| þ | ANNUAL REPORT PURSUANT TO 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
| o | TRANSITION REPORT PURSUANT TO 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
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| 2008 | 2007 | |||||||
ASSETS: |
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Investments at fair value: |
||||||||
Interest in Sensient Technologies Corporation |
||||||||
Master Trust |
$ | 74,408,185 | $ | 103,113,322 | ||||
Participant loans |
4,117,761 | 4,232,062 | ||||||
Total investments |
78,525,946 | 107,345,384 | ||||||
Contributions receivable from Sensient Technologies
Corporation: |
||||||||
Employee contributions |
— | 130,267 | ||||||
Employer contributions |
2,796,837 | 2,702,535 | ||||||
Total receivables |
2,796,837 | 2,832,802 | ||||||
Net assets available for benefits at fair value |
81,322,783 | 110,178,186 | ||||||
Adjustments from fair value to contract value for
fully benefit-responsive investment contracts |
543,737 | 129,211 | ||||||
Net assets available for benefits |
$ | 81,866,520 | $ | 110,307,397 | ||||
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| 2008 | ||||
ADDITIONS: |
||||
Contributions: |
||||
Participants |
$ | 5,379,215 | ||
Sensient Technologies Corporation |
2,796,837 | |||
Rollovers |
102,578 | |||
Interest on Participant Loans |
345,282 | |||
Total additions |
8,623,912 | |||
DEDUCTIONS: |
||||
Withdrawals and distributions |
(7,811,547 | ) | ||
Administrative expenses |
(43,605 | ) | ||
Total deductions |
(7,855,152 | ) | ||
Investment loss — equity in net loss of Sensient
Technologies Corporation |
||||
Master Trust |
(29,209,637 | ) | ||
Net deductions |
(28,440,877 | ) | ||
Net assets available for benefits: |
||||
Beginning of year |
110,307,397 | |||
End of year |
$ | 81,866,520 | ||
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| Note A — | Description of the Plan: | |
| The following description of the Sensient Technologies Corporation Savings Plan (the Plan) provides only general information. Participants should refer to the Plan document for a more comprehensive description of the Plan’s provisions. | ||
| The Plan is a defined-contribution plan sponsored by Sensient Technologies Corporation (the Company). Substantially all domestic employees of the Company, except for employees covered by collective bargaining agreements that do not expressly provide for participation in the Plan, are eligible to participate in the Plan. The Plan is subject to the provisions of the Employee Retirement Income Security Act of 1974, as amended (ERISA). As of January 1, 2008, the plan will accept Roth elective deferrals made on behalf of participants. The participant’s Roth elective deferrals will be allocated to a separate account maintained for such deferrals (the Roth Elective Deferral Account). Employees can contribute up to the maximum amount of their eligible compensation prescribed by law. Employee contributions are 100% vested at all times. The Company intends to contribute an amount sufficient to provide 100% matching of the first 4% of eligible compensation contributed to the Plan by those employees who made contributions during the Plan year. All Company contributions made after January 1, 2003 are invested in accordance with each participant’s investment election, regardless of age or vested service. Company contributions made before January 1, 2003 previously were invested in common stock of the Company. Effective January 1, 2007, these contributions can be diversified into the employee’s choice of funds. Company contributions to the Plan were $2,796,837 for the year ended December 31, 2008. | ||
| Effective January 1, 2006, the Plan was amended and restated. The amendment provides that company matching contributions allocable for Plan years beginning on or after January 1, 2006, shall be fully vested at all times. Company matching contributions, allocable for Plan years beginning before January 1, 2006, vest at 20% per year of credited service with the Company or upon termination due to death or disability. | ||
| The amendment further states, 2% of the compensation of eligible employees hired (or rehired) on or after January 1, 2006, shall be automatically withheld and contributed to the Plan on the employee’s behalf as a pre-tax elective deferral contribution, unless the employee elects a different contribution amount or elects not to participate in the Plan. | ||
| The administration of the Plan is the responsibility of the Benefits Administrative Committee (the Committee) which is appointed by the Finance Committee of the Company Board of Directors. The assets of the Plan are maintained in a trust fund that is administered under a Master Trust agreement (as described in Note C) with Fidelity Management Trust Company (the Trustee or Fidelity). The Trustee is responsible for maintaining the assets of the Plan and, generally, performing all other acts deemed necessary or proper to fulfill its responsibility as set forth in the Master Trust agreement pertaining to the Plan. | ||
| Effective December 4, 2008, the Company, by action of the Finance Committee of its Board of Directors amended the plan to clarify certain responsibilities of the Benefits Investment Committee and the Benefits Administrative Committee. |
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| Note A — | (continued): | |
| Amounts that have been forfeited in accordance with provisions of the Plan serve to reduce Company contributions. Forfeitures available to reduce the Company contribution were $31,024 at December 31, 2008. | ||
| Plan assets may be invested in any type of investment that is legally permitted for employee retirement plans. | ||
| Participants direct the investment of their account balance from both participant and employer contributions, except certain prior Company contributions previously noted, into various investment options offered by the Plan. The Plan currently offers nine mutual funds, three fixed income funds, and the Sensient Technologies Common Stock Fund as investment options for participants. Participants may revise their investment allocations daily. | ||
| Individual accounts are maintained by the Trustee for each Plan participant. Each participant’s account is credited with the participant’s contribution, the Company’s matching contribution and an allocation of Plan income and charged with withdrawals and an allocation of Plan losses. Allocations are based on participant earnings or account balances, as defined. The benefit to which a participant is entitled is the benefit that can be provided from the participant’s vested account. | ||
| The Plan allows participants to borrow funds from their account through the loan fund, up to 50% of their vested balance up to a maximum of $50,000 less any other outstanding loans in the Plan. The minimum loan allowable is $1,000. Monthly payroll deductions are required to repay the loan over one to five years, or longer if the loan is used to acquire a principal residence. Loans bear interest at a rate of 1.5% above the prime rate at the end of the previous quarter. Unless loans are repaid in full 90 days after the time of retirement or termination, the amount of the loan becomes taxable income to the participant. Interest rates on loans outstanding at December 31, 2008 and 2007, ranged from 5.50% to 9.75%. | ||
| Hardship withdrawals may be authorized by the Committee in the event of financial hardship of the participant. Such distributions are made in accordance with written policies and procedures, as set forth in accordance with the Internal Revenue Code, Treasury regulations and applicable law. | ||
| Note B — | Accounting Policies: | |
| In the event of termination, participant accounts become fully vested. The financial statements of the Plan are prepared on an accrual basis in accordance with generally accepted accounting principles in the United States. Assets of the Plan are stated at fair value. | ||
| Certain administrative expenses incurred by the Plan are paid by the Company on behalf of the Plan or from Plan assets as determined by the Committee. | ||
| The preparation of financial statements in conformity with generally accepted accounting principles in the United States requires management to make estimates that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates. |
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| Note B — | (continued): | |
| The Plan’s investments are stated at fair value. Shares of mutual funds are valued based on quoted market prices which represent the net asset value of shares held by the Plan at year-end. The fair value of the participation units in the common collective trusts is based on quoted redemption values on the last business day of the Plan’s year-end. Participant loans are valued at their outstanding balances, which approximate fair value. | ||
| As described in Financial Accounting Standards Board Staff Position (FSP) AAG INV-1 and SOP 94-4-1, Reporting of Fully Benefit-Responsive Investment Contracts Held by Certain Investment Companies Subject to the AICPA Investment Company Guide and Defined-Contribution Health and Welfare and Pension Plans (the FSP), investment contracts held by a defined contribution plan are required to be reported at fair value. However, contract value is the relevant measurement attribute for that portion of the net assets available for benefits of a defined contribution plan attributable to fully benefit-responsive investment contracts, because contract value is the amount participants would receive if they were to initiate permitted transactions under the terms of the Plan. The Plan has an investment in the Managed Income Portfolio, a common collective trust fund of the Fidelity Group Trust, which consists of benefit responsive investment contracts. As required by the FSP, the statement of net assets available for benefits presents the fair value of the investment in the common collective trust as well as the adjustment from fair value to contract value for fully benefit-responsive investment contracts. The fair value of the Plan’s interest in the common collective trust is based on information reported by the issuer of the common collective trust at year-end. The contract value of the common collective trust represents contributions plus earnings, less participant withdrawals and administrative expenses. | ||
| Note C — | Sensient Technologies Corporation Master Trust: | |
| The Plan’s investments, except participant loans, are held by the Master Trust, along with the investments of the Sensient Technologies Corporation Retirement Employee Stock Ownership Plan (ESOP). Use of the Master Trust permits the commingling of assets of various employee benefit plans for investment and administrative purposes. Although plan assets are commingled, supporting records are maintained for the purpose of determining changes in each plan’s undivided and specifically allocated interest in the Master Trust. | ||
| Quoted market prices are used to determine the fair value of marketable securities. Shares of registered investment companies or collective trusts are stated at quoted market prices or withdrawal value. Investment income, realized gains and losses, and unrealized appreciation and depreciation of investments in the Master Trust are allocated to each plan participating in the Master Trust based upon the relationship of the individual interest of each plan to the total of the individual interests of all plans participating in the Master Trust. | ||
| Purchases and sales of investments are recorded on a trade-date basis. Interest income is accrued when earned. Dividend income is recorded on the ex-dividend date. Capital gain distributions are included in dividend income. | ||
| The Master Trust invests in various securities. Investment securities, in general, are exposed to various risks, such as interest rate, credit, and overall market volatility. Due to the level of risk associated with certain investment securities, it is reasonably possible that changes in the values of |
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| Note C — | (continued): | |
| investment securities will occur in the near term and that such change could materially affect the amounts reported in the financial statements. | ||
| The Master Trust invests in various securities. Investment securities, in general, are exposed to various risks, such as interest rate, credit, and overall market volatility. Due to the level of risk associated with certain investment securities, it is reasonably possible that changes in the values of investment securities will occur in the near term and that such change could materially affect the amounts reported in the financial statements. | ||
| The fair value of the net assets of the Master Trust as of December 31, 2008 and 2007, is as follows: |
| 2008 | 2007 | |||||||
Sensient Technologies Corporation common stock* |
$ | 45,126,990 | $ | 55,532,190 | ||||
Fixed income funds |
22,119,291 | 19,477,275 | ||||||
Equity mutual funds |
45,116,141 | 74,133,324 | ||||||
Net assets in Master Trust at fair value |
112,362,422 | 149,142,789 | ||||||
Adjustments from fair value to contract value
for fully benefit-responsive investment
contracts |
816,824 | 194,135 | ||||||
Net assets in Master Trust at contract value |
$ | 113,179,246 | $ | 149,336,924 | ||||
Plan’s investment in Master Trust as a percent
of total |
66.22 | % | 69.14 | % | ||||
| * | Party-in-interest |
| The net loss of the Master Trust for the year ended December 31, 2008, is as follows: |
| 2008 | ||||
Dividends on Sensient Technologies Corporation common stock* |
$ | 1,313,948 | ||
Interest and other dividends |
2,146,114 | |||
Net depreciation of investments based on quoted market prices |
(38,259,935 | ) | ||
Net loss of Master Trust |
$ | (34,799,873 | ) | |
Plan’s equity in net loss of the Master Trust |
$ | (29,209,637 | ) | |
| * | Party-in-interest |
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| Note C — | (continued): | |
| During the year ended December 31, 2008, net depreciation of the investments held by the Master Trust (including gains and losses on investments bought and sold, as well as held, during the year) is as follows: |
| 2008 | ||||
Sensient Technologies Corporation common stock* |
$ | (7,892,245 | ) | |
Mutual funds |
(30,367,690 | ) | ||
Net depreciation in fair value of investments — Master Trust |
$ | (38,259,935 | ) | |
| * | Party-in-interest |
| Note D — | Non-participant Directed Investments: | |
| The non-participant directed investments of the Plan held by the Master Trust are invested in Sensient Technologies Corporation common stock. Participant account balances, which are eligible to be diversified but remain in Sensient Technologies Corporation common stock, cannot be separately determined and are reported as non-participant directed investments. Information about the net assets and the significant components of the changes in net assets relating to non-participant directed net assets of the Plan held by the Master Trust is as follows: |
| 2008 | 2007 | |||||||
Non-participant directed net assets: |
||||||||
Sensient Technologies Corporation
common stock* |
$ | 12,708,206 | $ | 16,486,125 | ||||
| 2008 | ||||||||
Changes in non-participant directed net assets: |
$ | 426,375 | ||||||
Dividends |
(2,970,558 | ) | ||||||
Net depreciation |
(1,229,456 | ) | ||||||
Withdrawals and distributions |
(4,280 | ) | ||||||
Other |
||||||||
| $ | (3,777,919 | ) | ||||||
| * | Party-in-interest |
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| Note E — | Income Tax Status: | |
| The Plan has received a determination letter from the Internal Revenue Service dated December 18, 2002, stating that the Plan is qualified under Section 401(a) of the Internal Revenue Code (the Code) and, therefore, the related trust is exempt from taxation. Subsequent to this determination by the Internal Revenue Service, the Plan was amended and restated. Once qualified, the Plan is required to operate in conformity with the Code to maintain its qualification. The Plan administrator believes the Plan is being operated in compliance with the applicable requirements of the Code and, therefore, believes that the Plan, as amended and restated, is qualified and the related trust is tax exempt. | ||
| Note F — | Benefits Payable: | |
| As of December 31, 2008 and 2007, the Plan had no benefits payable to persons who elected to withdraw from participation in the earnings and operations of the Plan but had not yet been paid. | ||
| Note G — | Parties-in-Interest: | |
| Certain Plan investments are managed and issued by Fidelity, the custodian of the Plan’s investment assets, and therefore, some transactions qualify as party-in-interest transactions. The Plan pays fees to Fidelity for investment management, recordkeeping, and other administrative services. Fees paid by the Plan were $43,605 for the year ended December 31, 2008. | ||
| Note H — | Fair Value Measurements: | |
| On January, 1, 2009, the Plan adopted Statement of Financial Accounting Standards (SFAS) No. 157, Fair Value Measurements (SFAS No. 157). This statement defines fair value for financial assets and liabilities, establishes a framework for measuring fair value in accordance with generally accepted accounting principles (GAAP) and expands disclosures about fair value measurements. | ||
| As of December 31, 2008, the Plan’s only assets and liabilities subject to this statement are Sensient Technologies Corporation common stock and mutual fund investments held by the Master Trust and participant loans held by the Plan. These financial instruments were previously reported by the Plan at fair value that meets the requirements as defined by SFAS No. 157. Accordingly, there was no impact on the Plan’s financial position as a result of adopting this standard. The fair values of the Sensient Technologies Corporation common stock and the mutual fund investments were based on market quotes (Level 1 inputs per SFAS No. 157). One of the mutual funds is a Fidelity Common Collective Trust. The fair value of the Common Collective Trust is based on information provided by Fidelity (Level 2 inputs per SFAS No. 157) and the fair values of the participant loans were based on the amortized value of the loans (Level 3 inputs per SFAS No. 157). |
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| Level 1 | Level 2 | Level 3 | Total | |||||||||||||
Sensient Technologies
Corporation common stock * |
$ | 45,126,990 | $ | — | $ | — | $ | 45,126,990 | ||||||||
Mutual fund investments |
52,092,826 | — | — | 52,092,826 | ||||||||||||
Fidelity Common Collective Trust |
— | 15,142,606 | 15,142,606 | |||||||||||||
Participant loans |
— | — | 4,117,761 | 4,117,761 | ||||||||||||
Total assets at fair value |
$ | 97,219,816 | $ | 15,142,606 | $ | 4,117,761 | $ | 116,480,183 | ||||||||
| * | Party-in-interest |
| 2008 | ||||
Beginning Balance |
$ | 4,232,062 | ||
Loan repayments |
(1,573,549 | ) | ||
Loan disbursements |
1,459,248 | |||
Ending Balance |
$ | 4,117,761 | ||
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| FORM 5500, SCHEDULE H, PART IV, LINE 4i | ||
| SCHEDULE OF ASSETS (HELD AT END OF YEAR) | Plan 006 | |
| DECEMBER 31, 2008 | EIN 39-0561070 |
| (a) | (b) | (e) | ||||||||||||||
| Identity of Issuer, Borrower, | (c) | (d) | Current | |||||||||||||
| Lessor or Similar Party | Description of Investment | Cost | Value | |||||||||||||
| * | Participant Loans | Participant borrowings
against their individual
account balances,
interest rates from
5.50% to 9.75%, and
maturing through 2028 |
||||||||||||||
(639 loans outstanding) |
$ | 4,117,761 | $ | 4,117,761 | ||||||||||||
| Total | $ | 4,117,761 | $ | 4,117,761 | ||||||||||||
| * | Party-in-interest |
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| Sensient Technologies Corporation Savings Plan | ||||||
Date: June 12, 2009
|
By: Name: |
/s/ John L. Hammond
|
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| Title: | Senior Vice President, General Counsel and | |||||
| Secretary | ||||||
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