Exhibit 10(aaaa)
CHANGE IN CONTROL
AGREEMENT
THIS AGREEMENT,
dated April 2 nd
, 2007,
between QUAKER CHEMICAL CORPORATION, a Pennsylvania corporation
(the “Company”), and L. WILLEM PLATZER (the
“Manager”),
WITNESSETH THAT
WHEREAS, the Board of Directors of
the Company has determined that it is in the best interests of the
Company and its shareholders that the Company and its subsidiaries
be able to attract, retain, and motivate highly qualified
management personnel and, in particular, that they be assured of
continuity of management in the event of any actual or threatened
change in control of the Company; and
WHEREAS, the Board of Directors of
the Company believes that the execution by the Company of change in
control agreements with certain management personnel, including the
Manager, is an important factor in achieving this desired
end;
NOW, THEREFORE, IN CONSIDERATION of
the mutual obligations and agreements contained herein and
intending to be legally bound hereby, the Manager and the Company
agree as follows:
This Agreement shall become
effective on January 1, 2007 (the “Effective
Date”), and shall continue in effect through
December 31, 2007, provided, however, that the term of this
Agreement shall automatically be extended for one additional year
beyond December 31, 2007 and successive one year periods
thereafter, unless, not later than eighteen (18) months
preceding the calendar year in which the term would otherwise
automatically extend, the Company shall have given written notice
to the Manager of intention not to extend this Agreement for an
additional year, in which event this Agreement shall continue in
effect until December 31 of the calendar year immediately
preceding the calendar year in which the term would have otherwise
automatically extended. Notwithstanding any such notice not to
extend, if a Change in Control (as defined in Section 2)
occurs during the original or extended term of this Agreement, this
Agreement shall remain in effect after a Change in Control until
all obligations of the parties hereto under this Agreement shall
have been satisfied.
As used in this Agreement, a
“Change in Control” of the Company shall be deemed to
have occurred if:
(a) Any person (a
“Person”), as such term is used in Sections 13(d) and
14(d) of the Securities Exchange Act of 1934, as amended (the
“Exchange Act”) (other than (i) the Company and/or
its wholly owned subsidiaries; (ii) any ESOP or other employee
benefit plan of the Company and any trustee or other fiduciary in
such capacity holding securities under such plan; (iii) any
corporation owned, directly or indirectly, by the shareholders of
the Company in substantially the same proportions as their
ownership of stock of the Company; or (iv) any other Person
who, within the one year prior to the event which would otherwise
be a Change in Control, is an executive officer of the Company or
any group of Persons of which he voluntarily is a part), is or
becomes the “beneficial owner” (as defined in Rule
13d-3 under the Exchange Act), directly or indirectly, of
securities of the Company representing 30% or more of the combined
voting power of the Company’s then outstanding securities or
such lesser percentage of voting power, but not less than 15%, as
determined by the members of the Board of Directors of the Company
who are independent directors (as defined in the New York Stock
Exchange, Inc. Listed Company Manual); provided, however, that a
Change in Control shall not be deemed to have occurred under the
provisions of this subsection (a) by reason of the beneficial
ownership of voting securities by members of the Benoliel family
(as defined below) unless and until the beneficial ownership of all
members of the Benoliel family (including any other individuals or
entities who or which, together with any member or members of the
Benoliel family, are deemed under Sections 13(d) or 14(d) of the
Exchange Act to constitute a single Person) exceeds 50% of the
combined voting power of the Company’s then outstanding
securities;
(b) During any two-year period after
the Effective Date, Directors of the Company in office at the
beginning of such period plus any new Director (other than a
Director designated by a Person who has entered into an agreement
with the Company to effect a transaction within the purview of
subsections (a) or (c)) whose election by the Board of
Directors of the Company or whose nomination for election by the
Company’s shareholders was approved by a vote of at least
two-thirds of the Directors then still in office who either were
Directors at the beginning of the period or whose election or
nomination for election was previously so approved shall cease for
any reason to constitute at least a majority of the
Board;
(c) The consummation of (i) any
consolidation or merger of the Company in which the Company is not
the continuing or surviving corporation or pursuant to which the
Company’s voting common shares (the “Common
Shares”) would be converted into cash, securities, and/or
other property, other than a merger of the Company in which holders
of Common Shares immediately prior to the merger have the same
proportionate ownership of voting shares of the surviving
corporation immediately after the merger as they had in the Common
Shares immediately before; or (ii) any sale, lease, exchange,
or other transfer (in one transaction or a series of related
transactions) of all or substantially all the assets or earning
power of the Company; or
- 2 -
(d) The Company’s shareholders
or the Company’s Board of Directors shall approve the
liquidation or dissolution of the Company.
As used in this Agreement,
“members of the Benoliel family” shall mean Peter A.
Benoliel, his wife and children and their respective spouses and
children, and all trusts created by or for the benefit of any of
them.
|
3.
|
Entitlement to Change in Control Benefits;
Certain Definitions .
|
The Manager shall be entitled to the
benefits provided in this Agreement in the event the
Manager’s employment with the Company or its affiliates is
terminated under the circumstances described in (a) or
(b) below (a “Covered Termination”), provided the
Manager executes and does not revoke a Release (as defined below),
if any, provided by the Company.
(a) A Covered Termination shall have
occurred within the meaning of this subsection (a) in the
event the Manager’s employment with the Company or its
affiliates is terminated within two (2) years following a
Change in Control by:
(i) The Company or its affiliates
without Cause (as defined below); or
(ii) Resignation of the Manager for
Good Reason (as defined below).
(b) A Covered Termination shall have
occurred within the meaning of this subsection (b) in the
event the Manager’s employment with the Company or its
affiliates is terminated by the Company or its affiliates without
Cause within six months prior to a Change in Control and the
Manager reasonably demonstrates after such Change in Control that
such termination was at the request or suggestion of any individual
or entity who or which has taken steps reasonably calculated to
effect such Change in Control.
The Manager shall have no rights to
any payments or benefits under this Agreement in the event the
Manager’s employment with the Company and its affiliates is
terminated (i) as a result of death or disability, or
(ii) by the Company or its affiliates for Cause. Except as
provided in subsection (b), in the event the Manager’s
employment is terminated for any reason prior to a Change in
Control, the Manager shall have no rights to any payments or
benefits under this Agreement and, after any such termination, this
Agreement shall be of no further force or effect.
“ Cause ” shall
mean (i) the Manager’s willful and material breach of
the employment agreement, if any, between the Manager and the
Company (after having received notice thereof and a reasonable
opportunity to cure or correct), (ii) dishonesty, fraud,
willful malfeasance, gross negligence, or other gross misconduct,
in each case relating to the performance of the Manager’s
employment with the Company or its affiliates which is materially
injurious to the Company, or (iii) conviction of or plea of
guilty to a felony, such Cause to be determined, in each case, by a
resolution approved by at least two-thirds of the Directors of the
Company after having afforded the Manager a reasonable opportunity
to appear before the Board of Directors of the Company and present
his position.
“ Code ” shall
mean the Internal Revenue Code of 1986, as amended, together with
any applicable regulations thereunder.
- 3 -
“ Good Reason ”
shall mean any of the following actions without the Manager’s
consent, other than due to the Manager’s death or disability:
(i) any reduction in the Manager’s base salary from that
provided immediately before the Covered Termination or, if higher,
immediately before the Change in Control; (ii) any reduction
in the Manager’s bonus opportunity (including cash and
noncash incentives) or increase in the goals or standards required
to accrue that opportunity, as compared to the opportunity and
goals or standards in effect immediately before the Change in
Control; (iii) a material adverse change in the nature or
scope of the Manager’s authorities, powers, functions, or
duties from those in effect immediately before the Change in
Control; (iv) a reduction in the Manager’s benefits from
those provided immediately before the Change in Control,
disregarding any reduction under a plan or program covering
employees generally that applies to all employees covered by the
plan or program; or (v) the Manager being required to accept a
primary employment location which is more than twenty-five
(25) miles from the location at which he primarily was
employed during the ninety (90) day period prior to a Change
in Control.
“ Payment Date ”
shall mean (i) in the case of a Covered Termination described
in Section 3(a), the last business day of the second month
following the month in which the Manager’s Separation from
Service occurs, subject to Section 9, or (ii) in the case
of a Covered Termination described in Section 3(b),
(A) the last business day of the second month following the
month in which the Change in Control giving rise to such Covered
Termination occurs, if the Change in Control is also a
“change in control event” under Section 409A of
the Code, or (B) the last business day of the eighth month
following the month in which the Manager’s Separation from
Service occurs, if such Change in Control is not a “change in
control event” under Section 409A of the
Code.
“ Release ” shall
mean a release (in a form satisfactory to the Company) of any and
all claims against the Company and all related parties with respect
to all matters arising out of the Manager’s employment by the
Company and its affiliates, or the termination thereof (other than
claims for any entitlements under the terms of this Agreement or
under any plans or programs of the Company under which the Manager
has accrued a benefit) that the Company provides to the Manager no
later than (i) in the case of a Covered Termination described
in Section 3(a), three days after the date of the
Manager’s Covered Termination, or (ii) in the case of a
Covered Termination described in Section 3(b), three days
after the date of the Change in Control giving rise to such Covered
Termination. Notwithstanding any provision of this Agreement to the
contrary, if the Company provides a Release to the Manager, the
Manager shall not be entitled to any payments or benefits under
this Agreement unless the Manager executes and does not revoke the
Release.
“ Separation from
Service ” shall mean the Manager’s separation from
service with the Company and its affiliates within the meaning of
Prop. Treas. Reg. §1.409A-1(h) or any successor
thereto.
“ Specified Employee
” shall mean the Manager if he is a specified employee as
defined in Section 409A of the Code as of the date of his
Separation from Service.
- 4 -
(a) Amount of Severance
Allowance . In the event of a Covered Termination, the Company
shall pay or cause to be paid to the Manager in cash a severance
allowance (the “Severance Allowance”) equal to 1.5
times the sum of the amounts determined in accordance with the
following paragraphs (i) and (ii):
|
|
(i)
|
An amount
equivalent to the highest annualized base salary which the Manager
was entitled to receive from the Company and its subsidiaries at
any time during his employment prior to the Covered Termination;
and
|
|
|
(ii)
|
An amount equal
to the average of the aggregate annual amounts paid to the Manager
under all applicable annual incentive compensation plans maintained
by the Company and its affiliates (other than compensation relating
to relocation expense; the grant, exercise, or settlement of stock
options or performance incentive units or the sale or other
disposition of shares received upon exercise or settlement of such
options) during the three (3) calendar years prior to the year
such Covered Termination occurs or, if higher, prior to the year
such Change in Control occurs (provided, however, that (x) in
determining the average amount paid under the annual incentive plan
during such period there shall be excluded any year in which no
amounts were paid to the Manager under that plan; and
(y) there shall be excluded from such calculation any amounts
paid to the Manager under any such incentive compensation plan as a
result of the acceleration of such payments under such plan due to
termination of the plan, a Change in Control, or a similar
occurrence).
|
In no event shall any retention
bonus or change in control or success fee be taken into account
when determining the amount of the Severance Allowance
hereunder.
(b) Payment of Severance
Allowance . The Severance Allowance shall be paid to the
Manager in a lump sum on the Payment Date.
If a court awards the Manager a
severance pay and/or any compensation in relation to the
termination of the Manager’s employment, the Manager may no
longer assert any rights under this Agreement. If and insofar the
Company or any of its affiliates has already made any payments
under this Agreement, the Company or any of its affiliates may set
off the payments that have been made against any net salary payment
to which the Manager is entitled, or recover such from the Manager
in any other way.
|
5.
|
Outplacement and Welfare Benefits
.
|
(a) Outplacement . Subject to
Section 6, for a period of one year following a Covered
Termination of the Manager (or the Change in Control resulting in a
Covered Termination, if later), the Company shall make or cause to
be made available to the Manager, at its expense, outplacement
counseling and other outplacement services comparable to those
available for the Company’s senior managers prior to the
Change in Control.
- 5 -
