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Exhibit
10(cccc)
CHANGE IN CONTROL
AGREEMENT
THIS AGREEMENT, dated
June 27, 2007, between QUAKER CHEMICAL CORPORATION, a
Pennsylvania corporation (the “Company”), and Jan F.
Nieman (the “Manager”),
W I T N E S S E T
H T H A T
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
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(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:
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(i) |
The Company or its affiliates without Cause (as defined below);
or |
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(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.
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“ 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.
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(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):
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(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 |
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(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
manager
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