AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON SEPTEMBER 5, 2001
REGISTRATION NO. 333-63910
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
---------------------
AMENDMENT NO. 1 TO
FORM S-4
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
---------------------
INTERNATIONAL FLAVORS & FRAGRANCES INC.
(Exact name of Registrant as specified in its charter)
NEW YORK 2860 13-1432060
(State or other jurisdiction (Primary Standard Industrial (I.R.S. Employer
of incorporation or Classification Code Number) Identification No.)
organization)
---------------------
521 WEST 57TH STREET
NEW YORK, NEW YORK 10019
(212) 765-5500
(Address, including zip code, and telephone number, including
area code, of registrant's principal executive offices)
---------------------
STEPHEN A. BLOCK, ESQ.
INTERNATIONAL FLAVORS & FRAGRANCES INC.
521 WEST 57TH STREET
NEW YORK, NEW YORK 10019
(212) 708-7291
(Name, address, including zip code, and telephone number, including
area code, of agent for service)
---------------------
Copy to:
GREGORY A. FERNICOLA, ESQ.
SKADDEN, ARPS, SLATE, MEAGHER & FLOM LLP
FOUR TIMES SQUARE
NEW YORK, NEW YORK 10036
---------------------
Approximate date of commencement of proposed sale to the public: As soon as
practicable after this Registration Statement becomes effective.
---------------------
If the securities being registered on this Form are to be offered in
connection with the formation of a holding company and there is compliance with
General Instruction G, check the following box. [ ]
If this form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, check the following box and
list the Securities Act registration number of the earlier effective
registration statement for the same offering. [ ]
If this form is a post-effective amendment filed pursuant to Rule 462(d)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
---------------------
The Registrant hereby amends this Registration Statement on such date or
dates as may be necessary to delay its effective date until the Registrant shall
file a further amendment which specifically states that this Registration
Statement shall thereafter become effective in accordance with Section 8(a) of
the Securities Act of 1933 or until the Registration Statement shall become
effective on such date as the Securities and Exchange Commission, acting
pursuant to said Section 8(a), may determine.
================================================================================
THE INFORMATION IN THIS PROSPECTUS IS NOT COMPLETE AND MAY BE CHANGED. WE MAY
NOT SELL THESE SECURITIES UNTIL THE PROSPECTUS IS IN FINAL FORM. THIS
PROSPECTUS IS NOT AN OFFER TO SELL THESE SECURITIES AND IT IS NOT SOLICITING AN
OFFER TO BUY THESE SECURITIES IN ANY STATE WHERE THE OFFER OR SALE IS NOT
PERMITTED.
SUBJECT TO COMPLETION, DATED SEPTEMBER 5, 2001
PROSPECTUS
OFFER TO EXCHANGE $700 MILLION 6.45% NOTES DUE 2006 FOR $700 MILLION
6.45% NOTES DUE 2006, WHICH HAVE BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, OF
[GRAPHIC OMITTED]
INTERNATIONAL FLAVORS & FRAGRANCES INC.
THE EXCHANGE OFFER WILL EXPIRE AT 5:00 P.M.,
NEW YORK CITY TIME, ON OCTOBER 10, 2001, UNLESS EXTENDED.
----------------
Terms of the exchange offer:
o The exchange notes are being registered with the Securities and
Exchange Commission and are being offered in exchange for the original
notes that were previously issued in an offering exempt from the
Securities and Exchange Commission's registration requirements. The
terms of the exchange offer are summarized below and more fully
described in this prospectus.
o We will exchange all original notes that are validly tendered and not
withdrawn prior to the expiration of the exchange offer.
o You may withdraw tenders of original notes at any time prior to the
expiration of the exchange offer.
o We believe that the exchange of original notes will not be a taxable
event for U.S. federal income tax purposes, but you should see
"Material Federal Tax Considerations" on page 25 for more information.
o We will not receive any proceeds from the exchange offer.
o The terms of the exchange notes are substantially identical to the
original notes, except that the exchange notes are registered under the
Securities Act and the transfer restrictions and registration rights
applicable to the original notes do not apply to the exchange notes.
----------------
SEE "RISK FACTORS" BEGINNING ON PAGE 6 FOR A DISCUSSION OF THE RISKS THAT
SHOULD BE CONSIDERED BY HOLDERS PRIOR TO TENDERING THEIR ORIGINAL NOTES.
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PRINCIPAL AMOUNT ANNUAL INTEREST FINAL DISTRIBUTION DATE
--------------------------------------------------------------------------------
$700,000,000 6.45% May 15, 2006
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Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or passed upon the
adequacy or accuracy of this prospectus. Any representation to the contrary is
a criminal offense.
----------------
The date of this prospectus is September , 2001.
YOU SHOULD RELY ON THE INFORMATION CONTAINED IN OR INCORPORATED BY
REFERENCE IN THIS PROSPECTUS. WE HAVE NOT AUTHORIZED ANYONE TO PROVIDE YOU WITH
DIFFERENT INFORMATION. THIS PROSPECTUS IS NOT AN OFFER TO SELL, OR A
SOLICITATION OF AN OFFER TO BUY, ANY OF THE SECURITIES TO ANY PERSON OR BY
ANYONE IN ANY JURISDICTION WHERE IT IS UNLAWFUL. YOU SHOULD NOT ASSUME THAT THE
INFORMATION CONTAINED IN OR INCORPORATED BY REFERENCE IN THIS PROSPECTUS IS
ACCURATE AS OF ANY DATE OTHER THAN THE DATE ON THE FRONT OF THIS PROSPECTUS OR
THE DATE OF THE DOCUMENT INCORPORATED BY REFERENCE.
TABLE OF CONTENTS
PAGE
-----
Forward-Looking Statements ......................................... i
Where You Can Find More Information ................................ i
Prospectus Summary ................................................. 1
About IFF .......................................................... 1
Risk Factors ....................................................... 6
Use Of Proceeds .................................................... 7
Ratio Of Earnings To Fixed Charges ................................. 7
Selected Consolidated Financial Data ............................... 8
The Exchange Offer ................................................. 10
Description Of The Notes ........................................... 18
Material Federal Tax Considerations ................................ 25
Plan Of Distribution ............................................... 27
Legal Matters ...................................................... 27
Experts ............................................................ 28
FORWARD-LOOKING STATEMENTS
This prospectus includes and incorporates by reference forward-looking
statements within the meaning of the Private Securities Litigation Reform Act of
1995. Such forward-looking statements may be included in, but are not limited
to, various filings made by us with the Securities and Exchange Commission and
press releases or oral statements made by our management. These statements
relate to analyses and other information which are based on forecasts of future
results and estimates of amounts not yet determinable. These statements also
relate to our future prospects, developments and business strategies.
These forward-looking statements are identified by their use of terms and
phrases such as "anticipate," "believe," "could," "estimate," "expect,"
"intend," "may," "plan," "predict," "project," "should," "will" and similar
terms and phrases, including references to assumptions.
The Private Securities Litigation Reform Act of 1995 provides a "safe
harbor" for these forward-looking statements. In order to comply with the terms
of the safe harbor, we note that a variety of factors could cause our actual
results and experience to differ materially from the anticipated results or
other expectations expressed in the forward-looking statements. Risks and
uncertainties with respect to our business include, but are not limited to:
o general economic and business conditions;
o interest rates;
o the price and availability of raw materials;
o and political and economic uncertainties, including the fluctuation or
devaluation of currencies in countries in which we do business.
For additional factors that could affect the validity of our
forward-looking statements, you should read "Risk Factors" beginning on page 6.
These or other factors could cause our actual performance or financial results
to differ materially from those expressed in the forward-looking statements. You
should not put undue reliance on any forward-looking statements.
WHERE YOU CAN FIND MORE INFORMATION
We file reports, proxy statements and other information with the SEC. Our
SEC filings are available over the Internet at the SEC's web site at
http://www.sec.gov. You also may read and copy any document we file with the SEC
at the SEC's public reference rooms at 450 Fifth Street, N.W., Room 1024,
Washington, D.C. 20549; Seven World Trade Center, 13th Floor, New York, New York
10048; and Citicorp Center, 5000 West Madison Street (Suite 1400), Chicago,
Illinois 60601. Please call the SEC at 1-800-SEC-0330 for more information on
the public reference rooms and their copy charges. Our common stock is listed
and traded on the New York Stock Exchange under the trading symbol "IFF." You
may also inspect the information we file with the SEC at the NYSE, 20 Broad
Street, New York New York 10005.
IFF "incorporates by reference" information into this prospectus which
means that we disclose important business and financial information to you by
referring you to another document filed separately with the SEC. The information
incorporated by reference is deemed a part of this prospectus, except for any
information superseded by information contained directly in this prospectus.
This prospectus incorporates by reference the following documents filed by IFF
with the SEC:
o Our Annual Report on Form 10-K for the year ended December 31, 2000;
o Our Quarterly Reports on Form 10-Q for the quarters ended March 31,
2001 and June 30, 2001;
o Our Current Reports on Form 8-K, dated March 22, 2000, September 25,
2000, September 26, 2000, November 3, 2000, March 2, 2001, April 27,
2001 and May 4, 2001; and
o Our Current Report on Form 8-K/A, dated January 17, 2001.
i
All documents filed by IFF with the SEC from the date of this prospectus to
the completion of the offering of the exchange notes under this document shall
also be deemed to be incorporated herein by reference.
You may also request a copy of any of these filings, at no cost, by writing
or telephoning us at the following address or phone number:
International Flavors & Fragrances Inc.
521 West 57th Street
New York, New York 10019-2960
(212) 765-5500
Attention: Stephen A. Block, Esq.,
Senior Vice President,
General Counsel and Secretary
Exhibits to the filings will not be sent, however, unless those exhibits
have specifically been incorporated by reference in this document.
IN ORDER TO OBTAIN TIMELY DELIVERY, YOU MUST REQUEST THIS INFORMATION NO
LATER THAN 5 BUSINESS DAYS BEFORE YOU MAKE YOUR DECISION TO EXCHANGE.
ii
PROSPECTUS SUMMARY
The following summary highlights selected information from this prospectus
and may not contain all of the information that is important to you. This
prospectus includes specific terms of the exchange notes we are offering, as
well as information regarding our business and detailed financial data. We
encourage you to read this prospectus in its entirety. You should pay special
attention to the "Risk Factors" section beginning on page 6 of this prospectus.
ABOUT IFF
International Flavors & Fragrances Inc., incorporated in New York in 1909,
is a leading creator and manufacturer of flavor and fragrance products used by
other manufacturers to impart or improve flavor or fragrance in a wide variety
of consumer products. Effective November 3, 2000, IFF acquired Bush Boake Allen
Inc., a flavors, fragrances and aroma chemicals company with complementary
product offerings. As a result of the synergies and efficiencies expected to be
achieved in connection with the integration of IFF and BBA, we expect to
generate $70 million in annual cost savings, $50 million of which, on an annual
run-rate basis, have been achieved as of June 30, 2001. In October 2000, we
announced a major reorganization of our operating segments under the broad
umbrellas of Business Development and Operations (rather than in separate
divisions for flavors and fragrances) in order to better support and service
our customers. We expect to generate additional annual cost savings of
approximately $25 to $30 million by 2003 as a result of the reorganization.
In 2000, we reported net sales of approximately $1,462.8 million. On a pro
forma basis, giving effect to the acquisition of BBA as if such acquisition had
occurred on January 1, 2000, sales were $1,880.6 million. As of December 31,
2000, we employed approximately 6,610 persons worldwide.
We are incorporated under the laws of the State of New York. Our
headquarters and principal executive offices are located at 521 West 57th
Street, New York, New York 10019, and our telephone number is (212) 765-5500.
1
SUMMARY OF THE EXCHANGE OFFER
On May 7, 2001, we completed the private offering of $700 million aggregate
principal amount of 6.45% Notes due 2006. As part of that offering, we entered
into a registration rights agreement with the initial purchasers of these
original notes in which we agreed, among other things, to deliver this
prospectus to you and to complete an exchange offer for the original notes.
Below is a summary of the exchange offer.
Securities Offered.......... Up to $700,000,000 aggregate principal amount
of new 6.45% Notes due 2006, which have been
registered under the Securities Act. The form and
terms of these exchange notes are identical in
all material respects to those of the original
notes. The exchange notes, however, will not
contain transfer restrictions and registration
rights applicable to the original notes.
The Exchange Offer.......... We are offering to exchange new $1,000
principal amount of our 6.45% Notes due 2006,
which have been registered under the Securities
Act, for $1,000 principal amount of our
outstanding 6.45% Notes due 2006.
In order to be exchanged, an original note must
be properly tendered and accepted. All original
notes that are validly tendered and not
withdrawn will be exchanged. As of the date of
this prospectus, there are $700 million
principal amount of original notes outstanding.
We will issue exchange notes promptly after the
expiration of the exchange offer.
Resales..................... Based on interpretations by the staff of the
SEC, as detailed in a series of no-action letters
issued to third parties, we believe that the
exchange notes issued in the exchange offer may
be offered for resale, resold or otherwise
transferred by you without compliance with the
registration and prospectus delivery requirements
of the Securities Act as long as:
o you are acquiring the exchange notes in the
ordinary course of your business;
o you are not participating, do not intend to
participate and have no arrangement or
understanding with any person to participate,
in a distribution of the exchange notes; and
o you are not an affiliate of ours.
If you are an affiliate of ours, are engaged in
or intend to engage in or have any arrangement
or understanding with any person to participate
in the distribution of the exchange notes:
(1) you cannot rely on the applicable
interpretations of the staff of the SEC; and
(2) you must comply with the registration
requirements of the Securities Act in
connection with any resale transaction.
2
Each broker or dealer that receives exchange
notes for its own account in exchange for
original notes that were acquired as a result of
market-making or other trading activities must
acknowledge that it will comply with the
registration and prospectus delivery
requirements of the Securities Act in connection
with any offer to resell, resale, or other
transfer of the exchange notes issued in the
exchange offer, including the delivery of a
prospectus that contains information with
respect to any selling holder required by the
Securities Act in connection with any resale of
the exchange notes.
Furthermore, any broker-dealer that acquired any
of its original notes directly from us:
o may not rely on the applicable interpretation
of the staff of the SEC's position contained
in Exxon Capital Holdings Corp., SEC
no-action letter (April 13, 1988), Morgan,
Stanley & Co. Inc., SEC no-action letter
(June 5, 1991) and Shearman & Sterling, SEC
no-action letter (July 2, 1983); and
o must also be named as a selling noteholder in
connection with the registration and
prospectus delivery requirements of the
Securities Act relating to any resale
transaction.
Expiration Date............. 5:00 p.m., New York City time, on October 10,
2001 unless we extend the expiration date.
Accrued Interest on the Exchange
Notes and Original Notes.... The exchange notes will bear interest from the
most recent date to which interest has been paid
on the original notes. If your original notes are
accepted for exchange, then you will receive
interest on the exchange notes and not on the
original notes.
Conditions to the
Exchange Offer............... The exchange offer is subject to customary
conditions. We may assert or waive these
conditions in our sole discretion. If we
materially change the terms of the exchange
offer, we will resolicit tenders of the original
notes. See "The Exchange Offer--Conditions to the
Exchange Offer" for more information regarding
conditions to the exchange offer.
Procedures for Tendering
Original Notes.............. Except as described in the section titled "The
Exchange Offer--Guaranteed Delivery Procedures,"
a tendering holder must, on or prior to the
expiration date:
o transmit a properly completed and duly
executed letter of transmittal, including all
other documents required by the letter of
transmittal, to United States Trust Company
of New York at the address listed in this
prospectus; or
3
o if original notes are tendered in accordance
with the book-entry procedures described in
this prospectus, the tendering holder must
transmit an agent's message to the exchange
agent at the address listed in this
prospectus.
See "The Exchange Offer--Procedures for
Tendering."
Special Procedures for
Beneficial Holders.......... If you are the beneficial holder of original
notes that are registered in the name of your
broker, dealer, commercial bank, trust company or
other nominee, and you wish to tender in the
exchange offer, you should promptly contact the
person in whose name your original notes are
registered and instruct that person to tender on
your behalf. See "The Exchange Offer--Procedures
for Tendering."
Guaranteed Delivery
Procedures................... If you wish to tender your original notes and you
cannot deliver your original notes, the letter of
transmittal or any other required documents to
the exchange agent before the expiration date,
you may tender your original notes by following
the guaranteed delivery procedures under the
heading "The Exchange Offer--Guaranteed Delivery
Procedures."
Withdrawal Rights........... Tenders may be withdrawn at any time before
5:00 p.m., New York City time, on the expiration
date.
Acceptance of Original Notes and
Delivery of Exchange Notes... Subject to the conditions stated in the section
"The Exchange Offer--Conditions to the Exchange
Offer" of this prospectus, we will accept for
exchange any and all original notes which are
properly tendered in the exchange offer before
5:00 p.m., New York City time, on the expiration
date. The exchange notes will be delivered
promptly after the expiration date. See "The
Exchange Offer--Terms of the Exchange Offer."
Material Federal
Tax Considerations............ We believe that your exchange of original notes
for exchange notes to be issued in the exchange
offer will not result in any gain or loss to you
for U.S. federal income tax purposes. See
"Material Federal Tax Considerations."
Exchange Agent.............. Bank One Trust Company, N.A. is serving as
exchange agent in connection with the exchange
offer. The address and telephone number of the
exchange agent are listed under the heading "The
Exchange Offer--Exchange Agent."
Use of Proceeds............. We will not receive any proceeds from the
issuance of exchange notes in the exchange offer.
We will pay all expenses incident to the exchange
offer. See "Use of Proceeds."
4
SUMMARY OF TERMS OF THE EXCHANGE NOTES
The form and terms of the exchange notes and the original notes are
identical in all material respects, except that transfer restrictions and
registration rights applicable to the original notes do not apply to the
exchange notes. The exchange notes will evidence the same debt as the original
notes and will be governed by the same indenture.
Exchange Notes Offered...... $700 million principal amount of 6.45% Notes
due 2006.
Maturity.................... May 15, 2006.
Interest.................... Interest accrues on the principal amount of the
exchange notes at 6.45% per year. Interest is
payable on the exchange notes, and distributions
will be made semi-annually in arrears on May 15
and November 15 of each year. The first payment
will be made on November 15, 2001.
Ranking..................... The exchange notes will be our senior unsecured
obligations and will rank equally with all of our
other senior indebtedness. The exchange notes
will be effectively subordinated to all
liabilities of our subsidiaries, including trade
payables.
Optional Redemption......... We may redeem any or all of the exchange notes
at a redemption price equal to the greater of (1)
100% of the principal amount of the exchange
notes being redeemed and (2) the sum of the
present values of the remaining scheduled
payments of principal and interest on the
exchange notes being redeemed, discounted to the
redemption date on a semiannual basis, assuming a
360-day year consisting of twelve 30-day months,
at the Treasury Rate, plus 25 basis points, plus,
in each case, accrued and unpaid interest on the
exchange notes being redeemed.
5
RISK FACTORS
IN ADDITION TO THE INFORMATION CONTAINED ELSEWHERE IN THIS PROSPECTUS, THE
FOLLOWING RISK FACTORS SHOULD BE CAREFULLY CONSIDERED IN EVALUATING THE EXCHANGE
OFFER AND AN INVESTMENT IN THE EXCHANGE NOTES.
YOU MAY HAVE DIFFICULTY SELLING THE ORIGINAL NOTES THAT YOU DO NOT EXCHANGE.
If you do not exchange your original notes for exchange notes in the
exchange offer, you will continue to be subject to the restrictions on transfer
of your original notes described in the legend on your original notes. The
restrictions on transfer of your original notes arise because we issued the
original notes under exemptions from, or in transactions not subject to, the
registration requirements of the Securities Act and applicable state securities
laws. In general, you may only offer or sell the original notes if they are
registered under the Securities Act and applicable state securities laws, or
offered and sold under an exemption from these requirements. We do not intend to
register the original notes under the Securities Act. To the extent original
notes are tendered and accepted in the exchange offer, the trading market, if
any, for the original notes would be adversely affected. See "The Exchange
Offer--Consequences of Exchanging or Failing to Exchange Original Notes."
YOU MAY FIND IT DIFFICULT TO SELL YOUR EXCHANGE NOTES BECAUSE THERE IS NO
EXISTING TRADING MARKET FOR THE EXCHANGE NOTES.
You may find it difficult to sell your exchange notes because an active
trading market for the exchange notes may not develop. The exchange notes are
being offered to the holders of the original notes. The original notes were
issued on May 7, 2001 primarily to a small number of institutional investors.
After the exchange offer, the trading market for the remaining untendered
original notes also could be adversely affected.
There is no existing trading market for the exchange notes. We do not
intend to apply for listing or quotation of the exchange notes on any exchange,
and so we do not know the extent to which investor interest will lead to the
development of a trading market or how liquid that market might be. Although
some or all of the initial purchasers of the original notes have informed us
that they may make a market in the exchange notes, they are not obligated to do
so, and any market-making may be discontinued at any time without notice. As a
result, the market price of the exchange notes, as well as your ability to sell
the exchange notes, could be adversely affected.
BROKER-DEALERS OR NOTEHOLDERS MAY BECOME SUBJECT TO THE REGISTRATION AND
PROSPECTUS DELIVERY REQUIREMENTS OF THE SECURITIES ACT.
Any broker-dealer that:
o exchanges its original notes in the exchange offer for the purpose of
participating in a distribution of the exchange notes, or
o resells exchange notes that were received by it for its own account in
the exchange offer, may be deemed to have received restricted
securities and may be required to comply with the registration and
prospectus delivery requirements of the Securities Act in connection
with any resale transaction by that broker-dealer. Any profit on the
resale of the exchange notes and any commission or concessions received
by a broker-dealer may be deemed to be underwriting compensation under
the Securities Act.
In addition to broker-dealers, any noteholder that exchanges its original
certificates in the exchange offer for the purpose of participating in a
distribution of the exchange notes may be deemed to have received restricted
securities and may be required to comply with the registration and prospectus
delivery requirements of the Securities Act in connection with any resale
transaction by that noteholder.
6
USE OF PROCEEDS
We will not receive any proceeds from the exchange offer. In consideration
for issuing the exchange notes, we will receive in exchange the original notes
of like principal amount, the terms of which are identical in all material
respects to the exchange notes. The original notes surrendered in exchange for
exchange notes will be retired and canceled and cannot be reissued.
Accordingly, issuance of the exchange notes will not result in any increase in
our indebtedness. We have agreed to bear the expenses of the exchange offer. No
underwriter is being used in connection with the exchange offer.
On May 7, 2001, we issued and sold the original notes. We used the net
proceeds of that offering, which were approximately $694 million, to repay a
portion of the outstanding borrowings under our commercial paper program.
RATIO OF EARNINGS TO FIXED CHARGES
Our ratio of earnings to fixed charges for each of the years ended
December 31, 1996 through 2000 was 39.40x, 45.80x, 42.08x, 22.83x and 6.72x,
respectively. Our ratio of earnings to fixed charges for the six months ended
June 30, 2001 was 2.94x. We compute these ratios by dividing fixed charges into
the sum of earnings and fixed charges. Earnings used in computing the ratio
consist of income before income taxes and fixed charges, excluding capitalized
interest. Fixed charges consist of interest expensed and capitalized,
amortization of debt expense and that portion of rental expense representative
of interest.
7
SELECTED CONSOLIDATED FINANCIAL DATA
The selected historical financial information of IFF set forth below has
been derived from the audited consolidated financial statements of IFF as of
and for the five years ended December 31, 2000. For the six months ended June
30, 2000 and 2001, the selected historical financial information has been
derived from the unaudited interim financial information of IFF. The following
selected financial information is qualified in its entirety by, and should be
read in conjunction with, the information contained under the heading
"Management's Discussion and Analysis of Financial Condition and Results of
Operations" and IFF's consolidated financial statements and the related notes
to those financial statements, included in the documents incorporated by
reference into this prospectus.
SIX MONTHS ENDED
FOR THE YEAR ENDED DECEMBER 31, JUNE 30,
----------------------------------------------------------------------- -----------------------
2000 1999 1998 1997 1996 2000 2001
--------------- ------------- ------------- ------------- ------------- ----------- -----------
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS AND RATIOS)
CONSOLIDATED STATEMENT OF
INCOME DATA
Net sales .......................... $ 1,462,795 $1,439,499 $1,407,349 $1,426,791 $1,436,053 $738,671 $ 961,877
----------- ---------- ---------- ---------- ---------- -------- ---------
Cost of goods sold(1) .............. 831,653 806,382 777,764 787,533 793,790 408,239 553,645
Research and development
expenses .......................... 112,671 103,794 98,438 94,411 93,545 53,757 70,908
Selling and administrative
expenses(1) ....................... 258,653 248,047 224,393 212,678 208,573 123,503 166,846
Amortization of goodwill and
other tangibles ................... 7,032 -- -- -- -- -- 22,755
Nonrecurring
charges(2)(3)(4)(5)(6) ............ 41,273 32,948 -- -- 49,707 9,354 21,200
Interest expense ................... 25,072 5,154 2,042 2,420 2,740 5,211 39,934
Other (income) expense, net ........ 2,314 (291) (6,356) (10,442) (11,405) (126) 766
----------- ---------- ---------- ---------- ---------- -------- ---------
1,278,668 1,196,034 1,096,281 1,086,600 1,136,950 599,938 876,054
----------- ---------- ---------- ---------- ---------- -------- ---------
Income before taxes on income....... 184,127 243,465 311,068 340,191 299,103 138,733 85,823
Taxes on income .................... 61,122 81,465 107,283 121,962 109,209 46,041 32,546
----------- ---------- ---------- ---------- ---------- -------- ---------
Net income ......................... $ 123,005 $ 162,000 $ 203,785 $ 218,229 $ 189,894 $ 92,692 $ 53,277
Net income per share -- basic ...... $ 1.22 $ 1.53 $ 1.90 $ 2.00 $ 1.71 $ 0.90 $ 0.55
Net income per share -- diluted..... $ 1.22 $ 1.53 $ 1.90 $ 1.99 $ 1.70 $ 0.90 $ 0.55
CONSOLIDATED BALANCE SHEET DATA
AS OF DECEMBER 31,
-------------------------------------------------------------------------- AS OF JUNE 30,
2000 1999 1998 1997 1996 2001
-------------- -------------- -------------- -------------- -------------- ---------------
Cash and short-term
investments .................... $ 129,238 $ 62,971 $ 115,999 $ 260,446 $ 317,983 $ 61,097
Total assets .................... 2,489,033 1,401,495 1,388,064 1,422,261 1,506,913 2,385,306
Short-term debt ................. 852,985 92,474 29,072 10,490 18,929 445,252
Long-term debt .................. 417,402 3,832 4,341 5,114 8,289 816,278
Shareholders' equity ............ 631,259 858,497 945,051 1,000,488 1,076,537 538,609
OTHER DATA
Gross additions to property,
plant and equipment ............ 60,696 103,835 91,690 59,284 80,782 20,160
Depreciation and amortization
charged to income .............. 69,344 56,369 49,006 50,278 47,764 62,330
Ratio of earnings to fixed
charges(7) ..................... 6.72x 22.83x 42.08x 45.80x 39.40x 2.94x
Cash dividends declared ......... 130,234 160,830 159,513 158,453 152,743 28,722
Per share ...................... $ 1.29 $ 1.52 $ 1.49 $ 1.45 $ 1.38 $ 0.30
8
----------
(1) Captions reflect the classification of shipping and handling costs as a
component of cost of goods sold; prior to 2000, we had accounted for such
costs as a component of selling and administrative expenses. Prior year
amounts have been reclassified from selling expense to cost of goods sold
in accordance with guidance established by Emerging Issues Task Force
Issue No. 00-10, "Accounting for Shipping and Handling Fees and Costs."
Implementation had no effect on net income.
(2) Nonrecurring charges ($13,425 after tax) in six months ended June 30,
2001 resulted from our reorganization program as well as certain costs
associated with the integration of BBA.
(3) Nonrecurring charges ($6,248 after tax) in six months ended June 30, 2000
resulted from our reorganization program.
(4) Nonrecurring charges ($26,765 after tax) in 2000 resulted from our
reorganization program as well as certain costs associated with the
integration of BBA.
(5) Nonrecurring charges ($21,910 after tax) in 1999 resulted from our
program to streamline our operations worldwide.
(6) Nonrecurring charges ($31,315 after tax) in 1996 resulted from our
program to phase out and close certain aroma chemical operations.
(7) The ratio of earnings to fixed charges is computed by dividing fixed
charges into the sum of earnings and fixed charges. Earnings used in
computing the ratio consist of income before income taxes and fixed
charges, excluding capitalized interest. Fixed charges consist of
interest expensed and capitalized, amortization of debt expense and that
portion of rental expense representative of interest, estimated at
one-third.
9
THE EXCHANGE OFFER
PURPOSE OF THE EXCHANGE OFFER
When we sold the original notes in May 2001, we entered into a
registration rights agreement with the initial purchasers of those original
notes. Under the registration rights agreement, we agreed to file a
registration statement regarding the exchange of the original notes for
exchange notes which are registered under the Securities Act of 1933. We also
agreed to use our reasonable best efforts to cause the registration statement
to become effective with the Securities and Exchange Commission, and to conduct
this exchange offer after the registration statement is declared effective. The
registration rights agreement provides that we will be required to pay
liquidated damages to the holders of the original notes if:
o the registration statement is not filed by August 7, 2001;
o the registration statement is not declared effective by November 7,
2001; or
o the exchange offer has not been consummated by December 7, 2001.
A copy of the registration rights agreement is filed as an exhibit to the
registration statement of which this prospectus is a part.
TERMS OF THE EXCHANGE OFFER
Upon the terms and conditions described in this prospectus and in the
accompanying letter of transmittal, which together constitute the exchange
offer, we will accept for exchange original notes that are properly tendered on
or before the expiration date and not withdrawn as permitted below. As used in
this prospectus, the term "expiration date" means 5:00 p.m., New York City
time, on October 10, 2001. However, if we, in our sole discretion, have
extended the period of time for which the exchange offer is open, the term
"expiration date" means the latest time and date to which we extend the
exchange offer.
As of the date of this prospectus, $700 million aggregate principal amount
of the original notes is outstanding. This prospectus, together with the letter
of transmittal, is first being sent on or about September 10, 2001 to all
holders of original notes known to us. Our obligation to accept original notes
for exchange in the exchange offer is subject to the conditions described below
under "Conditions to the Exchange Offer."
We reserve the right to extend the period of time during which the
exchange offer is open. We would then delay acceptance for exchange of any
original notes by giving oral or written notice of an extension to the holders
of original notes as described below. During any extension period, all original
notes previously tendered will remain subject to the exchange offer and may be
accepted for exchange by us. Any original notes not accepted for exchange will
be returned to the tendering holder after the expiration or termination of the
exchange offer.
Original notes tendered in the exchange offer must be in denominations of
principal amount of $1,000 and any integral multiple of $1,000.
We reserve the right to amend or terminate the exchange offer, and not to
accept for exchange any original notes not previously accepted for exchange,
upon the occurrence of any of the conditions of the exchange offer specified
below under "Conditions to the Exchange Offer." We will give oral or written
notice of any extension, amendment, non-acceptance or termination to the
holders of the original notes as promptly as practicable. If we materially
change the terms of the exchange offer, we will resolicit tenders of the
original notes, file a post-effective amendment to the prospectus and provide
notice to the noteholders. If the change is made less than five business days
before the expiration of the exchange offer, we will extend the offer so that
the noteholders have at least five business days to tender or withdraw. We will
notify you of any extension by means of a press release or other public
announcement no later than 9:00 a.m., New York City time on that date.
10
Our acceptance of the tender of original notes by a tendering holder will
form a binding agreement upon the terms and subject to the conditions provided
in this prospectus and in the accompanying letter of transmittal.
PROCEDURES FOR TENDERING
Except as described below, a tendering holder must, on or prior to the
expiration date:
o transmit a properly completed and duly executed letter of transmittal,
including all other documents required by the letter of transmittal, to
Bank One Trust Company, N.A. at the address listed below under the
heading "Exchange Agent;" or
o if original notes are tendered in accordance with the book-entry
procedures listed below, the tendering holder must transmit an agent's
message to the exchange agent at the address listed below under the
heading "Exchange Agent."
In addition:
o the exchange agent must receive, on or before the expiration date,
certificates for the original notes; or
o a timely confirmation of book-entry transfer of the original notes into
the exchange agent's account at the Depository Trust Company, the
book-entry transfer facility, along with the letter of transmittal or
an agent's message; or
o the holder must comply with the guaranteed delivery procedures
described below.
The Depository Trust Company will be referred to as DTC in this
prospectus.
The term "agent's message" means a message, transmitted to DTC and
received by the exchange agent and forming a part of a book-entry transfer,
that states that DTC has received an express acknowledgment that the tendering
holder agrees to be bound by the letter of transmittal and that we may enforce
the letter of transmittal against this holder.
The method of delivery of original notes, letters of transmittal and all
other required documents is at your election and risk. If the delivery is by
mail, we recommend that you use registered mail, properly insured, with return
receipt requested. In all cases, you should allow sufficient time to assure
timely delivery. You should not send letters of transmittal or original notes
to us.
If you are a beneficial owner whose original notes are registered in the
name of a broker, dealer, commercial bank, trust company or other nominee, and
wish to tender, you should promptly instruct the registered holder to tender on
your behalf. Any registered holder that is a participant in DTC's book-entry
transfer facility system may make book-entry delivery of the original notes by
causing DTC to transfer the original notes into the exchange agent's account.
Signatures on a letter of transmittal or a notice of withdrawal must be
guaranteed unless the original notes surrendered for exchange are tendered:
o by a registered holder of the original notes who has not completed the
box entitled "Special Issuance Instructions" or "Special Delivery
Instructions" on the letter of transmittal, or
o for the account of an "eligible institution."
If signatures on a letter of transmittal or a notice of withdrawal are
required to be guaranteed, the guarantees must be by an "eligible institution."
An "eligible institution" is a financial institution, including most banks,
savings and loan associations and brokerage houses, that is a participant in
the Securities Transfer Agents Medallion Program, the New York Stock Exchange
Medallion Signature Program or the Stock Exchanges Medallion Program.
We will determine in our sole discretion all questions as to the validity,
form and eligibility of original notes tendered for exchange. This discretion
extends to the determination of all questions concerning the timing of receipts
and acceptance of tenders. These determinations will be final and binding.
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We reserve the right to reject any particular original note not properly
tendered or any which acceptance might, in our judgment or our counsel's
judgment, be unlawful. We also reserve the right to waive any defects or
irregularities or conditions of the exchange offer as to any particular
original note either before or after the expiration date, including the right
to waive the ineligibility of any tendering holder. Our interpretation of the
terms and conditions of the exchange offer as to any particular original note
either before or after the expiration date, including the letter of transmittal
and the instructions to the letter of transmittal, shall be final and binding
on all parties. Unless waived, any defects or irregularities in connection with
tenders of original notes must be cured within a reasonable period of time.
Neither we, the exchange agent nor any other person will be under any duty to
give notification of any defect or irregularity in any tender of original
notes. Nor will we, the exchange agent or any other person incur any liability
for failing to give notification of any defect or irregularity.
If the letter of transmittal is signed by a person other than the
registered holder of original notes, the letter of transmittal must be
accompanied by a written instrument of transfer or exchange in satisfactory
form duly executed by the registered holder with the signature guaranteed by an
eligible institution. The original notes must be endorsed or accompanied by
appropriate powers of attorney. In either case, the original notes must be
signed exactly as the name of any registered holder appears on the original
notes.
If the letter of transmittal or any original notes or powers of attorney
are signed by trustees, executors, administrators, guardians,
attorneys-in-fact, officers of corporations or others acting in a fiduciary or
representative capacity, these persons should so indicate when signing. Unless
waived by us, proper evidence satisfactory to us of their authority to so act
must be submitted.
By tendering, each holder will represent to us that, among other things,
o the exchange notes are being acquired in the ordinary course of
business of the person receiving the exchange notes, whether or not
that person is the holder and
o neither the holder nor the other person has any arrangement or
understanding with any person to participate in the distribution of the
exchange notes.
In the case of a holder that is not a broker-dealer, that holder, by
tendering, will also represent to us that the holder is not engaged in and does
not intend to engage in a distribution of the exchange notes.
If any holder or other person is an "affiliate" of ours, as defined under
Rule 405 of the Securities Act, or is engaged in, or intends to engage in, or
has an arrangement or understanding with any person to participate in, a
distribution of the exchange notes, that holder or other person can not rely on
the applicable interpretations of the staff of the SEC and must comply with the
registration and prospectus delivery requirements of the Securities Act in
connection with any resale transaction.
Each broker-dealer that receives exchange notes for its own account in
exchange for original notes, where the original notes were acquired by it as a
result of market-making activities or other trading activities, must
acknowledge that it will deliver a prospectus that meets the requirements of
the Securities Act in connection with any resale of the exchange notes. The
letter of transmittal states that by so acknowledging and by delivering a
prospectus, a broker-dealer will not be deemed to admit that it is an
"underwriter" within the meaning of the Securities Act. See "Plan of
Distribution."
ACCEPTANCE OF ORIGINAL NOTES FOR EXCHANGE; DELIVERY OF EXCHANGE NOTES
Upon satisfaction or waiver of all of the conditions to the exchange
offer, we will accept, promptly after the expiration date, all original notes
properly tendered. We will issue the exchange notes promptly after acceptance
of the original notes. See "Conditions to the Exchange Offer" below. For
purposes of the exchange offer, we will be deemed to have accepted properly
tendered original notes for exchange when, as and if we have given oral or
written notice to the exchange agent, with prompt written confirmation of any
oral notice.
12
For each original note accepted for exchange, the holder of the original
note will receive an exchange note having a principal amount equal to that of
the surrendered original note. The exchange notes will bear interest from the
most recent date to which interest has been paid on the original notes.
Accordingly, registered holders of exchange notes on the relevant record date
for the first interest payment date following the completion of the exchange
offer will receive interest accruing from the most recent date to which
interest has been paid. Original notes accepted for exchange will cease to
accrue interest from and after the date of completion of the exchange offer.
Holders of original notes whose original notes are accepted for exchange will
not receive any payment for accrued interest on the original notes otherwise
payable on any interest payment date the record date for which occurs on or
after completion of the exchange offer and will be deemed to have waived their
rights to receive the accrued interest on the original notes.
In all cases, issuance of exchange notes for original notes will be made
only after timely receipt by the exchange agent of:
o certificates for the original notes, or a timely book-entry
confirmation of the original notes, into the exchange agent's account
at the book-entry transfer facility;
o a properly completed and duly executed letter of transmittal; and
o all other required documents.
Unaccepted or non-exchanged original notes will be returned without
expense to the tendering holder of the original notes. In the case of original
notes tendered by book-entry transfer in accordance with the book-entry
procedures described below, the non-exchanged original notes will be credited
to an account maintained with the book-entry transfer facility, as promptly as
practicable after the expiration or termination of the exchange offer.
BOOK-ENTRY TRANSFER
The exchange agent will make a request to establish an account for the
original notes at DTC for purposes of the exchange offer within two business
days after the date of this prospectus. Any financial institution that is a
participant in DTC's systems must make book-entry delivery of original notes by
causing DTC to transfer those original notes into the exchange agent's account
at DTC in accordance with DTC's procedure for transfer. This participant should
transmit its acceptance to DTC on or prior to the expiration date or comply
with the guaranteed delivery procedures described below. DTC will verify this
acceptance, execute a book-entry transfer of the tendered original notes into
the exchange agent's account at DTC and then send to the exchange agent
confirmation of this book-entry transfer. The confirmation of this book-entry
transfer will include an agent's message confirming that DTC has received an
express acknowledgment from this participant that this participant has received
and agrees to be bound by the letter of transmittal and that we may enforce the
letter of transmittal against this participant. Delivery of exchange notes
issued in the exchange offer may be effected through book-entry transfer at
DTC. However, the letter of transmittal or facsimile of it or an agent's
message, with any required signature guarantees and any other required
documents, must:
o be transmitted to and received by the exchange agent at the address
listed below under "--Exchange Agent" on or prior to the expiration
date; or
o comply with the guaranteed delivery procedures described below.
GUARANTEED DELIVERY PROCEDURES
If a registered holder of original notes desires to tender the original
notes, and the original notes are not immediately available, or time will not
permit the holder's original notes or other required documents to reach the
exchange agent before the expiration date, or the procedure for book-entry
transfer described above cannot be completed on a timely basis, a tender may
nonetheless be made if:
o the tender is made through an eligible institution;
13
o prior to the expiration date, the exchange agent received from an
eligible institution a properly completed and duly executed letter of
transmittal, or a facsimile of the letter of transmittal, and notice of
guaranteed delivery, substantially in the form provided by us, by
facsimile transmission, mail or hand delivery,
(1) stating the name and address of the holder of original notes and
the amount of original notes tendered;
(2) stating that the tender is being made; and
(3) guaranteeing that within three New York Stock Exchange trading
days after the expiration date, the certificates for all
physically tendered original notes, in proper form for transfer,
or a book-entry confirmation, as the case may be, and any other
documents required by the letter of transmittal will be deposited
by the eligible institution with the exchange agent; and
o the certificates for all physically tendered original notes, in proper
form for transfer, or a book-entry confirmation, as the case may be,
and all other documents required by the letter of transmittal, are
received by the exchange agent within three New York Stock Exchange
trading days after the expiration date.
WITHDRAWAL RIGHTS
Tenders of original notes may be withdrawn at any time before 5:00 p.m.,
New York City time, on the expiration date.
For a withdrawal to be effective, the exchange agent must receive a
written notice of withdrawal at the address or, in the case of eligible
institutions, at the facsimile number, indicated below under "Exchange Agent"
before 5:00 p.m., New York City time, on the expiration date. Any notice of
withdrawal must:
o specify the name of the person, referred to as the depositor, having
tendered the original notes to be withdrawn;
o identify the original notes to be withdrawn, including the certificate
number or numbers and principal amount of the original notes;
o contain a statement that the holder is withdrawing his election to have
the original notes exchanged;
o be signed by the holder in the same manner as the original signature on
the letter of transmittal by which the original notes were tendered,
including any required signature guarantees, or be accompanied by
documents of transfer to have the trustee with respect to the original
notes register the transfer of the original notes in the name of the
person withdrawing the tender; and
o specify the name in which the original notes are registered, if
different from that of the depositor.
If certificates for original notes have been delivered or otherwise
identified to the exchange agent, then, prior to the release of these
certificates, the withdrawing holder must also submit the serial numbers of the
particular certificates to be withdrawn and signed notice of withdrawal with
signatures guaranteed by an eligible institution unless this holder is an
eligible institution. If original notes have been tendered in accordance with
the procedure for book-entry transfer described above, any notice of withdrawal
must specify the name and number of the account at the book-entry transfer
facility to be credited with the withdrawn original notes. We will determine
all questions as to the validity, form and eligibility, including time of
receipt, of notices of withdrawal. Any original notes so withdrawn will be
deemed not to have been validly tendered for exchange. No exchange notes will
be issued unless the original notes so withdrawn are validly re-tendered. Any
original notes that have been tendered for exchange, but which are not
exchanged for any reason, will be returned to the tendering holder without cost
to the holder. In the case of original notes tendered by book-entry transfer,
the original
14
notes will be credited to an account maintained with the book-entry transfer
facility for the original notes. Properly withdrawn original notes may be
re-tendered by following the procedures described under "Procedures for
Tendering" above at any time on or before 5:00 p.m., New York City time, on the
expiration date.
CONDITIONS TO THE EXCHANGE OFFER
Notwithstanding any other provision of the exchange offer, we will not be
required to accept for exchange, or to issue exchange notes in exchange for,
any original notes, and may terminate or amend the exchange offer, if at any
time before the acceptance of the original notes for exchange or the exchange
of the exchange notes for the original notes, any of the following events
occurs:
o there is threatened, instituted or pending any action or proceeding
before, or any injunction, order or decree issued by, any court or
governmental agency or other governmental regulatory or administrative
agency or commission:
(1) seeking to restrain or prohibit the making or completion of the
exchange offer or any other transaction contemplated by the
exchange offer, or assessing or seeking any damages as a result
of this transaction;
(2) resulting in a material delay in our ability to accept for
exchange or exchange some or all of the original notes in the
exchange offer; or
(3) any statute, rule, regulation, order or injunction has been
sought, proposed, introduced, enacted, promulgated or deemed
applicable to the exchange offer or any of the transactions
contemplated by the exchange offer by any governmental authority,
domestic or foreign; or
o any action has been taken, proposed or threatened, by any governmental
authority, domestic or foreign, that in our sole judgment might
directly or indirectly result in any of the consequences referred to in
clauses (1), (2) or (3) above or, in our sole judgment, might result in
the holders of exchange notes having obligations with respect to
resales and transfers of exchange notes which are greater than those
described in the interpretation of the SEC referred to above, or would
otherwise make it inadvisable to proceed with the exchange offer; or
o the following has occurred:
(1) any general suspension of or general limitation on prices for, or
trading in, securities on any national securities exchange or in
the over-the-counter market; or
(2) any limitation by a governmental authority, which may adversely
affect our ability to complete the transactions contemplated by
the exchange offer; or
(3) a declaration of a banking moratorium or any suspension of
payments in respect of banks in the United States or any
limitation by any governmental agency or authority which
adversely affects the extension of credit; or
(4) a commencement of a war, armed hostilities or other similar
international calamity directly or indirectly involving the
United States, or, in the case of any of the preceding events
existing at the time of the commencement of the exchange offer, a
material acceleration or worsening of these calamities; or
o any change, or any development involving a prospective change, has
occurred or been threatened in our business, financial condition,
operations or prospects and those of our subsidiaries taken as a whole
that is or may be adverse to us, or we have become aware of facts that
have or may have an adverse impact on the value of the original notes
or the exchange notes; which in our sole judgment in any case makes it
inadvisable to proceed with the exchange offer and/or with such
acceptance for exchange or with such exchange.
These conditions to the exchange offer are for our sole benefit and we may
assert them regardless of the circumstances giving rise to any of these
conditions, or we may waive them in whole or in part in our sole discretion. If
we do so, the exchange offer will remain open for at least 5 business days
15
following any waiver of the preceding conditions. Our failure at any time to
exercise any of the foregoing rights will not be deemed a waiver of any right.
In addition, we will not accept for exchange any original notes tendered,
and no exchange notes will be issued in exchange for any original notes, if at
this time any stop order is threatened or in effect relating to the
registration statement of which this prospectus constitutes a part or the
qualification of the indenture under the Trust Indenture Act of 1939.
EXCHANGE AGENT
We have appointed Bank One Trust Company, N.A. as the exchange agent for
the exchange offer. You should direct all executed letters of transmittal to
the exchange agent at the address indicated below. You should direct requests
for additional copies of this prospectus or of the letter of transmittal and
requests for notices of guaranteed delivery to the exchange agent addressed as
follows:
Delivery To: United States Trust Company of New York, Exchange Agent
By Hand Before 4:30 p.m.: By Registered or Certified Mail:
Bank One Trust Company, N.A. Bank One Trust Company, N.A.
One North State Street, 9th Floor One North State Street, 9th Floor
Chicago, IL 60602 Chicago, IL 60602
Attention: Exchanges Attention: Exchanges
By Hand or Overnight Delivery after
4:30 p.m. on the Expiration Date:
Bank One Trust Company, N.A.
One North State Street, 9th Floor
Chicago, IL 60602
Attention: Exchanges
For Information Call:
(800) 524-9472
By Facsimile Transmission
(for Eligible Institutions only):
(312) 407-8853
Attention: Exchanges
Confirm by Telephone:
(800) 524-9472
All other questions should be addressed to International Flavors &
Fragrances Inc., 521 West 57th Street, New York, NY 10019, Attention: Stephen A.
Block. If you deliver the letter of transmittal to an address other than any
address indicated above or transmit instructions via facsimile other than any
facsimile number indicated, then your delivery or transmission will not
constitute a valid delivery of the letter of transmittal.
FEES AND EXPENSES
We will not make any payment to brokers, dealers, or others soliciting
acceptances of the exchange offer. The estimated cash expenses to be incurred in
connection with the exchange offer will be paid by us. We estimate these
expenses in the aggregate to be approximately $123,745.00.
ACCOUNTING TREATMENT
We will not recognize any gain or loss for accounting purposes upon the
consummation of the exchange offer. We will amortize the expense of the exchange
offer over the term of the exchange notes under generally accepted accounting
principles.
TRANSFER TAXES
Holders who tender their original notes for exchange will not be obligated
to pay any related transfer taxes, except that holders who instruct us to
register exchange notes in the name of, or
16
request that original notes not tendered or not accepted in the exchange offer
be returned to, a person other than the registered tendering holder will be
responsible for the payment of any applicable transfer taxes.
CONSEQUENCES OF EXCHANGING OR FAILING TO EXCHANGE ORIGINAL NOTES
Holders of original notes who do not exchange their original notes for
exchange notes in the exchange offer will continue to be subject to the
provisions in the indenture regarding transfer and exchange of the original
notes and the restrictions on transfer of the original notes as described in the
legend on the original notes as a consequence of the issuance of the original
notes under exemptions from, or in transactions not subject to, the registration
requirements of the Securities Act and applicable state securities laws. In
general, the original notes may not be offered or sold, unless registered under
the Securities Act, except under an exemption from, or in a transaction not
subject to, the Securities Act and applicable state securities laws.
Under existing interpretations of the Securities Act by the SEC's staff
contained in several no-action letters to third parties, and subject to the
immediately following sentence, we believe that the exchange notes would
generally be freely transferable by holders after the exchange offer without
further registration under the Securities Act, subject to certain
representations required to be made by each holder of exchange notes, as set
forth below. However, any purchaser of exchange notes who is one of our
"affiliates" (as defined in Rule 405 under the Securities Act) or who intends to
participate in the exchange offer for the purpose of distributing the exchange
notes:
o will not be able to rely on the interpretation of the SEC's staff;
o will not be able to tender its original notes in the exchange offer;
and
o must comply with the registration and prospectus delivery requirements
of the Securities Act in connection with any sale or transfer of the
exchange notes unless such sale or transfer is made pursuant to an
exemption from such requirements. See "Plan of Distribution."
We do not intend to seek our own interpretation regarding the exchange
offer and there can be no assurance that the SEC's staff would make a similar
determination with respect to the exchange notes as it has in other
interpretations to other parties, although we have no reason to believe
otherwise.
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DESCRIPTION OF THE NOTES
The terms of the exchange notes to be issued in the exchange offer are
identical in all material respects to the terms of the original notes, except
for the transfer restrictions relating to the original notes. Any original notes
that remain outstanding after the exchange offer, together with exchange notes
issued in the exchange offer, will be treated as a single class of securities
under the indenture for voting purposes. For the purposes of this
Section--"Description of the Notes"--where we refer to the terms "note" or
"notes", we are referring to both the original notes and the exchange notes.
The notes are governed by an indenture, dated as of May 1, 2001, between us
and Bank One Trust Company, N.A., as trustee. The following discussion
summarizes the material provisions of the indenture. Because this is only a
summary, it is not complete and does not describe every aspect of the notes and
the indenture. Whenever there is a reference to particular sections or defined
terms of the indenture, the sections or defined terms are incorporated by
reference, and the statement is qualified in its entirety by that reference.
There are references to section numbers of the indenture so that you can easily
locate these provisions. A copy of the form of the indenture is available from
us upon request. You should read the indenture for provisions that may be
important to you, but which are not included in this summary.
GENERAL TERMS OF THE NOTES
The notes are our direct, unsecured and unsubordinated obligations and rank
on a parity with all of our other unsecured and unsubordinated indebtedness. The
notes are effectively subordinated to all liabilities of our subsidiaries,
including trade payables. The indenture does not limit the amount of notes,
debentures or other evidences of indebtedness that we may issue under it and
provides that notes, debentures or other evidences of indebtedness may be issued
from time to time in one or more series.
The original notes were originally issued in the aggregate principal amount
of $700,000,000. We may from time to time, without giving notice to or seeking
the consent of the holders of the original notes, issue notes having the same
ranking and the same interest rate, maturity and other terms as the original
notes. Any additional notes having such similar terms, together with the
applicable original notes, will constitute a single series of notes under the
indenture.
The notes bear interest at 6.45% per annum from May 7, 2001, payable
semi-annually on May 15 and November 15 of each year, commencing November 15,
2001, to the persons in whose names the notes were registered at the close of
business on the next preceding April 1 and October 1, respectively. Interest on
the notes is computed on the basis of a 360-day year comprised of twelve 30-day
months. The notes will mature on May 15, 2006. Principal and interest are
payable, and the notes are transferable or exchangeable, at the office or
offices or agency maintained by us for this purpose. Payment of interest on the
notes may be made at our option by check mailed to the registered holders.
Any payment otherwise required to be made in respect of the notes on a date
that is not a business day for the notes may be made on the next succeeding
business day with the same force and effect as if made on that date. No
additional interest will accrue as a result of a delayed payment. A business day
is defined in the indenture as a day other than a Saturday, Sunday or other day
on which commercial banks in New York City are authorized or required by law to
close.
OPTIONAL REDEMPTION
The notes may be redeemed, in whole or in part, at our option, at any time
or from time to time. The redemption price for the notes to be redeemed on any
redemption date will be equal to the greater of the following amounts:
o 100% of the principal amount of the notes being redeemed on the
redemption date; or
18
o the sum of the present values of the remaining scheduled payments of
principal and interest on the notes being redeemed on that redemption
date, not including any portion of any payments of interest accrued to
the redemption date, discounted to the redemption date on a semiannual
basis at the Treasury Rate, as defined below, plus 25 basis points, as
determined by the Reference Treasury Dealer, as defined below,
plus, in each case, accrued and unpaid interest on the notes to the redemption
date. Notwithstanding the foregoing, installments of interest on notes that are
due and payable on interest payment dates falling on or prior to a redemption
date will be payable on the interest payment date to the registered holders as
of the close of business on the relevant record date according to the notes and
the indenture. The redemption price will be calculated on the basis of a
360-day year consisting of twelve 30-day months.
We will mail notice of any redemption at least 30 days, but not more than
60 days, before the redemption date to each registered holder of the notes to be
redeemed. Once notice of redemption is mailed, the notes called for redemption
will become due and payable on the redemption date and at the applicable
redemption price, plus accrued and unpaid interest to the redemption date.
"Treasury Rate" means, with respect to any redemption date, the rate per
annum equal to the semiannual equivalent yield to maturity of the Comparable
Treasury Issue, assuming a price for the Comparable Treasury Issue, expressed as
a percentage of its principal amount, equal to the Comparable Treasury Price for
such redemption date.
"Comparable Treasury Issue" means the United States Treasury security
selected by the Reference Treasury Dealer as having a maturity comparable to the
remaining term of the notes to be redeemed that would be utilized, at the time
of selection and in accordance with customary financial practice, in pricing new
issues of corporate debt notes of comparable maturity to the remaining term of
the notes.
"Comparable Treasury Price" means, with respect to any redemption date, (a)
the average of the Reference Treasury Dealer Quotations for such redemption
date, after excluding the highest and lowest such Reference Treasury Dealer
Quotations, or (b) if the trustee obtains fewer than three such Reference
Treasury Dealer Quotations, the average of all such Quotations, or (c) if only
one Reference Treasury Dealer Quotation is received, such Quotation.
"Reference Treasury Dealer" means (a) Salomon Smith Barney Inc. or any of
the other initial purchasers, or their respective affiliates which are Primary
Treasury Dealers, and their respective successors; provided, however, that if
any of those entities ceases to be a primary U.S. Government securities dealer
in New York City a "Primary Treasury Dealer" we will substitute for those
entities another Primary Treasury Dealer; and (b) any other Primary Treasury
Dealer(s) selected by the trustee after consultation with us.
"Reference Treasury Dealer Quotation" means, with respect to each Reference
Treasury Dealer and any redemption date, the average, as determined by the
trustee, of the bid and asked prices for the Comparable Treasury Issue,
expressed in each case as a percentage of its principal amount, quoted in
writing to the trustee by such Reference Treasury Dealer at 5:00 p.m., New York
City time, on the third business day preceding such redemption date.
On and after the redemption date, interest will cease to accrue on the
notes or any portion of the notes called for redemption, unless we default in
the payment of the redemption price and accrued interest. On or before the
redemption date, we will deposit with a paying agent, or the trustee, money
sufficient to pay the redemption price of and accrued interest on the notes to
be redeemed on that date. If less than all of the notes are to be redeemed, the
notes to be redeemed will be selected by lot by DTC in the case of notes
represented by a global security, or by the trustee by a method the trustee
deems to be fair and appropriate in the case of notes that are not represented
by a global security.
The notes are not be entitled to the benefit of any mandatory redemption or
sinking fund.
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BOOK-ENTRY; DELIVERY AND FORM
The descriptions of the operations and procedures of DTC, Euroclear and
Clearstream set forth below are provided solely as a matter of convenience.
These operations and procedures are solely within the control of the respective
settlement systems and are subject to change by them from time to time. Neither
we nor the initial purchasers takes any responsibility for these operations or
procedures, and investors are urged to contact the relevant system or its
participants directly to discuss these matters.
DTC has advised us that it is (1) a limited purpose trust company
organized under the laws of the State of New York, (2) a "banking organization"
within the meaning of the New York Banking Law, (3) a member of the Federal
Reserve System, (4) a "clearing corporation" within the meaning of the Uniform
Commercial Code, as amended and (5) a "clearing agency" registered pursuant to
Section 17A of the Securities Exchange Act of 1934. DTC was created to hold
notes for its participants and facilitates the clearance and settlement of
notes transactions between participants through electronic book-entry changes
to the accounts of its participants, thereby eliminating the need for physical
transfer and delivery of certificates. DTC's participants include notes brokers
and dealers, including the initial purchasers, banks and trust companies,
clearing corporations and certain other organizations. Indirect access to DTC's
system is also available to other entities such as banks, brokers, dealers and
trust companies, referred to as "indirect participants," that clear through or
maintain a custodial relationship with a participant, either directly or
indirectly. Investors who are not participants may beneficially own notes held
by or on behalf of DTC only through participants or indirect participants.
Pursuant to procedures established by DTC, upon deposit of each of the
global notes, DTC will credit the accounts of participants designated by the
initial purchasers with an interest in the global notes. Ownership of the notes
will be shown on, and the transfer of ownership of notes will be effected only
through, records maintained by DTC, with respect to the interests of
participants, and the records of participants and the indirect participants,
with respect to the interests of persons other than participants.
We understand that under existing industry practice, in the event that we
request any action of holders of notes, or a holder that is an owner of a
beneficial interest in a global note desires to take any action that DTC, as
the holder of such global note, is entitled to take, DTC would authorize the
participants to take the action and the participants would authorize holders
owning through the participants to take the action or would otherwise act upon
the instruction of the holders. Neither we nor the trustee will have any
responsibility or liability for any aspect of the records relating to or
payments made on account of notes by DTC, or for maintaining, supervising or
reviewing any records of DTC relating to the notes. Payments with respect to
the principal of, and premium, if any, liquidated damages, if any, and interest
on, any notes represented by a global note registered in the name of DTC or its
nominee on the applicable record date will be payable by the trustee to or at
the direction of DTC or its nominee in its capacity as the registered holder of
the global note representing the notes under the indenture. Under the terms of
the indenture, we may treat, and the trustee may treat, the persons in whose
names the notes, including the global notes, are registered as the owners of
the notes for the purpose of receiving payment on the notes and for any and all
other purposes whatsoever. Accordingly, neither we nor the trustee has or will
have any responsibility or liability for the payment of these amounts to owners
of beneficial interests in the global note, including principal, premium, if
any, liquidated damages, if any, and interest.
CERTAIN COVENANTS OF THE COMPANY
The following two covenants are the only restrictive covenants under the
indenture.
LIMITATION ON LIENS
The indenture provides that, except as otherwise provided below, IFF will
not, and will not permit any Restricted Subsidiary, as defined below, to,
issue, incur, create, assume or guarantee any
20
debt for borrowed money, collectively referred to as "Debt," secured by any
mortgage, security interest, pledge, lien, charge or other encumbrance, each a
"Lien" and collectively "Liens," upon any Principal Property, as defined below,
or shares of stock or indebtedness of a Restricted Subsidiary, unless the
notes, and, at IFF's option, any other indebtedness or guarantee ranking
equally with such notes, are secured equally and ratably with, or at the option
of IFF, prior to, such secured Debt, for so long as such Debt is so secured.
This restriction will not apply to Debt secured by:
o Liens on property, shares of stock or indebtedness of an entity
existing at the time it becomes a Restricted Subsidiary, but not
created in anticipation of the transaction in which such entity becomes
a Restricted Subsidiary;
o Liens on property acquired by IFF or a Restricted Subsidiary existing
at the time of acquisition by IFF or a Restricted Subsidiary;
o Liens on property acquired by IFF or a Restricted Subsidiary and
created prior to, at the time of, or within 180 days after the
acquisition of such property, or the completion of construction, the
completion of improvements or the commencement of substantial
commercial operation of such property, for the purpose of financing all
or any part of the purchase price of such property, such construction
or the making of such improvements;
o Liens on property, shares of stock or indebtedness of an entity
existing at the time such entity is merged into or consolidated with
IFF or a Restricted Subsidiary or at the time of a sale, lease or other
disposition of all or substantially all of the properties of an entity
as an entirety or substantially as an entirety to IFF or a Restricted
Subsidiary, provided that the Lien was not incurred in contemplation of
such merger or consolidation or sale, lease or other disposition;
o Liens on property of IFF or a Restricted Subsidiary in favor of
governmental bodies to secure payments of amounts owed under contract
or statute or to secure any indebtedness incurred for the purpose of
financing all or any part of the purchase price or the cost of
constructing or improving the property subject to such Liens;
o Liens to secure indebtedness owing to IFF or a Restricted Subsidiary;
o Liens existing on the date of the initial issuance of the notes; and
o any extension, renewal or replacement of any Lien referred to above or
of any Debt secured by that Lien; provided, however, that such
extension, renewal or replacement Lien will secure no larger an amount
of Debt than that existing at the time of such extension, renewal or
replacement.
In addition, IFF or a Restricted Subsidiary may issue, incur, create,
assume or guarantee Debt secured by a Lien which would otherwise be subject to
the foregoing restrictions without equally and ratably securing the notes,
provided that after giving effect to the Debt secured by such Lien, the
aggregate amount of all Debt so secured by Liens, not including Liens permitted
above, does not exceed the greater of (1) 15% of Consolidated Net Tangible
Assets, as defined below, or (2) $100 million. (Section 4.05(b))
LIMITATIONS ON SALE AND LEASE-BACK TRANSACTIONS
The indenture provides that Sale and Lease-Back Transactions, as defined
below, by IFF or any Restricted Subsidiary of any Principal Property, other
than any such transaction involving a lease for a term of not more than three
years or any such transaction between IFF and one of its Restricted
Subsidiaries or between Restricted Subsidiaries, are prohibited unless at the
effective time of such transaction:
o IFF or the Restricted Subsidiary would be entitled, pursuant to the
covenant relating to "Limitation on Liens," without equally and ratably
securing the notes, to incur Debt secured by a Lien on the Principal
Property involved in such transaction in an amount at least equal to
the Attributable Debt, as defined below, with respect to such Sale and
Lease-Back Transaction; or
21
o IFF or the Restricted Subsidiary applies, within 180 days of the
effective date of the Sale and Lease-Back Transaction, an amount equal
to the greater of (1) the net proceeds of such sale or (2) the
Attributable Debt with respect to such Sale and Lease-Back Transaction,
to either, or a combination of, (x) the prepayment or retirement, other
than any mandatory retirement, mandatory prepayment or sinking fund
payment or payment at maturity, of debt for borrowed money of IFF or a
Restricted Subsidiary, other than debt subordinate to the notes or debt
to IFF or a Restricted Subsidiary, that matures more than 12 months
after its creation or (y) the purchase, construction or development of
other comparable property. (Section 4.06(b))
CERTAIN DEFINITIONS
"Attributable Debt," as used with regard to a Sale and Lease-Back
Transaction, means, at the time of determination, the lesser of (a) the fair
market value of the Principal Property leased, as determined in good faith by
IFF's Board of Directors, or (b) the present value of the total net amount of
rent required to be paid under such lease during the remaining term thereof,
including any period for which such lease has been extended, discounted at the
rate of interest set forth or implicit in the terms of such lease, as
determined in good faith by IFF's Board of Directors, compounded semiannually.
"Consolidated Net Tangible Assets" means, as of any particular time, the
aggregate amount of assets included on a consolidated balance sheet of IFF and
its Subsidiaries as of the end of the last fiscal quarter for which financial
information is available, less applicable reserves and other properly
deductible items, after deducting from such amount:
o all current liabilities, including current maturities of long-term
indebtedness and current maturities of obligations under capital
leases; and
o the total of the net book values of all assets of IFF and its
Subsidiaries properly classified as intangible assets under U.S.
generally accepted accounting principles, including goodwill, trade
names, trademarks, patents, unamortized debt discount and expense and
other like intangible assets.
"Principal Property" means the land, improvements, buildings and fixtures
(including any leasehold interest therein), constituting the principal
corporate office, any manufacturing plant or any manufacturing or research or
engineering facility, whether owned at or acquired after the date of the
indenture, that is owned or leased by IFF or a Restricted Subsidiary, that is
located within the continental United States, and that has a net book value at
the time of the determination in excess of the greater of 10% of Consolidated
Net Tangible Assets or $50 million, unless IFF's Board of Directors has
determined in good faith that such property is not material to the operation of
the business conducted by IFF and its Subsidiaries taken as a whole; however,
for purposes of the indenture, IFF's corporate office located at 521 West 57th
Street, New York, New York 10019-2960 will not be deemed a Principal Property.
"Restricted Subsidiary" means any Subsidiary (a) substantially all of
whose property is located within the continental United States, (b) which owns
a Principal Property and (c) in which IFF's investment exceeds 1% of the
aggregate amount of assets included on a consolidated balance sheet of IFF and
its Subsidiaries as of the end of the last fiscal quarter for which financial
information is available. However, the term "Restricted Subsidiary" does not
include any Subsidiary that is principally engaged in certain types of leasing
and financing activities.
"Sale and Lease-Back Transaction" means any arrangement with any person
providing for the leasing by IFF or any Restricted Subsidiary of any Principal
Property, whether owned at the date of the issuance of the notes or thereafter
acquired, excluding temporary leases of a term, including renewal periods, of
not more than three years, that has been or is to be sold or transferred by IFF
or any Restricted Subsidiary to such person with the intention of taking back a
lease of this property.
"Subsidiary" means (a) any corporation at least a majority of whose
outstanding voting stock shall at the time be owned, directly or indirectly, by
IFF or by one or more of its subsidiaries or by IFF and one or more of its
subsidiaries, (b) any general partnership, limited liability company, joint
22
venture or similar entity, at least a majority of whose outstanding partnership
or similar interests shall at the time be owned by IFF, or by one or more of
its subsidiaries, or by IFF and one or more of its subsidiaries and (c) any
limited partnership of which IFF or any of its subsidiaries is a general
partner.
EVENTS OF DEFAULT
The following are events of default under the indenture with respect to
the notes:
o we fail to pay interest when due and continuing for 30 days and the
time for payment has not been properly extended or deferred;
o we fail to pay the principal or any premium when due;
o we fail to observe or perform any other covenant contained in the
notes, and such failure continues for 30 days after we receive notice
from the trustee or holders of at least 25% in aggregate principal
amount of the outstanding notes; and
o events of our bankruptcy or insolvency, whether voluntary or not.
If an event of default occurs and is continuing, the trustee or the
holders of at least 25% in aggregate principal amount of the outstanding notes
may declare the notes due and payable immediately. (Section 6.01)
The holders of a majority in principal amount of the outstanding notes may
waive any default or event of default with respect to the notes and its
consequences, except defaults or events of default regarding payment of
principal, any premium or interest. A waiver will eliminate the default.
(Section 6.06)
If an event of default under the indenture occurs and is continuing, the
trustee will be under no obligation to exercise any of its rights or powers
under the indenture, unless the holders of the notes have offered the trustee
reasonable indemnity. The holders of a majority in principal amount of the
notes will have the right to direct the time, method and place of conducting
any proceeding for any remedy available to the trustee, or exercising any trust
or power conferred on the trustee, provided that:
o such proceeding or exercise is not in conflict with any law or the
indenture;
o the trustee may take any other action deemed proper by it that is not
inconsistent with directions from the holders; and
o unless otherwise provided under the Trust Indenture Act, the trustee
need not take any action that might involve it in personal liability or
might be unduly prejudicial to the holders not involved in the
proceeding. (Sections 6.04 and 6.06)
A holder of the notes will only have the right to institute a proceeding
under the indenture or to appoint a receiver or trustee, or to seek other
remedies if:
o the holder has given written notice to the trustee of a continuing
event of default;
o the holders of at least 25% in aggregate principal amount of the
outstanding notes have made written request;
o those holders have offered reasonable indemnity to the trustee to
institute proceedings as trustee; and
o the trustee does not institute a proceeding, and does not receive
conflicting directions within 60 days.
These limitations do not apply to a suit brought by a holder of the notes
if IFF defaults in the payment of the principal, any premium or interest.
(Section 6.04) Any right of a holder of the notes to receive payments of the
principal of, and premium, if any, and any interest on the notes on or after
the due dates expressed in the notes and to institute suit for the enforcement
of any such payment on or after such dates will not be impaired or affected
without the consent of such holder.
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IFF will periodically file statements with the trustee regarding its
compliance with the covenants in the indenture. (Section 5.03)
MODIFICATION OF INDENTURE
IFF and the trustee may change the indenture without the consent of any
holders to:
o fix any ambiguity, defect or inconsistency in the indenture; and
o change anything that does not materially adversely affect the interests
of any holder of the notes. (Section 9.01)
In addition, the rights of holders may be changed by IFF and the trustee
with the written consent of the holders of a majority of the principal amount
of the notes outstanding. However, the following changes may only be made with
the consent of each affected holder:
o extending the fixed maturity;
o reducing the principal amount or any premium;
o reducing the rate of or extending the time of payment of interest;
o reducing any premium payable upon redemption; or
o reducing the percentage of notes outstanding required to consent to any
amendment to the indenture or to the notes. (Section 9.02)
DEFEASANCE AND COVENANT DEFEASANCE
The indenture provides that, subject to conditions specified in the
indenture, we may elect either:
o defeasance, whereby we are discharged from any and all obligations with
respect to the notes, except as may be otherwise provided in the
indenture; or
o covenant defeasance, whereby we are released from our obligations
described above under "Limitation on Liens" and "Limitations on Sale
and Lease-Back Transactions."
We may do so in either case by depositing with the trustee, as trust
funds, cash, and/or government securities which through the payment of
principal and interest in accordance with their terms will provide money, in an
amount sufficient to pay the principal and any premium and interest on the
notes and all other sums payable by us under the indenture in connection with
the notes. This type of a trust may only be established if, among other things,
IFF has delivered to the trustee an opinion of counsel meeting the requirements
set forth in the indenture.
GOVERNING LAW
The indenture provides that it and the notes are to be governed by, and
construed in accordance with, the laws of the State of New York, except to the
extent that the Trust Indenture Act otherwise applies.
RELATIONSHIPS WITH THE TRUSTEE
We maintain customary banking relationships with Bank One, N.A., an
affiliate of the trustee under the indenture and the exchange agent for the
exchange offer.
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MATERIAL FEDERAL TAX CONSIDERATIONS
The following summary describes certain U.S. federal income and estate tax
consequences resulting from the ownership and disposition of the exchange notes.
This summary is based on the Internal Revenue Code of 1986, as amended,
administrative pronouncements, judicial decisions and existing and proposed
Treasury regulations, and interpretations of the foregoing, changes to any of
which subsequent to the date of this offering memorandum may affect the tax
consequences we describe below, possibly with retroactive effect. This summary
discusses only notes held as capital assets within the meaning of Section 1221
of the Code. It does not discuss all of the tax consequences that may be
relevant to a holder in light of such holder's particular circumstances, for
example, insurance companies, tax exempt organizations, financial institutions,
dealers in securities, holders whose functional currency is not the United
States dollar and holders of the notes held as part of a "straddle," "hedge" or
"conversion transaction," and does not address U.S. state or local or foreign
tax consequences. Prospective holders should consult their tax advisors as to
the application of U.S. federal tax laws to their particular situations, as well
as any tax consequences arising under the laws of any state, local or foreign
taxing jurisdiction.
As used herein, the term "United States Holder" means a beneficial owner of
a note that is (a) a citizen or resident of the United States for U.S. federal
income tax purposes, (b) a corporation or partnership, or any entity treated as
a corporation or partnership for U.S. federal income tax purposes, created or
organized under the laws of the United States, any state thereof or the District
of Columbia, (c) an estate the income of which is subject to U.S. federal income
tax without regard to its source or (d) a trust if (x) a court within the United
States is able to exercise primary supervision over the administration of the
trust and one or more United States persons have the authority to control all
substantial decisions of the trust or (y) the trust has a valid election in
effect under applicable U.S. Treasury regulations to be treated as a United
States Holder. If a partnership, including any entity treated as a partnership
for United States federal income tax purposes, is a holder of the notes, the
U.S. federal income tax treatment of a partner in such a partnership will
generally depend on the status of the partner and the activities of the
partnership. Partners in such a partnership should consult their own tax
advisors as to the particular federal income tax consequences applicable to
them.
A "Non-United States Holder" is any beneficial holder of a note that is
not a United States Holder.
For United States federal income tax purposes, a beneficial owner of an
original note will not recognize any taxable gain or loss on the exchange of
original notes for exchange notes under the exchange offer, and a beneficial
owner's tax basis and holding period in the exchange notes will be the same as
in the original notes.
UNITED STATES HOLDERS
With the exception of a de minimis amount of original issue discount, the
original notes were not issued with original issue discount. As a result,
interest on a note generally will be taxable to a United States Holder as
ordinary income as it accrues or is received in accordance with the United
States Holder's method of accounting for U.S. federal income tax purposes.
Upon the sale, exchange, redemption, retirement, or other disposition of a
note, a United States Holder generally will recognize gain or loss equal to the
difference between the amount realized upon the sale, exchange, redemption,
retirement or other disposition, not including amounts attributable to accrued
but unpaid interest, which will be taxable as ordinary income, and such United
States Holder's adjusted tax basis in the note. A United States Holder's
adjusted tax basis in a note will, in general, be the United States Holder's
adjusted tax basis in the original note exchanged for the exchange note, less
any principal payments received by such holder. Such gain or loss will
generally be capital gain or loss. Capital gain recognized by an individual
investor upon a disposition of a note that has been held for more than 12
months will generally be subject to a maximum tax rate of 20% or, in
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the case of a note that has been held for 12 months or less, will be subject to
tax at ordinary income tax rates. A United States Holder's holding period for
an exchange note will include the holding period of the original note exchanged
for the exchange note.
NON-UNITED STATES HOLDERS
Subject to the discussion below concerning backup withholding, payment of
interest on the exchange notes by IFF or any paying agent to any Non-United
States Holder will not be subject to U.S. federal withholding tax, provided
that (a) such holder does not own, actually or constructively, 10% or more of
the total combined voting power of all classes of stock of IFF entitled to
vote, is not a controlled foreign corporation related, directly or indirectly,
to IFF through stock ownership and is not a bank receiving interest described
in Section 881(c)(3)(A) of the Code and (b) certain certification requirements
are met. Such certification will be satisfied if the beneficial owner of the
note certifies on IRS Form W-8BEN or a substantially similar substitute form,
under penalties of perjury, that it is not a U.S. person and provides its name
and address, and (x) such beneficial owner files such form with the withholding
agent or (y) in the case of a note held through a foreign partnership or
intermediary, the beneficial owner and the foreign partnership or intermediary
satisfy the certification requirements of applicable U.S. Treasury regulations.
Subject to the discussion below concerning backup withholding, a
Non-United States Holder of a note will not be subject to U.S. federal income
tax on gain realized on the sale, exchange or other disposition of such note,
unless (a) such holder is an individual who is present in the United States for
183 days or more in the taxable year of disposition, and certain other
conditions are met, or (b) such gain is effectively connected with a trade or
business carried on by such holder within the United States and, if a treaty
applies, and the holder complies with applicable certification and other
requirements to claim treaty benefits, is generally attributable to a U.S.
permanent establishment maintained by the holder.
A note held by an individual who at the time of death is not a citizen or
resident of the United States as determined for U.S. estate tax purposes will
not be subject to U.S. federal estate tax with respect to a note as a result of
such individual's death, provided that (a) the individual does not actually or
constructively own 10% or more of the total combined voting power of all
classes of our stock entitled to vote, and (b) the interest accrued on the note
was not effectively connected with the conduct of a U.S. trade or business.
BACKUP WITHHOLDING AND INFORMATION REPORTING
Under current U.S. federal income tax law, backup withholding at the
applicable federal rate will not apply to payments on an exchange note by IFF
(including any paying agent thereof) or a U.S. office of a broker if (a) in the
case of a United States Holder, the holder provides an accurate taxpayer
identification number, certifies that such holder is not subject to backup
withholding and does not fail to report all interest and dividends required to
be shown on its U.S. federal income tax returns, or (b) in the case of a
Non-United States Holder, the certification on IRS Form W-8BEN described above
is received, provided that IFF, the paying agent or the broker, as the case may
be, does not have knowledge that the payee is a U.S. person.
Payments to or through a foreign office of a foreign broker on a note
generally will not be subject to backup withholding or information reporting.
However, if such broker is, for U.S. federal income tax purposes, a U.S.
person, a controlled foreign corporation, a foreign person 50% or more of whose
gross income is effectively connected with a U.S. trade or business for a
specified three-year period or a foreign partnership with certain connections
to the United States, then information reporting will be required unless the
broker has in its records documentary evidence that the beneficial owner is not
a U.S. person and certain other conditions are met or the beneficial owner
otherwise establishes an exemption. Backup withholding may apply to any payment
that such broker is required to report if the broker has actual knowledge that
the payee is a U.S. person.
Holders of notes should consult their tax advisors regarding the
application of information reporting and backup withholding in their particular
situations, the availability of an exemption
26
therefrom, and the procedure for obtaining such an exemption, if available. Any
amounts withheld from a payment under the backup withholding rules will be
allowed as a credit against such holder's U.S. federal income tax liability and
may entitle such holder to a refund, provided that the required information is
furnished to the U.S. Internal Revenue Service.
PLAN OF DISTRIBUTION
Each broker-dealer that receives exchange notes for its own account in the
exchange offer must acknowledge that it will deliver a prospectus in connection
with any resale of the exchange notes. This prospectus, as it may be amended or
supplemented from time to time, may be used by a broker-dealer in connection
with resales of exchange notes received in exchange for original notes where
the original notes were acquired as a result of market-making activities or
other trading activities. We have agreed that, for a period of 180 days after
the expiration date of the exchange offer, we will make this prospectus
available to any broker-dealer for use in connection with any resale.
We will not receive any proceeds from any sale of exchange notes by
broker-dealers. Exchange notes received by broker-dealers for their own account
in the exchange offer may be sold from time to time in one or more transactions
in the over-the-counter market, in negotiated transactions, through the writing
of options on the exchange notes or a combination of these methods of resale.
These resales may be made at market prices prevailing at the time of resale, at
prices related to these prevailing market prices or negotiated prices. Any
resale may be made directly to purchasers or to or through brokers or dealers
who may receive compensation in the form of commissions or concessions from any
broker-dealer or the purchasers of any of the exchange notes. Any broker-dealer
that resells exchange notes that were received by it for its own account in the
exchange offer and any broker or dealer that participates in a distribution of
the exchange notes may be deemed to be an underwriter within the meaning of the
Securities Act, and any profit on the resale of exchange notes and any
commission or concessions received by those persons may be deemed to be
underwriting compensation under the Securities Act. Any broker-dealer that
resells notes that were received by it for its own account in exchange offer
and any broker-dealer that participates in a distribution of those notes may be
deemed to be an underwriter within the meaning of the Securities Act and must
comply with the registration and prospectus delivery requirements of the
Securities Act in connection with any resale transaction, including the
delivery of a prospectus that contains information with respect to any selling
holder required by the Securities Act in connection with any resale of the
exchange notes. The letter of transmittal states that, by acknowledging that it
will deliver and by delivering a prospectus, a broker-dealer will not be deemed
to admit that it is an underwriter within the meaning of the Securities Act.
Furthermore, any broker-dealer that acquired any of its original notes
directly from us:
o may not rely on the applicable interpretation of the staff of the SEC's
position contained in Exxon Capital Holdings Corp., SEC no-action
letter (April 13, 1988), Morgan, Stanley & Co. Inc., SEC no-action
letter (June 5, 1991) and Shearman & Sterling, SEC no-action letter
(July 2, 1983); and
o must also be named as a selling noteholder in connection with the
registration and prospectus delivery requirements of the Securities Act
relating to any resale transaction.
For a period of 180 days after the expiration date of the exchange offer,
we will promptly send additional copies of his prospectus and any amendment or
supplement to this prospectus to any broker-dealer that requests these
documents in the letter of transmittal. We have agreed to pay all expenses
incident to the exchange offer, including the expenses of one counsel for the
holders of the notes, other than commissions or concessions of any brokers or
dealers. We will indemnify the holders of the notes, including any
broker-dealers, against various liabilities, including liabilities under the
Securities Act.
LEGAL MATTERS
The validity of the exchange notes being offered hereby will be passed
upon for International Flavors & Fragrances Inc. by Skadden, Arps, Slate,
Meagher & Flom LLP, New York, New York.
27
EXPERTS
The International Flavors & Fragrances Inc. consolidated financial
statements incorporated in this prospectus by reference to IFF's Annual Report
on Form 10-K for the year ended December 31, 2000 and the Bush Boake Allen Inc.
consolidated financial statements incorporated in this prospectus by reference
to the International Flavors & Fragrances Inc. Current Report on Form 8-K/A
dated January 17, 2001 have been so incorporated in reliance on the reports of
PricewaterhouseCoopers LLP, independent accountants, given on the authority of
said firm as experts in auditing and accounting.
28
================================================================================
NO DEALER, SALESPERSON OR OTHER PERSON IS AUTHORIZED TO GIVE ANY INFORMATION OR
TO REPRESENT ANYTHING NOT CONTAINED IN THIS PROSPECTUS. YOU MUST NOT RELY ON ANY
UNAUTHORIZED INFORMATION OR REPRESENTATIONS. THIS PROSPECTUS DOES NOT OFFER TO
SELL OR ASK FOR OFFERS TO BUY ANY SECURITIES OTHER THAN THOSE TO WHICH THIS
PROSPECTUS RELATES AND IT DOES NOT CONSTITUTE AN OFFER TO SELL OR ASK FOR OFFERS
TO BUY ANY OF THE SECURITIES IN ANY JURISDICTION WHERE IT IS UNLAWFUL, WHERE THE
PERSON MAKING THE OFFER IS NOT QUALIFIED TO DO SO, OR TO ANY PERSON WHO CANNOT
LEGALLY BE OFFERED THE SECURITIES. THE INFORMATION CONTAINED IN THIS PROSPECTUS
IS CURRENT ONLY AS OF ITS DATE.
$700,000,000
INTERNATIONAL FLAVORS & FRAGRANCES INC.
Offer for All Outstanding 6.45% Notes due 2006
in Exchange for 6.45% Notes due 2006,
Which Have Been Registered Under
the Securities Act of 1933
[GRAPHIC OMITTED]
----------------
PROSPECTUS
----------------
September , 2001
================================================================================
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 20. INDEMNIFICATION OF DIRECTORS AND OFFICERS
On July 24, 1986, New York substantially revised the provisions of the New
York Business Corporation Law ("BCL") to permit New York corporations to extend
broader protection to their directors and officers by way of indemnity and
advancement of expenses than that previously afforded by New York law. On
October 31, 1986, the Board amended IFF's By-laws to extend such
indemnification and advancement of expenses to its directors and officers.
Article II, Section 14 of IFF's By-laws, as amended (the "By-Laws"), provides
among other things that a corporation may indemnify a person against judgments,
fines, amounts paid in settlement and reasonable expenses arising out of
litigation, to which such person shall have been made a party by reason of the
fact he is or was a director or officer of the corporation, unless a judgment
or other final adjudication adverse to such person establishes that his acts
were committed in bad faith or were the result of active and deliberate
dishonesty and were material to the action so adjucated, or that he personally
gained in fact a personal profit or other advantage to which he was not
entitled. The By-laws also permit IFF to advance litigation expenses of such
director or officer upon receipt of an undertaking to repay such advances if
the director or officer is ultimately determined not to be entitled to
indemnification.
In July 1987, New York added Section 402(b) to the BCL which permits New
York corporations, with shareholder approval, to amend their certificates of
incorporation in order to eliminate or limit the personal liability of
directors to a corporation and its shareholders for damages arising from
breaches of the directors' duty. On May 13, 1988, IFF amended its Certificate
of Incorporation by adding a new Article XI which had been approved by the
shareholders on May 12, 1988. Article XI provides that no director of IFF shall
be personally liable to IFF or its shareholders for damages for any breach of
duty as a director. Article XI does not permit elimination or limitation of the
liability of any director if a judgment or other final adjudication adverse to
him establishes that (i) his acts or omissions were in bad faith or involved
intentional misconduct or a knowing violation of law or that he personally
derived a financial profit or other advantage to which he was not legally
entitled, or (ii) that his action involved (a) an improper declaration of any
dividend or other distribution, (b) an improper redemption by IFF of its own
shares, (c) the distribution of assets to shareholders after dissolution,
without paying or adequately providing for, with certain exceptions, known
liabilities of IFF or (d) the making of an improper loan to a director. Article
XI also does not authorize any limitation on the ability of IFF or its
shareholders to obtain injunctive relief, specific performance or other
equitable remedies, and would not apply to acts or omissions which occurred
prior to the filing of the amendment to IFF's Certificate of Incorporation
containing the limitation on directors' liability.
On December 9, 1975, the Board adopted a resolution pursuant to which IFF
is obligated to indemnify, to the extent permitted by law, any director,
officer or employee of IFF against any liability arising out of claims under
the Employee Retirement Income Security Act of 1974.
II-1
ITEM 21. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.
EXHIBIT NO. DESCRIPTION
----------- -----------
3.1+ Restated Certificate of Incorporation of International Flavors &
Fragrances Inc., dated September 14, 1993 (incorporated by
reference to the Registrant's Annual Report on Form 10-K for the
fiscal year ended December 31, 1993).
3.2 + By-laws of International Flavors & Fragrances Inc., as amended
(incorporated by reference to the Registrants Quarterly Report
on Form 10-Q for the quarter ended September 30, 2000).
3.2.1 + Amendment to the Registrant's By-laws (incorporated by reference
to the Registrant's Annual Report on Form 10-K for the fiscal
year ended December 31, 2000).
4.1 + Indenture, dated as of May 1, 2001, between International
Flavors & Fragrances Inc. and Bank One Trust Company, N.A., as
Trustee.
4.2 + First Supplemental Indenture, dated as of May 7, 2001, between
International Flavors & Fragrances Inc. and Bank One Trust &
Company, N.A., as Trustee.
4.2.1 + Form of 6.45% Note due 2006 (included in Exhibit 4.2).
4.3 + Registration Rights Agreement, dated May 7, 2001, among
International Flavors & Fragrances Inc. and Salomon Smith Barney
Inc., Banc One Capitals Markets, Inc., First Union Securities,
Inc. and Tokyo -- Mitsubishi International plc, as
representatives of the Initial Purchasers.
5.1 + Opinion of Skadden, Arps, Slate, Meagher & Flom LLP, special
counsel to International Flavors & Fragrances Inc.
12.1 Statement regarding the computation of ratio of earnings to
fixed charges for International Flavors & Fragrances Inc.
23.1 Consent of PricewaterhouseCoopers LLP.
23.2 Consent of PricewaterhouseCoopers LLP.
23.3 + Consent of Skadden, Arps, Slate, Meagher & Flom LLP (included in
Exhibit 5.1).
24.1 + Power of Attorney of Richard A. Goldstein.
24.2 + Power of Attorney of Douglas J. Wetmore.
24.3 + Power of Attorney of Margaret Hayes Adame.
24.4 + Power of Attorney of Gunter Blobel.
24.5 + Power of Attorney of J. Michael Cook.
24.6 + Power of Attorney of Peter A. Georgescu.
24.7 + Power of Attorney of Carlos A. Lobbosco.
24.8 + Power of Attorney of Arthur C. Martinez.
24.9 + Power of Attorney of Henry P. van Ameringen.
24.10+ Power of Attorney of William D. Van Dyke, III.
25.1 + Statement of Eligibility and Qualification on Form T-1 of Bank
One Trust Company, N.A. for the 6.45% Notes.
99.1 + Form of Letter of Transmittal.
99.2 + Form of Notice of Guaranteed Delivery.
99.3 + Form of Letter to Clients.
99.4 + Form of Letter to Brokers, Dealers, Commercial Banks, Trust
Companies and Other Nominees.
----------
+ Previously filed.
II-2
ITEM 22. UNDERTAKINGS
The undersigned Registrant hereby undertakes: (1) to file, during any
period in which offers or sales are being made, a post-effective amendment to
this Registration Statement (i) to include any prospectus required by section
10(a)(3) of Securities Act of 1933; (ii) to reflect in the prospectus any facts
or events arising after the effective date of the Registration Statement (or
the most recent post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth in the
Registration Statement; and (iii) to include any material information with
respect to the plan of distribution not previously disclosed in the
Registration Statement or any material change to such information in the
Registration Statement, provided, however, that paragraphs (1) (i) and (1) (ii)
do not apply if the Registration Statement is on Form S-3 or Form S-8, and the
information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed by the Registrant pursuant to
section 13 or section 15(d) of the Securities Exchange Act of 1934 that are
incorporated by reference in the Registration Statement; (2) that, for the
purpose of determining any liability under the Securities Act of 1933, each
such post-effective amendment shall be deemed to be a new Registration
Statement relating to the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial bona fide offering
thereof; and (3) to remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at the
termination of the offering.
The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
Registrant's annual report pursuant to section 13(a) or section 15(d) of the
Securities Act of 1934 that is incorporated by reference in the Registration
Statement shall be deemed to be a new Registrant Statement relating to the
securities offered therein, and the offering of such securities at that time
shall be deemed to be the initial bona fide offering thereof.
The undersigned Registrant hereby undertakes to deliver or cause to be
delivered with the prospectus to each employee to whom the prospectus is sent
or given a copy of the Registrant's annual report to shareholders for its last
fiscal year, unless such employee otherwise has received a copy of such report,
in which case the Registrant shall state in the prospectus that it will
promptly furnish, without charge, a copy of such report on written request of
the employee. If the last fiscal year of the Registrant has ended within 120
days prior to the use of the prospectus, the annual report of the Registrant
for the preceding fiscal year may be so delivered, but within such 120 day
period the annual report for the last fiscal year will be furnished to each
such employee.
The undersigned Registrant hereby undertakes to transmit or cause to be
transmitted to all employees participating in the plan who do not otherwise
receive such material as shareholders of the Registrant, at the time and in the
manner such material is sent to its shareholders, copies all of reports, proxy
statements and other communications distributed to its shareholders generally.
Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling persons of
the Registrant pursuant to the foregoing provisions, or otherwise, the
Registrant has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the
Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
Registrant of expenses incurred or paid by a director, officer or controlling
person of the Registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the Registrant will, unless in
the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the Act and
will be governed by the final adjudication of such issue.
II-3
SIGNATURES
Pursuant to the requirements of the Securities Act, the Registrant has
duly caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of New York, State of New
York, on the 5th day of September 2001.
INTERNATIONAL FLAVORS & FRAGRANCES INC.
(Registrant)
By: /s/ Stephen A. Block
-------------------------------------------
Stephen A. Block
Senior Vice President, General Counsel and
Secretary
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities and on the dates indicated.
SIGNATURE TITLE DATE
--------- ----- ----
*
------------------------- Chairman of the Board and Chief Executive September 5, 2001
Richard A. Goldstein Officer (Principal Executive Officer)
*
------------------------- Director, Senior Vice President and Chief September 5, 2001
Douglas J. Wetmore Financial Officer (Principal Financial and
Accounting Officer)
*
------------------------- Director September 5, 2001
Margaret Hayes Adame
*
------------------------- Director September 5, 2001
Gunter Blobel, M.D., Ph.D.
*
------------------------- Director September 5, 2001
J. Michael Cook
*
------------------------- Director September 5, 2001
Peter A. Georgescu
*
------------------------- Director September 5, 2001
Carlos A. Lobbosco
*
------------------------- Director September 5, 2001
Arthur C. Martinez
*
------------------------- Director September 5, 2001
Henry P. van Ameringen
*
------------------------- Director September 5, 2001
William D. Van Dyke, III
----------
* Stephen A. Block, by signing his name hereto, does hereby execute this
Registration Statement on behalf of the directors and officers of the
Registrant indicated above by asterisks, pursuant to the Powers of
Attorney duly executed by such directors and officers as exhibits to the
Registration Statement filed on June 26, 2001.
By: /s/ Stephen A. Block
--------------------------
Stephen A. Block
Senior Vice President,
General Counsel and Secretary
II-4
INDEX TO EXHIBITS
EXHIBIT NO. DESCRIPTION
----------- -----------
3.1+ Restated Certificate of Incorporation of International Flavors &
Fragrances Inc., dated September 14, 1993 (incorporated by
reference to the Registrant's Annual Report on Form 10-K for the
fiscal year ended December 31, 1993).
3.2 + By-laws of International Flavors & Fragrances Inc., as amended
(incorporated by reference to the Registrant's Quarterly Report
on Form 10-Q for the quarter ended September 30, 2000).
3.2.1 + Amendment to the Registrant's By-laws (incorporated by reference
to the Registrant's Annual Report on Form 10-K for the fiscal
year ended December 31, 2000).
4.1 + Indenture, dated as of May 1, 2001, between International
Flavors & Fragrances Inc. and Bank One Trust Company, N.A., as
Trustee.
4.2 + First Supplemental Indenture, dated as of May 7, 2001, between
International Flavors & Fragrances Inc. and Bank One Trust &
Company, N.A., as Trustee.
4.2.1 + Form of 6.45% Note due 2006 (included in Exhibit 4.2).
4.3 + Registration Rights Agreement, dated May 7, 2001, among
International Flavors & Fragrances Inc. and Salomon Smith Barney
Inc., Banc One Capitals Markets, Inc., First Union Securities,
Inc. and Tokyo -- Mitsubishi International plc, as
representatives of the Initial Purchasers.
5.1 + Opinion of Skadden, Arps, Slate, Meagher & Flom LLP, special
counsel to International Flavors & Fragrances Inc.
12.1 Statement regarding the computation of ratio of earnings to
fixed charges for International Flavors & Fragrances Inc.
23.1 Consent of PricewaterhouseCoopers LLP.
23.2 Consent of PricewaterhouseCoopers LLP.
23.3 + Consent of Skadden, Arps, Slate, Meagher & Flom LLP (included in
Exhibit 5.1).
24.1 + Power of Attorney of Richard A. Goldstein.
24.2 + Power of Attorney of Douglas J. Wetmore.
24.3 + Power of Attorney of Margaret Hayes Adame.
24.4 + Power of Attorney of Gunter Blobel.
24.5 + Power of Attorney of J. Michael Cook.
24.6 + Power of Attorney of Peter A. Georgescu.
24.7 + Power of Attorney of Carlos A. Lobbosco.
24.8 + Power of Attorney of Arthur C. Martinez.
24.9 + Power of Attorney of Henry P. van Ameringen.
24.10+ Power of Attorney of William D. Van Dyke, III.
25.1 + Statement of Eligibility and Qualification on Form T-1 of Bank
One Trust Company, N.A. for the 6.45% Notes.
99.1 + Form of Letter of Transmittal.
99.2 + Form of Notice of Guaranteed Delivery.
99.3 + Form of Letter to Clients.
99.4 + Form of Letter to Brokers, Dealers, Commercial Banks, Trust
Companies and Other Nominees.
----------
+ Previously filed.
II-5