Exhibit 10(s)
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT, made and entered into as of the 9th day of
March 1998, by and between QUAKER CHEMICAL CORPORATION, a Pennsylvania
corporation (hereinafter referred to as "QUAKER"), and XXXXXX X. XXXXX
(hereinafter referred to as "EXECUTIVE").
W I T N E S S E T H:
WHEREAS, QUAKER wishes to employ EXECUTIVE, and EXECUTIVE 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 EXECUTIVE, and EXECUTIVE agrees to serve as
President and Chief Operating Officer 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. EXECUTIVE 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.
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2. Except as otherwise provided for in Paragraph 11, the term of
EXECUTIVE's employment shall continue until December 31, 1998 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 EXECUTIVE's
employment with QUAKER) except as otherwise provided under Paragraph 11 below.
3. QUAKER shall pay to EXECUTIVE and EXECUTIVE 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. EXECUTIVE shall participate in such QUAKER Incentive Programs as
described and set forth in Exhibit A. The particulars of the Incentive
Programs described in Exhibit A may be amended by the Board of Directors at
any time as to any matter set forth therein (with the exception of the items
covered in Paragraph 5 below) including 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
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programs approved by the Board of Directors. Revisions to Exhibit A shall
become effective upon notification in writing by QUAKER.
5. (a) With respect to QUAKER's Annual Bonus Plan for the 1998 year
only, EXECUTIVE's annual bonus (payable in early 1999) will not be less than
$100,000.
(b) With respect to QUAKER's Long Term Bonus Payment, FY95-FY98,
EXECUTIVE will be paid $75,000 in March, 1999, as long as regular participants
in the plan qualify for at least a 100% award level.
(c) With respect to QUAKER's Long-Term Performance Incentive Plan
(the "Incentive Plan"), for the 1997-2000 performance award period under the
terms and conditions of the Incentive Plan, EXECUTIVE will be granted:
* Stock options - 30,000 to be issued to EXECUTIVE on the first day
of employment -- 14,000 of which shall first become exercisable
on the second anniversary of the first day of employment and the
remaining 16,000 to first become exercisable on the third
anniversary of the first day of employment; in addition, if
EXECUTIVE makes a demand for his Termination Pay (as defined
hereinafter) pursuant to Paragraph 9(b)(ii), any of the
aforementioned 30,000 options not then exercisable shall become
immediately exercisable in accordance with the terms of the
Incentive Plan.
* 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 - 11,000 @ $16.9375 (equal to 100% of
target value).
For the 1999-2002 performance award period, level of EXECUTIVE's participation
will be consistent with his position and the then current program, except that
the amount of options granted shall be reduced by 8,000.
(d) EXECUTIVE 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,
EXECUTIVE will participate in Quaker's Supplemental Retirement Income Program
(SERP) under the plan's standard provisions, except as follows. If EXECUTIVE
leaves Quaker prior to age 60 for any reason, other than for termination of
employment due to performance (as determined in good faith) during the first
two years of employment as specified below, EXECUTIVE's SERP benefit will be
payable at age 65. If EXECUTIVE leaves for any reason after age 60, the SERP
benefit will be payable the first of the month following EXECUTIVE's last day
of active full time employment. If EXECUTIVE leaves during the first two
years of employment due to performance (as determined in good faith),
EXECUTIVE will not be eligible for benefits under the SERP.
(e) QUAKER shall reimburse EXECUTIVE for all reasonable expenses
incurred by EXECUTIVE on behalf of QUAKER in the course of EXECUTIVE's
employment under this Employment Agreement, provided that such expenses shall
have been approved by QUAKER in accordance with such expense reimbursement
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procedures as shall be adopted by QUAKER. In addition, QUAKER shall pay for
EXECUTIVE's country club membership, specifically, initiation fees, regular
dues and business related entertainment expenses.
(f) In addition to the benefits provided under QUAKER's
policy, EXECUTIVE will seek to sell his house at his own expense for 120 days
from the effective date of this Agreement. If EXECUTIVE has not signed an
agreement of sale for his house at the end of such period, QUAKER will buy
EXECUTIVE's house, probably through a third party, at its then appraised
value. EXECUTIVE can either accept the price, as determined by the appraisal
or continue to sell the house himself at his own expense. If QUAKER sells the
house, EXECUTIVE will receive any profit realized in excess of QUAKER's costs.
Further, EXECUTIVE will be eligible for temporary living expenses for 90 days,
as discussed.
6. In the event of the death of EXECUTIVE while this Employment
Agreement is in effect and as to which no notice of termination has been given
by EXECUTIVE 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 EXECUTIVE in writing, and, in the event he
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fails to so designate to whom payments shall be made, payments shall be made
to EXECUTIVE's personal representatives.
7. EXECUTIVE 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,
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). EXECUTIVE 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
EXECUTIVE's employment with QUAKER, or at any other time upon QUAKER's
request, EXECUTIVE 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 EXECUTIVE, required
by law to be disclosed, or which can be clearly shown to have been known by
EXECUTIVE prior to the commencement of his employment with QUAKER.
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8. EXECUTIVE agrees that during his employment and for a period of one
(1) year thereafter, regardless of the reason for the termination of
EXECUTIVE'S employment hereunder, he will not:
(a) directly or indirectly, together or separately or with any
third party, whether as an individual proprietor, partner, stockholder (unless
such holdings are less than 5% of the outstanding equity securities of a
publicly traded company), 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
(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.
EXECUTIVE 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
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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. EXECUTIVE 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 Paragraph 9, 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;
(iii) "Termination for Cause" means EXECUTIVE's employment
with QUAKER shall have been terminated by QUAKER by reason of either:
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(1) The willful and continued failure (following written
notice) by EXECUTIVE to execute his duties under this Employment Agreement; or
(2) The willful engaging by EXECUTIVE in a continued
course of misconduct which is materially injurious to QUAKER, monetarily or
otherwise.
EXECUTIVE 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 EXECUTIVE was guilty of the conduct set
forth in clause (1) or (2) hereof.
(iv) "Termination for Good Reason" means EXECUTIVE's employment
with QUAKER shall have been terminated by EXECUTIVE by reason of a material
change announced or promulgated by QUAKER in the terms, conditions, duties,
compensation, or benefits of EXECUTIVE's employment with QUAKER and not agreed
to by EXECUTIVE.
(b) The primary purpose of this Paragraph 9 is to reinforce and
encourage the continued dedication and attention of EXECUTIVE to EXECUTIVE's
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 EXECUTIVE's
then current annual salary for a twenty four (24) month period ("Termination
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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 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) EXECUTIVE's
employment with QUAKER shall terminate for a reason other than (1) EXECUTIVE's
death, (2) EXECUTIVE's normal retirement for age, (3) EXECUTIVE's physical or
mental disability in accordance with prevailing QUAKER policy, (4) by QUAKER
as a Termination for Cause, or (5) by EXECUTIVE other than as a Termination
for Good Reason, EXECUTIVE may demand that the Bank pay EXECUTIVE 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
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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.
(iii) After the receipt of the Demand, the Bank will pay
EXECUTIVE the Termination Pay in twenty four (24) equal consecutive monthly
installments, the first such installment to be paid within thirty (30) days
from the date of the demand. EXECUTIVE 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
EXECUTIVE 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
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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 EXECUTIVE (other than for Termination for
Cause, death, disability, or normal retirement age), QUAKER agrees to provide
EXECUTIVE with reasonable out-placement assistance and a severance payment
(contingent upon EXECUTIVE executing a form of release satisfactory to QUAKER)
that shall be equal to but not less than twelve (12) months' salary calculated
at EXECUTIVE's then current rate.
11. Termination. This Employment Agreement also can be terminated (and
thereby terminate EXECUTIVE's employment with QUAKER) at any time and without
notice by "Termination for Cause" as defined in Paragraph 9 (a) (iii).
12. EXECUTIVE represents and warrants to QUAKER that:
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(a) there are no restrictions, agreements, or understandings
whatsoever to which EXECUTIVE 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 EXECUTIVE's
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 Chairman of the Board, thereunto duly authorized, and its
corporate seal to be hereunto affixed and attested by its Corporate Secretary,
and EXECUTIVE 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:
_____________________________ ____________________________________
Xxxxxx X. Xxxxx
Exhibit 10(s)
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EMPLOYMENT AGREEMENT
EXHIBIT A
Effective: March 9, 1998
Name of Employee: Xxxxxx X. Xxxxx
Address: 0000 Xxx Xxxxxxxxx
Xxxxxxxxxx, XX 00000
Title: President and Chief Operating Officer
Annual Rate of
Salary at
Starting Date: $250,000
Participation in Quaker Incentive Programs
Annual Bonus Plan (1998)
Bonus will be based on achieving certain benchmarks, as follows:
Threshold level -15% of midpoint
Target level -30% of midpoint
Maximum level -60% of midpoint
For the year 1998 only, the Annual Bonus (payable in early 1999)
will not be less than $100,000.
Long-Term Bonus Payment, FY95-FY98
You will be paid $75,000 in March, 1999, as long as regular participants
in the plan qualify for at least a 100% award level.
Long-Term Performance Incentive Plan, 1997-2000
* Stock options - 30,000 to be issued to EXECUTIVE on the first day
of employment -- 14,000 of which shall first become exercisable
on the second anniversary of the first day of employment and the
remaining 16,000 to first become exercisable on the third
anniversary of the first day of employment; in addition, if
EXECUTIVE makes a demand for his Termination Pay (as defined
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hereinafter) pursuant to Paragraph 9(b)(ii), any of the
aforementioned 30,000 options not then exercisable shall become
immediately exercisable in accordance with the terms of the
Incentive Plan.
* Type of stock option offered - non-qualified stock options.
* Option price per share - closing price on first day of employment.
* Performance incentive units - 11,000 @ $16.9375 (equal to 100% of
target value).
For the 1999-2002 performance award period, will participate at an
appropriate level in relation to other officers, except that the
amount of options granted shall be reduced by 8,000.
Exhibit 10(s)
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