e10vk
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
__________
FORM 10-K
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ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
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For the Fiscal Year Ended December 31, 2010
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Commission File Number 1-7626
Sensient Technologies Corporation
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| WISCONSIN
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39-0561070 |
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(IRS Employer Identification Number) |
777 EAST WISCONSIN AVENUE
MILWAUKEE, WISCONSIN 53202-5304
(414) 271-6755
(Address of Principal Executive Offices)
SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT:
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TITLE OF EACH CLASS
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NAME OF EACH EXCHANGE |
| Common Stock, $0.10 par value
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ON WHICH REGISTERED |
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New York Stock Exchange, Inc. |
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in
Rule 405 of the Securities Act.
Yes x No o
Indicate by check mark if the registrant is not required to file reports pursuant to
Section 13 or Section 15(d) of the Act.
Yes o No x
Indicate by check mark whether the Registrant (1) has filed all reports required to be
filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months
(or such shorter period that the Registrant was required to file such reports), and (2) has been
subject to such filing requirements for at least the past 90 days. Yes x No o
Indicate by check mark whether the registrant has submitted electronically and posted on its
corporate Web site, if any, every Interactive Data File required to be submitted and posted
pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months
(or for such shorter period that the registrant was required to submit and post such files).
Yes x No o
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation
S-K is not contained herein, and will not be contained, to the best of Registrant’s knowledge, in
definitive proxy or information statements incorporated by reference in Part III of this Form 10-K
or any amendment to this Form 10-K.
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Indicate by check mark whether the registrant is a large accelerated filer, an accelerated
filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large
accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the
Exchange Act. (Check one):
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| Large accelerated filer x | |
Accelerated filer o | |
Non-accelerated filer o | |
Smaller reporting company o |
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(Do not check if a smaller reporting company) |
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Indicate by check mark if the registrant is a shell company (as defined in Rule 12b-2 of the
Exchange Act). Yes o No x
The aggregate market value of the voting Common Stock held by non-affiliates of the Registrant
as of
June 30, 2010, was $1,274,371,545. For purposes of this computation only, the Registrant’s
directors and executive officers were considered to be affiliates of the Registrant. Such
characterization shall not be construed to be an admission or determination for any other purpose
that such persons are affiliates of the Registrant.
There were 49,976,896 shares of Common Stock outstanding as of February 17, 2011.
DOCUMENTS INCORPORATED BY REFERENCE
Portions of: (1) the Company’s Annual Report to Shareholders for the fiscal year ended
December 31, 2010 (see Parts I, II and IV of this Form 10-K), and (2) the Company’s Notice of
Annual Meeting and Proxy Statement of the Company dated March 15, 2011 (see Part III of this Form
10-K).
SENSIENT TECHNOLOGIES CORPORATION—FORM 10-K FOR YEAR ENDED DECEMBER 31, 2010 INDEX
FORWARD-LOOKING STATEMENTS
This document contains forward-looking statements that reflect management’s current assumptions and
estimates of future economic circumstances, industry conditions, Company performance and financial
results. The Private Securities Litigation Reform Act of 1995 provides a safe harbor for such
forward-looking statements. Such forward-looking statements are not guarantees of future
performance and involve known and unknown risks, uncertainties and other factors that could cause
actual events to differ materially from those expressed in those statements. A variety of factors
could cause the Company’s actual results and experience to differ materially from the anticipated
results. These factors and assumptions include the pace and nature of new product introductions by
the Company and the Company’s customers; the Company’s ability to successfully implement its growth
strategies; the outcome of the Company’s various productivity-improvement and cost-reduction
efforts; changes in costs of raw materials, including energy; industry and economic factors related
to the Company’s domestic and international business; growth in markets for products in which the
Company competes; industry and customer acceptance of price increases; actions by competitors;
currency exchange rate fluctuations; and the matters discussed below under the heading “Risk
Factors” and under Part II, including the critical accounting policies incorporated by reference
from pages 23-24 of the Company’s 2010 Annual Report to Shareholders. The Company does not
undertake to publicly update or revise its forward-looking statements even if experience or future
changes make it clear that any projected results expressed or implied therein will not be realized.
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PART I
Item 1. Business
General
Sensient Technologies Corporation (the “Company”) was incorporated in 1882 in Wisconsin. Its
principal executive offices are located at 777 East Wisconsin Avenue, Suite 1100, Milwaukee,
Wisconsin 53202-5304, telephone (414) 271-6755.
The Company is subject to the informational and reporting requirements of the Securities
Exchange Act of 1934, as amended (the “Act”), and, in accordance with the Act, has filed annual,
quarterly and current reports, proxy statements and other information with the Securities and
Exchange Commission (the “Commission”). These reports and other information may be read and copied
at the public reference facilities of the Commission at its principal offices at 100 F Street,
N.E., Washington, D.C. 20549, and can also be accessed from the website maintained by the
Commission at http://www.sec.gov. The public may obtain information on operations of the public
reference room by calling the Commission at (800) SEC-0330.
The Company’s common stock is listed on the New York Stock Exchange under the ticker symbol
“SXT.” Information about the Company may be obtained at the offices of the New York Stock
Exchange, 20 Broad Street, New York, New York 10005.
The Company can also be reached at its website at www.sensient.com. The Company’s web address
is provided as an inactive textual reference only, and the contents of that website are not
incorporated in or otherwise to be regarded as part of this annual report. The Company makes
available free of charge on its website its proxy statement, its annual report on Form 10-K,
quarterly reports on Form 10-Q, current reports on Form 8-K, and amendments to these reports filed
or furnished pursuant to Section 13(a) or 15(d) of the Act as soon as reasonably practicable after
such documents are electronically filed with or furnished to the Commission. Charters for the
Audit, Compensation and Development, and Nominating and Corporate Governance Committees of the
Company’s Board of Directors, as well as the Company’s Code of Conduct, Standards of Conduct for
International Employees, Code of Ethics for Senior Financial Officers, and Corporate Governance
Guidelines are also available on the Company’s website, and are available in print to any
shareholder, free of charge, upon request. If there are any amendments to the Code of Conduct, the
Standards of Conduct, the Code of Ethics or the Corporate Governance Guidelines, or if waivers from
any of them are granted for executive officers or directors, those amendments or waivers also will
be posted on the Company’s website.
Description of Business
Sensient Technologies Corporation is a global manufacturer and marketer of colors, flavors and
fragrances. Sensient uses advanced technologies at facilities around the world to develop
specialty food and beverage systems, cosmetic and pharmaceutical systems, inkjet and specialty inks
and colors, and other specialty chemicals. The Company’s customers include major international
manufacturers representing some of the world’s best-known brands.
The Company’s principal products include:
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flavors, flavor enhancers and bionutrients; |
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fragrances and aroma chemicals; |
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dehydrated vegetables and other food ingredients; |
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natural and synthetic food and beverage colors; |
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cosmetic and pharmaceutical colors and additives; and |
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technical colors, inkjet colors and inks, and specialty dyes and pigments. |
The Company’s operations, except for the Asia Pacific and China Groups, are managed on a
products-and-services basis. The Company’s two reportable segments are the Flavors & Fragrances
Group and the Color Group. The Asia Pacific and the China Groups are included in the “Corporate &
Other” category, along with the
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Company’s corporate expenses. Financial information regarding the Company’s two reportable
segments and the operations included within Corporate & Other is incorporated by reference to the
information set forth on pages 41 through 43 of the Company’s 2010 Annual Report to Shareholders
under the heading “Segment and Geographic Information.”
Flavors & Fragrances Group
The Company is a global developer, manufacturer and supplier of flavor and fragrance systems
for the food, beverage, pharmaceutical, personal care and household-products industries. The
Company’s flavor formulations are used in many of the world’s best-known consumer products. Under
the unified brand names of Sensient Flavors, Sensient Dehydrated Flavors and Sensient Fragrances,
the Group is a supplier to multinational companies.
The Flavors & Fragrances Group produces flavor and fragrance products that impart a desired
taste, texture, aroma and/or other characteristics to a broad range of consumer and other products.
This Group includes the Company’s dehydrated flavors business, which produces ingredients for food
processors. The main products of the Group are systems products, including flavor-delivery
systems, and compounded and blended products. In addition, the Group has strong positions in
selected ingredient products such as essential oils, natural and synthetic flavors, and aroma
chemicals. The Group serves food and non-food industries. In food industries, markets include
savory, beverage, dairy, confectionery and bakery flavors. In non-food industries, the Group
supplies fragrance products to the personal and home care-markets and supplies flavor products to
the pharmaceuticals market.
Operating through its Sensient Dehydrated Flavors business, the Company believes it is the
second largest producer (by sales) of dehydrated onion and garlic products in the United States.
The Company is also one of the largest producers and distributors of chili powder, paprika, chili
pepper and dehydrated vegetables such as parsley, celery and spinach. Domestically, the Company
sells dehydrated products to food manufacturers for use as ingredients and also for repackaging
under private labels for sale to the retail market and to the food service industry. In addition,
Sensient Dehydrated Flavors is one of the leading dehydrators of specialty vegetables in Europe and
it has a growing presence in China. Advanced dehydration technologies utilized by Sensient
Dehydrated Flavors permit fast and effective rehydration of ingredients used in many of today’s
popular convenience foods.
The Flavors & Fragrances Group operates principally through the Company’s subsidiaries
Sensient Flavors LLC and Sensient Dehydrated Flavors LLC. The Group’s principal manufacturing
plants are located in California, Illinois, Indiana, Michigan, Wisconsin, Belgium, Canada, China,
France, Germany, Italy, Mexico, the Netherlands, Spain and the United Kingdom.
Color Group
The Company is a developer, manufacturer and supplier of colors for businesses worldwide. The
Company provides natural and synthetic color systems for use in foods, beverages and
pharmaceuticals; colors and other ingredients for cosmetics and pharmaceuticals; and technical
colors for industrial applications and digital imaging.
The Company believes that it is one of the world’s largest producers (by sales) of synthetic
and natural colors, and that it is the world’s largest manufacturer (by sales) of certified food
colors. The Company sells its synthetic and natural colors to domestic and international producers
of beverages, bakery products, processed foods, confections, pet foods, cosmetics and
pharmaceuticals. The Company also makes inkjet inks and other dyes and pigments used in a variety
of non-food applications.
The Color Group operates principally through the Company’s subsidiary Sensient Colors LLC,
which has its principal manufacturing plants in Missouri, California, New Jersey, Canada, Mexico,
France, Germany, Hungary, Italy, Switzerland and the United Kingdom.
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The Color Group operates under the following trade names:
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Sensient Food Colors (food and beverage colors); |
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Sensient Pharmaceutical Technologies (pharmaceutical colors and coatings); |
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Sensient Paper Colors (paper dyes and colorants); |
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Sensient Cosmetic Technologies (cosmetic colors and ingredients and systems); and |
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Sensient Technical Colors (including paper colors; industrial colors for plastics,
leather, wood stains, antifreeze and other uses; inkjet colors and inks; specialty
inks; and display imaging). |
The Company believes that its advanced process technology, state-of-the-art laboratory
facilities and equipment, and a complete range of synthetic and natural color products constitute
the basis for its market leadership position.
Asia Pacific and China Groups
The Asia Pacific Group and the China Group focus on marketing the Company’s diverse product
line in the Pacific Rim under the Sensient name. Through these operations, the Company offers a
full range of products from its Flavors & Fragrances Group and Color Group, as well as products
developed by regional technical teams to appeal to local preferences.
Sales, marketing and technical functions are managed through the Asia Pacific Group’s
headquarters in Australia. Manufacturing operations are located in Australia, Japan, New Zealand
and the Philippines. The Asia Pacific Group maintains offices for research and development, as
well as sales, in Indonesia, India, Korea, Singapore and Thailand.
The China Group’s operations include a manufacturing facility in China and multiple sales and
technical offices.
Research and Development/Quality Assurance
The development of specialized products and services is a complex technical process calling
upon the combined knowledge and talents of the Company’s research, development and quality
assurance personnel. The Company believes that its competitive advantage lies in its ability to
work with its customers to develop and deliver high-performance products that address the distinct
needs of those customers.
The Company’s research, development and quality assurance personnel support the Company’s
efforts to improve existing products and develop new products tailored to customer needs, while
providing on-going technical support and know-how to the Company’s manufacturing activities. We
employed 589 people in research and development, quality assurance, quality control and lab
technician positions as of December 31, 2010.
Expenditures for research and development related to continuing operations in calendar year
2010 were $30.6 million, compared with $29.3 million in the year ended December 31, 2009, and $28.3
million in the year ended December 31, 2008. As part of its commitment to quality as a competitive
advantage, the Company holds certifications under the requirements established by the International
Organization for Standardization in Geneva, Switzerland, through its ISO 9000 series of quality
standards. Certified sites include Flavors & Fragrances Group plants in the United States, Spain,
Italy, Mexico, Belgium, Germany, the United Kingdom, Canada, the Netherlands and France, and Color
Group plants in the United States, Mexico and the United Kingdom. The Flavors & Fragrances Group
plant in Spain has also received additional certification through the ISO 14001 and 18001 quality
standards.
Products and Application Activities
The Company’s strategic focus is on the manufacture and marketing of high-performance
components that bring life to products. Accordingly, the Company devotes considerable attention
and resources to the development of product applications and processing improvements to support its
customers’ numerous new and reformulated
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products. Many of the proprietary processes and formulae developed by the Company are maintained
as trade secrets and under confidentiality agreements with customers.
Within the Flavors & Fragrances Group, development activity is focused on ingredients, flavors
and flavor systems that are responsive to consumer trends and the processing needs of our food and
beverage customers. These activities include the development of functional ingredient systems for
foods and beverages, savory flavors, and ingredient systems for prepared foods and flavors and
ingredients for dairy, confectionery and other applications. The Company believes that the
development of yeast derivatives and other specialty ingredients also provides growth opportunities
in bionutrients and biotechnology markets, such as pharmaceuticals, vitamins, vaccines and
bioremediation.
Within the Color Group, development activity for food and beverage product lines is focused on
value-added products derived from synthetic dyes and pigments and natural food and beverage colors
and on color systems. The Company also produces a diverse line of colors and ingredients for
cosmetics and pharmaceutical applications and technical colors for industrial applications and
specialty chemicals for digital imaging.
Raw Materials
The Company uses a wide range of raw materials in producing its products. Chemicals used to
produce certified colors are obtained from several domestic and foreign suppliers. Raw materials
for natural colors, such as carmine, beta-carotene, annatto and turmeric, are purchased from
overseas and U.S. sources. In the production of flavors and fragrances, the principal raw materials
include essential oils, aroma chemicals, botanicals, fruits and juices, and are obtained from
domestic and foreign suppliers. Flavor enhancers and secondary flavors are produced from yeast and
vegetable materials such as corn and soybeans. Chili peppers, onion, garlic and other vegetables
are acquired under annual contracts with numerous growers in the western United States and Europe.
The Company has expanded its sources of vegetables to include growers in China and expects to add
growers in other Asian countries.
The Company believes that alternate sources of materials are available to enable it to
maintain its competitive position in the event of an interruption in the supply of raw materials
from a single supplier.
Competition
All Company products are sold in highly competitive markets. While no single factor is
determinative, the Company’s competitive position is based principally on process and applications
expertise, quality, technological advances resulting from its research and development, and
customer service and support. Because of its highly differentiated products, the Company competes
with only a few companies across multiple product lines, and is more likely to encounter
competition specific to an individual product.
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Flavors and Fragrances. Competition to supply the flavors and fragrances industries has
taken on an increasingly global nature. Most of the Company’s customers do not buy their
entire flavor and/or fragrance products from a single supplier and the Company does not
compete with a single supplier in all product categories. Competition for the supply of
flavors and fragrances is based on the development of customized ingredients for new and
reformulated customer products, as well as on quality, customer service and price.
Competition to supply dehydrated vegetable products is present through several large and
small domestic competitors, as well as competitors in other countries. Competition for the
supply of dehydrated vegetables is based principally on product quality, customer service
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Color. Competition in the color market is diverse, with the majority of the Company’s
competitors specializing in either synthetic dyes and pigments or natural colors. The
Company believes that it gains a competitive advantage as the only major basic manufacturer
of a full range of color products, including synthetic dyes and pigments as well as natural
colors. Competition in the supply of inkjet inks is based principally upon price, quality
and service, as well as product development and technical capabilities. The Company
competes against a number of large and small suppliers of inkjet inks. |
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Asia Pacific and China. Because of the broad array of products available to customers of
the Asia Pacific Group and the China Group, the Company believes that it is able to offer a
wider product base than many of its competitors. Competition is based upon reliability in
product quality, service and price as well as technical support available to customers. |
Foreign Operations
The information appearing under the heading “Geographic Information” in Note 8 to the
Consolidated Financial Statements of the Company, which appears on page 43 of the 2010 Annual
Report to Shareholders, is incorporated herein by reference.
Patents, Formulae and Trademarks
The Company owns or controls many patents, formulae and trademarks related to its businesses.
The businesses are not materially dependent upon patent or trademark protection; however,
trademarks, patents and formulae are important to the business of the Company.
Employees
As of December 31, 2010, the Company employed 3,618 persons worldwide.
Regulation
Compliance with government provisions regulating discharges into the environment, or otherwise
relating to the protection of the environment, did not have a material adverse effect on the
Company’s operations for the year covered by this report except for those settlement amounts set
forth in Item 3 of this Report under Environmental Matters. Current compliance is not expected to
have a material adverse effect in the next two years except for those settlement amounts set forth
in Item 3 of this Report under Environmental Matters. The production, packaging, labeling and
distribution of certain of the products of the Company in the U.S. are subject to the regulations
of various federal, state and local governmental agencies, in particular the U.S. Food & Drug
Administration. The Company is subject to similar regulations in many international markets.
Item 1A. Risk Factors.
As with any business, the Company’s business and operations involve risks and uncertainties.
In addition to the other discussions in, and incorporated by reference in, this Report,
particularly those in “Management’s Discussion & Analysis of Operations & Financial Condition”
incorporated by reference from pages 19 through 26 of the 2010 Annual Report to Shareholders and
“Forward Looking Statements” on page 26 of the 2010 Annual Report to Shareholders, the following
factors should be considered:
• In some product lines, most of our sales are made to a relatively small number of
customers; if we lose any of those customers, sales and operating results could decline.
In some of our product lines, our sales are concentrated to a small number of customers. While we
do not currently have any single customer that we consider to be significant to us as a whole, the
loss of a significant customer of a product line could substantially affect the sales and
profitability of that line, which may cause us to re-evaluate that line. Those developments could
affect our results. In addition, the financial condition of our customers may adversely affect
their ability to buy from us or to pay for products that they have already purchased.
• Many of our products are used in items for human consumption and contact. We may be
subject to product liability claims and product recalls, which could negatively impact our
profitability and corporate image.
We sell flavors, fragrances and colors which are used in foods, beverages, pharmaceuticals,
cosmetics, and other items for human consumption or contact. These products involve risks such as
product contamination or spoilage, product tampering and other adulteration. We may be subject to
liability if the consumption or use of our flavors,
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fragrances and colors, or products which incorporate ingredients we manufacture, cause injury,
illness or death. In addition, we or our customers may need to recall products in the event of
contamination or damage.
A significant product defect, product liability judgment or product recall may negatively impact
our profitability for a period of time depending on publicity, product availability, scope,
competitive reaction and consumer attitudes. Even if a product liability claim is unsuccessful or
is not fully pursued, the negative publicity surrounding any assertion that our products caused
illness, injury or death could adversely affect our reputation with existing and potential
customers and our corporate image.
• Consolidation has resulted in customers with increased buying power, which can affect our
profitability.
Many of our customers have consolidated in recent years and we expect the combination trend to
continue. These consolidations have often produced large, sophisticated customers with increased
buying power who are more capable of resisting price increases. If the larger size or greater
buying power of those customers results in additional negotiating strength, the prices we are able
to charge could be negatively affected and our profitability could decline.
• Intense competition may result in reduced sales and profitability.
The industries and markets in which we operate are highly competitive. That competition can reduce
both our sales and the prices at which we are able to sell our products, which can in turn
negatively affect our profitability.
• Our sales and profitability are affected by changing consumer preferences and changing
technologies.
Although we do not generally make or sell proprietary consumer products, many of our products are
sold to companies which develop and market consumer products. Sales of these flavors, fragrances,
colors and inks depend in part upon our customers’ ability to identify and meet consumer
preferences and their sales and marketing efforts, all of which are beyond our control. Our sales
could also be affected by changing technologies that could impact consumer demand for products that
contain our flavors, fragrances, colors and inks. Therefore, we depend upon our customers’ ability
to create markets for the consumer products which incorporate many of the flavors, fragrances,
colors and inks which we manufacture.
• If we do not maintain an efficient cost structure, our profitability could decrease.
Our success depends in part on our ability to maintain an efficient cost structure. We regularly
initiate cost-reduction measures that could impact our manufacturing, sales, operations and
information systems functions. If we do not continue to manage costs and achieve additional
efficiencies, or we do not successfully implement related strategies, our competitiveness and our
profits could decrease.
• Commodity and energy price increases or material shortages may reduce our profits.
We use many different commodities as raw ingredients. We also use petroleum-based raw materials
and other raw materials whose production is energy intensive. In addition, various energy sources
are used in our production and distribution processes. Commodity and energy prices are subject to
significant volatility caused by market fluctuations, supply and demand, currency fluctuation,
production and transportation disruption, world events, and changes in governmental programs.
Commodity and energy price increases, including any increases that may result from regulation of
greenhouse gases, will raise both our raw material costs and operating costs. We may not be able to
increase our product prices enough to offset these increased costs. Increasing our prices also may
reduce sales volume and related profitability.
In addition, we obtain some of the raw materials that we use from a single supplier or a limited
number of suppliers, and problems with those suppliers could affect the availability of those
materials. Even if there are multiple suppliers of a particular raw material, there are occasional
shortages. An unavailability or shortage of a raw material could negatively affect our operations
using that raw material and thus our results.
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• There are many laws and regulations applicable to our industries. Compliance with those
requirements is costly to us and can affect our operations. Failure to comply could also be costly
and disruptive.
Our facilities and products are subject to many laws and regulations relating to the processing,
packaging, storage, distribution, quality and safety of food, drugs and other consumer products,
inkjet inks and industrial colors. These laws and regulations are administered in the United
States by the Department of Agriculture, the Food and Drug Administration, the Environmental
Protection Agency and other federal and state governmental agencies. We are subject to similar
governmental regulation and oversight abroad. Compliance with these laws and regulations can be
costly and affect our operations. Also, if we fail to comply with applicable laws and regulations,
we could be subject to administrative penalties and injunctive relief, civil remedies, fines and
recalls of our products.
• Environmental compliance may be costly to us.
Our operations are subject to extensive and increasingly stringent laws and regulations which
pertain to the discharge of materials into the environment (including greenhouse gases) and the
handling and disposition of wastes. These rules operate or will operate at both the federal and
state levels in the United States, and there are analogous laws at many of our overseas locations.
We are currently involved in disputes relating to compliance with environmental laws. Settlements
have been reached by the principals and their insurers in one of those
disputes as described in Item 3 of this Report.
Environmental regulations, and the potential failure to comply with them, can have serious
consequences, including the costs of compliance and defense, interference with our operations or
the ability to obtain required permits, civil and administrative penalties and negative publicity.
• Operating in foreign countries exposes us to increased risks, including foreign currency
risks.
We operate and sell our products in many foreign countries. The international aspects of our
business subject us to risks that could materially impact our operating results, including: foreign
exchange rate fluctuations; difficulties in staffing and managing foreign personnel in diverse
cultures; transportation delays or interruptions; and the effects of international political
developments and political and economic instability. In addition, changes in policies by the
United States or foreign governments could negatively affect our operating results due to changes
in duties, tariffs, trade regulations, taxes or limitations on currency or fund transfers.
• We depend on certain key personnel, and the loss or retirement of these persons may harm
our business.
Our success depends in large part on the continued service and availability of our key management
and technical personnel, and on our ability to attract and retain qualified new personnel. The
competition for these individuals can be significant, and the loss of key employees could harm our
business. In addition, as some of these persons approach retirement age, we need to provide for
smooth transitions, and our operations and results may be negatively affected if we are not able to
do so.
• We may not successfully complete and integrate future acquisitions, which could adversely
affect our operating results.
We have acquired many companies and operations in the past and may resume growth by acquisition in
the future. Our future growth through acquisitions could involve significant risks that may have a
material adverse effect on us. We may also be at risk for factors associated with acquisitions
that the Company has made in the past. These risks include: inability to integrate successfully
our acquired operations’ businesses and personnel; the inability to realize anticipated synergies,
economies of scale or other value; difficulties coordinating management of operations at new sites;
the strain placed on our personnel, systems and resources; possible loss of an acquired business’
customer base; and the loss of key employees of acquired businesses. Acquired companies may also
have significant latent liabilities which may not be discovered before an acquisition or fully
reflected in the price we pay.
We may also need to finance future acquisitions, and the terms of any financing, and the need to
ultimately repay or refinance any indebtedness, may have negative effects on us. Acquisitions also
could have a dilutive effect on our financial results. Acquisitions also generally result in
goodwill, which would need to be written off against earnings in the future if it becomes impaired.
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• Our ability to successfully maintain and upgrade our information technology systems may
affect our competitiveness and our profits could decrease.
Our success depends in part on our ability to maintain a current information technology platform
for our business to operate. We routinely review and upgrade our information technology systems in
order to better manage and report the sales, manufacturing and other operations of our business.
If we do not continue to maintain our information technology platform and successfully implement
upgrades to the system, our competitiveness and profits could decrease.
• World events and natural disasters are beyond our control and could affect our results.
World events, such as the conflicts in Iraq and Afghanistan, and the situations in North Korea
Iran and elsewhere in the Middle East, can adversely affect national, international and local economies. Economies can also be
affected by natural disasters or by epidemics. Such events and conditions, as well as the current
impairment of financial markets, high unemployment and constrained consumer spending, have
adversely affected and could continue to affect our revenues and profitability, particularly if
they occur in locations in which we or our customers have significant operations.
Item 1B. Unresolved Staff Comments.
None.
Item 2. Properties
The following table sets forth information as to the principal properties of the
Company and its subsidiaries. All properties are owned except as otherwise indicated below. All
facilities are considered to be in good condition (ordinary wear and tear excepted) and suitable
and adequate for the Company’s requirements.
| |
|
|
|
|
|
|
|
|
| |
| |
LOCATION |
|
|
GROUP/DIVISION |
|
|
FUNCTION |
|
| |
UNITED STATES |
|
|
|
|
|
|
|
| |
California |
|
|
|
|
|
|
|
| |
Carlsbad* |
|
|
Color |
|
|
Sales and R&D/inkjet products and specialty inks |
|
| |
Greenfield** |
|
|
Flavors & Fragrances |
|
|
|
|
| |
Livingston (2) |
|
|
Flavors & Fragrances |
|
|
Production and R&D/dehydrated flavors |
|
| |
Turlock |
|
|
Flavors & Fragrances |
|
|
Production, R&D and sales/dehydrated flavors |
|
| |
|
|
|
|
|
|
|
|
| |
Illinois |
|
|
|
|
|
|
|
| |
Amboy |
|
|
Flavors & Fragrances |
|
|
Production/ingredients and flavors |
|
| |
|
|
|
|
|
|
|
|
| |
Indiana |
|
|
|
|
|
|
|
| |
Indianapolis |
|
|
Flavors & Fragrances |
|
|
Production, sales and R&D/flavors, group headquarters/flavors & fragrances |
|
| |
|
|
|
|
|
|
|
|
| |
Michigan |
|
|
|
|
|
|
|
| |
Harbor Beach |
|
|
Flavors & Fragrances |
|
|
Production/flavors and flavor enhancers |
|
| |
|
|
|
|
|
|
|
|
| |
Missouri |
|
|
|
|
|
|
|
| |
St. Louis |
|
|
Color |
|
|
Production, R&D, sales/food, cosmetic, pharmaceutical and technical colors, group headquarters/colors |
|
| |
|
|
|
|
|
|
|
|
| |
New Jersey |
|
|
|
|
|
|
|
| |
South Plainfield* |
|
|
Color |
|
|
Production, R&D and sales/cosmetic and pharmaceutical colors and ingredients |
|
| |
10
| |
|
|
|
|
|
|
|
|
|
| |
UNITED STATES
(continued) |
|
|
|
|
|
|
|
| |
Wisconsin |
|
|
|
|
|
|
|
| |
Juneau |
|
|
Flavors & Fragrances |
|
|
Production/flavor enhancers and extracts |
|
| |
Milwaukee* |
|
|
Headquarters |
|
|
Administrative offices |
|
| |
| |
|
|
|
|
|
|
|
|
|
| |
INTERNATIONAL |
|
|
|
|
|
|
|
| |
Argentina |
|
|
|
|
|
|
|
| |
Buenos Aires* |
|
|
Color |
|
|
Sales/food colors |
|
| |
|
|
|
|
|
|
|
|
| |
Australia |
|
|
|
|
|
|
|
| |
Keysborough |
|
|
Asia Pacific |
|
|
Production, R&D and sales/colors and flavors, group headquarters/Asia Pacific |
|
| |
|
|
|
|
|
|
|
|
| |
Austria |
|
|
|
|
|
|
|
| |
Vienna* |
|
|
Flavors & Fragrances |
|
|
Sales/flavors |
|
| |
|
|
|
|
|
|
|
|
| |
Belgium |
|
|
|
|
|
|
|
| |
Brussels* |
|
|
Flavors & Fragrances |
|
|
Production and sales/natural health ingredients |
|
| |
Heverlee |
|
|
Flavors & Fragrances |
|
|
Production, R&D and sales/ingredients and flavors |
|
| |
|
|
|
|
|
|
|
|
| |
Brazil |
|
|
|
|
|
|
|
| |
São Paulo* |
|
|
Color |
|
|
Production, R&D and sales/food colors and flavors |
|
| |
|
|
|
|
|
|
|
|
| |
Canada |
|
|
|
|
|
|
|
| |
Cornwall, Ontario |
|
|
Flavors & Fragrances |
|
|
Production/flavor enhancers and extracts |
|
| |
Delta, British Columbia |
|
|
Flavors & Fragrances |
|
|
Production/ingredients and flavors |
|
| |
Halton Hills, Ontario |
|
|
Flavors & Fragrances |
|
|
Production/ingredients and flavors |
|
| |
Kingston, Ontario |
|
|
Color |
|
|
Production, R&D and sales/food colors |
|
| |
Mississauga, Ontario |
|
|
Flavors & Fragrances |
|
|
R&D and sales/flavors |
|
| |
Mississauga, Ontario* |
|
|
Flavors & Fragrances |
|
|
Sales/dehydrated flavors |
|
| |
Tara, Ontario |
|
|
Flavors & Fragrances |
|
|
Production/ingredients and flavors |
|
| |
|
|
|
|
|
|
|
|
| |
China |
|
|
|
|
|
|
|
| |
Beijing* |
|
|
China |
|
|
Sales/colors and flavors |
|
| |
Guangzhou* |
|
|
China |
|
|
Production, R&D and sales/flavors and food and pharmaceutical colors, group headquarters/China |
|
| |
Hong Kong |
|
|
China |
|
|
Sales/colors and flavors |
|
| |
Qingdao* |
|
|
Flavors & Fragrances |
|
|
Production/dehydrated flavors |
|
| |
Shanghai* |
|
|
China |
|
|
R&D and sales/colors and flavors |
|
| |
|
|
|
|
|
|
|
|
| |
Costa Rica |
|
|
|
|
|
|
|
| |
San Jose* |
|
|
Flavors & Fragrances |
|
|
Production and sales/flavors |
|
| |
|
|
|
|
|
|
|
|
| |
Czech Republic |
|
|
|
|
|
|
|
| |
Prague* |
|
|
Color |
|
|
Sales/food colors |
|
| |
|
|
|
|
|
|
|
|
| |
Denmark |
|
|
|
|
|
|
|
| |
Ryslinge* |
|
|
Flavors & Fragrances |
|
|
Sales/flavors |
|
| |
11
| |
|
|
|
|
|
|
|
|
|
| |
INTERNATIONAL (continued) |
|
|
|
|
|
|
|
| |
Finland |
|
|
|
|
|
|
|
| |
Espoo |
|
|
Flavors & Fragrances |
|
|
Sales/flavors |
|
| |
|
|
|
|
|
|
|
|
| |
France |
|
|
|
|
|
|
|
| |
Marchais |
|
|
Flavors & Fragrances |
|
|
Production/dehydrated flavors |
|
| |
Saint-Denis* |
|
|
Color |
|
|
Sales/food colors |
|
| |
Saint Ouen L’Aumone* |
|
|
Color |
|
|
Production, R&D and sales/cosmetic colors and ingredients |
|
| |
Strasbourg |
|
|
Flavors & Fragrances |
|
|
Production, R&D and sales/flavor enhancers and extracts |
|
| |
|
|
|
|
|
|
|
|
| |
Germany |
|
|
|
|
|
|
|
| |
Bremen (2) |
|
|
Flavors & Fragrances |
|
|
Production, R&D and sales/flavors, flavored products and essential oils |
|
| |
Geesthacht |
|
|
Color |
|
|
Production, R&D and sales/food colors |
|
| |
Wolfen |
|
|
Color |
|
|
Production, R&D and sales/specialty dyes and chemicals |
|
| |
|
|
|
|
|
|
|
|
| |
Guatemala |
|
|
|
|
|
|
|
| |
Guatemala City* |
|
|
Flavors & Fragrances |
|
|
Sales/fragrances |
|
| |
|
|
|
|
|
|
|
|
| |
Hungary |
|
|
|
|
|
|
|
| |
Budapest |
|
|
Color |
|
|
Production/food colors |
|
| |
|
|
|
|
|
|
|
|
| |
India |
|
|
|
|
|
|
|
| |
Mumbai* |
|
|
Asia Pacific |
|
|
R&D and sales/colors and flavors |
|
| |
|
|
|
|
|
|
|
|
| |
Indonesia |
|
|
|
|
|
|
|
| |
Jakarta* |
|
|
Asia Pacific |
|
|
R&D and sales/fragrances and cosmetic colors |
|
| |
|
|
|
|
|
|
|
|
| |
Italy |
|
|
|
|
|
|
|
| |
Milan |
|
|
Flavors & Fragrances |
|
|
Production, R&D and sales/flavors |
|
| |
Reggio Emilia (2) |
|
|
Color |
|
|
Production, R&D and sales/natural colors |
|
| |
|
|
|
|
|
|
|
|
| |
Japan |
|
|
|
|
|
|
|
| |
Hitachi |
|
|
Asia Pacific |
|
|
Production/flavors and colors |
|
| |
Tokyo* |
|
|
Asia Pacific |
|
|
R&D and sales/flavors and colors |
|
| |
|
|
|
|
|
|
|
|
| |
Korea |
|
|
|
|
|
|
|
| |
Seoul* |
|
|
Asia Pacific |
|
|
Sales/flavors, colors and specialty chemicals |
|
| |
|
|
|
|
|
|
|
|
| |
Mexico |
|
|
|
|
|
|
|
| |
Celaya |
|
|
Flavors & Fragrances |
|
|
Production and sales/flavor enhancers and extracts |
|
| |
Lerma |
|
|
Color |
|
|
Production, R&D and sales/food and cosmetic colors |
|
| |
Tijuana* |
|
|
Color |
|
|
Production/inkjet inks |
|
| |
Tlalnepantla (2)* |
|
|
Flavors & Fragrances |
|
|
Production, R&D, distribution and sales/ingredients, flavors and fragrances |
|
| |
|
|
|
|
|
|
|
|
| |
The Netherlands |
|
|
|
|
|
|
|
| |
Elburg |
|
|
Flavors & Fragrances |
|
|
Production/dehydrated flavors |
|
| |
Naarden* |
|
|
Flavors & Fragrances |
|
|
Sales/food colors and dehydrated and other flavors |
|
| |
12
| |
|
|
|
|
|
|
|
|
|
| |
INTERNATIONAL (continued) |
|
|
|
|
|
|
|
| |
New Zealand |
|
|
|
|
|
|
|
| |
Auckland |
|
|
Asia Pacific |
|
|
Production, R&D and sales/flavors |
|
| |
|
|
|
|
|
|
|
|
| |
Philippines |
|
|
|
|
|
|
|
| |
Manila* |
|
|
Asia Pacific |
|
|
Production, R&D and sales/flavors, fragrances, cosmetic ingredients and color blending |
|
| |
|
|
|
|
|
|
|
|
| |
Poland |
|
|
|
|
|
|
|
| |
Warsaw* |
|
|
Color |
|
|
Sales/food colors |
|
| |
Warsaw* |
|
|
Flavors |
|
|
Sales/flavors |
|
| |
|
|
|
|
|
|
|
|
| |
Romania |
|
|
|
|
|
|
|
| |
Bucharest* |
|
|
Flavors |
|
|
Sales/flavors |
|
| |
Morazia* |
|
|
Color |
|
|
Sales/food colors |
|
| |
|
|
|
|
|
|
|
|
| |
Singapore |
|
|
|
|
|
|
|
| |
Singapore* |
|
|
Asia Pacific |
|
|
R&D and sales/food colors and flavors |
|
| |
|
|
|
|
|
|
|
|
| |
South Africa |
|
|
|
|
|
|
|
| |
Johannesburg* |
|
|
Color |
|
|
Production, R&D and sales/food colors |
|
| |
|
|
|
|
|
|
|
|
| |
Spain |
|
|
|
|
|
|
|
| |
Barcelona* |
|
|
Flavors & Fragrances |
|
|
Sales/flavors |
|
| |
Granada |
|
|
Flavors & Fragrances |
|
|
Production, R&D and sales/fragrances and aromatic chemicals |
|
| |
|
|
|
|
|
|
|
|
| |
Sweden |
|
|
|
|
|
|
|
| |
Kristianstad* |
|
|
Flavors & Fragrances |
|
|
Sales/flavors |
|
| |
|
|
|
|
|
|
|
|
| |
Switzerland |
|
|
|
|
|
|
|
| |
Morges* |
|
|
Color |
|
|
Production, R&D and sales/technical colors |
|
| |
|
|
|
|
|
|
|
|
| |
Thailand |
|
|
|
|
|
|
|
| |
Bangkok* |
|
|
Asia Pacific |
|
|
R&D and sales/colors and flavors |
|
| |
|
|
|
|
|
|
|
|
| |
Ukraine |
|
|
|
|
|
|
|
| |
Kiev* |
|
|
Flavors & Fragrances |
|
|
Sales/flavors |
|
| |
|
|
|
|
|
|
|
|
| |
United Kingdom |
|
|
|
|
|
|
|
| |
Ceredigion |
|
|
Flavors & Fragrances |
|
|
Production, R&D and sales/flavors and flavor enhancers |
|
| |
Kings Lynn * |
|
|
Color |
|
|
Production, R&D and sales/food colors and ink jet inks |
|
| |
Milton Keynes |
|
|
Flavors & Fragrances |
|
|
Production, R&D and sales/flavors and extracts |
|
| |
( ) Indicates number of properties at the locations, if more than one.
*Indicates one leased property at the location.
**Production has ceased at indicated facility and property is to be sold.
13
Item 3. Legal Proceedings
Environmental Matters
Superfund Claim
In July 2004, the Environmental Protection Agency (“EPA”) notified the Company’s subsidiary
Sensient Colors Inc. (“Sensient Colors”) that it may be a potentially responsible party (“PRP”)
under the Comprehensive Environmental Response, Compensation and Liability Act (“CERCLA”) for
activities at the General Color Company Superfund Site in Camden, New Jersey (the “Site”). The EPA
requested reimbursement of $10.9 million in clean-up costs, plus interest. Sensient Colors advised
the EPA that the Site had been expressly excluded from the Company’s 1988 stock purchase of H.
Kohnstamm & Company, Inc. (now Sensient Colors). The selling shareholders had retained ownership of
and liability for the Site, and some became owners of General Color Company, which continued to
operate there until the mid-1990s. In a letter to the EPA in January 2005, the Company outlined
legal challenges to the recoverability of certain costs and urged the EPA to pursue General Color
Company and related parties. The EPA informed Sensient Colors that it was unwilling to discuss
these legal challenges without prior conditions. In 2005, a private developer, Westfield Acres
Urban Renewal Association II, LP, pursuant to an agreement with the EPA, began redevelopment
efforts at the Site (construction of affordable housing) by demolishing buildings thereon.
Thereafter, the EPA removed allegedly contaminated soil from the locations where the buildings once
stood.
In March 2007, the United States filed a complaint in the U.S. District Court in New Jersey against
Sensient Colors claiming “over $16 million” in response costs allegedly incurred and to be incurred
by the EPA pursuant to CERCLA. Sensient Colors moved to dismiss the United States’ complaint, which
motion was denied by the Court in October 2007. Sensient Colors timely filed its answer and
affirmative defenses to the United States’ complaint, as well as a third-party complaint against
current and former owners and/or operators of the Site. The United States moved to strike Sensient
Colors’ affirmative defenses. In an August 12, 2008 Opinion and Order, following briefs and oral
argument, the Court partly granted and partly denied the United States’ motion, effectively
preserving most of Sensient Colors’ affirmative defenses, either as originally pled or with changes
outlined by the Court. Sensient Colors promptly filed an amended pleading incorporating the revised
affirmative defenses. On July 29, 2008, Sensient Colors filed a third-party complaint adding
Kohnstamm Inc. (a Canadian affiliate of General Color Company) and its president Avtar Singh as
defendants.
In late August 2008, in the course of reviewing documents produced by the EPA, Sensient Colors
discovered an e-mail exchange between EPA officials that Sensient Colors believes supports many of
the legal theories and affirmative defenses advanced by Sensient Colors in the litigation and
undermines key United States cost recovery claims. By letter dated August 26, 2008, based on the
above document and other evidence adduced in the case, Sensient Colors demanded that the United
States dismiss its case with prejudice and reimburse Sensient Colors for attorneys’ fees and costs
incurred. In response to the August 26, 2008 letter, the United States withdrew, without prejudice,
its then-pending motion to limit the scope of review to EPA’s administrative record and told the
Court that it would respond to Sensient’s letter by September 10, 2008. The United States then
sought additional time for its review of Sensient Colors’ demand. In an October 3, 2008 Letter
Order, the Court directed the United States to provide Sensient with notice of its decision with
respect to the demand for dismissal by October 31, 2008. In a letter to Sensient Colors dated
October 31, 2008, the United States declined to voluntarily dismiss the case but agreed, with
certain conditions, not to oppose depositions of current and former EPA employees on the issues
raised in Sensient Colors’ letter of August 26, 2008. The United States reserved its rights to seek
limitations on discovery and to seek to limit review of EPA’s choice of response action to the
administrative record.
Using the evidence that supports its demand for dismissal, Sensient Colors moved for leave to amend
its responsive pleading to include a new affirmative defense, a counterclaim against the United
States and the EPA, and third-party claims against certain EPA employees or agents. After briefing,
the motion for leave to amend was argued before the magistrate judge on November 18, 2008. On
February 13, 2009, the magistrate issued an opinion and order denying Sensient Colors’ motion for
leave to amend. Sensient Colors appealed the magistrate’s decision to the district court judge. On
July 22, 2009, the district court judge issued a decision affirming the magistrate’s opinion and
order, largely on sovereign immunity grounds.
14
Sensient Colors also issued subpoenas or deposition notices to numerous current or former EPA
officials. Motions were filed to block the depositions of former EPA Administrator Christine Todd
Whitman, former EPA Regional Administrator Jane Kenny, and EPA On-Scene Coordinator David Rosoff.
On January 28, 2009, the magistrate judge issued an opinion and order denying or delaying Sensient
Color’s ability to conduct the foregoing depositions. Sensient Colors exercised its right to appeal
the magistrate’s decision to the district court judge. On July 22, 2009, the district court judge
issued a decision reversing the magistrate and ordering the depositions of Kenny and Rosoff to
proceed.
On May 8, 2009, Sensient Colors filed a motion for summary judgment seeking dismissal with
prejudice of the United States’ claims.
Prior to arguing the summary judgment motion and to scheduling the depositions of the current and
former EPA officials, the United States and Sensient Colors agreed to meet with each other, with
the parties involved in the Pleasant Gardens dispute described below and with interested insurers
to determine if a resolution short of trial was possible. The parties met and ultimately agreed to
a settlement in principle to resolve the matter by specified payments among the parties and their
insurers. As a result of the proposed settlements, Sensient’s results for the quarter and year
ended December 31, 2009 included pre-tax charges for estimated settlement liabilities and related
legal costs, net of insurance reimbursements, of approximately $11.3 million. In July 2010, the
U.S. District Court in New Jersey approved the consent decree with the United States. Sensient
Colors and the third-party defendants settled the third-party claims, which were then dismissed by
the Court pursuant to Consent Orders. On August 4, 2010, the Court closed the case.
Pleasant Gardens Realty Corp. v. H. Kohnstamm & Co., et al.
The owner of Pleasant Gardens (“Property”), an apartment complex adjacent to the General Color
Superfund Site, filed a complaint in New Jersey state court in November 2003 against H. Kohnstamm &
Co. (now Sensient Colors), the Company, General Color Company, and unknown defendants. Plaintiff
sought to hold defendants liable, in an unspecified amount, for damages related to the alleged
contamination of the Property. Plaintiff voluntarily dismissed the Company without prejudice.
Sensient Colors filed an answer denying liability and asserting affirmative defenses. In November
2006, the Camden Redevelopment Agency (“Agency”) filed condemnation litigation against plaintiff
(and other purported interested parties) to take the Property. Sensient Colors was not a party to
the condemnation litigation. In advance of its filing, the Agency notified plaintiff that its
appraiser had assessed the fair market value of the Property at $7.7 million and that its
environmental consultant had estimated the costs for environmental cleanup, purportedly to meet
requirements of the New Jersey Department of Environmental Protection (“DEP”), at $7.5 million.
That amount was held in escrow pending the outcome of the lawsuit. Sensient Colors and plaintiff
pursued a reduction in the scope and cost of the Agency’s proposed environmental cleanup in
meetings with the DEP, the Agency and another party involved in the condemnation, the New Jersey
Schools Construction Corporation (“NJSCC”). In March 2007, plaintiff filed an amended complaint
naming the Agency, the NJSCC and the DEP as additional defendants in furtherance of this effort. In
April 2007, Sensient Colors filed its answer to the amended complaint, including cross claims
against these newly added parties. The Agency, the DEP and the New Jersey Schools Development
Authority (“NJSDA”) (which replaced the NJSCC as a state agency effective August 7, 2007) each
filed answers, cross-claims and counter-claims; Sensient Colors has responded to all three
cross-claims. Document discovery was completed in July 2008, and expert and rebuttal expert reports
were exchanged.
Sensient Colors advised the Court and the other parties in this litigation of the developments in
the Superfund Claim as described above. Sensient Colors took supplemental depositions of several
DEP officials and served subpoenas upon five current or former EPA officials. The United States,
though not a party to the Pleasant Gardens case, initially sought to quash those subpoenas before
the Pleasant Gardens court. On November 17, 2008, the United States removed the subpoenas and
related proceedings to federal court. At an initial court conference on the removed proceedings on
February 19, 2009, the federal magistrate judge asked for additional briefing on the issue of the
government’s standing to seek to quash the state court subpoenas. In September 2009, the federal
magistrate judge ordered that former EPA officials could be deposed but only as to “individual” and
not “official” matters. Sensient Colors appealed this decision to the district court judge.
15
On January 8, 2009, the state court judge recused himself from the Pleasant Gardens case (as well
as the related insurance coverage case) because of a conflict of interest and the Pleasant Gardens
case was reassigned to another judge. In light of the recusal and reassignment, the new judge
re-scheduled the trial to commence no earlier than June 1, 2009, and indicated that depending on
how certain outstanding discovery issues were resolved, the trial might be deferred further. On
April 20, 2009, the court further extended the pretrial schedule and set a trial date for October
5, 2009. On July 24, 2009, Sensient Colors filed a motion for summary judgment on the grounds that
the DEP’s proposed remedy was arbitrary and capricious. At a conference held on September 18, 2009,
the state court judge ordered that discovery be completed before November 15, 2009, that
dispositive motions be heard on December 11, 2009, and that the trial commence on February 8, 2010.
The judge also ordered that mediation occur before November 15, 2009.
As described above, Sensient Colors met with the parties to the Pleasant Gardens litigation, to the
Superfund claims described above and their respective insurers, and they ultimately agreed to a
settlement to resolve the matter by specified payments among the parties and their insurers. As a
result of the settlements, Sensient’s results for the quarter and year ended December 31, 2009,
included pre-tax charges for estimated settlement liabilities and related legal costs, net of
insurance reimbursements, of approximately $11.3 million. The settlement of the Pleasant Gardens
litigation was memorialized in a consent decree that was approved by the Superior Court of New
Jersey after an opportunity for public comment. The Agency and the NJSDA have been remediating the
Property with reimbursement from the funds held by the Court in escrow. Should the remediation cost
less than the escrowed amount, the balance of the escrow should be paid to Sensient Colors.
Commercial Litigation
Cherry Blossom Litigation
In June 2009, Sensient sued one of its product vendors, Cherry Blossom LLC (“Cherry Blossom”), a
supplier of processed cherry products in Michigan, when Cherry Blossom prepared to close its
facility and refused to return to Sensient raw cherries to which Sensient held title. Sensient
sued for conversion, breach of contract, possession of the cherries, and money damages of
approximately $0.5 million. Cherry Blossom and its lender opposed the claim.
Cherry Blossom counter-claimed against Sensient, primarily relating to ownership of certain cherry
processing formulas. Sensient sold Cherry Blossom certain materials containing formulas used in
the processing of cherries. Cherry Blossom claims it has an exclusive right to use Sensient’s
formulas. On June 22, 2009, Cherry Blossom moved for an injunction to prohibit Sensient from using
its cherry processing formulas. The court denied that motion.
Crossroads Debt, LLC (“Crossroads”), a secured lender to Cherry Blossom, intervened in the case and
asserted multiple claims against Cherry Blossom related to Cherry Blossom’s $1.4 million debt to
Crossroads. Crossroads also asserted cross-claims against Sensient related to offsets Sensient
took against its payments to Cherry Blossom for the processed cherry product Sensient purchased
from Cherry Blossom.
Under Sensient’s contract with Cherry Blossom, Cherry Blossom would purchase Sensient’s raw
cherries for use in making finished cherry product. Sensient then purchased the finished product
from Cherry Blossom at a purchase price reduced by setoffs for the amount Cherry Blossom owed
Sensient for raw cherries. Eventually, Cherry Blossom directed Sensient to make payments directly
to Crossroads, which Sensient did for about seven months, until Cherry Blossom ceased operations.
At a mediation on March 24, 2010, Crossroads claimed for the first time that because Sensient paid
for the finished cherry product by offsetting antecedent debt, Sensient was not a “buyer in the
ordinary course of business” as defined by the Uniform Commercial Code. As a result, Crossroads
claimed that Sensient was not entitled to take such offsets because Crossroads claimed it had a
perfected senior lien on the offset funds. Crossroads sought the imposition of a constructive
trust over $1.4 million of such funds and a judgment requiring their return by Sensient. The total
exposure could have exceeded this amount due to interest.
In addition, Sensient asserted indemnification claims against Crossroads related to a US Department
of Labor “hot goods” issue. The US Department of Labor prohibited Sensient from selling in
interstate commerce cherries made
16
by Cherry Blossom’s employees and for which Sensient had paid Cherry Blossom because Cherry Blossom
failed to pay its employees their wages earned when they processed the cherries.
Crossroads moved for summary disposition on April 12, 2010, based on the Uniform Commercial
Code argument it raised at mediation on March 24, 2010. Sensient opposed the motion and argued
that Sensient was entitled to summary disposition, not Crossroads. At a hearing on the motion, the
court ruled in Sensient’s favor, dismissing all of Crossroads’ claims against Sensient.
On May 27, 2010, Cherry Blossom filed a bankruptcy petition in U.S. Bankruptcy Court for the
Western District of Michigan. Such filing triggered an automatic stay of all litigation pending
against Cherry Blossom, including the instant case. The state court determined that the automatic
stay in Cherry Blossom’s bankruptcy case did not prevent it from signing the order granting
Sensient summary judgment disposing of Crossroads’ claims in Sensient’s favor. The court also
decided that the bankruptcy filing stayed indefinitely the remaining claims regarding possession of
the cherries, hot goods, and returned goods.
The bankruptcy trustee stipulated to lift the stay as to the issue of possession of the 2006
cherries, and on September 7, 2010, the Michigan state court lifted the administrative stay over
the three remaining issues: (1) Sensient’s claim for reimbursement from Crossroads in connection
with the U.S. Department of Labor hot goods issue described above; (2) Sensient’s claim for
reimbursement from Crossroads for certain returned goods; and (3) ownership of the 2006 cherry
inventory. The court accepted the parties’ stipulation that these three issues could be resolved
on briefs and set a schedule accordingly. The Court ordered the parties to file simultaneously
opening briefs on October 1, 2010, and file simultaneously reply briefs on October 8, 2010. The
Court heard oral argument on these three issues on December 6, 2010. On January 10, 2011, the
Court entered an order that Crossroads is entitled to the first lien position on the remaining
cherry inventory and denying Sensient’s claims against Crossroads for reimbursement. Pursuant to
the Court’s order of January 10, 2011, any proceeds from the sale of the remaining cherry inventory
will be paid to the Court and then released to Crossroads. Sensient will appeal the Court’s
decision regarding these three issues. Sensient also intends to move the Court to stay the
enforcement of its January 10, 2011, order pending appeal.
S.A.M. (Amaral) v. Sensient Technologies Corp., et al.
On August 5, 2010, the owners and operators of a 135-acre vineyard near the dehydration facility
formerly operated by Sensient Dehydrated Flavors, LLC (“SDF”) in Greenfield, California filed a
lawsuit in California state court in Monterey, California. The lawsuit names as defendants both
Sensient Technologies Corporation (“Sensient”) and SDF and a response to the complaint was filed on
October 1. The suit sets out claims for nuisance per se, trespass and negligence per se and
alleges almost a million dollars in losses plus punitive damages, all based on the fact that,
between the summer of 2007 and early October, 2009, SDF was processing onions that allegedly caused
an “onion taint” in the grapes and wine produced from the plaintiffs’ vineyard. While SDF had an
air permit covering its operations, its Monterey County use permit specifically named only chili
peppers, celery and parsley, but not onions, as commodities that could be dehydrated at the
Greenfield facility. SDF’s effort to modify the Greenfield facility’s use permit to specifically
include the processing of onions was blocked by local vineyard owners, and SDF has since closed its
Greenfield facility and consolidated its onion dehydration operations at its fully-permitted and
more efficient facility at Livingston, California.
This lawsuit follows an earlier lawsuit (J. Lohr Vineyards and Wines v. Sensient Technologies) (the
“Lohr lawsuit”) brought by a larger, adjacent landowner. The Lohr lawsuit was settled in December,
2009, with an agreement that included SDF’s abandonment of onion processing at its Greenfield
facility but did not require the payment of any settlement amount to Lohr despite Lohr’s
substantial damage claims. The S.A.M. plaintiffs have essentially copied, and seek to rely upon,
the factual allegations and expert analyses developed in the Lohr lawsuit before a settlement was
reached. The S.A.M. plaintiffs will not, however, be receiving any assistance from Lohr. Sensient
and SDF believe the S.A.M. plaintiffs’ claims are without merit and intend to pursue a vigorous
defense. Trial has been set to commence on October 31, 2011, and the parties have been directed to
attend a mandatory settlement conference on September 30, 2011.
17
Daito Kasei Kogyo Co. Ltd. vs. Sensient Cosmetic Technologies SAS
In 1992 Sensient Cosmetic Technologies SAS (“SCT”) and Daito Kasei Kogyo Co., Ltd. (“Daito”)
entered into a distribution agreement pursuant to which SCT became the exclusive distributor in
Europe of coloring agents and ingredients manufactured in Japan by Daito and, in turn, Daito became
the exclusive distributor in Japan of certain products produced in France by SCT. By 2008, the
sale of Daito products represented €4 million of SCT’s sales. In contrast, Daito’s sales of SCT’s
products in Japan amounted to only €0.4 million in 2008. The agreement was entered into for an
initial period to end on December 31, 1993 and was tacitly renewed for two-year periods through
December 31, 2009, subject to a requirement of six months’ notice for termination.
On July 7, 2009, Daito notified SCT of its decision to terminate SCT’s distributorship in Europe,
with effect as of February 10, 2010. SCT informed Daito that the notice of termination was
insufficient in light of the lengthy commercial relationship between the parties. Daito eventually
ostensibly agreed to extend the notice period but the commercial relationship did not function as
it had in the past. On August 10, 2010, SCT filed a complaint before the Paris Commercial Court
alleging that Daito wrongfully terminated its long-standing established commercial relationship
with SCT, that SCT should have been given a notice period of thirty-six months in light of the
twenty-year relationship between the parties and that Daito should pay damages to SCT of over €3.8
million.
On January 26, 2011, Daito filed a response in a hearing of the Court in which it denied any
liability for SCT’s claims and asserted counter-claims of €1.5 million for unlawful termination of
Daito’s distributorship in Japan, unlawful termination of an alleged “agency contract” in Japan and
SCT’s cancellation of certain Daito orders in October, 2010.
The court has scheduled a hearing on March 23, 2011, at which SCT will file its response to Daito’s
defenses and counter-claims.
The Company is involved in various other claims and litigation arising in the normal course of
business. In the judgment of management, which relies in part on information from Company counsel,
the ultimate resolution of these actions will not materially affect the consolidated financial
statements of the Company except as described above.
Item 4. Reserved
Executive Officers of the Registrant
The executive officers of the Company and their ages as of March 1, 2011, are as follows:
| |
|
|
|
|
| Name |
|
Age |
|
Position |
Kenneth P. Manning |
|
69 |
|
Chairman and Chief Executive Officer |
John F. Collopy |
|
41 |
|
Vice President and Treasurer |
Christopher M. Daniels |
|
37 |
|
Vice President, Human Resources |
John L. Hammond |
|
64 |
|
Senior Vice President, General Counsel and Secretary |
Dr. Gordon E. Hering |
|
54 |
|
Vice President, Marketing & Technology |
Richard F. Hobbs |
|
63 |
|
Senior Vice President and Chief Financial Officer |
Jeffrey T. Makal |
|
47 |
|
Vice President, Controller & Chief Accounting Officer |
Richard J. Malin |
|
44 |
|
Assistant Controller |
Paul Manning |
|
36 |
|
President, Color Group |
James P. McCarthy |
|
58 |
|
President, Flavor & Fragrances Group |
Douglas S. Pepper |
|
58 |
|
President and Chief Operating Officer |
Stephen J. Rolfs |
|
46 |
|
Vice President, Administration |
Robert J. Wilkins |
|
54 |
|
President, Asia Pacific Group |
The Company has employed all of the individuals named above, in their current positions, for at
least the past five years except as follows. Mr. Collopy has held his present office since October
2006, and previously served as Assistant Treasurer (February 2006 - October 2006), Director,
Treasury Operations (2004-2006), and Manager,
18
Corporate Development (1999-2004). Mr. Daniels has held his present office since July 22, 2010,
and previously served as Assistant Treasurer (October 2008 - July 2010), Director, Treasury
Services (February 2006 - October 2008) and Manager, Treasury & Risk (April 2005 - February
2006). Mr. Hammond was Vice President before being named Senior Vice President in December 2008.
Dr. Hering has held his current position since December 8, 2009, and previously served as appointed
Vice President, Marketing & Technology (2007-2009). Mr. Hobbs was Vice President before being
named Senior Vice President in December 2008. Mr. Makal has held his present office since July 22,
2010, and previously served as Vice President Taxation (December 2006 - July 2010) and Director
Taxation (2000-2006). Mr. Malin has held his present office since April 2005 and previously served
as Assistant Treasurer (2001-2005). Mr. Paul Manning has held his present office since July 22,
2010, and previously served as General Manager, Colors - North America (November 2009 - July 2010)
and General Manager, Food Colors - North America (June 2009 - November 2009). Mr. McCarthy has
held his present office since July 22, 2010, and previously served as appointed President Flavors &
Fragrances Group (June 2009 - July 2010) and General Manager Dairy Systems (September 2008 - June
2009). Mr. Pepper has held his current position since July 22, 2010, and previously served as
Vice President, Administration (February 2008 - July 2010), Vice President - Human Resources
(September 2007 - January 2008), Chief Financial Officer - Color Group (2005-2007). Mr. Rolfs has
held his present position since July 22, 2010, and previously served as Vice President, Controller
and Chief Accounting Officer (2001-2010). Mr. Wilkins has held his present position since April
23, 2009, and previously served as appointed President, Asia Pacific (2005-2009).
PART II
|
|
|
| Item 5. |
|
Market for the Registrant’s Common Equity, Related Stockholder Matters
and Issuer Purchases of Equity Securities |
The only market in which the common stock of the Company is traded is the New York Stock
Exchange. The range of the high and low sales prices as quoted in the New York Stock Exchange -
Composite Transaction tape for the common stock of the Company and the amount of dividends declared
for the fiscal years 2009 and 2010 appearing under “Common Stock Prices and Dividends” on page 49
of the 2010 Annual Report to Shareholders are incorporated by reference. In 2010, common stock
dividends were paid on a quarterly basis, and it is expected that quarterly dividends will continue
to be paid in the future.
On February 10, 2000, the Board of Directors established a share-repurchase program that
authorized the Company to repurchase up to five million shares of the Company’s common stock, all
of which have been repurchased. On April 27, 2001, the Board of Directors authorized the
repurchase of an additional five million shares. As of February 15, 2011, 2,012,990 shares had
been repurchased under the latter authorization. The Company did not repurchase any shares during
the fourth quarter of 2010.
The number of shareholders of record on February 17, 2011 was 2,952.
On April 22, 2010, the Company announced an increase in its cash dividend on its common stock
from an annual rate of 76 cents per share to an annual rate of 80 cents per share, commencing with
the quarterly dividend paid on June 1, 2010, to shareholders of record on May 6, 2010.
On January 21, 2011, the Company announced an increase in its cash dividend on its common
stock from an annual rate of 80 cents per share to an annual rate of 84 cents per share, commencing
with the quarterly dividend paid on March 1, 2011, to shareholders of record on February 9, 2011.
Information regarding the Company’s equity compensation plans is incorporated by reference
into Item 11 of Part III of this annual report.
The graph found on page 49 of the Company’s 2010 Annual Report to Shareholders comparing the
cumulative five year total return on the Company’s common stock to the appropriate Standard and
Poor’s indices is incorporated by reference.
19
Item 6. Selected Financial Data
The selected financial data required by this item is incorporated by reference from the
“Five Year Review” and the notes thereto on pages 50 and 51 of the 2010 Annual Report to
Shareholders.
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operation
The information required by this item is set forth under “Management’s Discussion & Analysis
of Operations & Financial Condition” on pages 19 through 26 of the 2010 Annual Report to
Shareholders and is incorporated by reference.
Item 7A. Quantitative and Qualitative Disclosures about Market Risk
The information required by this item is set forth under “Market Risk Factors” on pages 24 and
25 of the 2010 Annual Report to Shareholders and is incorporated by reference.
Item 8. Financial Statements and Supplementary Data
The financial statements and supplementary data required by this item are set forth on pages
27 through 45 and page 49 of the 2010 Annual Report to Shareholders and are incorporated by
reference.
Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
None.
Item 9A. Controls and Procedures
Evaluation of Disclosure Controls and Procedures. The Company carried out an evaluation,
under the supervision and with the participation of management, including the Company’s Chairman
and Chief Executive Officer and its Senior Vice President and Chief Financial Officer, of the
effectiveness, as of December 31, 2010, of the design and operation of the disclosure controls and
procedures, as defined in Rule 13a-15(e) of the Act. Based upon that evaluation, the Company’s
Chairman and Chief Executive Officer, and its Senior Vice President and Chief Financial Officer
have concluded that the disclosure controls and procedures were effective as of December 31, 2010.
Management’s Report on Internal Control over Financial Reporting. The management of the
Company is responsible for establishing and maintaining adequate internal control over financial
reporting, as defined in Rule 13a-15(f) under the Act. The Company’s internal control over
financial reporting is designed to provide reasonable assurance regarding the reliability of
financial reporting and the preparation of financial statements for external purposes in accordance
with generally accepted accounting principles. Management has assessed the effectiveness of the
Company’s internal control over financial reporting as of December 31, 2010. In making its
assessment of internal control over financial reporting, management used the criteria set forth by
the Committee of Sponsoring Organizations of the Treadway Commission in Internal Control —
Integrated Framework. Based on that assessment, management has concluded that the Company’s
internal control over financial reporting was effective as of December 31, 2010. Management’s
report on internal control over financial reporting, which appears on page 46 of the 2010 Annual
Report to Shareholders, is incorporated by reference.
The Company’s internal control over financial reporting as of December 31, 2010, has been
audited by Ernst & Young LLP, an independent registered public accounting firm. Their opinion on
the Company’s internal control over financial reporting, set forth on page 48 of the 2010 Annual
Report to Shareholders, is incorporated by reference.
Because of its inherent limitations, internal control over financial reporting may not prevent
or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are
subject to the risk that controls may become inadequate because of changes in conditions, or that
the degree of compliance with the policies or procedures may deteriorate.
20
Changes in Internal Control over Financial Reporting. There has been no change in the
Company’s internal control over financial reporting during the quarter ended December 31, 2010,
that has materially affected, or is reasonably likely to materially affect, the Company’s internal
control over financial reporting.
Item 9B. Other Information
None.
PART III
Item 10. Directors, Executive Officers of the Registrant and Corporate Governance
Information regarding directors and officers and corporate governance matters including
information regarding our Audit Committee and our Nominating and Corporate Governance Committees
appearing under “Election of Directors” and “Section 16(a) Beneficial Ownership Reporting
Compliance” in the Proxy Statement for the Annual Meeting of Shareholders of the Company dated
March 15, 2011 (“Proxy Statement”), is incorporated by reference. Additional information regarding
executive officers appears at the end of Part I above, and information regarding codes of conduct
and ethics for officers appears at the beginning of Part I above.
Item 11. Executive Compensation
Information relating to compensation of directors and officers is incorporated by reference
from the “Director Compensation and Benefits,” “Executive Compensation,” “Equity Compensation Plan
Information” and “Employment Agreements” portions of the Proxy Statement. Information relating to
the Compensation and Development Committee of the Company’s Board of Directors is incorporated by
reference from the corresponding subsection E under the heading “Committees of the Board of
Directors” in the Proxy Statement.
|
|
|
| Item 12. |
|
Security Ownership of Certain Beneficial Owners and Management and Related Stockholder
Matters |
The discussion of security ownership of certain beneficial owners and management and
related stockholder matters appearing under “Principal Shareholders” in the Proxy Statement is
incorporated by reference. The discussion appearing under “Equity Compensation Plan Information”
in the Proxy Statement is incorporated by reference.
Item 13. Certain Relationships and Related Transactions and Directors Independence
There are no family relationships between any of the directors or director nominees and the
officers of the Company, nor any arrangement or understanding between any director or officer or
any other person pursuant to which any of the nominees has been
nominated except as described under “Transactions with Related Persons” found in the Proxy Statement, which is incorporated by reference herein.
No director, nominee
for director or officer had any material interest, direct or indirect, in any material business
transaction of the Company or any subsidiary during the period January 1, 2010, through December
31, 2010, or in any such proposed transaction except as described under “Transactions With Related
Persons” found in the Proxy Statement, which is incorporated by reference herein. In the ordinary
course of business, the Company may engage in business transactions with companies whose officers
or directors are also directors of the Company. These transactions are routine in nature and are
conducted on an arm’s-length basis. The terms of any such transactions are comparable at all times
to those obtainable in business transactions with unrelated persons.
Item 14. Principal Accountant Fees and Services
The disclosure regarding principal accountant fees and services appearing under
“Audit Committee Report” in the Proxy Statement is incorporated by reference.
21
PART IV
Item 15. Exhibits and Financial Statement Schedules
Documents filed:
| 1 and 2: |
|
Financial Statements and Financial Statement Schedule. See below for
“List of Financial Statements and Financial Statement Schedule.” |
| |
| 3: |
|
See Exhibit Index following this report. |
List of Financial Statements and Financial Statement Schedule
Page Reference in
| |
|
|
|
|
| 1. Financial Statements |
|
2010 Annual Report |
| |
|
To Shareholders |
The following consolidated financial statements of Sensient Technologies
Corporation and subsidiaries are incorporated by reference from the Annual
Report to Shareholders for the year ended December 31, 2010: |
|
|
|
|
|
|
|
|
|
Reports of Independent Registered Public Accounting Firm |
|
|
47-48 |
|
|
|
|
|
|
Consolidated Balance Sheets - December 31, 2010 and 2009 |
|
|
28 |
|
|
|
|
|
|
Consolidated Statements of Earnings - Years ended December 31, 2010, 2009
and 2008 |
|
|
27 |
|
|
|
|
|
|
Consolidated Statements of Shareholders’ Equity - Years ended December 31,
2010, 2009 and 2008 |
|
|
30-31 |
|
|
|
|
|
|
Consolidated Statements of Cash Flows - Years ended December 31, 2010, 2009
and 2008 |
|
|
29 |
|
|
|
|
|
|
Notes to Consolidated Financial Statements |
|
|
32-45 |
|
Page Reference in
| |
|
|
|
|
| 2. Financial Statement Schedule |
|
Form 10-K |
|
|
|
|
|
Report of Independent Registered Public Accounting Firm |
|
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23 |
|
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|
|
|
|
Schedule II - Valuation and Qualifying Accounts |
|
|
24 |
|
All other schedules are omitted because they are inapplicable, not required by the instructions or
the information is included in the consolidated financial statements or notes thereto.
22
Report of Independent Registered Public Accounting Firm
To the Board of Directors and Shareholders of
Sensient Technologies Corporation
Milwaukee, Wisconsin
We have audited the accompanying consolidated balance sheets of Sensient Technologies Corporation
and subsidiaries as of December 31, 2010 and 2009, and the related consolidated statements of
earnings, shareholders’ equity, and cash flows for each of the three years in the period ended
December 31, 2010 and the effectiveness of the Company’s internal control over financial reporting
as of December 31, 2010, and have issued our reports thereon dated February 25, 2011. Such
consolidated financial statements and reports are included in your 2010 Annual Report to
Shareholders and are incorporated herein by reference. Our audits also included the consolidated
financial statement schedule of the Company listed in Item 15. That consolidated financial
statement schedule is the responsibility of the Company’s management. Our responsibility is to
express an opinion based on our audits.
In our opinion, that consolidated financial statement schedule referred to above, when considered
in relation to the basic consolidated financial statements taken as a whole, presents fairly in all
material respects the information set forth therein.
/s/ ERNST & YOUNG LLP
Milwaukee, Wisconsin
February 25, 2011
23
Schedule II
Valuation and Qualifying Accounts
(in thousands); Years Ended December 31, 2010, 2009, 2008
| |
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| |
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Additions |
|
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Additions |
|
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| |
Valuation Accounts Deducted in the |
|
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Balance at |
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Charged to |
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Recorded |
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Balance |
|
| |
Balance Sheet From the Assets To |
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Beginning of |
|
|
Costs and |
|
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During |
|
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Deductions |
|
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At End of |
|
| |
Which They Apply |
|
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Period |
|
|
Expenses |
|
|
Acquisitions |
|
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(A) |
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Period |
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| |
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2008 |
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| |
Allowance for losses: |
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| |
Trade accounts receivable |
|
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$4,242 |
|
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$725 |
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$0 |
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$672 |
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$4,295 |
|
| |
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2009 |
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| |
Allowance for losses: |
|
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|
|
|
|
|
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|
|
|
|
|
|
|
| |
Trade accounts receivable |
|
|
$4,295 |
|
|
$1,264 |
|
|
$0 |
|
|
$2,132 |
|
|
$3,427 |
|
| |
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2010 |
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|
|
|
|
|
|
|
|
|
|
|
| |
Allowance for losses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
Trade accounts receivable |
|
|
$3,427 |
|
|
$1,326 |
|
|
$0 |
|
|
$754 |
|
|
$3,999 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
(A) Accounts written off, net of recoveries. |
|
| |
|
|
|
|
|
|
|
|
|
|
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24
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of
1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized.
SENSIENT TECHNOLOGIES CORPORATION
/s/ John L. Hammond
John L. Hammond
Senior Vice President, General Counsel and Secretary
Dated: February 25, 2011
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been
signed below as of February 25, 2011, by the following persons on behalf of the Registrant and in
the capacities indicated.
| |
|
|
|
/s/ Kenneth P. Manning
|
|
/s/ James A.D. Croft |
Kenneth P. Manning
|
|
James A.D. Croft |
Chairman of the Board and
|
|
Director |
Chief Executive Officer |
|
|
|
|
|
/s/ Richard F. Hobbs
|
|
/s/ William V. Hickey |
Richard F. Hobbs
|
|
William V. Hickey |
Senior Vice President and
|
|
Director |
Chief Financial Officer |
|
|
|
|
|
/s/ Jeffrey T. Makal
|
|
/s/ Peter M. Salmon |
Jeffrey T. Makal
|
|
Peter M. Salmon |
Vice President, Controller and
|
|
Director |
Chief Accounting Officer |
|
|
|
|
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/s/ Hank Brown
|
|
/s/ Elaine R. Wedral |
Hank Brown
|
|
Elaine R. Wedral |
Director
|
|
Director |
|
|
|
/s/ Fergus M. Clydesdale
|
|
/s/ Essie Whitelaw |
Fergus M. Clydesdale
|
|
Essie Whitelaw |
Director
|
|
Director |
25
SENSIENT TECHNOLOGIES CORPORATION
EXHIBIT INDEX
2010 ANNUAL REPORT ON FORM 10-K
| |
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|
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| Exhibit |
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|
Incorporated by |
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Filed |
| Number |
|
Description |
|
Reference From |
|
Herewith |
|
|
|
|
|
|
|
3.1
|
|
Amended and Restated Articles of
Incorporation adopted January 21, 1999 as
amended as of April 21, 2005
|
|
Exhibit 3.1 to
Quarterly Report on
Form 10-Q for the
quarter ended March
31, 2005
(Commission File
No.1-7626)
|
|
|
|
|
|
|
|
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|
3.2
|
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Amended and Restated By-Laws of Sensient
Technologies Corporation as amended as
of December 9, 2010
|
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Exhibit 3.2 to
Current Report on
Form 8-K dated
December 9, 2010
(Commission File
No. 1-7626) |
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4.4
|
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Note Purchase Agreement dated as of June
27, 2006
|
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Exhibit 10.1 to
Current Report on
Form 8-K dated June
27, 2006
(Commission File
No. 1-7626) |
|
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|
|
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10
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Material Contracts |
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|
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10.1
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Management Contracts or
Compensatory
Plans |
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|
10.1(a)(1)
|
|
Amended and Restated Executive
Employment Contract dated August 17,
2007 between Registrant and Kenneth P.
Manning (superseded)
|
|
Exhibit 10.1 to
Current Report on
Form 8-K dated
August 17, 2007
(Commission File
No. 1-7626) |
|
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|
|
|
|
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|
|
10.1(a)(2)
|
|
Amended and Restated Executive
Employment Contract dated as of October
27, 2008 between the Company and Kenneth
P. Manning (superseded)
|
|
Exhibit 10.2 to
Quarterly Report on
Form 10-Q for the
quarter ended
September 30, 2008
(Commission File
No. 1-7626) |
|
|
|
|
|
|
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|
10.1(a)(3)
|
|
Amended and Restated Executive
Employment Contract dated as of February
5, 2009 between the Company and Kenneth
P. Manning (superseded)
|
|
Exhibit 10.1 to
Current Report on
Form 8-K dated
February 5, 2009
(Commission File
No. 1-7626) |
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|
|
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|
10.1(a)(4)
|
|
Amended and Restated Executive
Employment Contract dated as of July 22, 2010 between the Company and Kenneth
P. Manning |
|
Exhibit 10.1 to
Current Report on
Form 8-K dated
July 22, 2010
(Commission File No. 1-7626)
|
|
|
|
|
|
|
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|
|
10.1(b)(1)
|
|
Form of Amended and Restated Change of
Control Employment and Severance
Agreement for Executive Officers
(“Executive Change in Control
Agreement”)
|
|
Exhibit 10.1 to
Quarterly Report on
Form 10-Q for the
quarter ended
September 30, 2008
(Commission File
No. 1-7626) |
|
|
|
|
|
|
|
|
|
10.1(b)(2)
|
|
Form of Amendment to Executive
Change in Control Agreement |
|
Exhibit 10.1 to
Current Report on
Form 8-K dated
March 23, 2010
(Commission File No. 1-7626)
|
|
|
|
|
|
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10.1(c)
|
|
Sensient Technologies Corporation 2002
Non-Employee Directors Stock Plan
|
|
Appendix C to
Definitive Proxy
Statement filed on
Schedule 14A on
March 15, 2004
(Commission File
No. 1-7626) |
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10.1(d)
|
|
Universal Foods Corporation 1994
Employee Stock Plan, as amended
September 10, 1998
|
|
Exhibit 10.2(f) to
Annual Report on
Form 10-K for the
fiscal year ended
September 30, 1998
(Commission File
No. 1-7626) |
|
|
E-1
SENSIENT TECHNOLOGIES CORPORATION
EXHIBIT INDEX
2010 ANNUAL REPORT ON FORM 10-K
| |
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|
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| Exhibit |
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|
Incorporated by |
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Filed |
| Number |
|
Description |
|
Reference From |
|
Herewith |
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10.1(d)(1)
|
|
Amendment of 1994 Employee
Stock Plan dated as of November
6, 2000
|
|
Exhibit 10.1(e)(1) to Annual Report on Form
10-K for the fiscal year ended December 31,
2000 (Commission File No. 1-7626)
|
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|
|
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|
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10.1(e)
|
|
Universal Foods Corporation 1998
Stock Option Plan, as amended
September 10, 1998
|
|
Exhibit 10.2(h) to Annual Report on Form 10-K
for the fiscal year ended September 30, 1998
(Commission File No. 1-7626) |
|
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|
|
|
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|
|
10.1(e)(1)
|
|
Amendment of 1998 Stock Option
Plan dated as of November 6,
2000
|
|
Exhibit 10.1(f)(1) to Annual Report on Form
10-K for
the fiscal year ended December 31, 2000
(Commission File No. 1-7626) |
|
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|
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|
|
10.1(f)
|
|
1999 Non-Employee Director Stock
Option Plan
|
|
Appendix A to Definitive Proxy Statement filed
on Schedule 14A on December 17, 1999.
(Commission File No. 1-7626) |
|
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|
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|
|
10.1(f)(1)
|
|
Amendment of 1999 Non-Employee
Director Stock Option Plan
dated as of November 6, 2000
|
|
Exhibit 10.1(g)(1) to Annual Report of Form
10-K for the fiscal year ended December 31,
2000 (Commission File No. 1-7626) |
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|
|
10.1(g)
|
|
Sensient Technologies
Corporation 2002 Stock Option
Plan
|
|
Appendix B to Definitive Proxy Statement
filed on Schedule 14A on March 22, 2002 |
|
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|
10.1(g)(1)
|
|
Amendment of No. 1 to the
Sensient Technologies
Corporation 2002 Stock Option
Plan
|
|
Exhibit 10.11 to Quarterly Report on Form
10-Q for the quarter ended September 30, 2008
(Commission File No. 1-7626) |
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|
10.1(g)(2)
|
|
Form of Restricted Stock
Agreement thereunder
|
|
Exhibit 10.1 to Current Report on Form 8-K
dated December 1, 2005 (Commission File No.
1-7626) |
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|
10.1(h)
|
|
Sensient Technologies
Corporation 2007 Restricted
Stock Plan
|
|
Appendix B to the Proxy Statement for the
Annual Meeting of Shareholders of the Company
dated March 15, 2007 |
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10.1(h)(1)
|
|
Amendment No. 1 to the Sensient
Technologies Corporation 2007
Restricted Stock Plan
|
|
Exhibit 10.12 to Quarterly Report on Form
10-Q for the quarter ended September 30, 2008
(Commission File No. 1-7626) |
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|
|
10.1(i)
|
|
Directors Deferred Compensation
Plan, as amended and restated
effective as of January 1, 2005
|
|
Exhibit 10.3 to Quarterly Report on Form
10-Q for the quarter ended September 30, 2008
(Commission File No. 1-7626) |
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|
10.1(i)(1)
|
|
Directors Unfunded Retirement
Plan, Amended and Restated as
of January 1, 2009
|
|
Exhibit 10.1(i)(l) to Annual Report of Form
10-K for the fiscal year ended December 31,
2009 (Commission File No. 1-7626) |
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10.1(j)(1)
|
|
Management Income Deferral
Plan, as amended and restated
effective as of December 31,
2004 (frozen portion)
|
|
Exhibit 10.5(a) to Quarterly Report on Form
10-Q for the quarter ended September 30, 2008
(Commission File No. 1-7626) |
|
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|
|
10.1(j)(2)
|
|
Management Income Deferral
Plan, as amended and restated
effective as of January 1, 2005
(non-frozen portion)
|
|
Exhibit 10.5(b) to Quarterly Report on Form
10-Q for the quarter ended September 30, 2008
(Commission File No. 1-7626) |
|
|
E-2
SENSIENT TECHNOLOGIES CORPORATION
EXHIBIT INDEX
2010 ANNUAL REPORT ON FORM 10-K
| |
|
|
|
|
|
|
| Exhibit |
|
|
|
Incorporated by |
|
Filed |
| Number |
|
Description |
|
Reference From |
|
Herewith |
|
|
|
|
|
|
|
10.1(k)(1)
|
|
Executive Income Deferral Plan, as
amended and restated effective as of
December 31, 2004 (frozen portion)
|
|
Exhibit 10.4(a) to
Quarterly Report on
Form 10-Q the
quarter ended
September 30, 2008
(Commission File
No. 1-7626)
|
|
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|
|
|
|
|
|
|
10.1(k)(2)
|
|
Executive Income Deferral Plan, as
Amended and restated effective as of
January 1, 2005 (non-frozen portion)
|
|
Exhibit 10.4(b) to
Quarterly Report on
Form 10-Q for the
quarter ended
September 30, 2008
(Commission File
No. 1-7626) |
|
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|
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|
|
10.1(l)
|
|
Amended and Restated Sensient
Technologies Corporation Rabbi Trust
“A” Agreement dated November 30, 2009
between Registrant and Wells Fargo Bank
N.A.
|
|
Exhibit 10.1(l) to
Annual Report on
Form 10-K for the
fiscal year ended
December 31, 2009
(Commission File
No. 1-7626) |
|
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|
|
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|
|
10.1(m)
|
|
Amended and Restated Sensient
Technologies Corporation Rabbi Trust
“B” Agreement dated November 30, 2009
between Registrant and Wells Fargo Bank
N.A.
|
|
Exhibit 10.1(m) to
Annual Report on
Form 10-K for the
fiscal year ended
December 31, 2009
(Commission File
No. 1-7626) |
|
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|
|
|
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|
|
10.1(n)
|
|
Amended and Restated Sensient
Technologies Corporation Rabbi Trust
“C” Agreement dated November 30, 2009
between Registrant and Wells Fargo Bank
N.A.
|
|
Exhibit 10.1(n) to
Annual Report on
Form 10-K for the
fiscal year ended
December 31, 2009
(Commission File
No. 1-7626) |
|
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|
|
|
|
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|
|
10.1(o)
|
|
Incentive Compensation Plan for Elected
Corporate Officers
|
|
Exhibit 10.10 to
Quarterly Report on
Form 10Q for the
quarter ended
September 30, 2008
(Commission File
No. 1-7626) |
|
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|
|
|
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|
10.1(p)
|
|
Management Incentive Plan for Group
Presidents
|
|
Exhibit 10.9 to
Quarterly Report on
Form 10-Q for the
quarter ended
September 30, 2008
(Commission File
No. 1-7626) |
|
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|
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|
10.1(q)
|
|
Management Incentive Plan for Corporate
Management
|
|
Exhibit 10.7 to
Quarterly Report on
Form 10-Q for the
quarter ended
September 30, 2008
(Commission File
No. 1-7626) |
|
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|
|
|
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|
|
10.1(r)
|
|
Management Incentive Plan for
Group/Division Management
|
|
Exhibit 10.8 to
Quarterly Report on
Form 10-Q for the
quarter ended
September 30, 2008
(Commission File
No. 1-7626) |
|
|
|
|
|
|
|
|
|
10.1(s)(1)
|
|
Form of Agreement for Executive
Officers (Supplemental Executive
Retirement Plan A), as amended and
restated effective as of January 1,
2005
|
|
Exhibit 10.1(s) to
Annual Report on
Form 10-K for the
fiscal year ended
December 31, 2008
(Commission File
No. 1-7626) |
|
|
|
|
|
|
|
|
|
10.1(s)(2)
|
|
Form of Amendment No. 1 to the Sensient Technologies Corporation Amended
and Restated Supplemental Executive Retirement Plan A (Effective as of January 1, 2005)
|
|
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|
X |
|
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|
|
10.1(s)(3)
|
|
Form of Amendment No. 2 to the Sensient Technologies Corporation Amended and Restated
Supplemental Executive Retirement Plan A (Effective as of January 1, 2005)
|
|
Exhibit 10.1 to
Current Report on form 8-K dated April 22, 2010 (Commission File
No. 1-7626) |
|
|
|
|
|
|
|
|
|
10.1(t)(1)
|
|
Form of Agreement for Executive Officers
(Supplemental Executive Retirement Plan
B), as amended and restated effective
as of January 1, 2005
|
|
Exhibit 10.1(t) to
Annual Report on
Form 10-K for the
fiscal year ended
December 31, 2008
(Commission File
No. 1-7626) |
|
|
|
|
|
|
|
|
|
10.1(t)(2)
|
|
Form of Amendment No. 1 to the Sensient Technologies Corporation Amended
and Restated Supplemental Executive Retirement Plan B (Effective as of January 1, 2005)
|
|
|
|
X |
|
|
|
|
|
|
|
10.1(t)(3)
|
|
Form of Amendment No. 2 to the Sensient Technologies Corporation Amended and Restated Supplemental
Executive Retirement Plan B (Effective as of January 1, 2005)
|
|
Exhibit 10.2 to
Current Report on form 8-K dated April 22, 2010 (Commission File
No. 1-7626) |
|
|
E-3
SENSIENT TECHNOLOGIES CORPORATION
EXHIBIT INDEX
2010 ANNUAL REPORT ON FORM 10-K
| |
|
|
|
|
|
|
| Exhibit |
|
|
|
Incorporated by |
|
Filed |
| Number |
|
Description |
|
Reference From |
|
Herewith |
|
|
|
|
|
|
|
10.1(u)(1)
|
|
Supplemental Benefit Plan, as amended and
restated effective as of December 31, 2004
(frozen portion)
|
|
Exhibit 10.6(a) to Quarterly Report on Form
10-Q for the quarter ended September 30, 2008
(Commission File No. 1-7626) |
|
|
|
|
|
|
|
|
|
10.1(u)(2)
|
|
Supplemental Benefit Plan, as amended and
restated effective as of January 1, 2005
(non-frozen portion)
|
|
Exhibit 10.6(b) to Quarterly Report on Form
10-Q for the quarter ended September 30, 2008
(Commission File No. 1-7626) |
|
|
|
|
|
|
|
|
|
10.2
|
|
Credit Agreement dated as of June 15, 2007
|
|
Exhibit 10.1 to Current Report on Form 8-K
dated June 15, 2007 (Commission File No.
1-7626) |
|
|
|
|
|
|
|
|
|
10.3
|
|
Credit Agreement dated as of October 7, 2008
|
|
Exhibit 10.1 to Quarterly Report on Form 8-K
dated October 7, 2008 (Commission File No.
1-7626) |
|
|
|
|
|
|
|
|
|
13.1
|
|
Annual Report to Shareholders
for the year ended December 31, 2010
|
|
|
|
X |
|
|
|
|
|
|
|
14
|
|
Code of Ethics for Senior Financial Officers
|
|
Exhibit 14 to Annual Report on Form 10-K for the
fiscal year ended December 31, 2003
(Commission File No. 1-7626) |
|
|
|
|
|
|
|
|
|
21
|
|
Subsidiaries of the Registrant
|
|
|
|
X |
|
|
|
|
|
|
|
23.1
|
|
Consent of Ernst & Young LLP
|
|
|
|
X |
|
|
|
|
|
|
|
31
|
|
Certifications of Sensient’s Chairman and
Chief Executive Officer and Senior Vice
President and Chief Financial Officer,
pursuant to Rule 13a-14(a) of the Exchange
Act
|
|
|
|
X |
|
|
|
|
|
|
|
32
|
|
Certifications of Sensient’s Chairman and
Chief Executive Officer and Senior Vice
President and Chief Financial Officer,
pursuant to 18 United States Code § 1350
|
|
|
|
X |
E-4