Exhibit 10(r)
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT, made and entered into as of the 5th day of
November 1997, by and between QUAKER CHEMICAL CORPORATION, a Pennsylvania
corporation (hereinafter referred to as "QUAKER"), and XXXXX X. XXXXX
(hereinafter referred to as "XXXXX").
W I T N E S S E T H:
WHEREAS, QUAKER wishes to employ XXXXX, and XXXXX wishes to be employed
by QUAKER.
NOW, THEREFORE, in consideration of the mutual promises and covenants
herein contained, and intending to be legally bound hereby, the parties hereto
agree as follows:
1. QUAKER agrees to employ XXXXX, and XXXXX agrees to serve as Vice
President-Human Resources of QUAKER. He shall perform all duties consistent
with such position as well as any other duties which are assigned to him from
time to time by the Board of Directors or Chief Executive Officer of QUAKER.
XXXXX covenants and agrees that he will, during the term of this Employment
Agreement or any extension or renewal thereof, devote his knowledge, skill,
and working time solely and exclusively to the business and interests of
QUAKER.
2. The term of XXXXX'x employment shall continue until December 31,
1997 and shall continue for annual calendar year terms thereafter until either
party hereto shall have given the other at least ninety (90) days' prior
written notice of a desire to terminate this Agreement (and thereby terminate
XXXXX'x employment with QUAKER) except as otherwise provided under Paragraph
11 below.
Exhibit 10(r)
Page 1
3. QUAKER shall pay to XXXXX and XXXXX shall accept an annual rate of
salary as set forth in Exhibit A attached hereto, payable semi-monthly, during
the term of this Employment Agreement or any extension or renewal thereof.
The rate of salary will be reviewed on an annual basis consistent with
Quaker's then current practice for reviewing officers' salaries and
performance.
4. XXXXX shall participate in such QUAKER Incentive Programs as
described and set forth in Exhibit A. As an Officer of QUAKER, the
particulars of Exhibit A may be amended by the Board of Directors at any time
as to any matter set forth therein including rate of annual salary,
eligibility to participate in any given QUAKER incentive plan, the level of
participation in any QUAKER incentive plan, and the terms and conditions of
any QUAKER incentive plan. Any changes to Exhibit A shall not affect any of
the other terms and conditions hereof including, without limitation, the
provisions of Paragraphs 7 through 9. For the purposes of this Agreement, the
term "QUAKER Incentive Program" shall refer to each individual as well as the
combined incentive programs approved by the Board of Directors. Revisions to
Exhibit A shall become effective upon notification in writing by QUAKER and
XXXXX'x acceptance by his signature on the notification.
5. (a) With respect to Quaker's Long-Term Performance Incentive Plan
(the "Incentive Plan"), XXXXX shall be eligible to participate in the 1995-
1998 performance award period under the terms and conditions of the Incentive
Plan. In connection therewith, XXXXX will be granted:
* Stock options - 9,000 to be issued to XXXXX on the first day of
employment - 4,000 of which shall first become exercisable on the
second anniversary of the first day of employment and the
remaining 5,000 to first become exercisable on the third
anniversary of the first day of employment.
* Type of stock option offered - non-qualified stock options.
* Option price per share - closing price on first day of employment.
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* Performance incentive units - 3,500 @ $18.625 (equal to 100% of
target value).
(b) XXXXX shall be entitled to four (4) weeks vacation per year,
beginning the calendar year 1998, paid holidays, and such other employee
benefits, including, without limitation, life insurance, medical benefits,
disability, profit sharing, and retirement benefits as are made generally
available to all senior QUAKER salaried officers as a group. In addition,
XXXXX shall be eligible to participate in Quaker's Supplemental Retirement
Income Program.
(c) QUAKER shall reimburse XXXXX for all reasonable expenses
incurred by XXXXX on behalf of QUAKER in the course of XXXXX'x employment
under this Employment Agreement, provided that such expenses shall have been
approved by QUAKER in accordance with such expense reimbursement procedures as
shall be adopted by QUAKER. In addition, QUAKER shall provide for XXXXX'x use
a cellular phone, and QUAKER will reimburse XXXXX for all business-related
calls.
6. In the event of the death of XXXXX while this Employment Agreement
is in effect and as to which no notice of termination has been given by XXXXX
or, in the case of a Termination for Cause, by QUAKER, QUAKER shall (i)
continue to pay a sum of money equal to the salary that would have been paid
to him for four months following his death just as if he were living, and (ii)
QUAKER shall pay a death benefit equal to his then current annual salary plus
$30,000 to be paid in three equal payments, without interest, on the 16-, 28-,
and 40-month anniversary of the date of his death. Payments made pursuant to
this Paragraph 6 shall be made to the person or persons who may be designated
by XXXXX in writing, and, in the event he fails to so designate to whom
payments shall be made, payments shall be made to XXXXX'x personal
representatives.
7. XXXXX acknowledges that information concerning the method and
conduct of QUAKER's (and any affiliates') business, including, without
limitation, strategic and marketing plans, budgets, corporate practices and
procedures, financial statements, customer and supplier information, formulae,
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formulation information, application technology, manufacturing information,
and laboratory test methods and all of QUAKER's (and any affiliates') manuals,
documents, notes, letters, records, and computer programs are QUAKER's (and/or
QUAKER's affiliates', as the case may be) trade secrets ("Trade Secrets") and
are the sole and exclusive property of QUAKER (and/or QUAKER's affiliates, as
the case may be). XXXXX agrees that at no time during or following his
employment with QUAKER will he use, divulge, or pass on, directly or through
any other individual or entity, any Trade Secrets. Upon termination of
XXXXX'x employment with QUAKER, or at any other time upon QUAKER's request,
XXXXX agrees to forthwith surrender to QUAKER any and all materials in his
possession or control which include or contain any such Trade Secrets. The
words "Trade Secrets" do not include information already known to the public
through no act or failure to act on the part of XXXXX, required by law to be
disclosed, or which can be clearly shown to have been known by XXXXX prior to
the commencement of his employment with QUAKER.
8. XXXXX agrees that during his employment and for a period of one (1)
year thereafter, regardless of the reason for the termination of XXXXX'X
employment hereunder, he will not:
(a) directly or indirectly, together or separately or with any
third party, whether as an individual proprietor, partner, stockholder,
officer, director, joint venturer, investor, or in any other capacity
whatsoever actively engage in business or assist anyone or any firm in
business as a manufacturer, seller, or distributor of specialty chemical
products or chemical management services which are the same, like, similar to,
or which compete with the products and services offered by QUAKER (or any of
its affiliates);
(b) recruit or solicit any employee of QUAKER or otherwise induce
such employee to leave the employ of QUAKER or to become an employee or
otherwise be associated with his or any firm, corporation, business or other
entity with which he is or may become associated; and
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(c) solicit, directly or indirectly, for himself or as agent or
employee of any person, partnership, corporation, or other entity (other than
for QUAKER) any then or former customer, supplier, or client of QUAKER with
the intent of actively engaging in business which would cause competitive harm
to QUAKER.
XXXXX acknowledges and agrees that all of the foregoing restrictions
are reasonable as to the period of time and scope. However, if any paragraph,
sentence, clause, or other provision is held invalid or unenforceable by a
court of competent and relevant jurisdiction, such provision shall be deemed
to be modified in a manner consistent with the intent of such original
provision so as to make it valid and enforceable, and this Agreement and the
application of such provision to persons and circumstances other than those
with respect to which it would be invalid or unenforceable shall not be
affected thereby. XXXXX agrees and recognizes that in the event of a breach
or threatened breach of the provisions of the restrictive covenants contained
in Paragraph 7 or in this Xxxxxxxxx 0, XXXXXX may suffer irreparable harm, and
monetary damages may not be an adequate remedy. Therefore, if any breach
occurs or is threatened, in addition to all other remedies available to QUAKER
at law or in equity, QUAKER shall be entitled as a matter of right to specific
performance of the covenants of QUAKER contained herein by way of temporary or
permanent injunctive relief. In the event of any breach of the restrictive
covenant contained in this Paragraph 8, the term of the restrictive covenant
specified herein shall be extended by a period of time equal to that period
beginning on the date such violation commenced and ending when the activities
constituting such violation cease.
9. (a) Definitions. For the purposes of this agreement, the following
definitions shall apply and will be used.
(i) "Act" means the Securities Exchange Act of 1934, as
amended:
(ii) "QUAKER's Common Stock" means shares of Common Stock,
$1.00 par value, of QUAKER;
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(iii) "Termination for Cause" means XXXXX'x employment with
QUAKER shall have been terminated by QUAKER by reason of either:
(1) The willful and continued failure (following
written notice) by XXXXX to execute his duties under this Employment
Agreement; or
(2) The willful engaging by XXXXX in a continued
course of misconduct which is materially injurious to QUAKER, monetarily or
otherwise.
XXXXX shall have been given notice thereof from
QUAKER's Board of Directors and an opportunity (with counsel) to be heard by
said Board of Directors, and the Board of Directors shall have made a
reasonable and good faith finding that XXXXX was guilty of the conduct set
forth in clause (1) or (2) hereof.
(iv) "Termination for Good Reason" means XXXXX'x
employment with QUAKER shall have been terminated by XXXXX by reason of a
material change announced or promulgated by QUAKER in the terms, conditions,
duties, compensation, or benefits of XXXXX'x employment with QUAKER and not
agreed to by XXXXX.
(b) The primary purpose of this Paragraph 9 is to reinforce and
encourage the continued dedication and attention of XXXXX to XXXXX'x assigned
duties under this Employment Agreement without distraction as a result of
circumstances which may arise from the possibility of a change of control or
an attempt to change the control of QUAKER.
(i) Upon the occurrence of a "First Event," QUAKER will
deposit in an escrow account at CoreStates Bank, N.A. (or such other bank as
QUAKER may hereafter designate) (the "Bank") an amount equal to XXXXX'x then
current annual salary for an eighteen (18) month period ("Termination Pay").
A First Event for the purposes of this Agreement shall mean any one of the
following events.
(1) Shares of QUAKER's Common Stock are acquired
(other than directly from QUAKER in exchange for cash or property) by any
person (as used in Sections 13 and 14 of the Act) other than a person who is a
present Officer or Director of QUAKER, who thereby becomes the beneficial
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owner (as defined in Rule 13d-3 under the Act) of more than 10% of the issued
and outstanding shares of QUAKER's Common Stock.
(2) Any person, firm, or corporation (including a
shareholder of QUAKER) makes a tender offer or exchange offer for, or a
request or invitation for tenders or exchanges of shares of QUAKER's Common
Stock.
(ii) If a "Second Event" shall occur and thereafter (but
within three (3) years after date of the occurrence of the First Event)
XXXXX'x employment with QUAKER shall terminate for a reason other than (1)
XXXXX'x death, (2) XXXXX'x normal retirement for age, (3) XXXXX'x physical or
mental disability in accordance with prevailing QUAKER policy, (4) by QUAKER
as a Termination for Cause, or (5) by XXXXX other than as a Termination for
Good Reason, XXXXX may demand that the Bank pay XXXXX the Termination Pay (the
"Demand").
A "Second Event" for the purposes of this Agreement
shall mean any of the following events occurring after a First Event:
(1) A new Director of QUAKER is elected in an
election in which the acquirer of the shares or the offeror or the requester
voted, in person or by proxy, and such new Director was not nominated as a
candidate in a proxy statement forwarded to shareholders by QUAKER's
management prior to the occurrence of the First Event.
(2) More than 20% of the issued and outstanding
shares of QUAKER's Common Stock are owned by one person (as used in Sections
13 and 14 of the Act) other than a person who is a present Officer or Director
of QUAKER.
(3) During any period of two (2) consecutive
calendar years, individuals who at the beginning of such period constitute
QUAKER's Board of Directors cease for any reason to constitute at least a
majority thereafter, unless the election or the nomination for election by
QUAKER's shareholders of each new Director was approved by a vote of at least
two-thirds (2/3) of the Directors then still in office who were Directors at
the beginning of the two (2) year period.
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(iii) After the receipt of the Demand, the Bank will pay
XXXXX the Termination Pay in eighteen (18) equal consecutive monthly
installments, the first such installment to be paid within thirty (30) days
from the date of the demand. XXXXX shall not be required to diminish the
amount of any payment to which he is entitled under this subparagraph (b) by
seeking other employment or otherwise, nor shall the amount of any payment
provided for in this subparagraph (b) be reduced by any compensation earned by
XXXXX as the result of employment by another employer after the date of
termination.
(iv) QUAKER may withdraw the deposited Termination Pay if
three (3) years elapse from the date of deposit thereof and if no demand has
been made. If, prior to the expiration of said three (3) year period, there
shall occur another First Event, QUAKER will not be required to make an
additional deposit of Termination Pay, but the three (3) year period described
herein shall be deemed to commence on the date of the occurrence of the last
such First Event.
(v) QUAKER shall pay the usual and customary charges of
the Bank for acting as escrow agent. QUAKER will be entitled to the payment
of any and all interest and other income earned by the Bank through the
investment of the deposited Termination Pay. Said interest shall be paid to
QUAKER as earned. The escrow arrangement may be subject to the Bank's usual
rules and procedures, and QUAKER will indemnify the Bank against any loss or
liability for any action taken by it in good faith as escrow agent.
10. In the event that QUAKER in its sole discretion and at any time
terminates this Agreement with XXXXX (other than for Termination for Cause),
QUAKER agrees to provide XXXXX with reasonable out-placement assistance and a
severance payment (contingent upon XXXXX executing a form of release
satisfactory to QUAKER) that shall be equal to but not less than twelve (12)
months' salary calculated at XXXXX'x then current rate.
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11. Termination. This Employment Agreement also can be terminated (and
thereby terminate XXXXX'x employment with QUAKER) at any time and without
notice by "Termination for Cause" or "Termination for Good Reason" as defined
in and pursuant to Paragraph 9.
12. XXXXX represents and warrants to QUAKER that:
(a) there are no restrictions, agreements, or understandings
whatsoever to which XXXXX is a party which would prevent or make unlawful his
execution of this Employment Agreement or his employment hereunder; and
(b) his execution of this Employment Agreement and his employment
hereunder shall not constitute a breach of any contract agreement, or
understanding, oral or written, to which he is a party or by which he is
bound.
13. This Employment Agreement contains all the agreements and
understandings between the parties hereto with respect to XXXXX'x employment
by QUAKER and supersedes all prior or contemporaneous agreements with respect
thereto and shall be binding upon and for the benefit of the parties hereto
and their respective personal representatives, successors, and assigns. This
Employment Agreement shall be governed by and construed in accordance with the
laws of the Commonwealth of Pennsylvania without regard to any conflict of
laws.
IN WITNESS WHEREOF, QUAKER has caused this Employment Agreement to be
signed by its President, thereunto duly authorized, and its corporate seal to
be hereunto affixed and attested by its Corporate Secretary, and XXXXX has
hereunto set his hand and seal all as of the day and year first above written.
ATTEST: QUAKER CHEMICAL CORPORATION
(SEAL)
____________________________ By:________________________________
Xxxx X. Xxxxxx Xxxxxx X. Xxxxxx
Corporate Secretary Chairman, President and Chief
Executive Officer
WITNESS:
_____________________________ ____________________________________
Xxxxx X. Xxxxx
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EMPLOYMENT AGREEMENT
EXHIBIT A
Effective: November 17, 1997
Name of Employee: Xxxxx X. Xxxxx
Address: 0000 Xxxxxx Xxxxxx
Xxxxxxxxxxxx, XX 00000
Title: Vice President-Human Resources
Annual Rate of
Salary at
Starting Date: $152,000
Participation in Quaker Incentive Programs
Annual Bonus Plan (1997)
Bonus will be based on achieving certain benchmarks and/or a
discretionary award, as follows:
Threshold level - 10% of midpoint
Target level - 19% of midpoint
Maximum level - 37% of midpoint
Discretionary - 8% of midpoint
Total Bonus Opportunity - 45% of midpoint
For the year 1997 only, the Annual Bonus (payable in early 1998)
will not be less than $30,000.
Long-Term Performance Incentive Plan 1997-2000
Will be full participant in Plan, even though entering one (1) year after the
start, at an appropriate level in relation to other officers. (Awards not yet
designated by Compensation/Management Development Committee of the Board.)
Exhibit 10(r)
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