SEC Filing | International Flavors & Fragrances Inc.

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SCHEDULE 14A INFORMATION

Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934

Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]

Check the appropriate box:

[ ] Preliminary Proxy Statement
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to ss.240.14a-11(c) or ss.240.14a-12

INTERNATIONAL FLAVORS & FRAGRANCES INC.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)

- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

Payment of Filing Fee (Check the appropriate box):

[X] No fee required

[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.

1) Title of each class of securities to which transaction applies:

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2) Aggregate number of securities to which transaction applies:

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3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11:*

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4) Proposed maximum aggregate value of transaction:

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[ ] Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting
fee was paid previously. Identify the previous filing by registration
statement number, or the Form or Schedule and the date of its filing.

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IFF LOGO
INTERNATIONAL FLAVORS & FRAGRANCES INC.
521 WEST 57TH STREET
NEW YORK, N.Y. 10019

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NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD MAY 14, 1998

The Annual Meeting of Shareholders of International Flavors &
Fragrances Inc., a New York corporation (hereinafter called the "Company"), will
be held at the office of the Company, 521 West 57th Street, New York, New York,
on Thursday, May 14, 1998, at 10 A.M., Eastern Daylight Saving Time, to elect 11
directors for the ensuing year, and to transact such other business as may
properly come before the meeting or any adjournments thereof.

Only shareholders of record at the close of business on March 26, 1998
will be entitled to notice of and to vote at the meeting.

Admission to the meeting will be by ticket only. If you are a
shareholder of record and plan to attend, please complete and return the ticket
request card which is enclosed for such holders. If your shares are not
registered in your own name and you plan to attend, please request a ticket by
writing to the Office of the Secretary, International Flavors & Fragrances Inc.,
521 West 57th Street, New York, New York 10019. Evidence of your ownership,
which you can obtain from your bank or broker, must accompany your letter.

IF YOU DO NOT EXPECT TO ATTEND THE MEETING IN PERSON, YOU ARE REQUESTED
TO SIGN, DATE AND RETURN THE ENCLOSED PROXY PROMPTLY IN THE ENCLOSED ADDRESSED
ENVELOPE, WHICH REQUIRES NO POSTAGE IF MAILED IN THE UNITED STATES.

By Order of the Board of Directors,

STEPHEN A. BLOCK

Secretary

March 30, 1998

PROXY STATEMENT

This Proxy Statement is furnished in connection with the solicitation by
the Company's Board of Directors (the "Board") of proxies to be used at the
Annual Meeting of Shareholders of the Company to be held on May 14, 1998 at the
principal executive office of the Company, 521 West 57th Street, New York, New
York 10019. This proxy statement and the form of proxy will be sent to
shareholders on or about March 30, 1998. In addition to solicitation by mail,
proxies may be solicited personally, by telephone or by telegram. The Company
has retained Corporate Investor Communications, Inc. to assist in such
solicitation for a fee of $6,000. The cost of soliciting proxies will be borne
by the Company.

Any shareholder who signs and returns the enclosed form of proxy may revoke
it at any time before it has been exercised, by a written instrument or by
personal attendance at the meeting.

The Company had outstanding at the close of business on December 31, 1997,
109,130,929 shares of Common Stock entitled to one vote per share. Only
shareholders of record at the close of business on March 26, 1998 will be
entitled to vote at the meeting.

ELECTION OF DIRECTORS

At the meeting 11 directors will be elected in accordance with the By-laws
of the Company, as amended, to serve for the ensuing year and until their
successors are elected and shall qualify. Except as stated below, the shares of
Common Stock represented by the proxies hereby solicited will be voted for the
election of the 11 nominees whose names are listed below, all of whom are
presently directors of the Company. Should any of such nominees be unable for
good cause to serve (which is not now anticipated), it is intended that such
shares will be voted for the balance of those named and for such substitute
nominees as the Board may recommend.

Where no qualifying note reference appears in the table below next to the
number of shares beneficially owned, as defined by Rule 13d-3 under the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), the named
director has sole voting and investment power over all such shares.

INFORMATION ABOUT NOMINEES

SHARES OF PER-
COMPANY STOCK CENTAGE
BENEFICIALLY OF
PRINCIPAL OCCUPATION DURING YEAR FIRST OWNED AS OF SHARES
LAST FIVE YEARS AND BECAME DECEMBER 31, OUT-
NAME AGE OTHER DIRECTORSHIPS HELD DIRECTOR 1997 STANDING
---- --- ---------------------------- -------- ---------- --------

Margaret Hayes Adame .......... 58 President, Fashion Group International, 1993 4,000(1) (2)
an international trade organization;
Director, North American Watch
Corporation

David G. Bluestein ............ 52 Senior Vice-President of the Company 1998 0 (2)
since November 1997; Duracell
International, Inc., a battery
manufacturer, President North
America, 1994-1997, President
International Development Markets
prior thereto

Brian D. Chadbourne ........... 45 Senior Vice-President of the 1997 1,000 (2)
Company since January 1997;
Vice-President of the Company
September-December 1996; President
and Chief Executive Officer, Keebler
Company, a baked goods manufacturer,
a subsidiary of United Biscuits plc
prior thereto

Robin Chandler Duke(3) ........ 74 Chairman, Population Action 1975 17,000(1) (2)
International, a not-for-profit
organization; Director, American
Home Products Corp. and River Bank

Richard M. Furlaud ............ 74 Chairman of the Board of Trustees, 1990 57,250(1) (2)
The Rockefeller University, an
institution of higher learning;
Retired President, Bristol-Myers
Squibb Company

Eugene P. Grisanti(4) ......... 68 Chairman of the Board and President 1979 1,763,847(1)(5) 1.6%
of the Company

Herbert G. Reid(3) ............ 71 Retired; formerly Executive Vice- 1978 18,000(1)(6) (2)
President and Director, Schlumberger
Limited, oil field services and
electronics

George Rowe, Jr.(3) ........... 76 Attorney; member of the law firm of 1994 8,106,178(1)(5) 7.4%
Fulton, Rowe, Hart & Coon

Stanley M. Rumbough, Jr. ...... 77 Investments and business 1964 (2)
development; Director, Cendant Corp. 1964

Henry P. van Ameringen ........ 67 President, van Ameringen Foundation, 1961 8,135,943(1)(5) 7.5%
Inc., a charitable foundation; formerly
Vice-President, International Flavors
& Fragrances (Europe)

William D. Van Dyke, III (3) .. 66 Senior Vice-President, Salomon 1973 7,289,493(1)(7) 6.7%
Smith Barney, Inc., stock-brokers

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(1) Pursuant to Rule 13d-3 under the Exchange Act the number of shares of
Common Stock of the Company beneficially owned by Mr. Grisanti, and by
non-employee directors includes (where applicable) shares which he or she
has (or will have 60 days after such date) the right to acquire under stock
options granted by the Company. The respective numbers of such shares are
201,921 for Mr. Grisanti, 15,000 for each of Messrs. Furlaud, Rumbough, van
Ameringen and Van Dyke, 9,000 for Mrs. Duke, and 3,000 for each of Ms.
Adame and Messrs. Reid and Rowe.

(2) Less than .1%.

(3) Member of Executive Committee.

(4) Chairman of the Executive Committee.

(5) The numbers of shares of Common Stock of the Company beneficially owned by
Messrs. Rowe, Grisanti and van Ameringen listed above, and the numbers of
shares beneficially owned by Messrs. Rowe, van Ameringen and Henry G.
Walter, Jr. listed in the table on page 16, include holdings of the
following trusts and foundations. Messrs. Rowe, van Ameringen and Walter
are the trustees of three trusts, and Messrs. Rowe and Walter are trustees
under another trust established under the will of A. L. van Ameringen which
hold 1,737,225 shares and 182,498 shares, respectively. Messrs. Rowe and
van Ameringen are officers of the van Ameringen Foundation, Inc., which
owns 2,166,131 shares. Messrs. Rowe, Walter and van Ameringen are three of
the eight directors of that foundation. Messrs. Rowe and van Ameringen are
co-executors of an estate holding 78,633 shares and Mr. Rowe is the
executor of another estate holding 183,879 shares. Mr. Rowe is an officer
of two other charitable foundations which own 1,267,614 shares. Messrs.
Rowe, Grisanti and Walter are the directors of each of those two
foundations. Messrs. Rowe and Walter are also trustees of eight trusts
holding an aggregate of 780,364 shares. Messrs. Rowe and Walter are the
trustees of one trust and two of three trustees of another trust holding an
aggregate of 50,391 shares for the benefit of certain family members of Mr.
Walter. Mr. Walter is one of two trustees of another trust for the benefit
of a family member holding 3,744 shares. Mr. Rowe is a trustee of a
charitable foundation holding 1,500 shares, is one of three trustees of
another trust holding 4,000 shares and a co-trustee of two trusts holding
57,000 shares. Mr. Walter is one of two trustees of another trust holding
2,907 shares. Messrs. Rowe, Walter and van Ameringen are trustees of three
additional trusts each holding 280,981 shares. Mr. van Ameringen is also a
trustee of a charitable trust holding 673,474 shares. Messrs. Rowe and van
Ameringen are trustees of six trusts established under the will of Hedwig
van Ameringen which hold 750,000 shares. The number of shares beneficially
owned by Mr. Grisanti listed above includes 246,233 shares with respect to
which he has sole voting and investment power, 250,000 shares as to which
he has sole voting power but no investment power (see "Long Term Incentive
Awards in 1997" at page 8) and 1,267,614 shares with respect to which he
has shared voting and investment power. The number of shares with respect
to which Messrs. Rowe and van Ameringen have sole voting and investment
power and shared voting and investment power is set forth in the table on
page 16.

(6) All of the shares beneficially owned by Mr. Reid listed above are shares
over which he has shared voting and investment power.

(7) The number of shares beneficially owned by Mr. Van Dyke listed above
includes 15,957 shares with respect to which he has sole voting and
investment power and 7,273,536 shares over which he has shared voting and
investment power, including the holdings of the trust referred to in
footnote 2 on page 16, three other trusts and a foundation. Such number
does not include the beneficial interest of Mr. Van Dyke's wife in 129,426
shares owned directly by her. Mr. Van Dyke disclaims any beneficial
interest in any such shares.

All of the above nominees except Mr. Bluestein were elected by the
shareholders at the 1997 annual meeting. Mr. Bluestein was elected a director
effective January 1, 1998. During 1997 the Board of Directors held six meetings.
The Company has an Audit Committee which held two meetings and a Stock Option
and Compensation Committee which held four meetings in 1997. The Audit
Committee, consisting of Messrs. Furlaud, Reid and Van Dyke, oversees the
financial operations of the Company and the Company's relationship with its
independent accountants. The Stock Option and Compensation Committee, consisting
of Messrs. Furlaud, Rumbough and Van Dyke, oversees the Company's various
compensation arrangements, determines the stock options to be granted to
employees under the Company's stock option plans and the executive bonuses to be
granted under the Company's executive bonus plans, and makes recommendations to
the Board as to the salaries to be paid to the executive officers of the
Company. The Company does not have a nominating committee.

The Company's By-laws provide that each director whose service on the Board
begins on or after January 1, 1997 must retire effective as of the Annual
Meeting of Shareholders following the year in which his or her 72nd birthday
occurs. Each director serving on December 31, 1996 must retire effective as of
the Annual Meeting of Shareholders following the year in which his or her 78th
birthday occurs.

I. SUMMARY COMPENSATION

The following table sets forth information in respect of the compensation
of the Chairman and President and each of the other four most highly compensated
executive officers of the Company for 1995, 1996 and 1997.

LONG TERM
COMPENSATION
ANNUAL COMPENSATION AWARDS
---------------------- ----------
(a) (b) (c) (d) (e) (f)
SECURITIES ALL OTHER
NAME AND UNDERLYING COMPEN-
PRINCIPAL SALARY BONUS OPTIONS SATION
POSITION YEAR ($) ($)(1) (#) ($)(2)(3)
---------- ----- ------- -------- ------ ----------

Eugene P. Grisanti(4) ................. 1997 $930,000 $465,000 60,000 $39,218
Chairman of the Board 1996 890,000 222,500 40,000 36,636
and President 1995 850,000 425,000 75,000 34,287

Brian D. Chadbourne ................... 1997 460,644 225,000 50,000 14,326
Senior Vice-President 1996 201,346 112,500 10,000 254,167(5)
and Director 1995 -- -- --

Hendrik C. van Baaren ................. 1997 499,010 121,250 35,000 16,466
Senior Vice-President 1996 481,077 116,250 35,000 15,786
and Director 1995 440,263 255,000 50,000 14,362

Thomas H. Hoppel ...................... 1997 327,231 157,500 20,000 12,876
Vice-President, Chief Financial 1996 310,290 75,000 20,000 11,911
Officer and Director 1995 286,049 137,500 35,000 10,769

Stuart R. Maconochie .................. 1997 306,900 153,667 20,000 --
Vice-President 1996 279,900 76,600 15,000 --
1995 269,200 105,700 25,000 --

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(1) Under the Company's Management Incentive Compensation Plan.

(2) For the year 1997, the following amounts were paid or set aside by the
Company in respect of individual officers listed in the above compensation
table under the Company's Retirement Investment Fund Plan, a defined
contribution plan, and the Company's unfunded Supplemental Retirement
Investment Plan: Mr. Grisanti, $28,004, Mr. Chadbourne, $13,603, Mr. van
Baaren, $14,653 and Mr. Hoppel, $9,553.

(3) For the year 1997, the following amounts were imputed under the tax law as
compensation to the executive officers listed in the above compensation
table in consideration of life insurance coverage of such persons under the
Company's Executive Death Benefit Program: Mr. Grisanti, $11,214, Mr.
Chadbourne, $723, Mr. van Baaren, $2,088 and Mr. Hoppel, $3,323. No
participant in such Program has or will have any interest in the cash
surrender value of the underlying insurance policies.

(4) Under an employment contract dated as of January 1, 1997, Mr. Grisanti was
granted an award of 250,000 restricted shares of the Company's Common
Stock. See the "Long Term Incentive Awards in 1997" at page 8 and Note 1
thereunder for the terms thereof. At December 31, 1997, the 250,000 shares
of restricted stock subject to restriction had a market value of
$12,875,000, based on the closing price of the Company's stock on that
date.

(5) Includes $253,997 in reimbursed moving expenses.

II. OPTION GRANTS IN 1997

The following table shows all grants of options in 1997 to the executive
officers named in the Summary Compensation table. The Company's option plans do
not provide for the grant of stock appreciation rights (SARs).

INDIVIDUAL GRANTS
- --------------------------------------------------------------------------------------------
(a) (b) (c) (d) (e) (f)
NUMBER % OF TOTAL
OF SHARES OPTIONS
UNDERLYING GRANTED TO EXERCISE
OPTIONS EMPLOYEES OR BASE
GRANTED IN FISCAL PRICE EXPIRATION GRANT DATE PRESENT
NAME (#) (1) YEAR ($/SH)(2) DATE VALUE ($)(3)
---- ------- --------- -------- ---------- ------------

E. P. Grisanti .............. 50,000 6.6 43.25 5/8/07 $525,000
10,000 1.3 43.375 5/16/07 104,000

B. D. Chadbourne ............ 40,000 5.3 43.25 5/8/07 420,000
10,000 1.3 43.375 5/16/07 104,000

H. C. van Baaren ............ 35,000 4.6 43.25 5/8/07 367,500

T. H. Hoppel ................ 20,000 2.6 43.25 5/8/07 210,000

S. R. Maconochie ............ 20,000 2.6 43.25 5/8/07 210,000

- ----------
(1) All options were granted on May 8, 1997 and May 16, 1997. Such options
become exercisable in three equal installments 24, 36 and 48 months,
respectively, after the date of grant.

(2) All options were granted at the market price on the date of grant.

(3) The Company used the Black-Scholes model of option valuation to determine
grant date present value. The actual value, if any, an executive may
realize will depend on the excess of the stock price over the exercise
price on the date the option is exercised, so that there is no assurance
the value realized by an executive will be at or near the value estimated
by the Black-Scholes model. The estimated values under that model are based
on arbitrary assumptions as to variables such as interest rates, stock
price volatility, future dividend yield and the time of exercise. For these
reasons, the Company does not agree that the Black-Scholes model can
properly determine the value of an option. The assumptions used by the
Company are as follows: grant date stock prices and exercise prices of
$43.25 per share and 43.375 per share, for the options granted on May 8,
1997 and May 16, 1997, respectively; an option term of 10 years; a stock
price volatility based on the calendar year closing prices of the Company's
Common Stock (plus dividends) for the period December 31, 1987 through
December 31, 1997; dividend yields of 3.24% and 3.27%, for the options
granted on May 8, 1997 and May 16, 1997, respectively (the average dividend
yield for the 12-month period ending May 31, 1997, calculated by dividing
the dividends paid during the one-year period prior to the option grant by
the grant date stock price); and risk-free interest rates of 6.88% and
6.85%, for the options granted on May 8, 1997 and May 16, 1997,
respectively (the yield on the date of grant on the U.S. Government Zero
Coupon Bond with a maturity closest to the option term).

III. OPTIONS EXERCISED IN 1997 AND OPTION VALUES AT DECEMBER 31, 1997

The following table provides information as to options exercised in 1997 by
each of the executive officers named in the Summary Compensation table and the
value of options held by such executive officers at December 31, 1997 measured
in terms of the closing price of the Common Stock in consolidated trading on
December 31, 1997.

(a) (b) (c) (d) (e)
NUMBER OF VALUE OF UNEXERCISED
SECURITIES IN-THE-MONEY
UNDERLYING OPTIONS AT
UNEXERCISED FY-END($)
OPTIONS AT
FY-END (#)
SHARES ACQUIRED VALUE REALIZED EXERCISABLE/ EXERCISABLE/
NAME ON EXERCISE (#) ($) UNEXERCISABLE UNEXERCISABLE
---- ----------------- ------------ --------------- ---------------

E. P. Grisanti -- -- 175,000/201,921 3,483,922/1,097,500
B. D. Chadbourne -- -- 0/60,000 0/492,500
H. C. van Baaren 67,333 1,095,438 16,666/85,001 27,082/601,256
T. H. Hoppel 30,556 448,601 11,666/75,001 18,957/451,257
S. R. Maconochie 15,000 185,650 8,666/58,334 18,703/346,048

IV. LONG TERM INCENTIVE AWARDS IN 1997

The following table shows all grants of long term incentive awards in 1997
to the executive officers named in the Summary Compensation Table.

PERFORMANCE PERIOD
NUMBER OF UNTIL MATURATION OR
NAME SHARES PAYOUT
---- --------- --------------------
E. P. Grisanti .................. 250,000 1/1/97 - 12/31/01(1)

- ----------
(1) Under an employment contract dated as of January 1, 1997, Mr. Grisanti was
granted an award of 250,000 shares of restricted stock of the Company's
Common Stock. Because the shares are "restricted", they may not be sold,
pledged or otherwise transferred until the applicable restriction period on
a given installment of the award has lapsed. The restriction period extends
to February 28, 1998 with respect to one-fifth of the shares covered by the
award and to each succeeding February 28 through and including February 28,
2002 with respect to each additional one-fifth of such shares. Mr. Grisanti
has the right to vote, and receive dividends on, the restricted stock. All
or a portion of the shares are subject to forfeiture under certain
circumstances, including termination by either party, with or without
cause, of Mr. Grisanti's employment, and the failure of the Company to
attain either of the alternative performance goals either for an
installment period or subsequently during the term of the contract.

Each installment of the award is subject to the attainment of one of two
alternative performance goals, one based on the Company's net income and
the other on its return on equity. If a performance goal is not attained
for an installment period under either alternative, the shares awarded with
respect to that installment period will remain held in custody until the
end of a succeeding installment period, and the performance goal for the
former installment period or periods as well as for the latter installment
period will be deemed attained if either performance goal is attained for
the combined former and any later installment period or periods.

Notwithstanding the foregoing, a performance goal for any installment
period will be deemed attained if the performance goal is attained for the
combined first installment period and all subsequent installment periods.
If a performance goal for any installment period is not attained as
provided above, that installment of the award will be forfeited. This
provision has been satisfied with respect to the first year of the
contract, and, accordingly, the restrictions on the first installment of
50,000 shares of the award lapsed on February 28, 1998. In order to
maintain the deductibility under Section 162(m) of the Internal Revenue
Code of the amount of the award, any amendment which would change either
alternative performance goal, or the maximum award payable, is subject to
shareholder approval.

DIRECTORS' COMPENSATION

Directors who are not employees of the Company receive an annual retainer
of $15,000 and a fee of $750 for each meeting of the Board or committee
attended, except that when a committee meeting is held on the date of a Board
meeting a fee of only $500 is paid. Through 1999, on the date of the annual
meeting of shareholders, such directors also receive automatic annual stock
option grants of 3,000 shares of Common Stock under the Company's 1990 Stock
Option Plan for Non-Employee Directors. On May 8, 1997, each non-employee
director received an option for 3,000 shares at $43.25 per share.

The Company has established a Directors' Deferred Compensation Plan under
which directors may defer all or a portion of their cash compensation until
retirement or another specified date. Deferred amounts credited to a director's
plan account earn interest at the interest rates applicable from time to time to
deferred compensation awards under the Company's Management Incentive
Compensation Plan.

As part of its overall program of charitable contributions, the Company has
established the Director Charitable Contribution Program. Under the Program, the
Company has purchased life insurance policies on the lives of participating
directors and is the owner and sole beneficiary of the policies. After the death
of a covered director, the Company will donate $500,000 to one or more
qualifying charitable organizations designated by the director and $500,000 to
The IFF Foundation. Individual directors derive no financial benefit from the
Program since all deductions relating to the contributions accrue solely to the
Company. The Program should have no long-term cost to the Company.

EMPLOYMENT CONTRACTS AND TERMINATION OF EMPLOYMENT AND CHANGE-IN-CONTROL
ARRANGEMENTS

Mr. Grisanti is employed under a contract dated as of January 1, 1997 as an
executive at a salary of $930,000 per annum unless the Board shall have fixed a
higher salary, for the period (the "executive period") which commenced on
January 1, 1997 and which may be terminated at any time thereafter with or
without cause, by either the Company or Mr. Grisanti on written notice to the
other. Effective as of January 1, 1998, the Board fixed his annual salary at
$975,000. If the contract is not terminated on or before December 31, 2001, it
will expire on that date. Under the contract Mr. Grisanti may share, as
determined by the Board, in any incentive compensation, bonus, stock option or
other employee benefit plans, programs or policies of the Company. Mr. Grisanti
was granted a restricted stock award under the contract. See the "Long Term
Incentive Awards in 1997" at page 8 and Note 1 thereunder for the amount and
terms thereunder. The contract provides that, after termination of the executive
period, Mr. Grisanti will serve part-time in a consulting capacity for a period
of ten years. During that consulting period, Mr. Grisanti will receive an annual
fee of $150,000 per year.

Hendrik C. van Baaren retired from the employ of the Company on December
31, 1997. In connection therewith, Mr. van Baaren and the Company entered into
an agreement, dated June 19, 1997, pursuant to which Mr. van Baaren

resigned as Senior Vice-President and President, Flavor Division, and as a
Director of the Company on December 31, 1997. He will continue as a consultant
to the Company through December 31, 2000, which period may be extended at his
option through December 31, 2001 (the initial term and any extended term of Mr.
van Baaren's consultancy is referred to as the "Consulting Period"). During the
Consulting Period Mr. van Baaren will receive an annual consulting fee of
$25,000. In addition, Mr. van Baaren has agreed that, through the expiration of
the Consulting Period, he will not directly or indirectly be employed by, or be
a consultant to, any competitor of the Company. In consideration of this
obligation not to compete, the Company will pay Mr. van Baaren the sum of
$225,000 per year during the Consulting Period.

Thomas H. Hoppel will retire from the employ of the Company on March 31,
1998, at which time he will resign as a Vice-President and Director of the
Company. In connection therewith, Mr. Hoppel and the Company entered into an
agreement, dated February 13, 1998, pursuant to which Mr. Hoppel will continue
as a consultant for the Company through March 31, 1999, for which he will
receive a fee of $167,500.

The Board approved, and the Company has entered into agreements (the
"Agreements") with 20 of its present executives, including the executive
officers listed in the Summary Compensation Table. The Agreements provide that
if, within three years of a "change of control", as defined below, an Executive
is involuntarily terminated from employment by the Company or resigns following
a substantial diminution in his duties, responsibilities or status or change in
workplace or a decrease in his compensation of 10% or more, in each case which
is not corrected following notice of objection by the executive, the executive
will be entitled to receive a lump sum payment in an amount equal to the sum of:
(i) three times the higher of (a) his previous compensation for the calendar
year prior to the year in which the change in control occurred or (b) the
compensation for the calendar year prior to the year of termination, in each
case including awards under the Company's Management Incentive Compensation
Plan, provided that such payment will not exceed three times the Executive's
"base amount" allocable to such payment pursuant to Section 280 G of the
Internal Revenue Code, (ii) all unpaid compensation under the Company's
Management Incentive Compensation Plan or any other compensation plan of the
Company, payment of which has been deferred including interest or other
investment return thereon and (iii) for each share of Common Stock of the
Company subject to any option held by the executive, whether or not such option
is then exercisable, an amount equal to the difference between the exercise
price thereof and a price equal to the highest of (a) the market price on the
New York Stock Exchange at the close of business on the effective day of
termination, (b) the price contained in any published tender offer made within
one year before or after the date of change in control, (c) the price contained
in any merger or acquisition agreement entered into by the Company and any third
party within one year before or after the date of change in control, or (d) the
market price on the New York Stock Exchange on the date of change in control,
and, upon such payment, such option shall be deemed cancelled and annulled. The
Agreements also provide for a three-year continuation of certain benefits under
the Company's Pension Plan, Retirement Investment Fund Plan and any supplemental
pension provided by the Company. However, if any payments to the executive,
whether under the Agreement or otherwise, would be subject to the "golden
parachute" excise tax under Section 4999 of the Internal Revenue Code, as
amended, the payment to the executive above will be reduced by the amount
necessary to avoid the incurrence of such excise tax. Under the Agreements a
"change of control" means the earlier to occur of the following events: (i) when
any person, corporation, partnership, association, trust or other entity, or any
"group," as defined in Section 13(d)(3) of the Exchange Act, becomes the
"beneficial owner," as defined in Rule 13d-3 thereunder, directly or indirectly,
of securities of the Company representing 40% or more of the combined voting
power of the Company's then outstanding securities; or (ii) when persons not
nominated by the Board of Directors in the Company's most recent proxy statement
constitute a majority of the members of the Board.

PENSION PLANS

All of the executive officers named in the Summary Compensation Table,
except Mr. Maconochie, are participants in the Company's Pension Plan, a defined
benefit plan, under which the Company makes periodic payments computed on an
actuarial basis providing for fixed benefits for members in the event of
retirement at age 65 (normal retirement date contemplated by the Plan). Mr.
Maconochie is a participant in the pension plan of the Company's United Kingdom
subsidiary. Benefits under the Pension Plan are calculated with respect to a
five-year average of participating employees' covered compensation (base salary
or wage plus cash bonus), subject to an offset for amounts received as Social
Security benefits for service after November 30, 1979. The table below
indicates, for purposes of illustration, the approximate amounts of annual
retirement income (subject to the above Social Security offset and without
taking into account any limitations under the Internal Revenue Code) that would
have been payable upon retirement at December 1, 1997 on a straight life basis
under various assumptions as to salary and years of service to employees in
higher salary classifications who participate in the Pension Plan. Messrs.
Grisanti, Chadbourne, van Baaren and Hoppel have 37, 1, 21 and 37 years of
service, respectively under the Pension Plan, which does not include service
with foreign subsidiaries. To the extent that the amounts of annual retirement
income exceed the maximum benefit limitations, including limitations under
Section 415 of the Internal Revenue Code, such amounts are payable in the same
form and manner under the Company's unfunded Supplemental Retirement Plan
adopted on October 29, 1986, effective January 1, 1987. Mr. van Baaren, who is
not a United States citizen, has significant amounts of service with foreign
subsidiaries of the Company not covered by the Company's Pension Plan as a
result of which he participates in a separate unfunded arrangement, providing
supplemental pension benefits. Under that arrangement certain employees who
serve in foreign countries other than the countries of which they are nationals
receive at age 65 additional pension benefits to the extent that the aggregate
of the amounts payable by law or under the pension plans of the Company and its
subsidiaries are less than the amount payable under this arrangement. As of
December 31, 1997, Mr. van Baaren is entitled to an annual benefit under this
arrangement of $27,196. No other named executive officer participates in this
arrangement.

ESTIMATED ANNUAL PENSION FOR SPECIFIED YEARS OF SERVICE
------------------------------------------------------------------
AVERAGE
COMPENSATION 15 20 25 30 35 40
------------ -- -- -- -- -- --

$ 400,000 .............. $104,652 $133,790 $154,310 $174,830 $195,350 $215,870
500,000 .............. 130,815 167,238 192,888 218,538 244,188 269,838
600,000 .............. 156,978 200,686 231,466 262,246 293,026 323,806
700,000 .............. 183,141 234,133 270,043 305,953 341,863 377,773
800,000 .............. 209,304 267,581 308,621 349,661 390,701 431,741
900,000 .............. 235,467 301,028 347,198 393,368 439,538 485,708
1,000,000 .............. 261,630 334,476 385,776 437,076 488,376 539,676
1,100,000 .............. 287,793 367,924 424,354 480,784 537,214 593,644
1,200,000 .............. 313,956 401,371 462,931 524,491 586,051 647,611
1,300,000 .............. 340,119 434,819 501,509 568,199 634,889 701,579
1,400,000 .............. 366,282 468,266 540,086 611,906 683,726 755,546
1,500,000 .............. 392,445 501,714 578,664 655,614 732,564 809,514
1,600,000 .............. 418,608 535,162 617,242 699,322 781,402 863,482

REPORT OF THE
STOCK OPTION AND COMPENSATION COMMITTEE*

The Stock Option and Compensation Committee of the Board of Directors (the
"Committee") (all of the members of which are "outside directors" as that term
is defined in Section 162(m) of the Internal Revenue Code (the "Code")) is
responsible for setting and administering the policies which govern the annual
compensation paid to the executive officers, including the chief executive
officer.

The Committee recommends, for approval by the Board, the annual salaries of
such officers, makes awards under the Management Incentive Compensation Plan
(the "MICP"), grants stock options under the Company's stock option plans and
determines the form and amount of compensation to be given to the President, who
is the chief executive officer.

COMPENSATION POLICIES

The Company's executive compensation policies are based on several criteria
including, but not limited to, the goals established by the Company, the
performance of the executive in accomplishing them, the performance of the
Company itself, and finally, the competitive realities relating to the
compensation required to secure the services and motivational commitment of the
executive involved. Among other factors, the Committee takes into consideration
the Company's sales and earnings and return on equity, and the performance of
the Company's stock. The Committee is generally familiar with and also takes
into consideration the sales, earnings and return on equity, as well as the
performance of the stock, of other comparable companies. Those companies include
companies which were selected on the basis of their lines of business set forth
on the Performance Graphs on page 15, but they also include companies in other
lines of business as competition for executives extends beyond the Company's
line of business. The Committee has not made an analysis of the compensation
practices of other companies (which include non-public companies with which the
Company competes for executives) but the Committee is generally familiar with
the compensation practices of other companies and believes that the Company's
compensation practices including both the type and amount of compensation paid
to its executive officers are fair and appropriate under the circumstances.

The Company, in general, intends to structure executive compensation to be
deductible under Section 162(m) of the Internal Revenue Code. The Company also
believes, however, that, under some circumstances, such as to attract or retain
key executives or to recognize outstanding performance, it may be in the best
interests of the Company and its shareholders to pay executive compensation in
excess of that which may be deductible.

The three basic components of the Company's executive compensation in 1997
were annual salaries, stock options and incentive compensation.

- ----------
* The report of the Stock Option and Compensation Committee shall not be
deemed incorporated by reference by any general statement incorporating by
reference this proxy statement into any filing under the Securities Act of
1933 (the "1933 Act") or under the Exchange Act, except to the extent that
the Company specifically incorporates this information by reference, and
shall not otherwise be deemed filed under such Acts.

SALARIES

The annual salaries for executive officers for the following fiscal year
are usually recommended by the Committee and approved by the Board in December.
Recommendations for the annual salaries for the officers other than the
President are made by the President to the Committee, based on his firsthand
knowledge of the contribution of each executive officer to his respective area
of concentration. The Committee also reviews financial and other data reflecting
the performance of the various executives' areas of responsibility and how such
areas of responsibility contributed to the Company's overall performance, but
there is no precise test or formula by which the recommended salary is related
to performance. Rather than follow such a rigid standard, the Committee believes
that the Company's interests are best served by having a flexible compensation
policy that gives the Committee the leeway to fix compensation after considering
the factors enumerated above and evaluating such factors as each situation
requires.

The annual salary recommendation for the President is determined separately
by the Committee after reviewing the overall results of the Company during the
prior year taking into account economic conditions. The President has an
employment contract with the Company effective January 1, 1997, which was
approved by the Committee. Under the contract, he is to receive a salary of
$930,000 unless the Company's Board of Directors shall have fixed a higher
salary. It has been the Board's practice to have the Committee review all
executive officers' salaries, including the President's salary, on an annual
basis and make recommendations with respect to such salaries to the Board.
Although consideration is given by the Committee to compensation for earlier
years, the determination of the annual salary increase of the President as well
as the other officers is based primarily upon events occurring during the most
recent year including the Company's sales and earnings, the return on equity,
the performance of the Company's stock, inflation and cost of living factors.
For 1997, the President received a salary of $930,000, pursuant to his
employment contract.

STOCK OPTIONS

Stock options have long been a significant part of the long-term incentives
awarded by the Company to its officers and its employees. Such plans have been
successful in motivating the officers consistently to promote long-term
shareholder value. Stock options, which return no monetary value to the
recipient unless the shareholders as a whole also benefit from an increase in
the stock price, have been a particularly effective means of promoting
shareholder value and of attracting and retaining the services of qualified
officers of the Company.

The selection of the executive officers of the Company other than the
President for participation in the plans, and the timing, pricing and the number
of shares covered by individual options, are determined by the Committee, after
considering the recommendations of the President and applying the above
criteria, as well as taking into account options previously granted. As in the
case of salaries, the Committee does not use a precise test or formula of
corporate performance in determining either the timing or number of shares to be
granted. The granting of stock options to the President is considered separately
by the Committee applying the above policy guidelines taking into account
options and restricted stock previously granted. Recognizing the President's
contribution to the Company's overall performance in the past, the Committee
made the 1997 option grant to the President in order to motivate him to continue
in his efforts to improve the Company's performance. Without such an improvement
as reflected in increased shareholder value, the option will have no value.

INCENTIVE COMPENSATION

Under the MICP, the amount of bonus paid to the executive officers of the
Company is determined from year to year. All of the Company's executive officers
participate in the MICP. Under the MICP, the incentive compensation of

those selected for participation by the Committee for each year is paid from an
incentive fund for such year, the existence and amount of which is subject to a
performance goal, specified in the MICP, equal to 10% of the amount by which the
pretax consolidated earnings of the Company for such year exceed the sum of 20%
of net capital (defined as the average of the amounts of the Company's
consolidated capital and surplus at the beginning and end of such year) for such
year, provided that the fund may not exceed for any year 10% of the amount of
cash dividends paid by the Company in such year. No award to any participant may
exceed the lesser of 15% of the incentive fund or 100% of his annual rate of
salary. The Committee may exercise negative discretion to reduce the maximum
award to any participant. Under regulations adopted by the Committee pursuant to
the MICP, awards are payable in cash either currently in a lump sum or in
installments that may be deferred in various ways. Under the MICP the Committee,
following the criteria set forth above, and after the year-end results have been
certified by the Company's independent public accountants, determines whether
the MICP's performance goal has been met and, if it has been, so certifies. The
Committee then allocates the incentive fund, or such portion thereof as the
Committee has determined, to the participants and designates the manner in which
awards are to be paid. For 1997, the performance goal was satisfied and the
Committee so certified. With respect to 1997 incentive compensation under the
MICP, the Committee did not use a precise test or formula in determining whether
to reduce the maximum award to the executive officers including the President.
The Committee considered both the President's performance and the results
achieved by the Company in 1997 in determining the award for that year given to
the President under the MICP.

RESTRICTED STOCK AWARD

In connection with the restricted stock award to the President, his
employment contract requires that either of two alternative performance goals
specified in the contract must be met with respect to the applicable installment
of the award for the restrictions on that installment to lapse. The Committee
has certified that this provision has been satisfied with respect to the first
year of the contract. Accordingly, the restrictions on the first installment of
50,000 shares of the award lapsed on February 28, 1998.

In summary, the Company has an appropriate and competitive compensation
program, which is designed to promote shareholder value and attract and retain
qualified executives. The Company's compensation soundly balances base salary,
bonus based on annual performance and the use of long-term incentives.

William D. Van Dyke, III, Chairman
Richard M. Furlaud
Stanley M. Rumbough, Jr.

Comparisons of Total Cumulative Shareholder Return*
Five-Year period Ending December 31, 1997

(The following tabular information is a description, pursuant to Rule 304
of Regulation S-T, of a graph contained in the paper format of this Proxy
Statement being sent to Shareowners.)

IFF S&P 500 Peer Group
----- --------- ------------
1992 100.00 100.00 100.00
1993 107.52 110.06 99.80
1994 134.84 111.52 99.94
1995 143.56 153.39 126.99
1996 138.67 188.59 154.74
1997 163.75 251.49 202.16

Ten-Year period Ending December 31, 1997

(The following tabular information is a description, pursuant to Rule 304
of Regulation S-T, of a graph contained in the paper format of this Proxy
Statement being sent to Shareowners.)

IFF S&P 500 Peer Group
----- --------- ------------
1987 100.00 100.00 100.00
1988 115.07 116.56 118.86
1989 163.44 153.41 150.77
1990 185.74 148.66 154.40
1991 263.81 193.86 212.49
1992 286.99 208.61 214.98
1993 308.58 229.60 214.56
1994 386.97 232.64 214.85
1995 412.01 319.99 273.00
1996 397.98 393.43 332.66
1997 469.96 524.64 434.60

- ----------

(1) Total return assumes that the value of an investment in the Company's
common stock and each index was $100 on December 31, 1992 and December 31,
1987, respectively, and that all dividends were reinvested.

(2) The Peer Group consists of the following companies: Alberto Culver Company,
Avon Products, Inc., Block Drug Co., Inc., Church & Dwight Co., Inc.,
Ecolab Inc., Ethyl Corp., W.R. Grace & Co., Hershey Foods Corp., McCormick
& Company, Inc., Morton International, Inc., NCH Corp., Nalco Chemical
Company, The Quaker Oats Company, Ralston Purina Company, and Wm. Wrigley
Jr. Company. The performance of the Peer Group is weighted based on market
capitalization. For the years ended December 31, 1994 and earlier, Borden,
Inc. was included in the Peer Group but was omitted for the years ended
December 31, 1995 and December 31, 1996 since, in light of its acquisition
by Kohlberg Kravis Roberts & Co., it is no longer a separate reporting
entity. For the years ended December 31, 1995 and earlier, Helene Curtis
Industries, Inc. was included in the Peer Group, but was omitted for the
year ended December 31, 1996 since, in light of its acquisition by Unilever
United States, Inc., it is no longer a separate reporting entity. For the
years ended December 31, 1996 and earlier, Tambrands Inc. was included in
the Peer Group, but was omitted for the year ended December 31, 1997,
since, in light of its acquisition by The Procter & Gamble Company, it is
no longer a separate reporting entity.

* The Comparisons of Five Year and Ten Year Cumulative Total Return shall not
be deemed incorporated by reference by any general statement incorporating
by reference this proxy statement into any filing under the 1933 Act or
under the Exchange Act, except to the extent that the Company specifically
incorporates this information by reference, and shall not otherwise be
deemed filed under such Acts.

COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION

The Stock Option and Compensation Committee of the Board of Directors
consists of Messrs. Furlaud, Rumbough and Van Dyke. Mr. Van Dyke is Senior
Vice-President of Salomon Smith Barney, Inc. which has received commissions for
brokerage services performed in connection with securities transactions on
behalf of the Company and its retirement plans.

STOCK OWNERSHIP

The following is a tabulation as of December 31, 1997 of those shareholders
of the Company who own beneficially in excess of 5% of the Company's Common
Stock determined in accordance with Rule 13d-3 under the Exchange Act.

AMOUNT AND NATURE OF
BENEFICIAL OWNERSHIP
--------------------------------------------
TITLE SOLE VOTING SHARED VOTING PERCENT
OF NAME AND ADDRESS AND AND OF
CLASS OF BENEFICIAL OWNER INVESTMENT POWER INVESTMENT POWER CLASS
----- ------------------- ---------------- ---------------- -----

Common George Rowe, Jr. ............... 5,500 shares 8,100,678 shares(1) 7.4%
Stock One Rockefeller Plaza
New York, N.Y. 10020

Common State Farm Mutual Automobile
Stock Insurance Company and
related entities .............. 6,999,100 shares 0 shares 6.4%
One State Farm Plaza
Bloomington, Ill. 61701

Common Henry van Ameringen ............ 2,561,011 shares 5,574,932 shares(1) 7.5%
Stock 509 Madison Avenue
New York, N.Y. 10022

Common Trust, c/o J.P. Morgan
Stock Florida, FSB .................. 0 shares 5,442,762 shares(2) 5.0%
109 Royal Palm Way
Palm Beach, Florida 33480

Common Henry G. Walter, Jr. (3) ....... 312,525 shares 7,033,817 shares(1) 6.7%
Stock 509 Madison Avenue
New York, N.Y. 10022

- ----------
(1) See Note 5 on page 4.

(2) Held of record by CEDE & Co. as nominee for a trust of which Mr. and Mrs.
William D. Van Dyke, III and J. P. Morgan Florida, FSB are co-trustees,
who should be considered the beneficial owners of such shares with shared
voting and investment power. Mrs. Van Dyke is also beneficial owner of
1,830,774 shares in which she has sole voting and investment power and
129,426 shares over which she has shared voting and investment power. See
footnote 7 on page 5 for additional shares beneficially owned by Mr. Van
Dyke. J. P. Morgan and related entities also beneficially own 79,306
shares over which they have sole voting power and 118,922 shares over
which they have sole investment power, and 16,200 shares over which they
have shared voting power and 35,484 shares over which they have shared
investment power.

(3) The number of shares beneficially owned by Mr. Walter listed above does
not include the beneficial interest of Mr. Walter's wife in 18,016 shares
owned directly by her. Mr. Walter disclaims any beneficial interest in
any such shares.

As of December 31, 1997 the officers and directors of the Company (26
persons) and Messrs. Hoppel, Maconochie and van Baaren beneficially owned in the
aggregate shares of the Company's Common Stock as set forth below:

AMOUNT OF PERCENT
TITLE OF CLASS NAME BENEFICIAL OWNERSHIP(1)(2) OF CLASS
-------------- ---- -------------------------- --------

Common Stock .... All directors and officers as a group .. 18,952,430 17.4%
Common Stock .... T.H. Hoppel ............................ 58,599 (3)
Common Stock .... S. R. Maconochie ....................... 8,666 (3)
Common Stock .... H.C. van Baaren ........................ 37,325 (3)

- -----------
(1) Includes 507,168 shares of Common Stock which the directors and officers of
the Company have (or will have as of 60 days after such date) the right to
acquire under stock options granted by the Company.

(2) Adjusted to eliminate duplicate holdings of the same shares by two or more
officers and directors. Except for the shares included in footnotes 5, 6
and 7 on pages 4 and 5, the remaining shares listed as beneficially owned
by all directors and officers in the aggregate are subject to the sole
voting and investment power of the individual directors or officers whose
shares are included in such number.

(3) Less than .1%.

SHAREHOLDER PROPOSALS

Any shareholder proposal intended to be presented at the next Annual
Meeting of Shareholders must be received by the Company for inclusion in the
Company's Proxy Statement and form of proxy with respect to that meeting by
November 30, 1998.

ADDITIONAL INFORMATION

The Company has selected Price Waterhouse LLP to be its principal
independent accountants for 1998. Representatives of Price Waterhouse LLP are
expected to be present at the shareholders' meeting with the opportunity to make
a statement if they desire to do so and are expected to be available to respond
to appropriate questions.

The Company paid to Messrs. Fulton, Rowe, Hart & Coon, of which Mr. Rowe, a
director of the Company, is a member, $284,775 for legal services in 1997.

SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

In 1997, Judith C. Giordan, an officer of the Company, did not file on a
timely basis one report required by Section 16 of the Exchange Act relating to
her appointment as an officer of the Company, and each of Mr. Maconochie and
Rudolf Merz, an officer of the Company, did not file on a timely basis one
report required by Section 16 of the Exchange Act relating to a transaction in
Company stock.

OTHER MATTERS

As of the date of this Proxy Statement the Board of Directors is not aware
that any matters other than those specified above are to be presented for action
at the meeting. If any other matters should come before the meeting, proxies in
the enclosed form will be voted on such matters in accordance with the judgment
of the person or persons voting the proxies, unless otherwise specified. Shares
of Common Stock represented by executed proxies received by the Company will be
counted for purposes of establishing a quorum at the meeting, regardless of how
or whether such shares are voted on any specific proposal. All executed proxies
will be voted in accordance with the instructions contained therein. In
accordance with the Board of Directors' recommendations, executed proxies
returned by shareholders will be voted, if no contrary instruction is indicated,
FOR the election of the 11 nominees described herein. With respect to the
required vote on any particular matter, abstentions and votes withheld by
nominee recordholders will not be treated as votes cast or as shares present or
represented.

THE COMPANY WILL ON A REQUEST IN WRITING PROVIDE WITHOUT CHARGE TO EACH
PERSON FROM WHOM PROXIES ARE BEING SOLICITED FOR THE COMPANY'S ANNUAL MEETING A
COPY OF THE COMPANY'S ANNUAL REPORT ON FORM 10-K FOR THE YEAR ENDED DECEMBER 31,
1997, INCLUDING THE FINANCIAL STATEMENTS AND THE SCHEDULES THERETO, REQUIRED TO
BE FILED WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 13A-1
UNDER THE EXCHANGE ACT. A REQUEST FOR THE COMPANY'S ANNUAL REPORT ON FORM 10-K
SHOULD BE MADE TO STEPHEN A. BLOCK, SECRETARY, INTERNATIONAL FLAVORS &
FRAGRANCES INC., 521 WEST 57TH STREET, NEW YORK, N.Y. 10019.

THE BOARD OF DIRECTORS INVITES YOU TO ATTEND THE MEETING IN PERSON. IF YOU
ARE UNABLE TO DO SO, PLEASE SIGN, DATE AND RETURN THE ENCLOSED PROXY PROMPTLY IN
THE ENCLOSED ENVELOPE, SO THAT YOUR SHARES WILL BE REPRESENTED AT THE MEETING.

By Order of the Board of Directors,

STEPHEN A. BLOCK
Secretary

March 30, 1998

================================================================================

[IFF LOGO] PROXY

INTERNATIONAL FLAVORS & FRAGRANCES INC.

THIS PROXY IS SOLICITED ON BEHALF OF THE COMPANY'S BOARD OF DIRECTORS
FOR ANNUAL MEETING OF SHAREHOLDERS TO BE HELD MAY 14, 1998

The undersigned shareholder of INTERNATIONAL FLAVORS & FRAGRANCES INC.
(hereinafter called the Company) hereby appoints Messrs. EUGENE P. GRISANTI,
GEORGE ROWE, JR. and STEPHEN A. BLOCK, the attorneys and proxies, and each of
them the attorney and proxy, of the undersigned, with full power of
substitution, to act by a majority present, for and in the name, place and stead
of the undersigned, to attend the Annual Meeting of Shareholders to be held at
the headquarters of the Company, 521 West 57th Street, New York, New York, on
Thursday, May 14, 1998 at 10 A.M., and any adjournment or adjournments thereof,
and thereat to vote the number of votes or shares of stock the undersigned would
be entitled to vote if then and there personally present.

IFF
P.O. BOX 11117
NEW YORK, N.Y. 10203-0117

PLEASE INDICATE ON THE REVERSE SIDE OF THIS CARD
HOW YOUR SHARES OF STOCK ARE TO BE VOTED.

THE SHARES REPRESENTED BY THIS PROXY WILL BE VOTED AS DIRECTED.

(Continued and to be signed on the other side)

================================================================================

================================================================================
-----------

-----------
- --------------------------------------------------------------------------------
1. Election of all Directors M. H. Adame, D. G. Bluestein, B. D. Chadbourne, R.
C. Duke, R. M. Furlaud, E. P. Grisanti, H. G. Reid, G. Rowe, Jr., S. M.
Rumbough, Jr., H. P. van Ameringen, W. D. Van Dyke, III

For [X] Withheld [X] Exceptions* [X]

*Exceptions ...................................................................

...............................................................................

- --------------------------------------------------------------------------------

To vote your shares for all Director nominees, mark the "For" box on Item 1. To
withhold voting for all nominees, mark the "Withhold" box. If you do not wish
your shares voted "For" a particular nominee, mark the "Exceptions" box and
enter the name(s) of the exception(s) in the space provided.

Change of address and/or Comments
[X]

- --------------------------------------------------------------------------------
2. In their discretion, the Proxies are authorized to vote upon such other
business as may properly come before the meeting or any adjournment thereof.
- --------------------------------------------------------------------------------

(This Proxy will be voted FOR each of
the above nominees as a director, and in
the discretion of the proxy committee on
any other matter properly before the
meeting, unless otherwise specified)

Please sign exactly as name or names
appear on this proxy. If stock is held
jointly, each holder should sign. If
signing as attorney, trustee, executor,
administrator, custodian, guardian, or
corporate officer, please give full
title.

DATED __________________________, 1998

SIGNED _______________________________

______________________________________

Votes MUST be indicated in Black or Blue ink. [X]

Sign, Date and Return the Proxy Card Promptly Using the Enclosed Envelope.

================================================================================