of $540,000, 60% of his $900,000 base salary. For years after 2000 Mr. Goldstein's annual incentive compensation was subject to the attainment of certain annual corporate performance goals approved by the Board under the 2000 SAIP. For 2003, 2004 and 2005 those corporate performance goals were identical to the corporate performance goals applicable to all otherour named executive officers of the Company.

(d)   For 2000 Mr. Goldstein was guaranteed and received a long-term incentive compensation award of $720,000, 80% of his $900,000 base salary. For periods after 2000 Mr. Goldstein's long-term incentive compensation was subject to the attainment of certain corporate long-term performance goals approved by the Board under the 2000 SAIP. For the 2003-2005, 2004-2006 and 2005-2007 cycles of the Long-Term Incentive Plan, those corporate performance goals were identical to those applicable to all other executive officers of the Company.

(e)   On June 1, 2000 Mr. Goldstein was granted options to purchase 700,000 shares of the Company's Common Stock. Of these options, an option for 500,000 shares was a ‘‘sign-on’’ grant; an option for 100,000 shares was to compensate Mr. Goldstein for his forfeiture, upon his leaving Unilever United States, Inc. ("Unilever US"), of unvested options to purchase stock of Unilever plc; and an option for 100,000 shares was Mr. Goldstein's 2000 annual grant. The ‘‘sign-on’’ grant, made under the Company's 1997 Stock Option Plan, was immediately exercisable and will remain exercisable for the full option term irrespective of Mr. Goldstein's employment status, or until death, if earlier, except that if Mr. Goldstein's employment had been terminated for cause prior to a ‘‘Change-in-Control’’ (see ‘‘Executive Separation Policy’’ below at page 23), the unexercised portion of the option would have been immediately forfeited. The other grants were made under the 2000 SAIP, and are subject to the same terms and conditions as grants to other executive officers under the 2000 SAIP. Mr. Goldstein was also entitled to, and has received, annual option grants or restricted stock unit grants with a value as of the grant date, based on the Black-Scholes model of option or restricted stock unit valuation, of not less than $590,000.

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

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

(h)   In no event would Mr. Goldstein receive aggregate pension benefits from the Company and Unilever US that are less than the pension benefits he would have received had he continued to beDecember 31, 2006.

employed by Unilever US2006 Outstanding Equity Awards at Fiscal Year End

Option Awards																											Stock Awards
Name			Number of Securities Underlying Unexercised Options (#) Exercisable						Number of Securities Underlying Unexercised Options (#) Unexercisable						Option Exercise Price ($)						Option Expiration Date						Number of Shares or Units of Stock That Have Not Vested (#)						Market Value of Shares or Units of Stock That Have Not Vested ($)						Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested ($)
(a)			(b)						(c)						(e)						(f)						(g)						(h)						(i)
Robert M. Amen					0						150,000	(1)				$	35.24						7/1/2013	(2)
																													34,042	(23)				$	1,673,505						(3	)
					0						56,737	(1)(23)				$	35.25						7/25/2013	(4)
																													8,510	(23)				$	418,352						(3	)
Arthur C. Martinez					3,000						0					$	27.10						5/16/2011	(5)
					3,000						0					$	32.82						5/7/2012	(6)
					3,000						0					$	32.39						5/14/2013	(7)
					2,000						1,000					$	35.00						5/11/2014	(8)
																													750					$	36,870						(9	)
																													750					$	36,870						(10	)
																													10,638					$	522,964						(11	)
Richard A. Goldstein					50,500						0					$	27.10						5/16/2011	(5)
					140,000						0					$	32.82						5/7/2012	(6)
					140,000						0					$	29.86						3/11/2013	(12)
																													42,536					$	2,091,070						(13	)
																													9,450					$	464,562						(14	)
Douglas J. Wetmore					7,500						0					$	43.25						5/8/2007	(22)
					12,500						0					$	49.69						5/14/2008	(17)
																													13,308					$	654,221						(13	)
																													2,370					$	116,509						(14	)
																													30,000	(23)				$	1,474,800						(10	)
																													9,703					$	476,999						(16	)
James H. Dunsdon																													12,153					$	597,441						(13	)
																													7,000					$	344,120						(15	)
																													4,050					$	199,098						(14	)
																													30,000	(23)				$	1,474,800						(10	)
																													833	(23)				$	40,950						(10	)
																													3,881					$	190,790						(16	)
Nicolas Mirzayantz					5,000						0					$	49.69						5/14/2008	(17)
					7,500						0					$	43.00						12/8/2008	(18)
					5,000						0					$	39.19						5/20/2009	(19)
					20,000						0					$	34.56						2/8/2010	(20)
					12,000						0					$	28.77						1/28/2012	(21)
					25,000						0					$	32.82						5/7/2012	(6)
																													10,634					$	522,767						(13	)
																													2,370					$	116,509						(14	)
																													3,000					$	147,480						(10	)
																													15,000	(23)				$	737,400						(10	)
					0						25,000	(1)(23)				$	36.00						5/9/2013	(10)
																													1,231					$	60,516						(16	)
Dennis M. Meany					7,000						0					$	32.82						5/7/2012	(6)
					12,000						0					$	29.86						3/11/2013	(12)
																													10,634					$	522,767						(13	)
																													2,370					$	116,509						(14	)
																													20,000	(23)				$	983,200						(10	)

(1)	This grant is SSARs.

(2)	These SSARs vest on the third anniversary of the grant date, which was July 1, 2006.

(3)	These RSUs vest on the third anniversary of the grant date, which was July 25, 2006.

(4)	These SSARs vests on the third anniversary of the grant date, which was July 25, 2006.

(5)	These options vested 1/3, 1/3 and 1/3 on the first, second and third anniversaries of the grant date, which was May 16, 2001.

(6)	These options vested 1/3, 1/3 and 1/3 on the first, second and third anniversaries of the grant date, which was May 7, 2002.

(7)	These options vested 1/3, 1/3 and 1/3 on the first, second and third anniversaries of the grant date, which was May 14, 2003.

(8)	These options vest 1/3, 1/3 and 1/3 on the first, second and third anniversaries of the grant date, which was May 11, 2004.

(9)	These RSUs vest on the third anniversary of the grant date, which was May 10, 2005.

(10)	This grant vests on the third anniversary of the grant date, which was May 9, 2006.

(11)	These RSUs vest on the first anniversary of the grant date, which was July 25, 2006.

(12)	These options vested 1/3, 1/3 and 1/3 on the first, second and third anniversaries of the grant date, which was March 11, 2003.

(13)	These RSUs vest on the third anniversary of the grant date, which was May 11, 2004.

(14)	These RSUs vest on the third anniversary of the grant date, which was March 8, 2005.

(15)	These RSUs vest 2 1/2 years after the grant date, which was October 1, 2004.

(16)	This grant vests on the third anniversary of the grant date, which was December 18, 2006.

(17)	These options vested 1/3, 1/3 and 1/3 on the second, third and fourth anniversaries of the grant date, which was May 14, 1998.

(18)	These options vested 1/3, 1/3 and 1/3 on the second, third and fourth anniversaries of the grant date, which was December 8, 1998.

(19)	These options vested 1/3, 1/3 and 1/3 on the second, third and fourth anniversaries of the grant date, which was May 20, 1999.

(20)	These options vested 1/3, 1/3 and 1/3 on the second, third and fourth anniversaries of the grant date, which was February 8, 2000.

(21)	These options vested 1/3, 1/3 and 1/3 on the first, second and third anniversaries of the grant date, which was January 28, 2002.

(22)	These options vested 1/3, 1/3 and 1/3 on the second, third and fourth anniversaries of the grant date, which was May 8, 1997.

(23)	This grant was made under our Equity Choice Program.

Option Exercises and Stock Vested

The following table provides information regarding option exercises and restricted stock vested during 2006 for an additional five-year period. However, if he retires from the Company after completing five yearseach of service with the Company, his Company pension will be based on the period of his service with the Company only. If he had retired from the Company before completing five years of service, his Company pension would have been based on a combination of his service with the Company and his service with Unilever US totaling five years. After calculating the aggregate of his actual Company pension and his actual pension from Unilever US, the Company will supplement that total with an amount equal to the difference between what his pension would have been had he continued to be employed by Unilever US for the additional five-year period and such aggregate actual pensions.

Mr. Goldstein participates in and is entitled to the benefits of the Company's Executive Separation Policy (the ‘‘ESP’’), described below at page 23. Prior to 2003, Mr. Goldstein was reimbursed for incidental business-related and other expenses up to $120,000 per year. In 2001 and 2002, housing and personal expenses of $42,411 and $44,976, respectively, were reimbursed to Mr. Goldstein. In 2003 the Compensation Committee recommended, and the Board approved, that the $120,000 amount be reclassified as salary, effective January 1, 2003, and that Mr. Goldstein would not be reimbursed for any expenses other than expenses that would be reimbursed to Companyour named executive officers.

Effective August 1, 2002, the Board granted a Performance Incentive Award (the ‘‘PIA’’) under the 2000 SAIP to Mr. Goldstein. The PIA has two objectives: (a) to drive superior long term corporate performance on behalf of shareholders;2006 Option Exercises and (b) to retain and reward Mr. Goldstein for such performance over the following five years. The PIA has the following terms and conditions:

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

Period		Award Opportunity
3 years ending July 31, 2005Option Awards											25% of grant (50,000 shares)	Stock Awards
4 years ending July 31, 2006Name (a)		25%	Number of grantShares (50,000 shares)
5 years ending July 31, 2007Acquired on Exercise (#) (b)				50%	Value Realized on Exercise ($) (c)						Number of grantShares (100,000 shares)Acquired on Vesting (#) (d)						Value Realized on Vesting ($) (e)
Robert M. Amen					0						0						0						0
Arthur C. Martinez					0						0						0						0
Richard A. Goldstein					750,500						7,743,758						0						0
Douglas J. Wetmore					103,875						1,242,887						0						0
James H. Dunsdon					82,750						1,412,155						0						0
Nicolas Mirzayantz					64,500						1,054,967						0						0
Dennis M. Meany					0						0						0						0

(b)   To earn any award, Mr. Goldstein must continuePension Benefits

U.S. Retirement Plans

We provide a defined benefit Pension Plan to serve as the Company's Chief Executive Officer through the end of such performance/vesting period.

(c)   During each performance period, Mr. Goldstein may earn the following portions of each installment of the award basedeligible United States-based employees hired before January 1, 2006. Employees hired on the Company's Total Shareholder Return (‘‘TSR’’) during the performance periods as measured against a selected group of 21 companies (the ‘‘Comparison Group’’):

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

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

Based on the Company’s TSR during the performance period ending July 31, 2005, no shares were earned.

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

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

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

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

(f)   The Compensation Committee may adjust the composition of the Comparison Group or other provisions of the PIA in the event of changes in the business or performance of a Comparison Group company or the Company or in the event of other factors deemed relevant by the Compensation Committee, provided that the adjustment would not cause the performance goals not to meet the ‘‘performance goal requirement’’ set forth in Section 162(m) of the Internal Revenue Code.

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

Effective as of the 2006 Annual Meeting, Mr. Goldstein's role as Chairman of the Board and Chief Executive Officer will cease. The terms of his separation arrangement are currently being negotiated, and will be filed by the Company with the SEC when finalized.

As of January 13, 2006, Mr. Howard and the Company entered into a separation agreement in connection with Mr. Howard’s termination of employment with the Company. The principal terms of the agreement are:

(a)   Mr. Howard resigned as Executive Vice President of the Company effective as ofafter January 1, 2006, but remained a full-time employee of the Company through February 28 , 2006, his separation date. Until February 28, 2006,including Mr. Howard provided transitional assistance to those employees of the Company who assumed the responsibilities previously held by him.

(b)Amen and Mr. Howard continued to receive his base salary of $39,850 per month ($478,200 per year) through February 28, 2006. Thereafter Mr. Howard will be entitled to be paid severance of $47,012.58 per month for twenty-four months, or an aggregate of $1,128,302, representing his severance entitlement under the Company's ESP. During the twenty-four month severance period he also continues to be eligible to participate in the Company’s medical, dental and life insurance (executive death benefit) plans, and he is entitled to receive financial planning and outplacement services.

(c)   Mr. Howard will be entitled to incentive compensation as follows:

(i) if the Compensation Committee approves the payment of AIP awards to executive officers for 2006 based on achievement against pre-established performance criteria, Mr. Howard will be entitled to a payment of the same AIP award in respect of 2006 that is paid to others with the same target award and pre-established performance objectives as he had, which award will be prorated to reflect the time Mr. Howard was employed by the Company in 2006 (i.e. 2/12ths of the annual award). Mr. Howard’s AIP award, if any, will be paid to him in early 2007 at the same time as incentive compensation awards under the AIPMartinez, are paid to employees of the Company generally.

(ii) if the Compensation Committee approves the payment of LTIP awards to executive officers for the 2004-2006 and 2005-2007 performance cycles based on achievement against pre-established performance criteria, Mr. Howard will be entitled to receive 72% of any LTIP award that is paid to others with the same target award as he had in respect of the 2004-2006 performance cycle, and 39% of any LTIP award that is paid to others with the same target award as he had in respect of the 2005-2007 performance cycle. The amounts that Mr. Howard would be paid if the target award levels for the 2004-2006 and 2005-2007 LTIP performance cycles are attained would be $216,883 and $120,878 respectively. Any awards under the LTIP for the 2004-2006 and 2005-2007 performance cycles will be paid to Mr. Howard in early 2007 and 2008 at the same times as awards under those cycles of the LTIP are paid to other participants in those LTIP cycles. Mr. Howard was also entitled to receive, and did receive, an LTIP award of $133,383 in respect of the 2003-2005 performance cycle.

Mr. Howard is not eligible to participate in the Company's AIP for any year after 2006 orU.S. Pension Plan. All of our named executive officers except Mr. Amen and Mr. Martinez participate in any cyclethe U.S. Pension Plan.

We pay the full cost of providing benefits under the U.S. Pension Plan. The monthly pension benefit is equal to the number of years of credited service times the difference between (a) 1.7% times final average compensation and (b) 1.25% times the social security amount. The final average compensation is the average of the Company's LTIP commencing after 2005.five consecutive years of compensation during the last ten years that produce the highest average. The term ‘‘compensation’’ means the basic rate of monthly compensation plus 1/12 of any Annual Incentive Plan cash award received for the preceding year, reduced by any compensation deferred under our Deferred Compensation Plan. The normal retirement age under the U.S. Pension Plan is age 65 .

(d)Various provisions of the Internal Revenue Code (IRC) limit the amount of compensation used in determining benefits payable under our U.S. Pension Plan. We established a non-qualified Supplemental Retirement Plan to pay that part of the pension benefit that, because of these IRC limitations, cannot be paid under the U.S. Pension Plan to our U.S. senior executives. For purposes of the Supplemental Retirement Plan, compensation includes any compensation and Annual Incentive Plan amounts, including amounts deferred under our Deferred Compensation Plan. A description of our practices with regard to crediting additional years of service under our Supplemental Retirement Plan is included in the Compensation Discussion & Analysis at page 45.

Employees with at least 10 years of credited service are eligible for early retirement under the U.S. Pension Plan and the Supplemental Retirement Plan beginning at age 55. The exercisability, lapsing and forfeiture of stock options granted to Mr. Howardbenefit at early retirement is an unreduced benefit payable at age 62 or a reduced benefit (4% per year) if payable prior to executionage 62. At December 31, 2006, Mr. Dunsdon and Mr. Meany were each age 59 with more than 10 years of credited service (including service with Bush Boake Allen Inc. (BBA)), and were therefore eligible for early retirement as of December 31, 2006.

We acquired BBA in 2000, and the Bush Boake Allen Inc. Retirement Plan (the ‘‘BBA Plan’’) was merged into our U.S. Pension Plan on December 31, 2000. Benefit accruals under the BBA Plan were frozen as of that date. Benefit service under our U.S. Pension Plan for former BBA employees, including Mr. Dunsdon and Mr. Meany, starts as of December 1, 2000. Former BBA employees, including Mr. Dunsdon and Mr. Meany, will receive benefits under the frozen BBA Plan plus a benefit under our

U.S. Pension Plan for service after December 1, 2000. The value of the frozen accrued benefit under the BBA Plan is included in the Present Value of Accumulated Benefits columns in the Pension Benefits Table at page 66.

For participants of the BBA Plan on December 31, 2000, including Mr. Dunsdon and Mr. Meany, the following provisions apply in calculating the pension benefit earned as of December 31, 2000. The BBA pension benefit is payable in addition to the benefit participants earn under the IFF Pension Plan for service after December 31, 2000.

The benefit from the BBA Plan is based on pensionable pay, average final earnings as of December 31, 1999 and December 31, 2000, years of benefit service as of those dates, the participant’s Social Security average wage base and the participant’s estimated Social Security benefit at age 65 based on the law in effect as of December 31, 2000. For this purpose, (a) ‘‘pensionable pay’’ is defined as a participant’s previous 12 months’ earnings, excluding luncheon vouchers, travel allowances, special salary supplements and any other items that the Company may determine, (b) ‘‘pensionable service’’ is defined as the period of continuous service prior to retire ment and (c) ‘‘average final earnings’’ is defined as the three highest consecutive annual pensionable salaries in the 10 years preceding retirement.

Normal Retirement Benefit under BBA Plan Payable at Age 65

The formula by which a pension is calculated as of December 31, 2000 is the sum of A plus B as follows:

	A.	Benefit calculation for benefit service as Of December 31, 1999

The larger of (1) plus (2) or (3), or (4) plus (5)

	1.	1.05% of average final earnings up to the Social Security average wage base times years of benefit service as of December 31, 1999 not in excess of the service limitation plus 1.50% of average final earnings in excess of the Social Security average wage base times years of benefit service as of December 31, 1999 not in excess of the service limitation;

	2.	1.50% of average final earnings times years of benefit service in excess of the service limitation;

	3.	1.10% of average final earnings times years of benefit service as of December 31, 1999;

	4.	1.05% of average final earnings up to the Social Security average wage base times years of benefit service from January 1, 1994 to December 31, 1999 Plus 1.50% of average final earnings in excess of the Social Security average wage base, times years of benefit service from January 1, 1994 to December 31, 1999;

	5.	Grandfathered prior plan accrued benefit based on years of service and average final earnings as of December 31, 1993.

B. Benefit calculation for benefit service from January 1, 2000 to December 31, 2000

The larger of (1) minus (2), or (3)

	1.	1.67% of average final earnings, Times benefit service from January 1, 2000 to December 31, 2000

	2.	(a) Times (b)

	a.	1.67% of the participants Social Security benefit Times benefit service from January 1, 2000 projected to age 65, limited to 30 years

	b.	Years of service from January 1, 2000 to December 31, 2000, Divided by years of service from January 1, 2000 projected to age 65.

	3.	1.00% of average final earnings times benefit service from January 1, 2000 to December 31, 2000.

Early Retirement BBA Plan Benefit

Participants may retire with full, unreduced BBA Plan benefits at age 62, if they are at least 55 years old and have at least ten years of eligibility service or if the sum of their age at their last birthday plus the full years of benefit service at the time of termination of employment from IFF is at least 65.

Immediate Early Retirement

Participants are eligible for a vested BBA Plan pension benefit if they have five or more years of eligibility service when they terminate. The BBA Plan vested benefit begins the month after their 65th birthday. However, participants may choose to have their vested BBA Plan pension benefit start on the first day of any month after age 55. In that case, the BBA Plan pension benefit will be reduced to reflect the fact that the benefit is being received over a longer period of time. For service prior to January 1, 2000, the reduction factor is 3% a year for payment that starts between age 60 to 62 and 6% a year for payment that starts prior to age 60. For service after January 1, 2000, the reduction factor is 4% a year for each year that payments start prior to age 62. If the participant completed at least twenty years of service and terminates employment at age 61, there is no reduction for early commencement.

U.K Retirement Plan

Mr. Dunsdon is also entitled to a pension benefit based on his separation agreementservice in the United Kingdom with BBA. The Bush Boake Allen (BBA) United Kingdom Pension Plan is a non-contributory Defined Benefit Plan. The plan is closed and there are governedno active participants accruing benefits. The retirement benefit is based on pensionable service and final pensionable salary. ‘‘Pensionable service’’ is defined as completed years and months of service from age 20. ‘‘Final pensionable salary’’ is defined as the annual average of current pensionable salary over the best 3 consecutive years during the previous 10 years less the annual average of a lower earnings limit during that 3 year period.

The benefit from the BBA U.K. Pension scheme is equal to 1 2/3% of final pensionable salary (less the annual average of the lower earnings limit) for each year of pensionable service less 1% of final pensionable salary for each year of pensionable service prior to March 31, 1978. Pensionable salary is gross earnings during the previous 12 months. The ‘‘lower earnings limit’’ means the lower rate of pay earnings at which U.K. National Insurance Contributions commences.

The normal retirement age is 65. An early retirement pension is available on retirement after age 50, subject to reduction on account of early payment. The reduction factor is 6% per annum for each year that the participant’s actual date of retirement precedes his or her normal retirement date.

Pension benefits are indexed and increases are granted based on the following: 3% per annum, or the Retail Price Index (RPI) if less, for pensions accrued prior to April 5, 1997; and 5% per annum, or the RPI if less, for pensions accrued after April 5, 1997.

Deferred pensions in excess of a guaranteed minimum pension are revalued between exit and retirement in line with statutory requirements. The guaranteed minimum pension is the minimum pension that must be provided for participants for service prior to April 6, 1997. In respect of the guaranteed minimum pension, the participant’s deferred benefit is increased by a fixed amount each year. The amount is set by law and is based on the date the participant left the Plan.

Mr. Goldstein’s Retirement

Mr. Goldstein retired as our Chairman and CEO on May 9, 2006, when he was age 64. Under the terms of his various stock option agreements and the stock award plans under which those options were granted. As determined by the Compensation Committee of the Board of Directors, sinceretirement agreement, Mr. Howard was employed by the

Company during the performance periods relevantGoldstein is entitled to the final number of Restricted Stock Units (‘‘RSU’s’’) awarded to him for 2004 and 2005, those RSU awards will continue to vest on their normal vesting schedule. Accordingly, a total of 15,192 RSU’s and 3,375 RSU’s granted to Mr. Howard will vest on May 11, 2007 and March 8, 2008, respectively.

(e)   Mr. Howard is vested inreceive the benefits that he accrues as of February 28, 2006accrued under the Company’sour U.S. Pension Plan and Supplemental Retirement Plan, as well asPlan. The value of these benefits is included in the Present Value of Accumulated Benefits column in the Pension Benefits Table at page 66. In addition, under the terms of his June 1, 2000 Memorandum of Understanding, Mr. Goldstein was entitled to a ‘‘make-up’’ pension payment of $3,016,014, which we paid in 2006 (and which is not included in the Present Value of Accumulated Benefit column in the Pension Benefits Table). More details concerning Mr. Goldstein&rsqu o;s retirement are included in the Compensation Discussion & Analysis at page 47 and under ‘‘Other Separation Arrangements’’ at page 74.

The following table provides information for our named executive officers regarding the Company’s retirement plans. The present value of accumulated benefits payable to the named executive officers under each of our retirement plans was determined using the valuation method and material assumptions presented in Note 14 to the Company’s consolidated financial statements included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2006.

2006 PENSION BENEFITS

Name			Plan Name						Number of Years Credited Service (#)						Present Value of Accumulated Benefits Assuming Retirement Age of 62 ($)						Present Value of Accumulated Benefits Assuming Retirement Age of 65 ($)						Payments During Last Fiscal Year ($)
(a)			(b)						(c)						(d1)(1)						(d2)(2)						(e)
Robert M Amen (3)					—						—						—						—						—
Arthur C. Martinez (4)					—						—						—						—						—
Richard A. Goldstein			IFF Pension Plan								7.00						—					$	222,751						0.00
			Supplemental Retirement Plan								7.00						—					$	1,594,110						0.00
			Total														—	(5)				$	1,816,861						0.00	(6)
Douglas J. Wetmore			IFF Pension Plan								15.63					$	283,434					$	222,250						0.00
			Supplemental Retirement Plan								15.63					$	503,057					$	394,465						0.00
			Total													$	786,491					$	616,715						0.00
James H. Dunsdon			IFF Pension Plan								9.98					$	288,489	(7)				$	226,215	(7)					0.00
			Supplemental Retirement Plan								6.23					$	338,856					$	265,709						0.00
			BBA U.K. Pension Scheme								27.42					$	2,810,994					$	2,810,994						0.00
			Total													$	3,438,339					$	3,302,918						0.00
Nicolas Mirzayantz			IFF Pension Plan								15.23					$	196,307					$	153,931						0.00
			Supplemental Retirement Plan								15.23					$	252,602					$	198,074						0.00
			Total													$	448,909					$	352,005						0.00
Dennis M. Meany			IFF Pension Plan								29.64					$	735,716	(7)				$	576,901	(7)					0.00
			Supplemental Retirement Plan								6.23					$	135,491					$	106,243						0.00
			Total													$	871,207					$	683,144						0.00

(1)	For participants in the U.S. Pension Plan and the Supplemental Retirement Plan, the amounts in this column assume benefit commencement at unreduced early retirement at age 62 (with at least 10 years of credited service) and otherwise were determined using interest rate and mortality assumptions consistent with those used in the Company’s financial statements.

(2)	For participants in the U.S. Pension Plan and the Supplemental Retirement Plan, the amounts in this column assume benefit commencement at normal retirement at age 65 and otherwise were determined using interest rate and mortality assumptions consistent with those used in the Company’s financial statements.

(3)	Mr. Amen, who commenced employment as our CEO on July 1, 2006, is not eligible to participate in the U.S. Pension Plan, the Supplemental Retirement Plan or any other defined benefit plan.

(4)	Mr. Martinez, who served as our Interim CEO from May 9, 2006 to June 30, 2006, is not eligible to participate in the U.S. Pension Plan, the Supplemental Retirement Plan or any other defined benefit plan.

(5)	Mr. Goldstein has reached age 62, but is not entitled to an unreduced benefit at age 62 under the U.S. Pension Plan or the Supplemental Retirement Plan because he did not have ten years of credited service with the Company. See footnote (1) above.

(6)	See footnote 10 of the Summary Compensation Table at page 51 for the amount paid to Mr. Goldstein representing a ‘‘make-up’’ in his IFF retirement benefit based on the retirement benefit he would have earned with his prior employer.

(7)	Amounts under the U.S. Pension Plan include frozen accumulated benefits under the BBA Plan.

Non-Qualified Deferred Compensation

We offer to our executive officers and other senior employees based in the United States an opportunity to defer compensation under our Deferred Compensation Plan (DCP). The DCP allows these employees to defer salary and annual and long term incentive awards, and to defer receipt of stock under some equity awards. The deferral period can extend for a specified number of years or until retirement or employment termination, and participants may elect to extend deferrals, subject to applicable tax laws. Subject to certain limitations on the number of installments and periods over which installments will be paid, participants in the DCP elect the timing and number of installments as to which the participant’s DCP account will be settled. Deferred cash compensation may be treated as invested in (i) a variety of equity and debt mutual funds offered by The Vanguard Group, which administers the DCP, or (ii) a fund valued by reference to the value of our common stock with dividends reinvested, or (iii) an interest-bearing account. For the interest-bearing account, our Compensation Committee establishes an interest rate each year which we intend to be equal to 120% of the applicable federal long term interest rate. For 2006 this interest rate was 5.64% and for 2007 this interest rate is 5.77%.

We make matching contributions under the DCP to make up for tax limitations on our matching contributions under our 401(k) plan, which is called our Retirement Investment Fund Plan (401(k))Plan. For employees hired prior to January 1, 2006, including all of our U.S.-based named executive officers except Mr. Amen and Deferred Compensation Plan, subjectMr. Martinez, the 401(k) plan provides for matching contributions at a rate of $0.50 for each dollar of contribution up to 6% of a participant’s salary. For employees hired on or after January 1, 2006, including Mr. Amen, the 401(k) plan provides for matching contributions at a rate of $1.00 for each dollar of contribution up to 4% of a participant’s salary plus $0.75 for each dollar of contribution above 4% up to 8% of a participant’s salary. However, tax rules limit the amount of the match for our senior executives. The DCP matching contribution reflects the amount of the matching contribution which is limited by the tax laws. The same requirements under the 401(k) plan for matching, including vesting, apply to matching contributions under the DCP. Currently, matching contributions vest after three years of those plans.service.

(f)   Mr. HowardThe DCP gives participants an incentive to defer compensation into our common stock fund by granting a 25% premium, credited in additional deferred stock, on all cash compensation deferred into the stock fund. The shares representing the premium generally are forfeited if employment ends within one year of deferral or if the participant withdraws any deferred stock within one year of deferral. Vesting of the premium deferred stock accelerates upon a change in control. RSUs granted under our equity compensation plans may also be deferred, but no premium is subject to other provisionsadded.

The following table provides information for our named executive officers regarding plans that provide for the deferral of his separation agreementcompensation on a basis that is not tax-qualified.

2006 NON-QUALIFIED DEFERRED COMPENSATION

Name			Executive Contributions in Last FY ($)						Registrant Contributions in Last FY ($)						Aggregate Earnings in Last FY ($)						Aggregate Withdrawals/ Distributions ($)						Aggregate Balance at Last FYE ($)
(a)			(b)(1)						(c)(2)						(d)						(e)						(f)(3)
Robert M. Amen				$	36,667					$	9,167					$	7,821					$	0					$	53,654
Richard A. Goldstein				$	46,833					$	6,244					$	694,174					$	0					$	6,728,151
Arthur C. Martinez				$	39,650	(4)				$	0					$	123,155					$	0					$	596,081
Douglas J. Wetmore				$	165,328	(5)				$	50,444					$	413,286					$	0					$	1,515,843
James H. Dunsdon				$	191,194					$	48,652					$	318,203					$	0					$	1,191,873
Nicolas Mirzayantz				$	27,483	(6)				$	5,400					$	16,001					$	0					$	204,772
Dennis M. Meany				$	77,250					$	15,017					$	64,241					$	0					$	324,666

(1)	Except as provided in footnotes (5) and (6), the amounts in this column are included in the Salary column of the Summary Compensation Table at page 51.

(2)	The amounts in this column are included in the All Other Compensation column of the Summary Compensation Table at page 51.

(3)	If a person was a named executive officer in previous years’ proxy statements, this amount includes amounts that were included as compensation previously reported for that person in the Summary Compensation Table for those previous years.

(4)	This amount is included in the Stock Award column of the Summary Compensation Table at page 51.

(5)	Of this amount, $46,300 is included in the Salary column of the Summary Compensation Table at page 51 and $119,028 was included in the LTIP Payout column of the Summary Compensation Table included in the Company’s Proxy Statement for our 2006 Annual Meeting.

(6)	Of this amount, $24,000 is included in the Salary column of the Summary Compensation Table at page 51 and $3,483 was included in the Bonus column of the Summary Compensation Table included in the Company’s Proxy Statement for our 2006 Annual Meeting.

Termination of Employment and the ESP, including a provision that Mr. Howard will not, during the severance period, engageChange in certain activities that are competitive with the Company.Control Arrangements

Executive Separation Policy and Other Termination Benefits

The Board has adopted the ESPWe provide severance payments and has authorized participation in the ESP by thebenefits to our named executive officers of the Company.and other executive officers under our Executive Separation Policy (ESP). The ESP covers an executive’s separation from service, with different benefit levels (Tiers) for separations from the Company, includingunrelated to a change in control (CiC) and for separations within two years following a ‘‘Change-in-Control’’ (a ‘‘CIC,’’CiC. The following describes the definition of which is summarized below). All of the officers named in the Summary Compensation Table (see ‘‘Summary Compensation Table’’ at page 15) are covered by the ESP'sESP’s ‘‘Tier I’’ level of payments and benefits, described below.which apply to our named executive officers, other than Mr. Martinez. The ESP was originally adopted by the Boardapplied to Mr. Goldstein until his retirement date, May 9, 2006. Where other compensation programs and agreements provide for enhanced benefits in 2000. In December 2004, the Board amended the ESP with the overall effectcircumstances relating to terminations and change s in control of reducing the level of benefits for participants in Tier I and Tier II, while expanding the coverage of the ESP to additional employees in a new Tier III. Benefits for Tier III participants, none of whomIFF, these are executive officers, are similar to those for Tier I and Tier II participants but at reduced levels.described below as well.

Under the ESP, a participant whose employment with the Company is terminatedTerminations without cause as defined in the ESP, at any time other thanand not within the two years after a CiC.    If we terminate a participant’s employment without cause and not within two years following a CIC, receives severance, calculated onCiC, we will pay a monthly basis,severance for 24 months, or if a shorter period, until age 65. The monthly payment will equal to the sum of (1) the participant'sparticipant’s monthly base salary at the date of termination andplus (2) 1/12th12^th of the participant’s average ofAIP bonus for the participant's three most recent annual incentive compensation awards, in each case payable as ‘‘salary continuation’’ overyears. We also pay a period of 24 months, in the case of a Tier I participant, and 18 months, in the case of a Tier II participant, or until the participant attains age 65, if earlier. The participant is also entitled to a pro rataprorated AIP bonus for the year of termination and continuation ofbased on actual performance for the full year. We also continue medical, dental and insurance benefits forduring the applicable severance period. In our discussion of payments upon a separation from service, to ‘‘prorate’’ an award, such as AIP, means to pay a fraction of the award equal to the number of days in the period that the participant worked divid ed by the total number of days in the period (or 365 in the case of an AIP award). For this type of termination, the ESP provides nodoes not provide additional pension credit toor alter the participant, andterms of stock options or other equity awards.

Terminations not for cause or by the executive for good reason and other long-term awards are exercisable or payable only in accordance with their terms apart fromwithin the two years after a CiC.    We provide severance and related benefits under the ESP unless otherwise determinedto a participant terminated by the Compensation Committee.

A participant terminatedus without cause, or electing to terminate his or her employment with the Companywho terminates for ‘‘good reason’reason,’ (the definition of which is summarized below)’ during the two years following a CIC is entitled to the following:CiC. These are:

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

(b) a lump-sum payment of a prorated portion of the long-term incentive award for each long-term incentive plan cycle then in progress, with the amount of the award to equal the target award for each performance cycle prorated based on the portion of the performance cycle completed at the time of termination of employment;

(c) a lump-sum payment of a prorated portion of the target annual incentive award for the year of termination, with proration based on the portion of the year completed at the time of termination of employment;

(d) 100% vesting of outstanding options, with the remainder of the option term to exercise the participant’s options; provided that, if the applicable stock option plan does not permit the option to

	•	A lump-sum payment equal to three times the sum of (i) the participant’s highest annual salary during the five years preceding termination and (ii) the higher of his or her average AIP bonus for the three most recent years or his or her target AIP bonus for the year of termination;

	•	A prorated portion of the target LTIP for the cycles then in progress;

	•	A prorated portion of the target AIP bonus for the year of termination;

	•	Vesting of any stock options not already vested upon the CiC with the remainder of the option term to exercise the participant’s options, except, in the case of certain options granted before

		2001, we will instead cancel the option and pay an amount equal to the difference between the exercise price and the highest of (i) the market price of common stock on the date of termination, (ii) the price of common stock in any published tender offer or any merger or acquisition agreement within one year before or after the CiC, or (iii) the market price of common stock on the date of the CiC.

	•	Vesting of restricted stock and RSU awards and, unless deferred by the participant, settlement of RSU awards;

	•	An additional three years’ credit of age and compensation for pension calculation purposes, with the assumption that annual compensation would have continued at current rates during the additional period, and full funding of any supplemental pension obligation through a rabbi trust;

	•	Continuation of medical and dental coverage for three years, or until the participant obtains new employment providing similar benefits.

vest and remain outstanding for the remainder of the option term, the option will be cashed out based on the spread between the exercise price and the highest of (i) the market price of Common Stock on the date of termination, (ii) the price of Common Stock in any published tender offer or any merger or acquisition agreement within one year before or after the CIC, or (iii) the market price of Common Stock on the date of the CIC;

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

(f) credit for an additional three years, in the case ofIf payments to a Tier I participant and two years, in the case of a Tier II participant, of service and age for pension calculation purposes, with the assumption that annual compensation would have continued during such additional period, and with the Company to fully fund any supplemental pension obligations through a rabbi trust; and

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

If following a CIC a participant becomes entitled to payments that would trigger the golden parachute excise tax, or similar taxes (‘‘Excise Taxes’’), the Companywe will pay an additional amount, (acommonly called a ‘‘Gross-Up Payment’gross-up payment,’)’ so that the after-tax value of the participant's severanceparticipant’s payments and benefits under the ESP and other compensation paid by us would be the same as though no Excise Taxes applied (the Gross-Up Payment includes amounts offsettingexcise taxes applied. The gross-up payment would include the additional income taxes and other adverse tax effects to the participant resulting from our paying the Gross-Up Payment).gross-up payment. If, however, a limited reduction of severance payments or in the vesting of equity awards would avoid the Excise Taxes,golden parachute excise tax, then the severance amount or such vesting will be reduced in order to eliminate the need for a Gross-Up Payment. This reduction will be made, however,gross-up payment. We would reduce payments for this purpose only if itthe reduction would not exceed 10% of the amount of payments that could be received by the participant without triggering the Excise Taxes.excise tax.

Accelerated vesting of awards upon a CiC without regard to termination.The ESP provides for payments and benefits in the event of a participant's death, disability or retirement at or after age 62. In such case prior to a CIC, the participant will receive a prorated portion of the annual incentive and LTIP awards that would have become payable based on performance for the full year or multi-year performance period, and restricted stock and stock unit awards will become fully vested and settled (unless validly deferred). In the event of death, disability or retirement within two years after a CIC, the ESP provides that the participant would receive the same payout of annual incentive and LTIP awards and vesting of options and restricted stock and stock units as in the case of a termination by the Company not for cause, except that options will remain outstanding for no more than one year following death and three years following termination due to disability.

Under the ESP, a CIC is deemed to have occurred if:

(i) a person or group acquires Company securities and thereby becomes a beneficial owner of 40% or more of the voting power in the Company;

(ii) Board members as of September 1, 2000 and any new director (other than a person who became a director in a contested election) whose election or nomination was approved or recommended by at least two-thirds (2/3) of the directors who either were directors on September 1, 2000 or whose election or nomination was previously so approved or recommended, cease for any reason to constitute at least a majority of the Board;

(iii) immediately after a merger, consolidation, recapitalization, or reorganization of the Company, either new members constitute a majority of the board of the principal surviving entity or the voting securities of the Company outstanding immediately before the event do not represent at least 60% of the voting power in the principal surviving entity; or

(iv) the shareholders of the Company have approved a plan of complete liquidation and such liquidation has commenced, or a sale or disposition of all or substantially all of the Company's assets (or a similar transaction) has been consummated, with all material contingencies satisfied or waived.

Under the ESP, ‘‘good reason’’ means the occurrence of any of the following events, unless the participant has consented in writing to such event:

(i) a reduction in the participant's base salary as in effect before the CIC;

(ii) (a) the failure by the Company to continue any compensation or benefit plan in which the participant was a participant prior to the CIC, unless it is replaced by a comparable plan or it terminates due to its normal expiration, or (b) other Company actions or omissions that would materially adversely affect the participant's continued participation in such a plan;

(iii) an adverse change in the participant's position, level, authority and responsibilities or assignment of responsibilities materially inconsistent with the participant's position immediately prior to the CIC;

(iv) relocation of the participant more than 45 miles from the participant's office before the CIC; or

(v) the failure of a successor to assume the Company's obligations under the ESP.

However, good reason will exist only if the participant gives notice to the Company and the Company fails to correct its conduct within 30 days.

The ESP provides generally that, upon a CIC,CiC, options will become fully vested and exercisable, and forfeiture and deferral conditions and other restrictions on restricted stock and other equity awards will end, except to the extent waived by the employee.participant.

Death, disability or retirement.    The effectESP provides for payments and benefits upon death, disability or retirement at or after age 62. If one of these events occurs before a CICCiC, the participant or the participant’s estate will receive a prorated portion of the AIP and LTIP awards that would have become payable had he or she continued employment for the full performance period, based on performance-basedactual performance achieved. In this case, we do not alter the terms of stock options. If one of these events occurs, restricted stock and stock unit awards fully vest and are settled unless deferred. In addition, if one of these events occurs within two years after a CiC, the participant would receive the same AIP and LTIP awards and vesting conditions of equity awards is governed by the planas for a termination not for cause within two years after a CiC, except that options will remain outstanding for no more than one year following death and agreements relatingthree years following termin ation due to disability.

In addition to the specific award. Payments and benefitsamounts paid under the ESP, mayin the event of death, our named executive officers other than Mr. Martinez would be limitedentitled to payments under the Company’s Executive Death Benefit Plan as described in the Compensation Discussion and Analysis under the heading Executive Death Benefit Plan at page 47. In the event of disability, our named executive officers other than Mr. Martinez would be entitled to payments under the Company’s Disability Insurance Program that applies to salaried employees generally (60% of monthly salary up to a maximum of $15,000 per month).

Definitions of Key Terms under the ESP.    A CiC occurs if any of these events happen:

	•	A person or group acquires our stock and so becomes a beneficial owner of 40% or more of the voting power in IFF;

	•	Board members at September 1, 2000 (as well as generally any new director approved by at least two-thirds of the incumbent directors), cease to be at least a majority of the Board;

	•	Immediately following a merger, consolidation, recapitalization or reorganization of IFF, either new members constitute a majority of the Board of, or our voting securities outstanding before the event do not represent at least 60% of the voting power in, the surviving entity;

	•	Our shareholders approve a plan of complete liquidation and the liquidation commences, or a sale or disposition of substantially all of our assets (or similar transaction) is completed.

‘‘Good reason’’ means any of the following, unless the participant consents in writing to the event:

	•	A reduction in the participant’s base salary as in effect before the CiC;

	•	Our failure to continue a compensation or benefit plan for the participant, unless the plan is replaced by a comparable plan or it ends due to its normal expiration, or other action that materially adversely affects participation in one of these plans;

	•	A change in the participant’s position, level, authority or responsibilities in a way that adversely impacts the participant;

	•	Relocation of the participant’s work assignment by more than 45 miles; or

	•	The failure of a successor to assume our obligations under the ESP.

However, ‘‘good reason’’ will exist only if the participant can remain employed by a business unit that is sold or otherwise separated fromgives us notice and we fail to correct the Company prior to a CIC, if that business unit provides severance protections comparablematter within 30 days.

‘‘Cause’’ means an executive’s:

	•	Willful and continued failure to perform substantially his or her duties after demand for performance has been made;

	•	Willfully engaging in unauthorized conduct which is materially detrimental to us, including misconduct that results in material noncompliance with financial reporting requirements;

	•	Willfully engaging in illegal conduct or acts of serious dishonesty which materially adversely affects us.

Participant Obligations for the ESP.

Protection of Our Business.As a condition of the participant'sparticipant’s right to receive severance payments and benefits, the ESP requires that he or she not engage in competitioncompete with the Company,us, or induce customers, suppliers or others to curtail their business with the Companyus, or induce employees or others to terminate employment or service with the Company.us. These restrictions apply prior towhile a CIC both while the participant is employed before a CiC and forfollowing a termination of employment before a CiC during any post-termination period in which the participant is receiving severance payments.benefits. The ESP also conditions severance payments and benefits on the participant meeting commitments with respectrelating to confidentiality, cooperation in litigation and return toof our property. A ‘‘clawback’’ provision requires that a participant forfeit some of the Company of its property. Certain gains realized by the participant byfrom option exercises of options and settlements of other equity awards will be forfeited if he or shethe participant fails to meet the commitments described in this paragraph.these commitments.

SomeEffect of IRC Section 409A.    The timing of our payment of some payments and benefits may be limited or their timing alteredrestricted under Internal Revenue Code (the ‘‘Code’’) Section 409A, which regulates deferred compensation. In particular, someSome amounts payable to Tier Iany of our named executive officers or other participants in the ESP upon termination may be delayed until six months after termination.

Pension Plans

AllPayments and Benefits Upon a CiC and Various Types of Terminations.    The following table shows the estimated payments and value of benefits that we would provide to each of our named executive officers who are still employees of the Company in the event that the triggering events described in the heading of the table occurred on December 31, 2006. Although Mr. Dunsdon and Mr. Meany are eligible for early retirement under our U.S. Pension Plan, as described under Pension Benefits at page 63, none of our named executive officers is currently eligible for any additional benefits upon early retirement. The Company also does not provide any additional benefits to our named executive officers upon a voluntary resignation. Certain assumptions made for purposes of presenting this information and certain amounts not reflected in the table are explained below. For all cases, the per share market price of our common stock is assumed to be $49.16, the actual closing price per share on the last trading day of the year, December 29, 2006. In preparing the estimates in this table, we have assumed that any CiC would also constitute a ‘‘change in ownership and control’’ for purposes of the golden parachute excise tax rules. We have also assumed that any vesting and/or performance period under our annual and long term incentive plans that would occur at the end of our 2006 fiscal year would occur at the close of business on the last business day of the year, so that such vesting or performance period would have occurred immediately prior to the assumed time of termination. All amounts included in the table are stated in the aggregate, even if the payments will be made on a monthly basis.

The amounts set forth in the table below reflect the additional amounts of compensation that would be payable as a result of the indicated triggering event. Except as noted in footnote (7) of the table, these amounts do not include payments and benefits to the extent that are provided on a non-discriminatory basis to salaried employees generally upon termination of employment. The salary, Annual Incentive Plan award and Long-Term Incentive Plan award otherwise payable to each named executive officer through December 31, 2006 is included in the Summary Compensation Table are participants in the Company's Pension Plan, a defined benefit plan, under which the Company makes periodic payments computed on an actuarial basis providing for fixed benefits for members in the event of retirement on or after age 65 or on or after age 55 with at least 10 years of service. Unreduced benefits may also be payable in the event of retirement on or after age 62. Benefits under the Pension Plan are calculated with respect to a five-year average of participating employees' covered compensation (base salary or wage plus bonus), subject to an offset for amounts received as Social Security benefits for service after November 30, 1979. The table below indicates, for purposes of illustration, the approximate amounts of annual retirement income (subjectpage 51. In addition to the above Social Security offset and without taking into account any limitations under the Code) that would have been payable upon retirement at December 1, 2005 on a straight life basis, under various assumptions as to salary and years of service, to employees in higher salary classifications who participate in the Pension Plan, including the persons named above in the Summary Compensation Table. Messrs. Goldstein, Dunsdon, Howard, Wetmore and Mirzayantz currently have 6, 5, 10, 14 and 14 years of service, respectively, under the Pension Plan. To the extent that the amounts of annual retirement income exceed the maximum benefit and compensation limitations, including limitations under Section 415 and Section 401(a)(17) of the Code, such amounts are payable in the same form and manner under

the Company's unfunded Supplemental Retirement Plan (‘‘SRP’’). Mr. Goldstein, in addition to being a participant in the Company's Pension Plan and SRP, has a separate unfunded arrangement under the MOU providing for pension benefits, the amount of which is currently being finalized. See ‘‘Employment Contracts and Termination of Employment and Change-in-Control Arrangements’’ at page 20. Pursuant to a separate unfunded agreement entered into when Mr. Howard was hired by the Company, since Mr. Howard completed five years of service with the Company in 2005, he was credited with an additional five years of service. Mr. Mirzayantz, who has six years of service with the Company's French subsidiary and contributed to its retirement plans, will also be entitled to payments under those plans at the time of his retirement. Such amounts will be less than those set forth in the table below, in the event of a CiC, the aggregate balance held in the Company’s Deferred Compensati on Plan for each of our named executive officers who participate in that plan will be automatically accelerated and settled within five business days of the CiC, as opposed to the participant’s original deferral election. The amounts that would have been accelerated in the event of a CiC as well as, in all other cases, the amounts each of our named executive officers who participate in that plan would have received according the participant’s original deferral election, are shown in the Aggregate Balance at Fiscal Year-End column of the Non-Qualified Deferred Compensation Plan table at page 67. The timing and form of payments which may be made under that plan in events other than a CiC are described in the accompanying narrative to that table. The regular pension benefits that each of our named executive officers would receive under the normal terms of the Company’s U.S. Pension Plan and Supplemental Retirement Plan are shown in the Present Value of Accumulated Benefit Assuming Retirement A ge of 65 column of the Pension Benefits table at page 66. The timing and form of payments which may be made under these plans are described in the accompanying narrative to that table. The amounts shown in the table below as Incremental Non-Qualified Pension are explained in footnote 3 in the table presented below.

POTENTIAL PAYMENTS UPON TERMINATION AND CHANGE IN CONTROL

Average Compensation				Estimated annual pension for specified years of service
				5				10				15				20				25				30				35				40
$ 400,000				$	34,544			$	69,088			$	103,632			$	138,176			$	172,720			$	195,885			$	216,205			$	236,525
500,000					43,180				86,360				129,540				172,720				215,900				244,856				270,256				295,656
600,000					51,816				103,632				155,448				207,264				259,080				293,827				324,307				354,787
700,000					60,452				120,904				181,356				241,808				302,260				342,798				378,358				413,918
800,000					69,088				138,176				207,264				276,352				345,440				391,770				432,410				473,050
900,000					77,724				155,448				233,172				310,896				388,620				440,741				486,461				532,181
1,000,000					86,360				172,720				259,080				345,440				431,800				489,712				540,512				591,312
1,100,000					94,996				189,992				284,988				379,984				474,980				538,683				594,563				650,443
1,200,000					103,632				207,264				310,896				414,528				518,160				587,654				648,614				709,574
1,300,000					112,268				224,536				336,804				449,072				561,340				636,626				702,666				768,706
1,400,000					120,904				241,808				362,712				483,616				604,520				685,597				756,717				827,837
1,500,000					129,540				259,080				388,620				518,160				647,700				734,568				810,768				886,968
1,600,000					138,176				276,352				414,528				552,704				690,880				783,539				864,819				946,099
1,700,000					146,812				293,624				440,436				587,248				734,060				832,510				918,870				1,005,230
1,800,000					155,448				310,896				466,344				621,792				777,240				881,482				972,922				1,064,362
1,900,000					164,084				328,168				492,252				656,336				820,420				930,453				1,026,973				1,123,493
2,000,000					172,720				345,440				518,160				690,880				863,600				979,424				1,081,024				1,182,624
2,100,000					181,356				362,712				544,068				725,424				906,780				1,028,395				1,135,075				1,241,755
2,200,000					189,992				379,984				569,976				759,968				949,960				1,077,366				1,189,126				1,300,886
2,300,000					198,628				397,256				595,884				794,512				993,140				1,126,338				1,243,178				1,360,018
2,400,000					207,264				414,528				621,792				829,056				1,036,320				1,175,309				1,297,229				1,419,149
2,500,000					215,900				431,800				647,700				863,600				1,079,500				1,224,280				1,351,280				1,478,280
2,600,000					224,536				449,072				673,608				898,144				1,122,680				1,273,251				1,405,331				1,537,411
2,700,000					233,172				466,344				699,516				932,688				1,165,860				1,322,222				1,459,382				1,596,542
2,800,000					241,808				483,616				725,424				967,232				1,209,040				1,371,194				1,513,434				1,655,674
2,900,000					250,444				500,888				751,332				1,001,776				1,252,220				1,420,165				1,567,485				1,714,805
3,000,000					259,080				518,160				777,240				1,036,320				1,295,400				1,469,136				1,621,536				1,773,936
3,100,000					267,716				535,432				803,148				1,070,864				1,338,580				1,518,107				1,675,587				1,833,067
3,200,000					276,352				552,704				829,056				1,105,408				1,381,760				1,567,078				1,729,638				1,892,198
3,300,000					284,988				569,976				854,964				1,139,952				1,424,940				1,616,050				1,783,690				1,951,330
3,400,000					293,624				587,248				880,872				1,174,496				1,468,120				1,665,021				1,837,741				2,010,461
3,500,000					302,260				604,520				906,780				1,209,040				1,511,300				1,713,992				1,891,792				2,069,592
3,600,000					310,896				621,792				932,688				1,243,584				1,554,480				1,762,963				1,945,843				2,128,723
3,700,000					319,532				639,064				958,596				1,278,128				1,597,660				1,811,934				1,999,894				2,187,854
3,800,000					328,168				656,336				984,504				1,312,672				1,640,840				1,860,906				2,053,946				2,246,986
3,900,000					336,804				673,608				1,010,412				1,347,216				1,684,020				1,909,877				2,107,997				2,306,117

Following the acquisition by the Company of Bush Boake Allen Inc. (‘‘BBA’’) in November 2000, the Pension Plan for Eligible Employees of Bush Boake Allen Inc. was merged with the Company's Pension Plan as of December 31, 2000. Benefit accruals under the BBA Pension Plan were frozen as of that date. Benefit service for former BBA employees under the Company's Pension Plan starts as of December 1, 2000. Former BBA employees will receive a frozen accrued benefit under the BBA Pension Plan plus a benefit under the Company's Pension Plan for service after December 1, 2000. In addition to the benefit determined under the table above for service after December 1, 2000, Mr. Dunsdon, formerly an employee of BBA, is entitled, as of December 31, 2005 to an annual benefit of $8,676 based on his service

in the United States with BBA and an annual benefit of £81,761 ($141,446 as of December 31, 2005), based on his service in the United Kingdom with BBA.

Compensation Committee Interlocks

The members of the Compensation Committee during 2005 were Messrs. Georgescu, Martinez and Tansky.

Related Party Matters

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

The Company and Chromocell have entered into research agreements under which Chromocell is conducting a program to develop for the Company three distinct cell lines with related high throughput assays to assist the Company in creating new flavor ingredients. Through early 2006, Chromocell supplied two of the cell lines and assays to the Company and was paid $2 million therefor. The efficacy of the third and final cell line and assay is being considered by the parties. If deemed acceptable, it will result in an additional $1 million payment and bring to a close the current research agreements between the Company and Chromocell.

The Company and Chromocell have entered into a supply agreement under which the Company will have an exclusive right to use the cell lines and assays for the development of new flavor materials. The supply agreement is anticipated to have the Company pay Chromocell milestone payments and a running royalty on new products discovered using Chromocell technology.

In a separate agreement dated June 15, 2004, the Company and Chromocell entered into a Convertible Promissory Note. The Company loaned Chromocell $2 million at an annual interest rate of 6%, with principal and interest payable on December 31, 2007. The Company has the right, but not the obligation, to convert the debt into equity upon the occurrence of certain specified events.

REPORT OF THE AUDIT COMMITTEE

The Audit Committee (the ‘‘Committee’’) oversees IFF’s financial reporting process on behalf of the Board of Directors. Management is responsible for the preparation, presentation and integrity of the Company's financial statements, accounting and financial reporting principles, internal controls and procedures designed to ensure compliance with accounting standards, applicable laws and regulations. The Company's independent registered public accounting firm, PricewaterhouseCoopers LLP (‘‘PwC’’), annually performs an independent audit of the consolidated financial statements and of the internal control over financial reporting. PwC expresses an opinion on the conformity of those financial statements with generally accepted accounting principles and the effectiveness of the Company’s internal control over financial reporting. In addition, PwC conducts quarterly reviews of the Company’s financial statements.

The Committee reviews with PwC the scope of its services, the results of its audits and reviews, its evaluation of the Company's internal controls, and the overall quality of the Company's financial reporting. The Committee meets regularly with PwC, and separately with the Company’s Director of Internal Audit, without Company management present. The Committee also meets regularly with Company management without PwC present, and discusses management’s evaluation of PwC’s performance.

With respect to 2005, the Committee has reviewed and discussed the Company's audited financial statements with management and PwC. The Committee has reviewed and discussed with management its process for preparing its report on its assessment of the Company's internal control over financial reporting, and at regular intervals received updates on the status of this process and actions taken by management to respond to issues and deficiencies identified. The Committee discussed with PwC its audit of internal control over financial reporting and its attestation report on management's assessment of the effectiveness of internal control over financial reporting. The Committee discussed with PwC and the Director of Internal Audit the overall scope and plans for their respective audits.

The Committee has reviewed with PwC the quality of the Company's financial reporting and such other matters as are required to be discussed with the Committee under generally accepted auditing standards, including those described in Statement of Auditing Standards (SAS) No. 61 (Communication with Audit Committees), as amended by SAS 90 (Audit Committee Communications). Additionally, the Committee received from PwC written disclosures and the letter regarding its independence as required by Independence Standards Board Standard No. 1 (Independence Discussions with Audit Committees), describing all relationships between PwC and the Company that might bear on PwC's independence from management and the Company, and discussed this information with PwC; thereafter the Committee concluded that the independence of PwC was not compromised by the provision of non-audit services, the majority of which consisted of routine tax services.

In reliance on the reviews and discussions referred to above, the Committee recommended to the Board (and the Board subsequently approved the recommendation) that the audited financial statements be included in the Annual Report on Form 10-K for the year ended December 31, 2005 for filing with the SEC. The Committee also evaluated and selected PwC as the Company's independent auditors for 2006, subject to shareholder ratification.

Audit Committee

J. Michael Cook, Chairman Margaret Hayes Adame Henry W. Howell, Jr. Arthur C. Martinez

Name			Benefit			Involuntary Termination Not for Cause Prior to or More Than 2 Years After a Change in Control						Death Prior to or More Than 2 Years After a Change in Control						Separation Due to Disability Prior to or More Than 2 Years After a Change in Control						Involuntary or Good Reason Termination Within 2 Years After a Change in Control						Death Within 2 Years After a Change in Control						Separation Due to Disability Within 2 Years After a Change in Control
Robert M. Amen			Salary				$	2,000,000					$	—					$	—					$	3,000,000					$	—					$	—
			Annual Incentive Plan					2,400,000						—						—						3,600,000						—						—
			Long-Term Incentive Plan (1)					—						1,000,000						1,000,000						1,000,000						1,000,000						1,000,000
			Equity Award Acceleration (2)					—						4,969,068						2,091,856						4,969,068						4,969,068						4,969,068
			Incremental Non-Qualified Pension (3)					—						—						—						—						—						—
			Medical Benefits (4)					42,464						—						—						63,696						—						—
			Executive Death Benefit Proceeds (5)					—						2,000,000						—						—						2,000,000						—
			Executive Death Benefit Premium (6)					91,638						—						—						91,638						—						—
			Disability Insurance Proceeds (7)					—						—						180,000						—						—						180,000
			Excise Tax and Tax Gross-up (8)					—						—						—					$	5,896,607						—						—
			Total					4,534,102						7,969,068						3,271,856						18,621,009						7,969,068						6,149,068
Douglas J. Wetmore			Salary				$	926,000					$	—					$	—					$	1,389,000					$	—					$	—
			Annual Incentive Plan					308,011						—						—						833,400						—						—
			Long-Term Incentive Plan (1)					—						277,800						277,800						277,800						277,800						277,800
			Equity Award Acceleration (2)					—						2,722,530						2,722,530						2,722,530						2,722,530						2,722,530
			Incremental Non-Qualified Pension (3)					—						—						—						396,160						—						—
			Medical Benefits (4)					42,464						—						—						63,696						—						—
			Executive Death Benefit Proceeds (5)					—						926,000						—						—						926,000						—
			Executive Death Benefit Premium (6)					12,420						—						—						12,420						—						—
			Disability Insurance Proceeds (7)					—						—						180,000						—						—						180,000
			Excise Tax and Tax Gross-up (8)					—						—						—					$	1,787,669						—						—
			Total					1,288,895						3,926,330						3,180,330						7,482,674						3,926,330						3,180,330

PERFORMANCE GRAPH*

International Flavors & Fragrances Inc.

Total Cumulative Shareholder Return for Five-Year Period Ending December 31, 2005 (1)

Annual Return Percentage

	December 31					2000				2001				2002				2003				2004				2005
	International Flavors & Fragrances					100.00				49.69				20.27				1.42				24.89				-20.21
	S&P 500 Index					100.00				-11.89				-22.10				28.68				10.88				4.91
	Peer Group					100.00				-6.98				-2.17				16.60				8.71				4.43

Name			Benefit			Involuntary Termination Not for Cause Prior to or More Than 2 Years After a Change in Control						Death Prior to or More Than 2 Years After a Change in Control						Separation Due to Disability Prior to or More Than 2 Years After a Change in Control						Involuntary or Good Reason Termination Within 2 Years After a Change in Control						Death Within 2 Years After a Change in Control						Separation Due to Disability Within 2 Years After a Change in Control
James H. Dunsdon			Salary				$	1,200,000					$	—					$	—					$	1,800,000					$	—					$	—
			Annual Incentive Plan					559,550						—						—						1,620,000						—						—
			Long-Term Incentive Plan (1)					—						436,000						436,000						436,000						436,000						436,000
			Equity Award Acceleration (2)					—						2,847,200						2,847,200						2,847,200						2,847,200						2,847,200
			Incremental Non-Qualified Pension (3)					—						—						—						1,176,246						—						—
			Medical Benefits (4)					21,138						—						—						31,707						—
			Executive Death Benefit Proceeds (5)					—						1,200,000						—						—						1,200,000						—
			Executive Death Benefit Premium (6)					28,242						—						—						28,242						—						—
			Disability Insurance Proceeds (7)					—						—						180,000						—						—						180,000
			Excise Tax and Tax Gross-up (8)					—						—						—					$	3,553,475						—						—
			Total					1,808,930	(9)					4,483,200						3,463,200						11,492,870	(9)					4,483,200						3,463,200
Nicolas Mirzayantz			Salary				$	800,000					$	—					$	—					$	1,200,000					$	—					$	—
			Annual Incentive Plan					368,866						—						—						720,000						—						—
			Long-Term Incentive Plan (1)					—						240,000						240,000						240,000						240,000						240,000
			Equity Award Acceleration (2)					—						1,913,673						1,584,673						1,913,673						1,584,673						1,584,673
			Incremental Non-Qualified Pension (3)					—						—						—						283,857						—						—
			Medical Benefits (4)					42,464						—						—						63,696						—						—
			Executive Death Benefit Proceeds (5)					—						800,000						—						—						800,000						—
			Executive Death Benefit Premium (6)					5,914						—						—						5,914						—						—
			Disability Insurance Proceeds (7)					—						—						180,000						—						—						180,000
			Excise Tax and Tax Gross-up (8)					—						—						—					$	1,111,560						—						—
			Total					1,217,244						2,953,673						2,004,673						5,538,699						2,624,673						2,004,673
Dennis M. Meany			Salary				$	800,000					$	—					$	—					$	1,200,000					$	—					$	—
			Annual Incentive Plan					246,940						—						—						720,000						—						—
			Long-Term Incentive Plan (1)					—						218,000						218,000						218,000						218,000						218,000
			Equity Award Acceleration (2)					—						1,622,477						1,622,477						1,622,477						1,622,477						1,622,477
			Incremental Non-Qualified Pension (3)					—						—						—						631,263						—						—
			Medical Benefits (4)					21,138						—						—						31,707						—						—
			Executive Death Benefit Proceeds (5)					—						800,000						—						—						800,000						—
			Executive Death Benefit Premium (6)					16,459						—						—						16,459						—						—
			Disability Insurance Proceeds (7)					—						—						180,000						—						—						180,000
			Excise Tax and Tax Gross-up (8)					—						—						—					$	1,875,826						—						—
			Total					1,084,537	(9)					2,640,477						2,020,477						6,315,732	(9)					2,640,477						2,020,477

(1)

Total Cumulative Shareholder Return assumesThe amounts in this row are the additional LTIP amounts that would be payable as severance, which, with respect to the value of an investment2006-2008 LTIP cycle, would be paid 50% in the Company's Common Stockcash and each index was $10050% in stock. If death or disability does not take place within two years after a CiC, then this amount is based on December 31, 2000, and that all dividends were reinvested.actual performance. If death or disability takes place within two years after a CiC, then this amount is based on target LTIP.

(2)

The companiesamounts in this row would be payable upon a CiC, even if the executive’s employment is not terminated. The amounts in this row represent the aggregate in-the-money value of the options, SSARs, RSUs and other equity awards which would become vested as a direct result of the CiC before the stated vesting date specified in the Peer Group are Alberto-Culver Company, Avon Products, Inc., Campbell Soup Company, Church & Dwight Co., Inc.,applicable equity award document. The Clorox Company, The Coca-Cola Company, Colgate-Palmolive Company, ConAgra Foods, Inc., The Estee Lauder Companies Inc., General Mills, Inc., H.J. Heinz Company, Hershey Foods Corporation, Hormel Foods Corporation, Kellogg Company, McCormick & Company, Incorporated, McDonald's Corporation, Nestle S.A., PepsiCo, Inc., The Procter & Gamble Company, Revlon, Inc., Sara Lee Corporation, Sensient Technologies Corp., Unilever N.V., Wm. Wrigley Jr. Companystated vesting date in the equity award document is the date at which an award would have been vested if there were not a CiC and Yum! Brands, Inc. Due to the international scope and breadth of its business, the Company believes that a Peer Group comprised of international public companies which are representativeif there were not any termination of the customer groupexecutive’s employment. The calculation of these amounts does not attribute any additional value to which it sells its products, with market capitalizations ranging from approximately $842 millionoptions based on their remaining exercise term and does not discount the value of awards based on the portion of the vesting period elapsed at the date o f the CiC. These amounts also do not include any value for equity awards that, by their terms, are not accelerated and continue to approximately $190 billion, is the most appropriate group against which to compare shareholder returns. The Dial Corporation has been eliminated from the Peer Group due to its acquisition by Henkel KGAA in April 2004 and The Gillette Company has been eliminated from the Peer Group due to its acquisition by Procter & Gamble in November 2005.vest.

(3)	The amounts in this row represent the incremental increase in the present value of the executive’s pension benefit reflecting an additional 3 years of age and credited service under our Supplemental Retirement Plan. The incremental increase also reflects the value of subsidized early commencement of pension benefits under our Supplemental Retirement Plan prior to age 62 for those named executive officers who would have at least 10 years of service after crediting the additional 3 years of service. All the named executive officers who participate in the Supplemental Retirement Plan would have at least 10 years of service after a CiC. The amounts in this row would be payable upon termination in a lump sum amount. In addition, the Company may elect to pay the execut ive other benefits accrued under the Supplemental Retirement Plan in a lump sum amount upon termination of employment. Information regarding the pension benefits accrued under that plan is included in the Pension Benefits Table at page 66.

*(4)	Amounts in this row are the COBRA costs of medical and dental benefits for the covered period based on assumptions used for financial reporting purposes. Although our medical and dental insurance is generally available to our employees, only participants in our ESP, including our named executive officers, would be entitled to have the benefits paid by the Company.

(5)	The amounts in this row are the amounts that would be payable under our Executive Death Benefit Plan upon the death of the named executive officer.

(6)	The amounts in this row are the total dollar value of the additional premiums that would be payable to continue the Executive Death Benefit Plan for the named executive officer.

(7)	The amounts in this row are the amounts that would be payable under our disability insurance program upon the long-term disability of the named executive officer. This program is generally available to salaried employees.

(8)

This Comparisonamount represents the payment of Five Year Cumulative Total Return shalla ‘‘gross-up’’ to offset the estimated amount of the golden parachute excise tax that would apply to each executive and the amount of additional income and other taxes payable by the executive as a result of the gross-up payment. For purposes of computing this ‘‘gross-up’’ we include the present value of all accelerated equity awards. We would not be deemed incorporated by reference by any general statement incorporating by referenceentitled to claim tax deductions for a portion of the compensation paid in this proxy statement into any filingcircumstance; we estimate our federal income tax payable on the non-deductible portion of compensation to these executive officers would be, in the aggregate, $12,118,429.

(9)

In addition to this amount, since each of Mr. Dunsdon and Mr. Meany were 59 at December 31, 2006 and have more than ten years of service, they are each eligible for early retirement at a reduced benefit. The present value of accumulated benefits that would have been payable if they had retired at December 31, 2006 (including the frozen accumulated benefits under the Securities Act orBBA Plan and using the Securities Exchange Act, except tosame valuation method and material assumptions as under the extent that2006 Pension Benefits Table at page 66) is as follows: Mr. Dunsdon – $3,437,052 (including $310,849 under the Company specifically incorporates this information by reference,IFF Pension Plan, $365,119 under the Supplemental Retirement Plan and shall not otherwise be deemed filed$2,761,084 under either of such Acts.the BBA UK Pension Scheme) and Mr. Meany – $938,729 (including $792,737 under the IFF Pension Plan and $145,992 under the Supplemental Reti rement Plan). Additional details regarding our pension benefits is included under the heading Pension Benefits at page 63.

ITEM 2. RATIFICATION OF SELECTION OF INDEPENDENT ACCOUNTANT

The Audit Committee has selected PricewaterhouseCoopers LLPtable above should be understood to be the Company's Independent Accountant for 2006provide only estimates of amounts payable and the Boardvalue of Directors has directed that management submitbenefits under our existing plan and in the selection of Independent Accountant for ratificationcircumstances shown. The payments and benefits actually provided will be affected by the Company's shareholderstime of year at which any CiC occurs, the form and amount of consideration payable in the CiC and the market price of our stock at the 2006 Annual Meeting. Representatives of PricewaterhouseCoopers LLP are expected to be present at the 2006 Annual Meeting with the opportunity to make a statement if they desire to do so and are expected to be available to respond to appropriate questions.

Shareholder ratificationtime of the selectionCiC, the timing of PricewaterhouseCoopers LLP as the Company's Independent Accountant is not requiredany termination of employment, and many other factors. Payments and benefits are governed by the Company's By-laws or otherwise. However,terms of our plans and contracts with employees, which may be subject to interpretation, and the Board is submittingapplication of tax laws to these arrangements may vary from what we have anticipated, which can affect the selection of PricewaterhouseCoopers LLP to shareholders for ratification as a matter of good corporate governance. If shareholders fail to ratifyamounts we owe. In addition, our Compensa tion Committee may change such payments and benefits at any time.

Other Separation Arrangements

Mr. Amen

Details regarding Mr. Amen’s employment agreement dated June 28, 2006 are included in the selection, the Audit Committee will reconsider whether or not to retain that firm. Except as stated below (See ‘‘Other Matters’’Compensation Discussion & Analysis at page 31)48. In addition, under the terms of his employment agreement, Mr. Amen is entitled to certain payments upon termination. If Mr. Amen’s employment is terminated by us without ‘‘cause’’ or by Mr. Amen for ‘‘good reason’’, the shares of Common Stock represented by the proxies being solicitedMr. Amen will be voted FORentitled to (i) any unpaid base salary through the ratificationdate of the selection of PricewaterhouseCoopers LLP as the Company's Independent Accountant for 2006.

Principal Accountant Feestermination and Services

Aggregate fees for professional services rendered for the Company by PricewaterhouseCoopers LLP as of or for the years ended December 31, 2005 and 2004 were:

				2005				2004
Audit Fees				$	3,197,000			$	3,902,800
Audit-Related Fees				$	217,500			$	592,000
Tax Fees				$	2,366,700			$	1,703,700
All Other Fees				$	32,500			$	52,100
Total				$	5,813,700			$	6,250,600

The Audit Fees for the years ended December 31, 2005 and 2004, respectively, were for professional services rendered for the audits of the consolidated financial statements of the Company and statutory and subsidiary audits, consents and assistance with review of reports filed with the SEC. Each year included the fees associated with an annual audit of the Company's internal control over financial reporting, as required by Section 404 of the Sarbanes-Oxley Act of 2002, integrated with the audit of the Company's annual financial statements.

The Audit-Related Fees for the years ended December 31, 2005 and 2004, respectively, were for assurance and related servicesany accrued but unused vacation; (ii) any unpaid bonus earned with respect to employeeany year ending on or before the date of termination; (iii) reimbursement for any business expenses incurred ; (iv) al l other payments, benefits or perquisites to which he may be entitled; (v) a prorated AIP bonus for the year of termination; and (vi) severance benefits under our ESP. The severance benefits would be two times the sum of (1) Mr. Amen’s base salary and (2) his average AIP bonus (or his target bonus if termination had occurred in 2006). The severance amount is payable in equal monthly installments over 24 months. He would also receive a prorated AIP bonus for the year of termination. He would also continue participation for two years in all welfare benefit plan audits, accounting consultationsplans subject to any premium contribution or co-pay obligation. If Mr. Amen obtains other employment that offers comparable welfare benefits, then the benefit coverage would be reduced by those comparable benefits.

In the event the Company terminates his employment without ‘‘cause’’ or Mr. Amen terminates for ‘‘good reason’’ in contemplation of or within two years after a CiC, the severance multiplier would be ‘‘three times’’ rather than ‘‘two times,’’ and auditsthe welfare benefits would continue for three years rather than two years.

To receive the severance payments, Mr. Amen must comply with the restrictive covenants described below, deliver to the Company an executed general release, and resign from all offices, directorships and fiduciary positions with the Company.

Mr. Amen is subject to covenants regarding non-competition, non-solicitation, confidentiality, cooperation and non-disparagement. If Mr. Amen’s employment terminates prior to a CiC and he fails to comply with the covenants (either during his employment or for a period of two years after his termination), the unexercised portion of any vested or unvested option or SAR and any other award not then vested, is forfeited, no further severance will be paid, and he may be subject to a claw-back of any paid severance and certain other amounts.

Mr. Goldstein

On April 3, 2006 we entered into a retirement agreement with Mr. Goldstein in connection with specific transactions, information technology controlhis retirement. Details regarding Mr. Goldstein’s agreement are included in the Compensation Discussion & Analysis at page 47. Payments made or accrued to Mr. Goldstein under the agreement are reported under footnote 10 and security reviews, attest servicesfootnote 5 to the Summary Compensation Table at page 51. Those amounts do not reflect the following additional payments to which Mr. Goldstein is entitled under his retirement agreement: (i) Mr. Goldstein’s award under the 2005-2007 Long Term Incentive Plan cycle, which he will be entitled to receive if the performance goals are achieved for that cycle and, which will be pro-rated based on the nu mber of days Mr. Goldstein worked during the period; (ii) Mr. Goldstein’s unexercised option and unvested RSU awards granted in previous years, which will remain outstanding or vest according to the terms of the original agreements under which those awards were granted and (iii) the future cost to the

Company of providing retiree life insurance. Under the terms of his retirement agreement, Mr. Goldstein is entitled to be covered by retiree life insurance coverage with death benefits equal to $1,150,000. The 2006 premium for this coverage is included in the All Other Compensation Table at page 54. Mr. Goldstein is also entitled to receive his accrued benefits under the U.S. Pension Plan and Supplemental Retirement Plan reflected in column (d2) of the Pension Benefits table at page 66 and is entitled to the distribution of his accrued benefits under the DCP, as reflected in column (f) of the Nonqualified Deferred Compensation table at page 67.

Under the terms of the agreement, Mr. Goldstein is subject to non-competition and non-solicitation restrictions for one year from his retirement date. Mr. Goldstein also is subject to confidentiality, non-disparagement and cooperation in litigation clauses under the agreement, which are not requiredlimited in duration. In the event that Mr. Goldstein fails to comply with any of these commitments, the Company will have no obligation to make payments or provide benefits to Mr. Goldstein under the agreement and he could be subject to a ‘‘claw-back,’’ including cancellation of his right to exercise any outstanding option and any other award not then vested and an obligation to repay the Company: (i) any cash paymen ts made to him under the agreement (other than his annual salary, incentive compensation and benefits which had been earned or were payable as of his retirement date, unreimbursed business expenses and cash payments under welfare benefit plans); (ii) cash amounts paid to Mr. Goldstein under any AIP and LTIP awards since the date two years prior to his retirement date; and (iii) the gain recognized by statuteMr. Goldstein on any option exercise or regulation and consultations concerning financial accounting and reporting standards.

Tax Fees forsettlement of a RSU award since the date two years ended December 31, 2005 and 2004, respectively, were for services relatedprior to tax compliance, including the preparation of tax returns and claims for refund; and tax planning and tax advice, including assistance with and representation in tax audits and appeals, tax services for employee benefit plans and expatriate tax compliance services.his retirement date.

Mr.	Martinez

All Other Fees for the years ended December 31, 2005 and 2004, respectively, were for software license fees and other professional services.

Audit Committee Pre-Approval Policies and Procedures

The Audit Committee has adopted a formal policy concerning the pre-approval of audit and non-audit services to be providedDetails regarding payments made by the Independent AccountantCompany to Mr. Martinez for his service as the Company. The policy requires that all services to be performed by PricewaterhouseCoopers LLP, the Company's Independent Accountant, including audit services, audit-related services and permitted non-audit services, be pre-approved by the Audit Committee. Specific services being provided by the Independent Accountant

Company’s Interim CEO from May 9, 2006 until June 30, 2006 are regularly reviewed in accordance with the pre-approval policy. At subsequent Audit Committee meetings, the Committee receives updates on services being provided by the Independent Accountant, and management may present additional services for approval. All services rendered by PricewaterhouseCoopers LLP to the Company are permissible under applicable laws and regulations. During 2005, all services performed by PricewaterhouseCoopers LLP were approved in advance by the Audit Committee in accordance with the pre-approval policy.

Shareholder Proposals

Any shareholder proposal intended to be presented at the next annual meeting of shareholders must be received by the Secretary of the Company for inclusionincluded in the Company's proxy statement, notice of meetingCompensation Discussion & Analysis at page 48. Mr. Martinez was not and form of proxy with respect to that meeting by November 24, 2006. Section 3 of the By-laws of the Company provides that in order for a shareholder to submit a proposal or to nominate any director at an annual meeting of shareholders, the shareholder must satisfy the provisions of the By-laws, including giving written notice to the Secretary of the Company not less than 60 days nor more than 90 days prior to the anniversary date of the immediately preceding annual meeting of shareholders. The notice must contain specified information about the proposed business or candidate and the shareholder making the proposal. If the annual meeting is called for a date that is not within 30 days before or after such anniversary date,eligible to participate in the notice given by the shareholder must be received not later than the close of business on the tenth day following the day on which the notice of the date of such annual meeting was mailed or public disclosure of the date of such annual meeting was made, whichever first occurs.Company’s ESP.

Section 16(a) Beneficial Ownership Reporting Compliance

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

OTHER MATTERS

As of the date of this proxy statementProxy Statement, we do not know of any matters to be presented at the Board is not aware that any matters2007 Annual Meeting other than those specified above are to be presented for action at the 2006 Annual Meeting.described in this Proxy Statement. If any other matters should properly come before the meeting, proxies in the enclosed form will be voted on suchthose matters in accordance with the judgment of the person or persons voting the proxies, unless otherwise specified.

APPENDIX A

NOTE: Pursuant to Instruction 3 of Item 10 of Schedule 14A of the Securities Exchange Act of 1934, the following written plan document, which is not being mailed to shareholders with the Proxy Statement and shall not be deemed to be proxy soliciting materials or to form a part of the Proxy Statement, is being filed in electronic format as an appendix to this proxy statement filing.

INTERNATIONAL FLAVORS & FRAGRANCES INC.

2000 Stock Award and Incentive Plan
As Amended and Restated March 6, 2007

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INTERNATIONAL FLAVORS & FRAGRANCES INC.

2000 Stock Award and Incentive Plan
As Amended and Restated March 6, 2007

						Page
1.			Purpose					1
2.			Definitions					1
3.			Administration					3
4.			Stock Subject to Plan					4
5.			Eligibility; Per-Person Award Limitations					5
6.			Specific Terms of Awards					6
7.			Performance Awards, Including Annual Incentive Awards					10
8.			Certain Provisions Applicable to Awards					14
9.			Change in Control					15
10.			Additional Award Forfeiture Provisions					18
11.			General Provisions					20

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INTERNATIONAL FLAVORS & FRAGRANCES INC.

2000 Stock Award and Incentive Plan
As Amended and Restated March 6, 2007

1.    Purpose.    The purpose of this 2000 Stock Award and Incentive Plan (the ‘‘Plan’’) is to aid International Flavors & Fragrances Inc., a New York corporation (the ‘‘Company’’), in attracting, retaining, motivating and rewarding employees, non-employee directors, and other persons who provide substantial services to the Company or its subsidiaries or affiliates, to provide for equitable and competitive compensation opportunities, to recognize individual contributions and reward achievement of Company goals, and promote the creation of long-term value for shareholders by closely aligning the interests of Participants with those of shareholders. The Plan authorizes stock-based and cash-based incentives for Participants.

2.    Definitions.    In addition to the terms defined in Section 1 above and elsewhere in the Plan, the following capitalized terms used in the Plan have the respective meanings set forth in this Section:

(a)    ‘‘Annual Incentive Award’’ means a type of Performance Award granted to a Participant under Section 7(c) representing a conditional right to receive cash, Stock or other Awards or payments, as determined by the Committee, based on performance in a performance period of one fiscal year or a portion thereof.

(b)    ‘‘Award’’ means any cash award, Option, SAR, Restricted Stock, Deferred Stock, Stock granted as a bonus or in lieu of another award, Dividend Equivalent, Other Stock-Based Award, Performance Award or Annual Incentive Award, together with any related right or interest, granted to a Participant under the Plan.

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

(d)    ‘‘Board’’ means the Company’s Board of Directors.

(e)    ‘‘Change in Control’’ and related terms have the meanings specified in Section 9.

(f)    ‘‘Code’’ means the Internal Revenue Code of 1986, as amended. References to any provision of the Code or regulation (including a proposed regulation) thereunder shall include any successor provisions and regulations.

(g)    ‘‘Committee’’ means a committee of two or more directors designated by the Board to administer the Plan; provided, however, that, directors appointed or serving as members of a Board committee designated as the Committee shall not be employees of the Company or any subsidiary or affiliate. In appointing members of the Committee, the Board will consider whether a member is or will be a Qualified Member, but such members are not required to be Qualified Members at the time of appointment or during their term of service on the Committee. The full Board may perform any function of the Committee hereunder, in which case the term ‘‘Committee’’ shall refer to the Board.

(h)     ‘‘Covered Employee’’ means an Eligible Person who is a Covered Employee as specified in Section 11(j).

(i)    ‘‘Deferred Stock’’ means a right, granted to a Participant under Section 6(e), to receive Stock or other Awards or a combination thereof at the end of a specified deferral period.

(j)    ‘‘Dividend Equivalent’’ means a right, granted to a Participant under Section 6(g), to receive cash, Stock, other Awards or other property equal in value to all or a specified portion of the dividends paid with respect to a specified number of shares of Stock.

(k)    ‘‘Effective Date’’ means the effective date specified in Section 11(p).

(l)    ‘‘Eligible Person’’ has the meaning specified in Section 5.

(m)    ‘‘Exchange Act’’ means the Securities Exchange Act of 1934, as amended. References to any provision of the Exchange Act or rule (including a proposed rule) thereunder shall include any successor provisions and rules.

(n)    ‘‘Fair Market Value’’ means the fair market value of Stock, Awards or other property as determined by the Committee or under procedures established by the Committee. Unless otherwise determined by the Committee, the Fair Market Value of Stock shall be the closing sale price reported on the composite tape of the New York Stock Exchange on the day as of which such value is being determined or, if there is no sale on that day, then on the last previous day on which a sale was reported.

(o)    ‘‘Incentive Stock Option’’ or ‘‘ISO’’ means any Option designated as an incentive stock option within the meaning of Code Section 422 or any successor provision thereto and qualifying thereunder.

(p)    ‘‘Option’’ means a right, granted to a Participant under Section 6(b), to purchase Stock or other Awards at a specified price during specified time periods.

(q)    ‘‘Other Stock-Based Awards’’ means Awards granted to a Participant under Section 6(h).

(r)    ‘‘Participant’’ means a person who has been granted an Award under the Plan which remains outstanding, including a person who is no longer an Eligible Person.

(s)    ‘‘Performance Award’’ means a conditional right, granted to a Participant under Sections 6(i) and 7, to receive cash, Stock or other Awards or payments, as determined by the Committee, based upon performance criteria specified by the Committee.

(t)    ‘‘Qualified Member’’ means a member of the Committee who is a ‘‘Non-Employee Director’’ within the meaning of Rule 16b-3(b)(3) and an ‘‘outside director’’ within the meaning of Regulation 1.162-27 under Code Section 162(m).

(u)    ‘‘Restricted Stock’’ means Stock granted to a Participant under Section 6(d) which is subject to certain restrictions and to a risk of forfeiture.

(v)    ‘‘Rule 16b-3’’ means Rule 16b-3, as from time to time in effect and applicable to Participants, promulgated by the Securities and Exchange Commission under Section 16 of the Exchange Act.

(w)    ‘‘Stock’’ means the Company’s Common Stock, and any other equity securities of the Company that may be substituted or resubstituted for Stock pursuant to Section 11(c).

(x)    ‘‘Stock Appreciation Rights’’ or ‘‘SAR’’ means a right granted to a Participant under Section 6(c).

3.    Administration.

(a)    Authority of the Committee.    The Plan shall be administered by the Committee, which shall have full and final authority, in each case subject to and consistent with the provisions of the Plan, to select Eligible Persons to become Participants; to grant Awards; to determine the type and number of Awards, the dates on which Awards may be exercised and on which the risk of forfeiture or deferral period relating to Awards shall lapse or terminate, the acceleration of any such dates, the expiration date of any Award, whether, to what extent, and under what circumstances an Award may be settled, or the exercise price of an Awar d may be paid, in cash, Stock, other Awards, or other property, and other terms and conditions of, and all other matters relating to, Awards; to prescribe documents evidencing or setting terms of Awards (such Award documents need not be identical for each Participant), amendments thereto, and rules and regulations for the administration of the Plan and amendments thereto; to construe and interpret

the Plan and Award documents and correct defects, supply omissions or reconcile inconsistencies therein; and to make all other decisions and determinations as the Committee may deem necessary or advisable for the administration of the Plan. Decisions of the Committee with respect to the administration and interpretation of the Plan shall be final, conclusive, and binding upon all persons interested in the Plan, including Participants, Beneficiaries, transferees under Section 11(b) and other persons claiming rights from or through a Participant, and shareholders. The foregoing notwithstanding, the Board shall perform the functions of the Committee for purposes of granting Awards under the Plan to non-employee directors (authority with respect to other aspects of non-employee director awards is not exclusive to the Board, however).

(b)    Manner of Exercise of Committee Authority.    At any time that a member of the Committee is not a Qualified Member, (i) any action of the Committee relating to an Award intended by the Committee to qualify as ‘‘performance-based compensation’’ within the meaning of Code Section 162(m) and regulations thereunder may be taken by a subcommittee, designated by the Committee or the Board, composed solely of two or more Qualified Members, and (ii) any action relating to an Award granted or to be granted to a Participant who is then subject to Section 16 of the Exchange Act in respect of the Company may be taken either by such a subcommittee or by the Committee but with each such member who is not a Qualified Member abstaining or recusing himself or herself from such action, provided that, upon such abstention or recusal, the Committee remains composed of two or more Qualified Members. Such action, authorized by such a subcommittee or by the Committee upon the abstention or recusal of such non-Qualified Member(s), shall be the action of the Committee for purposes of the Plan. The express grant of any specific power to the Committee, and the taking of any action by the Committee, shall not be construed as limiting any power or authority of the Committee. The Committee may delegate to officers or managers of the Company or any subsidiary or affiliate, or committees thereof, the authority, subject to such terms as the Committee shall determine, to perform such functions, including administrative functions, as the Committee may determine, to the extent that such delegation will not result in the loss of an exempti on under Rule 16b-3(d) for Awards granted to Participants subject to Section 16 of the Exchange Act in respect of the Company and will not cause Awards intended to qualify as ‘‘performance-based compensation’’ under Code Section 162(m) to fail to so qualify.

(c)    Limitation of Liability.    The Committee and each member thereof, and any person acting pursuant to authority delegated by the Committee, shall be entitled, in good faith, to rely or act upon any report or other information furnished by any executive officer, other officer or employee of the Company or a subsidiary or affiliate, the Company’s independent auditors, consultants or any other agents assisting in the administration of the Plan. Members of the Committee, any person acting pursuant to authority delegated by the Committee, and any officer or employee of the Company or a subsidiary or affiliate acting at the direction or on behalf of the Committee or a delegee shall not be personally liable for any action or determination taken or made in good faith with respect to the Plan, and shall, to the extent permitted by law, be fully indemnified and protected by the Company with respect to any such action or determination.

4.    Stock Subject to Plan.

(a)     Overall Number of Shares Available for Delivery.    Subject to adjustment as provided in Section 11(c), the total number of shares of Stock reserved and available for delivery in connection with Awards under the Plan shall be 9,000,000 shares plus the number of shares reserved for options under the Company’s 1997 Employee Stock Option Plan (the ‘‘1997 Plan’’) but which have not been issued and delivered under the 1997 Plan, including such 1997 Plan shares as may become available in accordance with Section 4(b) hereof; provided, however, that the Board's recommendations, executed proxies returnedtotal number of shares with respect to which ISO s may be granted shall not exceed 9,000,000; and provided further, that the total number of shares which may be issued and delivered in connection with Awards other than Options and SARs shall not exceed 2,700,000. Any shares of Stock delivered under the Plan shall consist of authorized and unissued shares or treasury shares.

(b)     Share Counting Rules.    The Committee may adopt reasonable counting procedures to ensure appropriate counting, avoid double counting (as, for example, in the case of tandem or

substitute awards) and make adjustments if the number of shares of Stock actually delivered differs from the number of shares previously counted in connection with an Award; provided, however, that shares withheld in payment of taxes upon vesting of Restricted Stock and shares equal to the number of outstanding shares surrendered in payment of the exercise price or taxes relating to an Award shall not become available again under the Plan if the withholding or surrender transaction occurs more than ten years after the date of the most recent shareholder approval of the Plan, and otherwise shares shall not become available under this Section 4(b) in an event that would constitute a ‘‘material revision’’ of the Plan subject to shareholder approval under then applicable rules of the New York Stock Exchange. Shares subject to an Award or a 1997 Plan award that is canceled, expired, forfeited, settled in cash or otherwise terminated without a delivery of shares to the Participant will agai n be available for Awards, and shares withheld in payment of the exercise price or taxes relating to an Award or 1997 Plan award and shares equal to the number surrendered in payment of any exercise price or taxes relating to an Award or 1997 Plan award shall be deemed to constitute shares not delivered to the Participant and shall be deemed to again be available for Awards under the Plan. In addition, in the case of any Award granted in substitution for an award of a company or business acquired by shareholdersthe Company or a subsidiary or affiliate, shares issued or issuable in connection with such substitute Award shall not be counted against the number of shares reserved under the Plan, but shall be available under the Plan by virtue of the Company’s assumption of the plan or arrangement of the acquired company or business. This Section 4(b) shall apply to the number of shares reserved and available for ISOs only to the extent consistent with applicable regulations relating to ISOs under the Code.

5.    Eligibility; Per-Person Award Limitations.    Awards may be granted under the Plan only to Eligible Persons. For purposes of the Plan, an ‘‘Eligible Person’’ means an employee of the Company or any subsidiary or affiliate, including any executive officer, a non-employee director of the Company, a consultant or other person who provides substantial services to the Company or a subsidiary or affiliate, and any person who has been offered employment by the Company or a subsidiary or affiliate, provided that such prospective employee, non-employee director, consultant or other person may not receive any paym ent or exercise any right relating to an Award until such person has commenced employment with or providing of services to the Company or a subsidiary or affiliate. An employee on leave of absence may be considered as still in the employ of the Company or a subsidiary or affiliate for purposes of eligibility for participation in the Plan. For purposes of the Plan, a joint venture in which the Company or a subsidiary has a substantial direct or indirect equity investment shall be deemed an affiliate, if so determined by the Committee. In each calendar year during any part of which the Plan is in effect, an Eligible Person may be granted Awards intended to qualify as ‘‘performance-based compensation’’ under Code Section 162(m) under each of Section 6(b), 6(c), 6(d), 6(e), 6(f), 6(g) or 6(h) relating to up to his or her Annual Limit (such Annual Limit to apply separately to the type of Award authorized under each specified subsection, except that the limitation applies to Dividend Equiva lents under Section 6(g) only if such Dividend Equivalents are granted separately from and not as a feature of another Award). A Participant’s Annual Limit, in any year during any part of which the Participant is then eligible under the Plan, shall equal two million shares plus the amount of the Participant’s unused Annual Limit relating to the same type of Award as of the close of the previous year, subject to adjustment as provided in Section 11(c). In the case of an Award which is not valued in a way in which the limitation set forth in the preceding sentence would operate as an effective limitation satisfying Treasury Regulation 1.162-27(e)(4) (including Performance Awards under Section 7 not related to an Award specified in Section 6), the maximum amount of an Annual Incentive Award under Section 7(c) that may be earned by an Eligible Person in any year shall be 50% of the amount of the Annual Incentive Pool specified in Section 7(c)(ii), and the maximum amount of such an Award other than an Annual Incentive Award under Section 7(c) that may be earned by an Eligible Person during any calendar year shall be equal to the Participant’s Annual Limit, which for this purpose shall equal $6 million plus the amount of the Participant’s unused cash Annual Limit for such Awards other than Annual Incentive Awards as of the close of the previous year. For purposes of this Section 5, (i) the limitation on share-based awards, the limitation on the earning of Annual Incentive Awards, and the limitation on the earning of non-share-based

Awards other than Annual Incentive Awards each is a separate limitation, which is not decreased by the authorization or payout of Awards that are subject to the other limitations; (ii) ‘‘earning’’ means satisfying performance conditions so that an amount becomes payable, without regard to whether it is to be paid currently or on a deferred basis or continues to be subject to any service requirement or other non-performance condition; and (iii) a Participant’s Annual Limit is used to the extent an amount or number of shares may be potentially earned or paid under an Award, regardless of whether such amount or shares are in fact earned or paid.

6.    Specific Terms of Awards.

(a)    General.    Awards may be granted on the terms and conditions set forth in this Section 6. In addition, the Committee may impose on any Award or the exercise thereof, at the date of grant or thereafter (subject to Section 11(e)), such additional terms and conditions, not inconsistent with the provisions of the Plan, as the Committee shall determine, including terms requiring forfeiture of Awards in the event of termination of employment or service by the Participant and terms permitting a Participant to make elections relating to his or her Award. The Committee shall retain full power and discretion with respect to any te rm or condition of an Award that is not mandatory under the Plan. The Committee shall require the payment of lawful consideration for an Award to the extent necessary to satisfy the requirements of the New York Business Corporation Law, and may otherwise require payment of consideration for an Award except as limited by the Plan.

(b)    Options.    The Committee is authorized to grant Options to Participants on the following terms and conditions:

(i)    Exercise Price. The exercise price per share of Stock purchasable under an Option (including both ISOs and non-qualified Options) shall be determined by the Committee, provided that such exercise price shall be not less than the Fair Market Value of a share of Stock on the date of grant of such Option, subject to Sections 6(f) and 8(a).

(ii)    Option Term; Time and Method of Exercise.    The Committee shall determine the term of each Option, provided that in no event shall the term of any Option exceed a period of ten years from the date of grant. The Committee shall determine the time or times at which or the circumstances under which an Option may be exercised in whole or in part (including based on achievement of performance goals and/or future service requirements), the methods by which such exercise price may be paid or deemed to be paid and the form of such payment (subject to Section 11(k)), including, without limitation, cash, Stock, other Awards or awar ds granted under other plans of the Company or any subsidiary or affiliate, or other property (including through ‘‘cashless exercise’’ arrangements, to the extent permitted by applicable law, but excluding any exercise method in which a personal loan would be made from the Company to the Participant), and the methods by or forms in which Stock will be voted, if no contrary instruction is indicated, FORdelivered or deemed to be delivered in satisfaction of Options to Participants (including deferred delivery of shares representing the Option ‘‘profit,’’ at the election of the 8 nominees described hereinParticipant or as mandated by the Committee, with such deferred shares subject to any vesting, forfeiture or other terms as the Committee may specify).

(iii)    ISOs.    The terms of any ISO granted under the Plan shall comply in all respects with the provisions of Code Section 422, including but not limited to the requirement that no ISO shall be granted more than ten years after the Effective Date.

(c)    Stock Appreciation Rights.    The Committee is authorized to grant SAR’s to Participants on the following terms and FORconditions:

(i)    Right to Payment.    An SAR shall confer on the ratificationParticipant to whom it is granted a right to receive, upon exercise thereof, the excess of (A) the Fair Market Value of one share of Stock on the date of exercise over (B) the grant price of the selectionSAR as determined by the Committee, but which in no event will be less than 100% of PricewaterhouseCoopers LLPthe Fair Market Value of a share of Stock on the date of grant of the SAR.

(ii)    Other Terms.    The Committee shall determine the term of each SAR, provided that in no event shall the term of any SAR exceed a period of ten years from the date of

grant. The Committee shall determine at the date of grant or thereafter, the time or times at which and the circumstances under which a SAR may be exercised in whole or in part (including based on achievement of performance goals and/or future service requirements), the method of exercise, method of settlement, form of consideration payable in settlement, method by or forms in which Stock will be delivered or deemed to be delivered to Participants, and whether or not a SAR shall be free-standing or in tandem or combination with any other Award. Limited SARs that may only be exercised in connection with a Change in Control or other event as specified by the Committee may be granted on such terms, not inconsistent with this Section 6(c), as the Company's Independent Accountant for 2006.Committee may determine.

A quorum(d)    Restricted Stock.    The Committee is authorized to grant Restricted Stock to Participants on the following terms and conditions:

(i)    Grant and Restrictions.    Restricted Stock shall be subject to such restrictions on transferability, risk of forfeiture and other restrictions, if any, as the Committee may impose, which restrictions may lapse separately or in combination at such times, under such circumstances (including based on achievement of performance goals and/or future service requirements), in such installments or otherwise and under such other circumstances as the Committee may determine at the 2006date of grant or thereafter. The foregoing notwithstanding, Restricted Stock will vest over a minimum period of one year except in the event of a Particip ant’s death, disability, or retirement, or in the event of a Change in Control or other special circumstances. For purposes of this Section 6(d), vesting over a one-year period will include periodic vesting over such period if the rate of such vesting is proportional throughout such period. Except to the extent restricted under the terms of the Plan and any Award document relating to the Restricted Stock, a Participant granted Restricted Stock shall have all of the rights of a shareholder, including the right to vote the Restricted Stock and the right to receive dividends thereon (subject to any mandatory reinvestment or other requirement imposed by the Committee).

(ii)    Forfeiture.    Except as otherwise determined by the Committee, upon termination of employment or service during the applicable restriction period, Restricted Stock that is at that time subject to restrictions shall be forfeited and reacquired by the Company; provided that the Committee may provide, by rule or regulation or in any Award document, or may determine in any individual case, that restrictions or forfeiture conditions relating to Restricted Stock will lapse in whole or in part, including in the event of terminations resulting from specified causes.

(iii)    Certificates for Stock.    Restricted Stock granted under the Plan may be evidenced in such manner as the Committee shall determine. If certificates representing Restricted Stock are registered in the name of the Participant, the Committee may require that such certificates bear an appropriate legend referring to the terms, conditions and restrictions applicable to such Restricted Stock, that the Company retain physical possession of the certificates, and that the Participant deliver a stock power to the Company, endorsed in blank, relating to the Restricted Stock.

(iv)    Dividends and Splits.    As a condition to the grant of an Award of Restricted Stock, the Committee may require that any dividends paid on a share of Restricted Stock shall be either (A) paid with respect to such Restricted Stock at the dividend payment date in cash, in kind, or in a number of shares of unrestricted Stock having a Fair Market Value equal to the amount of such dividends, or (B) automatically reinvested in additional Restricted Stock or held in kind, which shall be subject to the same terms as applied to the original Restricted Stock to which it relates, or (C) deferred as to payment, either as a cash defer ral or with the amount or value thereof automatically deemed reinvested in shares of Deferred Stock, other Awards or other investment vehicles, subject to such terms as the Committee shall determine or permit a Participant to elect. Unless otherwise determined by the Committee, Stock distributed in connection with a Stock split or Stock dividend, and other property distributed as a dividend, shall be subject to restrictions and a risk of

forfeiture to the same extent as the Restricted Stock with respect to which such Stock or other property has been distributed.

(e)    Deferred Stock.    The Committee is authorized to grant Deferred Stock to Participants, which are rights to receive Stock, other Awards, or a combination thereof at the end of a specified deferral period, subject to the following terms and conditions:

(i)    Award and Restrictions.    Issuance of Stock will occur upon expiration of the deferral period specified for an Award of Deferred Stock by the Committee (or, if permitted by the Committee, as elected by the Participant). In addition, Deferred Stock shall be subject to such restrictions on transferability, risk of forfeiture and other restrictions, if any, as the Committee may impose, which restrictions may lapse at the expiration of the deferral period or at earlier specified times (including based on achievement of performance goals and/or future service requirements), separately or in combination, in installments or other wise, and under such other circumstances as the Committee may determine at the date of grant or thereafter. Deferred Stock may be satisfied by delivery of Stock, other Awards, or a combination thereof (subject to Section 11(k)), as determined by the Committee at the date of grant or thereafter.

(ii)    Forfeiture.    Except as otherwise determined by the Committee, upon termination of employment or service during the applicable deferral period or portion thereof to which forfeiture conditions apply (as provided in the Award document evidencing the Deferred Stock), all Deferred Stock that is at that time subject to such forfeiture conditions shall be forfeited; provided that the Committee may provide, by rule or regulation or in any Award document, or may determine in any individual case, that restrictions or forfeiture conditions relating to Deferred Stock will lapse in whole or in part, including in the event of termina tions resulting from specified causes.

(iii)    Dividend Equivalents.    Unless otherwise determined by the Committee, Dividend Equivalents on the specified number of shares of Stock covered by an Award of Deferred Stock shall be either (A) paid with respect to such Deferred Stock at the dividend payment date in cash or in shares of unrestricted Stock having a Fair Market Value equal to the amount of such dividends, or (B) deferred with respect to such Deferred Stock, either as a cash deferral or with the amount or value thereof automatically deemed reinvested in additional Deferred Stock, other Awards or other investment vehicles having a Fair Market Value equal to the amount of such dividends, as the Committee shall determine or permit a Participant to elect.

(f)    Bonus Stock and Awards in Lieu of Obligations.    The Committee is authorized to grant Stock as a bonus, or to grant Stock or other Awards in lieu of obligations of the Company or a subsidiary or affiliate to pay cash or deliver other property under the Plan or under other plans or compensatory arrangements, subject to such terms as shall be determined by the Committee.

(g)    Dividend Equivalents.    The Committee is authorized to grant Dividend Equivalents to a Participant, entitling the Participant to receive cash, Stock, other Awards, or other property equivalent to all or a portion of the dividends paid with respect to a specified number of shares of Stock. Dividend Equivalents may be awarded on a free-standing basis or in connection with another Award. The Committee may provide that Dividend Equivalents shall be paid or distributed when accrued or shall be deemed to have been reinvested in additional Stock, Awards, or other investment vehicles, and subject to restrictions on transferability , risks of forfeiture and such other terms as the Committee may specify.

(h)    Other Stock-Based Awards.    The Committee is authorized, subject to limitations under applicable law, to grant to Participants such other Awards that may be denominated or payable in, valued in whole or in part by reference to, or otherwise based on, or related to, Stock or factors that may influence the value of Stock, including, without limitation, convertible or exchangeable debt securities, other rights convertible or exchangeable into Stock, purchase rights for Stock, Awards with value and payment contingent upon performance of the Company or

business units thereof or any other factors designated by the Committee, and Awards valued by reference to the book value of Stock or the value of securities of or the performance of specified subsidiaries or affiliates or other business units. The Committee shall determine the terms and conditions of such Awards. Stock delivered pursuant to an Award in the nature of a purchase right granted under this Section 6(h) shall be purchased for such consideration, paid for at such times, by such methods, and in such forms, including, without limitation, cash, Stock, other Awards, or other property, as the Committee shall determine. Cash awards, as an element of or supplement to any other Award under the Plan, may also be granted pursuant to this Section 6(h).

(i)    Performance Awards.    Performance Awards, denominated in cash or in Stock or other Awards, may be granted by the Committee in accordance with Section 7.

7.    Performance Awards, Including Annual MeetingIncentive Awards.

(a)    Performance Awards Generally.    The Committee is authorized to grant Performance Awards on the terms and conditions specified in this Section 7. Performance Awards may be denominated as a cash amount, number of shares of Stock, or specified number of other Awards (or a combination) which may be earned upon achievement or satisfaction of performance conditions specified by the Committee. In addition, the Committee may specify that any other Award shall constitute a Performance Award by conditioning the right of a Participant to exercise the Award or have it settled, and the timing thereof, upon achievement or satisfaction o f such performance conditions as may be specified by the Committee. The Committee may use such business criteria and other measures of performance as it may deem appropriate in establishing any performance conditions, and may exercise its discretion to reduce or increase the amounts payable under any Award subject to performance conditions, except as limited under Sections 7(b) and 7(c) in the case of a Performance Award intended to qualify as ‘‘performance-based compensation’’ under Code Section 162(m).

(b)    Performance Awards Granted to Covered Employees.    If the Committee determines that a Performance Award to be granted to an Eligible Person who is designated by the Committee as likely to be a Covered Employee should qualify as ‘‘performance-based compensation’’ for purposes of Code Section 162(m), the grant, exercise and/or settlement of such Performance Award shall be contingent upon achievement of a preestablished performance goal and other terms set forth in this Section 7(b).

(i)    Performance Goal Generally.    The performance goal for such Performance Awards shall consist of one or more business criteria and a targeted level or levels of performance with respect to each of such criteria, as specified by the Committee consistent with this Section 7(b). The performance goal shall be objective and shall otherwise meet the requirements of Code Section 162(m) and regulations thereunder (including Regulation 1.162-27 and successor regulations thereto), including the requirement that the level or levels of performance targeted by the Committee result in the achievement of performance goals being ‘&ls quo;substantially uncertain.’’ The Committee may determine that such Performance Awards shall be granted, exercised and/or settled upon achievement of any one performance goal or that two or more of the performance goals must be achieved as a condition to grant, exercise and/or settlement of such Performance Awards. Performance goals may differ for Performance Awards granted to any one Participant or to different Participants.

(ii)    Business Criteria.    One or more of the following business criteria for the Company, on a consolidated basis, and/or for specified subsidiaries or affiliates or other business units of the Company shall be used by the Committee in establishing performance goals for such Performance Awards: (1) net sales; (2) earnings from operations, earnings before or after taxes, earnings before or after interest, depreciation, amortization, or extraordinary or special items; (3) net income or net income per common share (basic or diluted); (4) return on assets (gross or net), return on investment, return on capital, or return on equity ; (5) cash flow, free cash flow, cash flow return on investment (discounted or otherwise), net cash provided by operations, or cash flow in excess of cost of capital; (6) economic value created; (7) operating

margin or profit margin; (8) stock price or total shareholder return; (9) dividend payout as a percentage of net income; and (10) strategic business criteria, consisting of one or more objectives based on meeting specified market penetration, geographic business expansion goals, cost targets, customer satisfaction, employee satisfaction, management of employment practices and employee benefits, supervision of litigation and information technology, and goals relating to acquisitions or divestitures of subsidiaries, affiliates or joint ventures. The targeted level or levels of performance with respect to such business criteria may be established at such levels and in such terms as the Committee may determine, in its discretion, including in absolute terms, as a goal relative to performance in prior periods, or as a goal compared to the performance of one or more comparable companies or an index covering multiple companies.

(iii)    Performance Period; Timing for Establishing Performance Goals; Per-Person Limit.     Achievement of performance goals in respect of such Performance Awards shall be measured over a performance period of up to one year or more than one year, as specified by the Committee. A performance goal shall be established not later than the earlier of (A) 90 days after the beginning of any performance period applicable to such Performance Award or (B) the time 25% of such performance period has elapsed. In all cases, the maximum Performance Award of any Participant shall be subject to the limitation set forth in Section 5.

(iv)    Performance Award Pool.    The Committee may establish a Performance Award pool, which shall be an unfunded pool, for purposes of measuring performance of the Company in connection with Performance Awards. The amount of such Performance Award pool shall be based upon the achievement of a performance goal or goals based on one or more of the business criteria set forth in Section 7(b)(ii) during the given performance period, as specified by the Committee in accordance with Section 7(b)(iv). The Committee may specify the amount of the Performance Award pool as a percentage of any of such business criteria, a percentage ther eof in excess of a threshold amount, or as another amount which need not bear a strictly mathematical relationship to such business criteria.

(v)    Settlement of Performance Awards; Other Terms.    Settlement of such Performance Awards shall be in cash, Stock, other Awards or other property, in the discretion of the Committee. The Committee may, in its discretion, increase or reduce the amount of a settlement otherwise to be made in connection with such Performance Awards, but may not exercise discretion to increase any such amount payable to a Covered Employee in respect of a Performance Award subject to this Section 7(b). Any settlement which changes the form of payment from that originally specified shall be implemented in a manner such that the Performance Award an d other related Awards do not, solely for that reason, fail to qualify as ‘‘performance-based compensation’’ for purposes of Code Section 162(m). The Committee shall specify the circumstances in which such Performance Awards shall be paid or forfeited in the event of termination of employment by the Participant or other event (including a Change in Control) prior to the end of a performance period or settlement of such Performance Awards.

(c)    Annual Incentive Awards Granted to Designated Covered Employees.    The Committee may grant an Annual Incentive Award to an Eligible Person who is designated by the Committee as likely to be a Covered Employee. Such Annual Incentive Award will be intended to qualify as ‘‘performance-based compensation’’ for purposes of Code Section 162(m), and therefore its grant, exercise and/or settlement shall be contingent upon achievement of preestablished performance goals and other terms set forth in this Section 7(c).

(i)    Grant of Annual Incentive Awards.    Not later than the earlier of 90 days after the beginning of any performance period applicable to such Annual Incentive Award or the time 25% of such performance period has elapsed, the Committee shall determine the Covered Employees who will potentially receive Annual Incentive Awards, and the amount(s) potentially payable thereunder, for that performance period. The amount(s) potentially

payable as Annual Incentive Awards may be earned and become payable under the Plan only if and to the extent the Annual Incentive Pool, specified in Section 7(c)(ii), has become hypothetically funded. The portion of the Annual Incentive Award pool potentially payable to each Covered Employee shall be preestablished by the Committee. The foregoing notwithstanding, if any portion of the Annual Incentive Pool for a given fiscal year is not allocated and paid out for that year, the Committee, at any time after such fiscal year, may allocate and pay out from such then-unallocated amounts of hypothetical funding remaining an Award to any Eligible Person other than a Covered Employee, but such allocations may not affect the allocations or payouts to any Covered Employee. In all cases, the maximum Annual Incentive Award of any Participant shall be subject to the limitation set forth in Section 5. This Section 7(c) does not preclude the Committee from granting a Performance Award under Section 7(b) based on performan ce in a period of one year or less, in addition to or in lieu of an Annual Incentive Award under this Section 7(c).

(ii)    Creation of Annual Incentive Pool.    The Annual Incentive Pool for each fiscal year of the Company shall equal 10% of the amount by which the ‘‘pretax consolidated earnings’’ (as hereinafter defined) for such year shall exceed 20% of ‘‘net capital’’ (as hereinafter defined) for such year; provided, however, that the Annual Incentive Pool shall not exceed for any year 10% of the amount of cash dividends paid by the Company in such year. As soon as practicable after the end of each year the amount of the Annual Incentive Pool for such year shall be audited by the Company&rsquo ;s independent public accountants and shall be reported by them to the Committee. The term ‘‘pretax consolidated earnings’’ for any fiscal year means the sum of (i) the consolidated net earnings of the Company and its subsidiaries for such year before (A) extraordinary items determined in accordance with generally accepted accounting principles and (B) the cumulative effect of accounting changes, as contained in the financial statements audited by the Company’s independent public accountants and reported by the Company in its annual report to shareholders for such year, (ii) the provision for all taxes on income for such year, as contained in the financial statements audited by the Company’s independent public accountants and reported by the Company in its annual report to shareholders for such year, and (iii) the amount of the Annual Incentive Pool for such year, as audited by the Company’s independent public accountants and reported to the Committee as contemplated above. The term ‘‘net capital’’ for any year shall mean the arithmetic average of the amounts of the consolidated capital and surplus of the Company as at the beginning and the end of such year before (A) and (B) above, as such consolidated capital and surplus as of each such date is audited by the Company’s independent public accountants and reported by the Company in its annual report to shareholders for the prior year (with respect to the consolidated capital and surplus as at the beginning of such year) and for such year (with respect to the consolidated capital and surplus as at the end of such year). The Annual Incentive Pool shall be an unfunded pool established for the purpose of measuring performance of the Company to determine compensation in connection with Awards. Unallocated amounts of hypothetical funding of the Annual Incentive Pool for a given fiscal year will not be added to the Annual Incentive Pool for a subsequent year.

(iii)    Payout of Annual Incentive Awards.    After the end of each performance period, the Committee shall determine the amount, if any, of the Annual Incentive Award for that performance period payable to each Participant. The Committee may, in its discretion, determine that the amount payable to any Participant as a final Annual Incentive Award shall be reduced from the amount of his or her potential Annual Incentive Award, including a determination to make no final Award whatsoever, but may not exercise discretion to increase any such amount. The Committee shall specify the circumstances in which an Annual Incentive Award sha ll be paid or forfeited in the event of termination of employment by the Participant or other event (including a Change in Control) prior to the end of a performance period or settlement of such Annual Incentive Award.

(d)    Written Determinations.    Determinations by the Committee as to the establishment of performance goals, the amount potentially payable in respect of Performance Awards and Annual Incentive Awards, the level of actual achievement of the specified performance goals relating to Performance Awards and Annual Incentive Awards, the level of hypothetical funding of the Annual Incentive Pool and the amount of any final Performance Award and Annual Incentive Award shall be recorded in writing in the case of Performance Awards intended to qualify under Section 162(m). Specifically, the Committee shall certify in writing, in a manner conforming to applicable regulations under Section 162(m), prior to settlement of each such Award granted to a Covered Employee, that the performance objective relating to the Performance Award and other material terms of the Award upon which settlement of the Award was conditioned have been satisfied.

8.    Certain Provisions Applicable to Awards.

(a)    Stand-Alone, Additional, Tandem, and Substitute Awards.    Awards granted under the Plan may, in the discretion of the Committee, be granted either alone or in addition to, in tandem with, or, subject to the restriction on repricing in Section 11(e), in substitution or exchange for, any other Award or any award granted under another plan of the Company, any subsidiary or affiliate, or any business entity to be acquired by the Company or a subsidiary or affiliate, or any other right of a Participant to receive payment from the Company or any subsidiary or affiliate. Awards granted in addition to or in tandem with other Award s or awards may be granted either as of the same time as or a different time from the grant of such other Awards or awards. Subject to Section 11(k) and subject to the restriction on repricing in Section 11(e), the Committee may determine that, in granting a new Award, the in-the-money value of any surrendered Award or award may be applied to reduce the exercise price of any Option, grant price of any SAR, or purchase price of any other Award.

(b)    Term of Awards.    The term of each Award shall be for such period as may be determined by the Committee, subject to the express limitations set forth in Section 6(b)(ii).

(c)    Form and Timing of Payment under Awards; Deferrals.    Subject to the terms of the Plan (including Section 11(k)) and any applicable Award document, payments to be made by the Company or a subsidiary or affiliate upon the exercise of an Option or other Award or settlement of an Award may be made in such forms as the Committee shall determine, including, without limitation, cash, Stock, other Awards or other property, and may be made in a single payment or transfer, in installments, or on a deferred basis. The settlement of any Award may be accelerated, and cash paid in lieu of Stock in connection with such settlement, in th e discretion of the Committee or upon occurrence of one or more specified events (subject to Section 11(k)). Installment or deferred payments may be required by the Committee (subject to Section 11(e)) or permitted at the election of the Participant on terms and conditions established by the Committee. Payments may include, without limitation, provisions for the payment or crediting of reasonable interest on installment or deferred payments or the grant or crediting of Dividend Equivalents or other amounts in respect of installment or deferred payments denominated in Stock.

d)    Exemptions from Section 16(b) Liability.    With respect to a Participant who is then subject to the reporting requirements of Section 16(a) of the Exchange Act in respect of the Company, the Committee shall implement transactions under the Plan and administer the Plan in a manner that will ensure that each transaction with respect to such a Participant is exempt from liability under Rule 16b-3 or otherwise not subject to liability under Section 16(b)), except that this provision shall not limit sales by such a Participant, and such a Participant may engage in other non-exempt transactions under the Plan. The Committee may au thorize the Company to repurchase any Award or shares of Stock deliverable or delivered in connection with any Award (subject to Section 11(k)) in order to avoid a Participant who is subject to Section 16 of the Exchange Act incurring liability under Section 16(b). Unless otherwise specified by the Participant, equity securities or derivative securities acquired under the Plan which are disposed of by a Participant shall be deemed to be disposed of in the order acquired by the Participant.

9.    Change in Control.

(a)    Effect of ‘‘Change in Control’’ on Non-Performance Based Awards.    In the event of a ‘‘Change in Control,’’ the following provisions shall apply to non-performance based Awards, including Awards as to which performance conditions previously have been satisfied or are deemed satisfied under Section 9(b), unless otherwise provided by the Committee in the Award document:

(i)    All deferral of settlement, forfeiture conditions and other restrictions applicable to Awards granted under the Plan shall lapse and such Awards shall be fully payable as of the time of the Change in Control without regard to deferral and vesting conditions, except to the extent of any waiver by the Participant or other express election to defer beyond a Change in Control and subject to applicable restrictions set forth in Section 11(a);

(ii)    Any Award carrying a right to exercise that was not previously exercisable and vested shall become fully exercisable and vested as of the time of the Change in Control and shall remain exercisable and vested for the balance of the stated term of such Award without regard to any termination of employment or service by the Participant other than a termination for ‘‘cause’’ (as defined in any employment or severance agreement between the Company or a subsidiary or affiliate and the Participant then in effect or, if none, as defined by the Committee and in effect at the time of the Change in Control), subject only to applicable restrictions set forth in Section 11(a); and

(iii)    The Committee may, in its discretion, determine to extend to any Participant who holds an Option the right to elect, during the 60-day period immediately following the Change in Control, in lieu of acquiring the shares of Stock covered by such Option, to receive in cash the excess of the Change in Control Price over the exercise price of such Option, multiplied by the number of shares of Stock covered by such Option, and to extend to any Participant who holds other types of Awards denominated in shares the right to elect, during the 60-day period immediately following the Change in Control, in lieu of receiving the shares of Stock covered by such Award, to receive in cash the Change in Control Price m ultiplied by the number of shares of Stock covered by such Award.

(b)    Effect of ‘‘Change in Control’’ on Performance-Based Awards.    In the event of a ‘‘Change in Control,’’ with respect to an outstanding Award subject to achievement of performance goals and conditions, such performance goals and conditions shall be deemed to be met or exceeded if and to the extent so provided by the Committee in the Award document governing such Award or other agreement with the Participant.

(c)    Definition of ‘‘Change in Control.’’    A ‘‘Change in Control’’ shall be deemed to have occurred if, after the Effective Date, there shall have occurred any of the following:

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

receipt or exercise of, or accrual of any right to exercise, a stock option granted by the Company or receipt or settlement of any other stock-related award granted by the Company) by purchase of any additional voting securities of the Company; and provided further, that the term ‘‘40% Beneficial Owner’’ shall not include any person who shall become the beneficial owner of 40% or more of the combined voting power of the Company’s then-outstanding voting securities solely as a result of an acquisition by the Company of its voting securities, until such time thereafter as such person shall become the beneficial owner (other than by means of a stock dividend or stock split) of any additional voting securities and becomes a 40% Beneficial Owner in accordance with this Section 9(c)(i);

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

(iii)     There is consummated a merger, consolidation, recapitalization, or reorganization of the Company, or a reverse stock split of any class of voting securities of the Company, if, immediately following consummation of any of the foregoing, either (A) individuals who, immediately prior to such consummation, constitute the Board do not constitute at least a majority of the members of the board of directors of the Company or the surviving or parent entity, as the case may be, or (B) the voting securities of the Company outstanding immediately prior to such recommendation do not represent (either by remaining outstanding or by being converted into voting securities of a surviving or parent entity) at least 60% or more of the combined voting power of the outstanding voting securities of the Company or such surviving or parent entity; or

(iv)     The shareholders of the Company have approved a plan of complete liquidation of the Company or there is consummated an agreement for the sale or disposition by the Company of all or substantially all of the Company’s assets (or any transaction have a similar effect).

(d)    Definition of ‘‘Change in Control Price.’’    The ‘‘Change in Control Price’’ means an amount in cash equal to the higher of (i) the amount of cash and fair market value of property that is the highest price per share paid (including extraordinary dividends) in any transaction triggering the Change in Control or any liquidation of shares following a sale of substantially all assets of the Company, or (ii) the highest Fair Market Value per share at any time during the 60-day period preceding and 60-day period following the Change in Control.

10.    Additional Award Forfeiture Provisions.

(a)    Forfeiture of Options and Other Awards and Gains Realized Upon Prior Option Exercises or Award Settlements.    Unless otherwise determined by the Committee, each Award granted hereunder shall be subject to the following additional forfeiture conditions, to which the Participant, by accepting an Award hereunder, agrees. If any of the events specified in Section 10(b)(i), (ii), or (iii) occurs (a ‘‘Forfeiture Event’’), all of the following forfeitures will result:

(i)    The unexercised portion of the Option, whether or not vested, and any other Award not then settled (except for an Award that has not been settled solely due to an elective deferral by the Participant and otherwise is not forfeitable in the event of any termination of service of the Participant) will be immediately forfeited and canceled upon the occurrence of the Forfeiture Event; and

(ii)    The Participant will be obligated to repay to the Company, in cash, within five business days after demand is made therefor by the Company, the total amount of Award Gain (as defined herein) realized by the Participant upon each exercise of an Option or

settlement of an Award (regardless of any elective deferral) that occurred on or after (A) the date that is six months prior to the occurrence of the Forfeiture Event, if the Forfeiture Event occurred while the Participant was employed by the Company or a subsidiary or affiliate, or (B) the date that is six months prior to the date the Participant’s employment by the Company or a subsidiary or affiliate terminated, if the Forfeiture Event occurred after the Participant ceased to be so employed. For purposes of this Section, the term ‘‘Award Gain’’ shall mean (i), in respect of a given Option exercise, the product of (X) the Fair Market Value per share of Stock at the date of such exercise (without regard to any subsequent change in the market price of shares) minus the exercise price times (Y) the number of shares as to which the Option was exercised at that date, and (ii), in respect of any other settlement of an Award granted to the Participant, the Fair Market Value of the ca sh or Stock paid or payable to the Participant (regardless of any elective deferral) less any cash or the Fair Market Value of any Stock or property (other than an Award or award which would have itself then been forfeitable hereunder and excluding any payment of tax withholding) paid by the Participant to the Company as a condition of or in connection such settlement. For purposes of this Section 10(a), an Award that is electively deferred shall be treated as settled at the date it would have settled but for such elective deferral.

(b)    Events Triggering Forfeiture.    The forfeitures specified in Section 10(a) will be triggered upon the occurrence of any one of the following Forfeiture Events at any time during the Participant’s employment by the Company or a subsidiary or affiliate or during the one-year period following termination of such employment:

(i)    The Participant, acting alone or with others, directly or indirectly, prior to a Change in Control, (A) engages, either as employee, employer, consultant, advisor, or director, or as an owner, investor, partner, or shareholder unless the Participant’s interest is insubstantial, in any business in an area or region in which the Company conducts business at the date the event occurs, which is directly in competition with a business then conducted by the Company or a subsidiary or affiliate; (B) induces any customer or supplier of the Company or a subsidiary or affiliate, or other company with which the Company or a subsidiary or affiliate has a business relationship, to curtail, cancel, not renew, o r not continue his or her or its business with the Company or any subsidiary or affiliate; or (C) induces, or attempts to influence, any employee of or service provider to the Company or a subsidiary or affiliate to terminate such employment or service. The Committee shall, in its discretion, determine which lines of business the Company conducts on any particular date and which third parties may reasonably be deemed to be in competition with the Company. For purposes of this Section 10(b)(i), a Participant’s interest as a shareholder is insubstantial if it represents beneficial ownership of less than five percent of the outstanding class of stock, and a Participant’s interest as an owner, investor, or partner is insubstantial if it represents ownership, as determined by the Committee in its discretion, of less than five percent of the outstanding equity of the entity;

(ii)    The Participant discloses, uses, sells, or otherwise transfers, except in the course of employment with or other service to the Company or any subsidiary or affiliate, any confidential or proprietary information of the Company or any subsidiary or affiliate, including but not limited to information regarding the Company’s current and potential customers, organization, employees, finances, and methods of operations and investments, so long as such information has not otherwise been disclosed to the public or is not otherwise in the public domain, except as required by law or pursuant to legal process, or the Participant makes statements or representations, or otherwise communicates, directly or in directly, in writing, orally, or otherwise, or takes any other action which may, directly or indirectly, disparage or be damaging to the Company or any of its subsidiaries or affiliates or their respective officers, directors, employees, advisors, businesses or reputations, except as required by law or pursuant to legal process; or

(iii)    The Participant fails to cooperate with the Company or any subsidiary or affiliate by making himself or herself available to testify on behalf of the Company or such subsidiary

or affiliate in any action, suit, or proceeding, whether civil, criminal, administrative, or investigative, or otherwise fails to assist the Company or any subsidiary or affiliate in any such action, suit, or proceeding by providing information and meeting and consulting with members of management of, other representatives of, or counsel to, the Company or such subsidiary or affiliate, as reasonably requested.

(c)    Agreement Does Not Prohibit Competition or Other Participant Activities.    Although the conditions set forth in Section 10(a) and 10(b) shall be deemed to be incorporated into an Award, a Participant is not thereby prohibited from engaging in an activity identified in Section 10(b), including but not limited to competition with the Company and its subsidiaries and affiliates. Rather, the non-occurrence of the Forfeiture Events set forth in Section 10(b) is a condition to the Participant’s right to realize and retain value from his or her compensatory Options and Awards, and the consequence under the Plan if the Parti cipant engages in an activity giving rise to any such Forfeiture Event are the forfeitures specified herein. The Company and the Participant shall not be precluded by this provision or otherwise from entering into other agreements concerning the subject matter of Section 10(a) and 10(b).

(d)    Forfeitures Resulting from Financial Reporting Misconduct.    If the Company is required to prepare an accounting restatement due to the material noncompliance of the Company, as a result of misconduct, with any financial reporting requirement under the securities laws, and if a Participant, knowingly or through gross negligence, caused or failed to prevent such misconduct, the Participant (i) shall forfeit any Performance Award (including any Annual Incentive Award) that was or would be deemed to be earned in whole or in part based on performance during the period covered by the noncompliant financial report and during th e 12-month period following the first public issuance or filing with the Securities and Exchange Commission (whichever first occurs) of the non-compliant financial report; and (ii) shall forfeit any other Award that was granted hereunder during the 12-month period following such first public issuance or filing of the non-compliant financial report and thereafter until the accounting restatement correcting such non-compliant financial report has been filed, and (iii) shall forfeit any profits realized from the sale of shares during the 12-month period following such first public issuance or filing if such shares were acquired upon exercise or settlement of Awards. For purposes of this Section 10(d), (A) if an Award subject to forfeiture has become vested or settled, the Participant will be liable to repay the Award Gain (as defined above), (B) ‘‘profit’’ shall be calculated based on the excess of any selling price of shares over the average market price of shares in the 20 trading days ending the day before the first public issuance or filing of the non-compliant report, and (C) the term ‘‘misconduct’’ and other terms shall have meanings and be interpreted in a manner consistent with the meanings and interpretation of such terms under Section 304 of the Sarbanes-Oxley Act of 2002. This Section 10(d) will apply to Awards granted on and after March 6, 2007 and, with the consent of the Participant, to Awards granted prior to that date.

(e)    Committee Discretion.    The Committee may, in its discretion, waive in whole or in part the Company’s right to forfeiture under this Section, but no such waiver shall be effective unless evidenced by a writing signed by a duly authorized officer of the Company. In addition, the Committee may impose additional conditions on Awards, by inclusion of appropriate provisions in the document evidencing or governing any such Award.

11.    General Provisions.

(a)    Compliance with Legal and Other Requirements.    The Company may, to the extent deemed necessary or advisable by the Committee, postpone the issuance or delivery of Stock or payment of other benefits under any Award until completion of such registration or qualification of such Stock or other required action under any federal or state law, rule or regulation, listing or other required action with respect to any stock exchange or automated quotation system upon which the Stock or other securities of the Company are listed or quoted, or compliance with any other obligation of the Company, as the Committee may consider appropr iate, and may require any Participant to make such representations, furnish such information and comply with or be

subject to such other conditions as it may consider appropriate in connection with the issuance or delivery of Stock or payment of other benefits in compliance with applicable laws, rules, and regulations, listing requirements, or other obligations. The foregoing notwithstanding, in connection with a Change in Control, the Company shall take or cause to be taken no action, and shall undertake or permit to arise no legal or contractual obligation, that results or would result in any postponement of the issuance or delivery of Stock or payment of benefits under any Award or the imposition of any other conditions on such issuance, delivery or payment, to the extent that such postponement or other condition would represent a greater burden on a Participant than existed on the 90th day preceding the Change in Control.

(b)    Limits on Transferability; Beneficiaries.    No Award or other right or interest of a Participant under the Plan shall be pledged, hypothecated or otherwise encumbered or subject to any lien, obligation or liability of such Participant to any party (other than the Company or a subsidiary or affiliate thereof), or assigned or transferred by such Participant, and such Awards or rights that may be exercisable shall be exercised during the lifetime of the Participant only by the Participant or his or her guardian or legal representative, except that (i) Awards and related rights shall be transferred to a Participant’s Ben eficiary or Beneficiaries upon the death of the Participant, and (ii) Awards and other rights (other than ISOs and SARs in tandem therewith) may be transferred to one or more Beneficiaries during the lifetime of the Participant, and rights thereunder may be exercised by such transferees in accordance with the terms of such Award, but only if and to the extent such transfers are then permitted by the Committee and the Committee has determined that there will be no transfer of the Award to a third party for value, and subject to any terms and conditions which the Committee may impose thereon (including limitations the Committee may deem appropriate in order that offers and sales under the Plan will meet applicable requirements of registration forms under the Securities Act of 1933 specified by the Securities and Exchange Commission). A Beneficiary or other person claiming any rights under the Plan from or through any Participant shall be subject to all terms and conditions of the Plan and any Award document ap plicable to such Participant, except as otherwise determined by the Committee, and to any additional terms and conditions deemed necessary or appropriate by the Committee.

(c)    Adjustments.    In the event that any large, special and non-recurring dividend or other distribution (whether in the form of cash or property other than Stock), recapitalization, forward or reverse split, Stock dividend, reorganization, merger, consolidation, spin-off, combination, repurchase, share exchange, liquidation, dissolution or other similar corporate transaction or event affects the Stock such that an adjustment is determined by the Committee to be appropriate under the Plan, then the Committee shall, in such manner as it may deem equitable, adjust any or all of (i) the number and kind of shares of Stock which m ay be delivered in connection with Awards granted thereafter, including all applicable limitations specified in Section 4(a), (ii) the number and kind of shares of Stock by which annual per-person Award limitations are measured under Section 5, (iii) the number and kind of shares of Stock subject to or deliverable in respect of outstanding Awards and (iv) the exercise price, grant price or purchase price relating to any Award or, if deemed appropriate, the Committee may make provision for a payment of cash or property to the holder of an outstanding Option (subject to Section 11(k)). In addition, the Committee is authorized to make adjustments in the terms and conditions of, and the criteria included in, Awards (including Performance Awards and performance goals and any hypothetical funding pool relating thereto) in recognition of unusual or nonrecurring events (including, without limitation, events described in the preceding sentence, as well as acquisitions and dispositions of businesses and assets) af fecting the Company, any subsidiary or affiliate or other business unit, or the financial statements of the Company or any subsidiary or affiliate, or in response to changes in applicable laws, regulations, accounting principles, tax rates and regulations or business conditions or in view of the Committee’s assessment of the business strategy of the Company, any subsidiary or affiliate or business unit thereof, performance of comparable organizations, economic and business conditions, personal performance of a Participant, and any other circumstances deemed relevant; provided that no such adjustment shall

be authorized or made if and to the extent that the existence of such authority (i) would cause Options, SARs, or Performance Awards granted under Section 8 to Participants designated by the Committee as Covered Employees and intended to qualify as ‘‘performance-based compensation’’ under Code Section 162(m) and regulations thereunder to otherwise fail to qualify as ‘‘performance-based compensation’’ under Code Section 162(m) and regulations thereunder, or (ii) would cause the Committee to be deemed to have authority to change the targets, within the meaning of Treasury Regulation 1.162-27(e)(4)(vi), under the performance goals relating to Options or SARs granted to Covered Employees and intended to qualify as ‘‘performance-based compensation’’ under Code Section 162(m) and regulations thereunder.

(d)    Tax Provisions.

(i)    Withholding.    The Company and any subsidiary or affiliate is authorized to withhold from any Award granted, any payment relating to an Award under the Plan, including from a distribution of Stock, or any payroll or other payment to a Participant, amounts of withholding and other taxes due or potentially payable in connection with any transaction involving an Award, and to take such other action as the Committee may deem advisable to enable the Company and Participants to satisfy obligations for the payment of withholding taxes and other tax obligations relating to any Award. This authority shall include authority to withh old or receive Stock or other property and to make cash payments in respect thereof in satisfaction of a Participant’s withholding obligations, either on a mandatory or elective basis in the discretion of the Committee. Other provisions of the Plan notwithstanding, only the minimum amount of Stock deliverable in connection with an Award necessary to satisfy statutory withholding requirements will be withheld.

(ii)    Required Consent to and Notification of Code Section 83(b) Election.    No election under Section 83(b) of the Code (to include in gross income in the year of transfer the amounts specified in Code Section 83(b)) or under a similar provision of the laws of a jurisdiction outside the United States may be made unless expressly permitted by the terms of the Award document or by action of the Committee in writing prior to the making of such election. In any case in which a Participant is permitted to make such an election in connection with an Award, the Participant shall notify the Company of such election within ten days of filing notice of the election with the Internal Revenue Service or other governmental authority, in addition to any filing and notification required pursuant to regulations issued under Code Section 83(b) or other applicable provision.

(iii)    Requirement of Notification Upon Disqualifying Disposition Under Code Section 421(b).    If any Participant shall make any disposition of shares of Stock delivered pursuant to the exercise of an Incentive Stock Option under the circumstances described in Code Section 421(b) (relating to certain disqualifying dispositions), such Participant shall notify the Company of such disposition within ten days thereof.

(e)    Changes to the Plan.    The Board may amend, suspend or terminate the Plan or the Committee’s authority to grant Awards under the Plan without the consent of shareholders or Participants; provided, however, that any amendment to the Plan shall be submitted to the Company’s shareholders for approval not later than the earliest annual meeting for which the record date is after the date of such Board action if such shareholder approval is required by any federal or state law or regulation or the rules of any stock exchange or automated quotation system on which the Stock may then be listed or quoted and the Board m ay otherwise, in its discretion, determine to submit other amendments to the Plan to shareholders for approval; and provided further, that, without the consent of an affected Participant, no such Board action may materially and adversely affect the rights of such Participant under any outstanding Award. Without the approval of shareholders, the Committee will not amend or replace previously granted Options or SARs in a transaction that constitutes a ‘‘repricing,’’ which for this purpose means any of the following or any other action that has the same effect:

	•	Lowering the exercise price of an Option or SAR after it is granted;

	•	Any other action that is treated as a repricing under generally accepted accounting principles;

	•	Canceling an Option or SAR at a time when its exercise price exceeds the fair market value of the underlying Stock, in exchange for another Option or SAR, restricted stock, other equity, cash or other property;

provided, however, that the foregoing transactions shall not be deemed a repricing if pursuant to an adjustment authorized under Section 11(c). The Committee shall have no authority to waive or modify any other Award term after the Award has been granted to the extent that the waived or modified term was mandatory under the Plan.

(f)    Right of Setoff.    The Company or any subsidiary or affiliate may, to the extent permitted by applicable law, deduct from and set off against any amounts the Company or a subsidiary or affiliate may owe to the Participant from time to time, including amounts payable in connection with any Award, owed as wages, fringe benefits, or other compensation owed to the Participant, such amounts as may be owed by the Participant to the Company, including but not limited to amounts owed under Section 10(a), although the Participant shall remain liable for any part of the Participant’s payment obligation not satisfied through su ch deduction and setoff. By accepting any Award granted hereunder, the Participant agrees to any deduction or setoff under this Section 11(f).

(g)    Unfunded Status of Awards; Creation of Trusts.    The Plan is intended to constitute an ‘‘unfunded’’ plan for incentive and deferred compensation. With respect to any payments not yet made to a Participant or obligation to deliver Stock pursuant to an Award, nothing contained in the Plan or any Award shall give any such Participant any rights that are greater than those of a general creditor of the Company; provided that the Committee may authorize the creation of trusts and deposit therein cash, Stock, other Awards or other property, or make other arrangements to meet the Company’s obligations under the Plan. Such trusts or other arrangements shall be consistent with the ‘‘unfunded’’ status of the Plan unless the Committee otherwise determines with the consent of each affected Participant.

(h)    Nonexclusivity of the Plan.    Neither the adoption of the Plan by the Board nor its submission to the shareholders of the Company for approval shall be construed as creating any limitations on the power of the Board or a committee thereof to adopt such other incentive arrangements, apart from the Plan, as it may deem desirable, including incentive arrangements and awards which do not qualify under Code Section 162(m), and such other arrangements may be either applicable generally or only in specific cases.

(i)    Payments in the Event of Forfeitures; Fractional Shares.    Unless otherwise determined by the Committee, in the event of a forfeiture of an Award with respect to which a Participant paid cash consideration, the Participant shall be repaid the amount of such cash consideration. No fractional shares of Stock shall be issued or delivered pursuant to the Plan or any Award. The Committee shall determine whether cash, other Awards or other property shall be issued or paid in lieu of such fractional shares or whether such fractional shares or any rights thereto shall be forfeited or otherwise eliminated.

(j)    Compliance with Code Section 162(m).    It is the intent of the Company that Options and SARs granted to Covered Employees and other Awards designated as Awards to Covered Employees subject to Section 7 shall constitute qualified ‘‘performance-based compensation’’ within the meaning of Code Section 162(m) and regulations thereunder, unless otherwise determined by the Committee at the time of allocation of an Award. Accordingly, the terms of Sections 7(b), (c), and (d), including the definitions of Covered Employee and other terms used therein, shall be interpreted in a manner consistent with Code Se ction 162(m) and regulations thereunder. The foregoing notwithstanding, because the Committee cannot determine with certainty whether a given Participant will be a Covered Employee with respect to a fiscal year that has not yet been completed, the term Covered Employee as used herein shall mean only a person designated by the Committee as likely to be a Covered Employee with respect to a specified fiscal year. If any provision of the Plan or any Award document relating to a Performance Award that is designated as intended to comply with Code Section 162(m) does not comply or is inconsistent with the requirements of Code Section 162(m) or regulations

thereunder, such provision shall be construed or deemed amended to the extent necessary to conform to such requirements, and no provision shall be deemed to confer upon the Committee or any other person discretion to increase the amount of compensation otherwise payable in connection with any such Award upon attainment of the applicable performance objectives.

(k)    Certain Limitations Relating to Accounting Treatment of Awards.    Other provisions of the Plan notwithstanding, the Committee’s authority under the Plan (including under Sections 8(c), 8(d), 11(c) and 11(d)) is limited to the extent necessary to ensure that any Option or other Award of a type that the Committee has intended to be subject to fixed accounting with a measurement date at the date of grant or the date performance conditions are satisfied under APB 25 shall not become subject to ‘‘variable’’ accounting solely due to the existence of such authority, unless the Committee specifically determines that the Award shall remain outstanding despite such ‘‘variable’’ accounting. In addition, other provisions of the Plan notwithstanding, (i) if any right under this Plan would cause a transaction to be ineligible for pooling-of-interests accounting that would, but for the right hereunder, be eligible for such accounting treatment, such right shall be automatically adjusted so that pooling-of-interests accounting shall be available, including by substituting Stock or cash having a Fair Market Value equal to any cash or Stock otherwise payable in respect of any right to cash which would cause the transaction to be ineligible for pooling-of-interests accounting, and (ii) if any authority under Section 9(c) would cause a transaction to be ineligible for pooling-of-interests accounting that would, but for such authority, be eligible for such accounting treatment, such authority shall be limited to the extent necessary so that such transaction would be eligible for pooling-of-int erests accounting.

(l)    Governing Law.    The validity, construction, and effect of the Plan, any rules and regulations relating to the Plan and any Award document shall be determined in accordance with the laws of the State of New York, without giving effect to principles of conflicts of laws, and applicable provisions of federal law.

(m)    Awards to Participants Outside the United States.    The Committee may modify the terms of any Award under the Plan made to or held by a Participant who is then resident or primarily employed outside of the United States in any manner deemed by the Committee to be necessary or appropriate in order that such Award shall conform to laws, regulations, and customs of the country in which the Participant is then resident or primarily employed, or so that the value and other benefits of the Award to the Participant, as affected by foreign tax laws and other restrictions applicable as a result of the Participant’s residence or employment abroad shall be comparable to the value of such an Award to a Participant who is resident or primarily employed in the United States. An Award may be modified under this Section 11(m) in a manner that is inconsistent with the express terms of the Plan, so long as such modifications will not contravene any applicable law or regulation or result in actual liability under Section 16(b) for the Participant whose Award is modified.

(n)    Limitation on Rights Conferred under Plan.    Neither the Plan nor any action taken hereunder shall be construed as (i) giving any Eligible Person or Participant the right to continue as an Eligible Person or Participant or in the employ or service of the Company or a subsidiary or affiliate, (ii) interfering in any way with the right of the Company or a subsidiary or affiliate to terminate any Eligible Person’s or Participant’s employment or service at any time, (iii) giving an Eligible Person or Participant any claim to be granted any Award under the Plan or to be treated uniformly with other Participants a nd employees, or (iv) conferring on a Participant any of the rights of a shareholder of the Company unless and until the Participant is duly issued or transferred shares of Stock in accordance with the terms of an Award or an Option is duly exercised. Except as expressly provided in the Plan and an Award document, neither the Plan nor any Award document shall confer on any person other than the Company and the Participant any rights or remedies thereunder.

(o)    Severability; Entire Agreement.    If any of the provisions of this Plan or any Award document is finally held to be invalid, illegal or unenforceable (whether in whole or in part), such provision shall be deemed modified to the extent, but only to the extent, of such invalidity,

illegality or unenforceability, and the remaining provisions shall not be affected thereby; provided, that, if any of such provisions is finally held to be invalid, illegal, or unenforceable because it exceeds the maximum scope determined to be acceptable to permit such provision to be enforceable, such provision shall be deemed to be modified to the minimum extent necessary to modify such scope in order to make such provision enforceable hereunder. The Plan and any Award documents contain the entire agreement of the parties with respect to the subject matter thereof and supersede all prior agreements, promises, covenants, arrangements, communications, representations and warranties between them, whether written or oral with respect to the subject matter thereof.

(p)    Plan Effective Date and Termination.    The Plan shall become effective if, and at such time as, the shareholders of the Company have approved it by the affirmative votes of the holders of a majority of the votes that shareholders are entitled to cast are present at the meeting, either in person or by proxy. Broker non-votes and abstentions are counted for purposes of determining a quorum, but are not counted for purposes of determining the approvalvoting securities of the proposals to be acted upon. Shares of Common StockCompany present, or represented, by executed proxies received by the Company will be counted for purposes of establishing a quorum at the meeting, regardless of how or whether such shares are voted on any specific proposal. All executed proxies will be voted in accordance with the instructions contained therein. The 8 nominees for director receiving a plurality of the votes cast at the meeting in person or by proxy will be elected as directors. A majority of the votes cast is required to ratify the appointment of Independent Accountant. Under New York law, abstentions and broker non-votes, if any, will not be counted as votes cast and, therefore, will have no effect on the outcome of the matters to be voted on at the meeting.

A broker non-vote occurs when a brokerage firm or other nominee holding shares for a beneficial owner does not vote on a particular proposal because the nominee does not have authorityentitled to vote on that particular proposal without receiving voting instructions from the beneficial owner. Under the NYSE rules, certain proposals, such as the electionsubject matter at a duly held meeting of directors and the ratificationshareholders. Unless earlier terminated by action of the selection of independent registered public accounting firms, are considered ‘‘routine’’ matters and brokers generally may vote on behalf of beneficial owners who have not furnished voting instructions, subject to the rules

of the NYSE concerning transmission of proxy materials to beneficial owners, and subject to any proxy voting policies and procedures of such brokerage firms. For ‘‘non-routine’’ proposals, such as proposals on equity compensation plans, brokers may not vote on the proposals unless they have received voting instructions from the beneficial owner, and these are called ‘‘broker non-votes’’. An ‘‘abstention’’ is a properly signed proxy card which is marked ‘‘abstain’’ as to a particular matter. If a person is a participant in the Company's Retirement Investment Fund (401(k)) plan or employee stock purchase plan and has Common Stock in a plan account, the proxy also serves as voting instructions for the plan trustee.

The Company will on a request in writing provide without charge to each person from whom proxies are being solicited for the Company's 2006 Annual Meeting a copy of the Company's Annual Report on Form 10-K for the year ended December 31, 2005 including the financial statements and any schedules thereto, required to be filed with the Securities and Exchange Commission, except exhibits thereto. The Company may impose a reasonable fee for providing such exhibits. Requests should be made to Secretary, International Flavors & Fragrances Inc., 521 West 57th Street, New York, N.Y. 10019. The Company's Annual Report on Form 10-K is also available free of charge through the Investor Relations link on the Company's website, www.iff.com.

The Board of Directors, invites youthe Plan will remain in effect until such time as no Stock remains available for delivery under the Plan and the Company has no further rights or obligations under the Plan with respect to attendoutstanding Awards under the meeting in person. Whether or not you plan to attend, please sign, date and return the enclosed proxy promptly in the enclosed envelope, so that your shares will be represented at the meeting.Pl an.

ANNUAL MEETING OF SHAREHOLDERS OF
INTERNATIONAL FLAVORS & FRAGRANCES INC
May 8, 2007

PROXY / VOTING INSTRUCTIONS

By Order

MAIL – Date, sign and mail your proxy card in the envelope provided as soon as possible.

- OR -

TELEPHONE – Call toll-free 1-800-PROXIES (1-800-776-9437) from any touch-tone telephone and follow the instructions. Have your proxy card available when you call. (International Callers should dial 718-921-8500)

COMPANY NUMBER

ACCOUNT NUMBER

- OR -

INTERNET – Access ‘‘www.voteproxy.com’’ and follow the on-screen instructions. Have your proxy card available when you access the web page.

You may enter your voting instructions at 1-800-PROXIES or www.voteproxy.com up until 11:59 PM Eastern Time May 7, 2007.

↓ Please detach along perforated line and mail in the envelope provided IF you are not voting via telephone or the Internet. ↓

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THE BOARD OF DIRECTORS RECOMMENDS A VOTE ‘‘FOR’’ THE ELECTION OF DIRECTORS AND ‘‘FOR’’ PROPOSALS 2 AND 3.
PLEASE SIGN, DATE AND RETURN PROMPTLY IN THE ENCLOSED ENVELOPE. PLEASE MARK YOUR VOTE IN BLUE OR BLACK INK AS SHOWN HERE

1.    Election of Directors:

2.    To ratify the selection of         PricewaterhouseCoopers LLP as the         Company’s independent registered         public accounting firm for 2007.

FOR

AGAINST

ABSTAIN

NOMINEES:

FOR ALL NOMINEES     WITHHOLD AUTHORITY         FOR ALL NOMINEES     FOR ALL EXCEPT         (See instructions below)

○    Margaret Hayes Adame ○    Robert M. Amen ○    Günter Blobel ○    J. Michael Cook ○    Peter A. Georgescu ○    Alexandra A. Herzan ○    Henry W. Howell, Jr. ○    Arthur C. Martinez ○    Burton M. Tansky

3.    To reapprove the business criteria used         for setting performance goals under the         2000 Stock Award and Incentive Plan.

INSTRUCTION:    To withhold authority to vote for any individual                                  nominees(s), mark ‘‘FOR ALL EXCEPT’’ and                                  fill in the circle next to each nominee from         &n bsp;                        whom you wish to withhold authority to vote, as                                  shown here:

This proxy is solicited on behalf of the Board of Directors of International Flavors & Fragrances Inc. This proxy, when properly executed, will be voted in accordance with the instructions given above. If no instructions are given, this proxy will be voted ‘‘FOR’’ the election of the Directors, ‘‘FOR’’ proposals 2 and 3, and, in the discretion of the proxy holders named herein, on any other matters that may properly come before the Meeting and any postponement(s) or adjournment(s) thereof.

To change the address on your account, please check the box at right and indicate your new address in the address space above. Please note that changes to the registered name(s) on the account may not be submitted via this method.

MARK ‘‘X’’ HERE IF YOU PLAN TO ATTEND THE MEETING.

Signature of Shareholder __________________    Date __________    Signature of Shareholder __________________    Date __________

Note:

Please sign exactly as your name or names appear on this Proxy. When shares are held jointly each holder should sign. When signing as executor, administrator, attorney, trustee or guardian, please give full title as such. If the signer is a corporation, please sign full corporate name by duly authorized officer, giving full title as such. If signer is a partnership, please sign in partnership name by authorized person.

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ADMISSION TICKET
INTERNATIONAL FLAVORS & FRAGRANCES INC.

ANNUAL MEETING OF SHAREHOLDERS

MAY 8, 2007 AT 10:00 A.M.
INTERNATIONAL FLAVORS & FRAGRANCES INC.
521 WEST 57^TH STREET
NEW YORK, NY 10019
(Attendees are requested to enter at 533 West 57^th Street.)

ADMITS ONE SHAREHOLDER

	Dennis M. Meany Senior Vice President, General Counsel and Secretary
			0			▪

March 10, 2006INTERNATIONAL FLAVORS & FRAGRANCES INC.
ANNUAL MEETING OF SHAREHOLDERS TO BE HELD ON MAY 8, 2007
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS

The undersigned hereby appoints each of Messrs. ROBERT M. AMEN, DOUGLAS J. WETMORE and DENNIS M. MEANY as the attorney and proxy of the undersigned, with full power of substitution, to vote the number of shares of stock the undersigned is entitled to vote at the Annual Meeting of Shareholders to be held at the headquarters of the Company, 521 West 57^th Street, New York, New York on Tuesday, May 8, 2007 at 10:00 A.M. Eastern Time, and any postponement(s) or adjournment(s) thereof (the ‘‘Meeting’’).

(Continued and to be signed on the reverse side.)

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