CHANGE IN CONTROL AGREEMENT


 


                THIS
AGREEMENT, dated              November 30, 2015             between
QUAKER CHEMICAL CORPORATION, a Pennsylvania corporation (the “Company”), and
Mary Dean Hall (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:


 


1.                 
Term of Agreement. 


                This
Agreement shall become effective on November 30, 2015 (the “Effective
Date”), and shall continue in effect through December 31, 2016, provided,
however, that the term of this Agreement shall automatically be extended for
successive one-year periods thereafter, unless, not later than eighteen (18)
months preceding the calendar year for 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 for 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.


 


2.                 
Change in Control. 


                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 



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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


(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 has a Separation from Service under the circumstances described in (a)
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
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).


                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 (as defined below), or (ii)
by the Company or its affiliates for Cause.  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.


 


“Disability”
shall mean covered total and permanent disability as defined in the long-term
disability plan maintained by the Company for employees generally or, if the
Company does not maintain such a plan, the long-term disability plan most
recently maintained by the Company for employees generally.


 


“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 the 60th day after the Manager’s Separation from Service,
subject to Section 9.


 


                “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 



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termination thereof (other than claims for any
entitlements under the terms of this Agreement, under any employment agreement
between the Manager and the Company, 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 three days after the date of the Manager’s
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 the Release within 45 days of the later of the date he
receives the Release or the date of his Covered Termination, and the Manager
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 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.                 
Severance Allowance. 


(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 (one and one-half) 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 in the Applicable Three-Year
Period 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, restricted stock
or performance incentive units or the sale or other disposition of shares
received upon exercise or settlement of such awards); provided, however, that
(x) in determining the average amount paid under the annual incentive plan
during the Applicable Three-Year 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.  The Applicable Three-Year Period shall be (A) if the
Manager has received an annual incentive compensation plan payment in the
calendar year of his Covered Termination, the calendar year in which such
Covered Termination occurs and the two preceding calendar years, or (B) in any
other case, the three calendar years preceding the calendar year in which the
Manager’s Covered Termination occurs; provided, however, that the Applicable
Three-Year Period shall be determined by substituting “Change In Control” for “Covered
Termination” if such substitution results in a higher amount under this
subsection (ii).    


 


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 the applicable Change in Control
is also a change in control event as defined in Treas. Reg. §1.409A-3(i)(5) (or
any successor thereto).  In any other case, the Severance Allowance shall be
paid in eighteen monthly installments commencing on the Payment Date, each of
which is equal to one eighteenth (1/18th) of the amount of the Severance
Allowance determined under Section 4(a), which are treated as a right to a
series of separate payments for purposes of Section 409A of the Code.


5.                 
Outplacement and Welfare Benefits. 


(a)               
Outplacement.  Subject to Section 6, for a period of one year
following a Covered Termination of the Manager, 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.


(b)              
Welfare Benefits.  Subject to Section 6, for a period eighteen months
following a Covered Termination of the Manager, the Manager and the Manager’s
dependents shall be entitled to participate in the Company’s life, medical, and
dental insurance plans at the Company’s expense, in accordance with the terms
of such plans at the time of such Covered Termination as if the Manager were
still employed by the Company or its affiliates under this Agreement.  If,
however, life, medical, or dental insurance 



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benefits
are not paid or provided under any such plan to the Manager or his dependents
because the Manager is no longer an employee of the Company or its
subsidiaries, the Company itself shall, to the extent necessary, pay or
otherwise provide for such benefits to the Manager and his dependents.


 


6.                 
Effect of Other Employment. 


                In the event the Manager becomes employed (as defined
below) during the period with respect to which benefits are continuing pursuant
to Section 5:  (a) the Manager shall notify the Company not later than the day
such employment commences; and (b) the benefits provided for in Section 5 shall
terminate as of the date of such employment.  For the purposes of this Section
6, the Manager shall be deemed to have become “employed” by another entity or
person only if the Manager becomes essentially a full-time employee of a person
or an entity (not more than 30% of which is owned by the Manager and/or members
of his family); and the Manager’s “family” shall mean his parents, his siblings
and their spouses, his children and their spouses, and the Manager’s spouse and
her parents and siblings.  Nothing herein shall relieve the Company of its
obligations for compensation or benefits accrued up to the time of termination
provided for herein.


 


7.                 
Other Payments and Benefits.   


                On the Payment
Date, the Company shall pay or cause to be paid to the Manager the aggregate
of:  (a) the Manager’s earned but unpaid base salary through the Covered
Termination at the rate in effect on the date of the Covered Termination, or if
higher, at the rate in effect at any time during the 90-day period preceding
the Change in Control; (b) any unpaid bonus or annual incentive payable to the
Manager in respect of the calendar year ending prior to the Covered
Termination; (c) the pro rata portion of any and all unpaid bonuses and annual
incentive awards for the calendar year in which the Covered Termination occurs,
said pro rata portion to be calculated on the fractional portion (the numerator
of said fraction being the number of days between January 1 and the date of the
Covered Termination, and the denominator of which is 365) of the target bonuses
or annual incentive awards for such calendar year; and (d) the pro rata portion
of any and all awards under the Company’s long term incentive plan for the
performance period(s) in which the Covered Termination occurs, said pro rata
portion to be calculated on the fractional portion (the numerator of said
fraction being the number of days between the first day of the applicable
performance period and the date of the Covered Termination, and the denominator
of which is the total number of days in the applicable performance period) of
the amount of the award which would have been payable had (i) the Covered
Termination not occurred, and (ii) the target level of performance been
achieved for the applicable performance period.  The Manager shall be entitled
to receive any other payments or benefits that the Manager is entitled to
pursuant to the express terms of any compensation or benefit plan or
arrangement of the Company or any of its affiliates; provided that: (x) the
Severance Allowance (i) shall be in lieu of any severance payments to which the
Manager might otherwise be entitled under the terms of any severance pay plan,
policy, or arrangement maintained by the Company or the employment agreement,
if any, between the Manager and the Company, and (ii) shall be credited against
any severance payments to which the Manager may be entitled by statute; (y) any
annual incentive described in subsection (b) or (c) shall decrease (or shall be
decreased by), but not below zero, the amount of the annual incentive payable
(or paid) with respect to the same calendar year under the Company’s annual
incentive plan (currently the 2001 Global Annual Incentive Plan); and (z) any
amount described in subsection (d) shall decrease (or shall be decreased by),
but not below zero, the amount of the analogous performance award payable (or
paid) with respect to the same performance period(s) under the Company’s long
term incentive plan(s) (currently the 2011 Long-Term Performance Incentive
Plan).  


 


8.                 
Death After Covered Termination. 


                In the
event the Manager dies after a Covered Termination occurs, (a) any payments due
to the Manager under Section 4 and the first sentence of Section 7 and not paid
prior to the Manager’s death shall be made to the person or persons who may be
designated by the Manager in writing or, in the event he fails to so designate,
to the Manager’s personal representatives, and (b) the Manager’s spouse and
dependents shall be eligible for the welfare benefits described in Section
5(b).  Payments pursuant to subsection (a) shall be made on the later of (i)
the date payment would have been made to the Manager without regard to Section
9, or (ii) the date of the Manager’s death.


 


9.                 
Certain Section 409A Rules.  


(a)               
Specified Employee.  Notwithstanding any provision of this Agreement to
the contrary, if the Manager is a Specified Employee, any payment or benefit
under this Agreement that constitutes deferred compensation subject to Section
409A of the Code and for which the payment event is Separation from Service
shall not be made or provided before the date that is six months after the date
of the Manager’s Separation from Service.  Any payment or benefit that is
delayed pursuant to this Section 9 shall be made or provided on the first
business day of the seventh month following the month in which the Manager’s
Separation from Service occurs.  With respect to any cash payment delayed
pursuant to this Section 9, the first payment shall include interest, at the
Wall Street Journal Prime Rate published in the Wall Street Journal on the date
of the Manager’s Covered Termination (or the previous business day if such date
is not a business day), for the period from the date the payment would have
been made but for this Section 9 through the 



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date
payment is made.  The provisions of this Section 9 shall apply only to the
extent required to avoid the Manager’s incurrence of any additional tax or
interest under Section 409A of the Code.


(b)              
Reimbursement and In-Kind Benefits.  Notwithstanding any provision of this Agreement to
the contrary, with respect to in-kind benefits provided or expenses eligible
for reimbursement under this Agreement which are subject to Section 409A of the
Code, (i) the benefits provided or the amount of expenses eligible for
reimbursement during any calendar year shall not affect the benefits provided
or expenses eligible for reimbursement in any other calendar year, except as
otherwise provided in Treas. Reg. §1.409A-3(i)(1)(iv)(B), and (ii) the
reimbursement of an eligible expense shall be made as soon as practicable after
the Manager requests such reimbursement (subject to Section 9(a)), but not
later than the December 31 following the calendar year in which the expense was
incurred.


(c)               
Interpretation and Construction.  This Agreement is intended to comply with Section
409A of the Code and shall be administered, interpreted and construed in
accordance therewith to avoid the imposition of additional tax under Section
409A of the Code.


 


10.             
Confidentiality and Noncompetition. 


(a)               
Confidential Information. The Manager acknowledges that information concerning
the method and conduct of the Company’s (and any affiliate’s) 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 the Company’s
(and any affiliate’s) manuals, documents, notes, letters, records, and computer
programs (“Proprietary Business Information”), are the sole and exclusive
property of the Company (and/or the Company’s affiliates, as the case may be)
and are likely to constitute, contain or reveal trade secrets (“Trade Secrets”)
of the Company (and/or the Company’s affiliate’s, as the case may be).  The
term “Trade Secrets” as used herein does not include Proprietary Business
Information that is known or becomes known to the public through no act or
failure to act on the part of the Manager, or which can be clearly shown by
written records to have been known by the Manager prior to the commencement of
his employment with the Company.


(i)                
The Manager agrees that at no time during
or following his employment with the Company will he use, divulge, or pass on,
directly or through any other individual or entity, any Trade Secrets.  


(ii)              
Upon termination of the Manager’s
employment with the Company regardless of the reason for the termination of the
Manager’s employment hereunder, or at any other time upon the Company’s
request, the Manager agrees to forthwith surrender to the Company any and all
materials in his possession or control which constitute or contain any
Proprietary Business Information.


(b)              
Noncompetition.  The Manager agrees that during his employment and
for a period of one (1) year thereafter, regardless of the reason for the
termination of the Manager’s employment, he will not:


(i)                
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 the
Company (or any of its affiliates);


(ii)              
directly or indirectly recruit, solicit
or encourage any employee of the Company (or any of its affiliates) or
otherwise induce such employee to leave the employ of the Company (or any of
its affiliates) 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; or


(iii)            
solicit, directly or indirectly, for
himself or as agent or employee of any person, partnership, corporation, or
other entity (other than for the Company), any then or former customer,
supplier, or client of the Company with the intent of actively engaging in
business which would cause competitive harm to the Company (or any of its
affiliates).


(c)               
Severability.  The Manager 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 



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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.


(d)              
Remedies.  The Manager agrees and recognizes that in the event
of a breach or threatened breach of the provisions of the restrictive covenants
contained in this Section 10, the Company may suffer irreparable harm, and
monetary damages may not be an adequate remedy.  Therefore, if any breach
occurs or is threatened, the Company shall be entitled to seek equitable
remedies, including injunctive relief in any court of applicable jurisdiction
notwithstanding the provisions of Section 12.  In the event of any breach of
the restrictive covenant contained in this Section 10, 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.  Furthermore, if a court
or arbitration panel determines that the Manager has breached any of the
provisions of this Section 10, the Company’s obligations to pay amounts and
continue the benefits under this Agreement to the Manager (and his dependents)
shall immediately terminate.


11.             
Set-Off Mitigation. 


                Except as
provided in Section 6, the Company’s obligation to make the payments provided
for in this Agreement and otherwise to perform its obligations hereunder shall
not be affected by any set-off, counterclaim, recoupment, defense, or other
claim, right, or action which the Company may have against the Manager or
others.  In no event shall the Manager be obligated to seek other employment or
take any other action by way of mitigation of the amounts payable to the
Manager under any of the provisions of this Agreement.


 


12.             
Arbitration:  Costs and Expenses
of Enforcement. 


(a)               
Arbitration.  Except as otherwise provided in Sections 10(d) and
13, any controversy or claim arising out of or relating to this Agreement or
the breach thereof which cannot promptly be resolved by the parties shall be
promptly submitted to and settled exclusively by arbitration in the City of
Philadelphia, Pennsylvania, in accordance with the laws of the Commonwealth of
Pennsylvania by three arbitrators, one of whom shall be appointed by the
Company, one by the Manager, and the third of whom shall be appointed by the
first two arbitrators.  The arbitration shall be conducted in accordance with
the rules of the American Arbitration Association, except with respect to the
selection of arbitrators which shall be as provided in this Section 12. 
Judgment upon the award rendered by the arbitrators may be entered in any court
having jurisdiction thereof.


(b)              
Costs and Expenses.  In the event that it shall be necessary or
desirable for the Manager to retain legal counsel and/or incur other costs and
expenses in connection with the enforcement of any and all of his rights under
this Agreement at any time during his lifetime, the Company shall pay (or the
Manager shall be entitled to recover from the Company, as the case may be) his
reasonable attorneys’ fees and costs and expenses in connection with the
enforcement of his said rights (including those incurred in or related to any
arbitration proceedings provided for in subsection (a) and the enforcement of
any arbitration award in court), regardless of the final outcome. 


13.             
Limitation on Payment Obligation. 


(a)               
Definitions.  For purposes of this Section 13, all terms
capitalized but not otherwise defined herein shall have the meanings as set
forth in Section 280G of the Code.  In addition:


(i)                
the term “Parachute Payment” shall mean a
payment described in Section 280G(b)(2)(A) or Section 280G(b)(2)(B) of the Code
(including, but not limited to, any stock option rights, stock grants, and
other cash and noncash compensation amounts that are treated as payments under
either such section) and not excluded under Section 280G(b)(4)(A) or Section
280G(b)(6) of the Code;


(ii)              
the term “Reasonable Compensation” shall
mean reasonable compensation for prior personal services as defined in Section
280G(b)(4)(B) of the Code and subject to the requirement that any such
reasonable compensation must be established by clear and convincing evidence;
and


(iii)            
the portion of the “Base Amount” and the
amount of “Reasonable Compensation” allocable to any “Parachute Payment” shall
be determined in accordance with Section 280G(b)(3) and (4) of the Code.


(b)              
Limitation.  Notwithstanding any other provision of this
Agreement, Parachute Payments to be made to or for the benefit of the Manager
but for this subsection (b), whether pursuant to this Agreement or otherwise,
shall be reduced if and to the 



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extent necessary so that
the aggregate Present Value of all such Parachute Payments shall be at least
one dollar ($1.00) less than the greater of (i) three times the Manager’s Base
Amount and (ii) the aggregate Reasonable Compensation allocable to such
Parachute Payments.  Any reduction in Parachute Payments caused by reason of
this subsection (b) shall be applied in the manner least economically
detrimental to the Manager.  In the event reduction of two or more types of
payments would be economically equivalent, the reduction shall be applied
pro-rata to such types of payments.


                This subsection
(b) shall be interpreted and applied to limit the amounts otherwise payable to
the Manager under this Agreement or otherwise only to the extent required to
avoid any material risk of the imposition of excise taxes on the Manager under
Section 4999 of the Code or the disallowance of a deduction to the Company
under Section 280G(a) of the Code.  In the making of any such interpretation
and application, the Manager shall be presumed to be a disqualified individual
for purposes of applying the limitations set forth in this subsection (b)
without regard to whether or not the Manager meets the definition of
disqualified individual set forth in Section 280G(c) of the Code.  In the event
that the Manager and the Company are unable to agree as to the application of
this subsection (b), the Company’s independent auditors shall select
independent tax counsel to determine the amount of such limits.  Such selection
of tax counsel shall be subject to the Manager’s consent, provided that the
Manager shall not unreasonably withhold his consent.  The determination of such
tax counsel under this Section 13 shall be final and binding upon the Manager
and the Company.


 


(c)               
Illegal Payments.  Notwithstanding any other provision of this
Agreement, no payment shall be made hereunder to or for the benefit of the
Manager if and to the extent that such payments are determined to be illegal.


14.             
Notices. 


                Any
notices, requests, demands, and other communications provided for by this
Agreement shall be sufficient if in writing, and if hand delivered or if sent
by registered or certified mail, if to the Manager, at the last address he had
filed in writing with the Company or if to the Company, at its principal
executive offices.  Notices, requests, etc. shall be effective when actually received
by the addressee or at such address.


 


15.             
Withholding. 


                Notwithstanding
any provision of this Agreement to the contrary, the Company may, to the extent
required by law, withhold applicable Federal, state and local income and other
taxes from any payments due to the Manager hereunder.


 


16.             
Assignment and Benefit. 


(a)               
This Agreement is personal to the Manager
and shall not be assignable by the Manager, by operation of law, or otherwise
without the prior written consent of the Company otherwise than by will or the laws
of descent and distribution.  This Agreement shall inure to the benefit of and
be enforceable by the Manager’s heirs and legal representatives.


(b)              
This Agreement shall inure to the benefit
of and be binding upon the Company and its successors and assigns, including,
without limitation, any subsidiary of the Company to which the Company may
assign any of its rights hereunder; provided, however, that no assignment of
this Agreement by the Company, by operation of law, or otherwise shall relieve
it of its obligations hereunder except an assignment of this Agreement to, and
its assumption by, a successor pursuant to subsection (c).


(c)               
The Company shall require any successor
(whether direct or indirect, by purchase, merger, consolidation, operation of
law, or otherwise) to all or substantially all of the business and/or assets of
the Company to assume expressly and agree to perform this Agreement in the same
manner and to the same extent that the Company would be required to perform it
if no such succession had taken place, but, irrespective of any such assignment
or assumption, this Agreement shall inure to the benefit of and be binding upon
such a successor.  As used in this Agreement, “Company” shall mean the Company
as hereinbefore defined and any successor to its business and/or assets as
aforesaid.


17.             
Governing Law. 


                The
provisions of this Agreement shall be construed in accordance with the laws of
the Commonwealth of Pennsylvania without reference to principles of conflicts
of laws.


 


18.             
Entire Agreement; Amendment. 


(a)               
Except for the change in control
provisions set forth in the Company’s annual incentive plan and long term
incentive plans, this Agreement represents the entire agreement and
understanding of the parties with respect to the subject matter hereof.  The Manager
understands and acknowledges that the Company’s severance plan, annual
incentive plan and long term incentive plans are hereby amended with respect to
the Manager to avoid duplication of benefits, as provided in Section 7.





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(b)              
The Company reserves the right to
unilaterally amend this Agreement without the consent of the Manager to the
extent the Compensation/Management Development Committee of the Company’s Board
of Directors (in its sole discretion) determines is necessary or appropriate to
avoid the additional tax under Section 409A(a)(1)(B) of the Code; otherwise,
this Agreement may not be altered or amended except by an agreement in writing
executed by the Company and the Manager.


19.             
No Waiver. 


                The failure
to insist upon strict compliance with any provision of this Agreement by any
party shall not be deemed to be a waiver of any future noncompliance with such
provision or of noncompliance with any other provision.


 


20.             
Severability. 


                In the
event that any provision or portion of this Agreement shall be determined to be
invalid or unenforceable for any reason, the remaining provisions of this
Agreement shall be unaffected thereby and shall remain in full force and
effect.


 


21.             
Indemnification.   


                The Company shall defend and hold the Manager harmless
to the fullest extent permitted by applicable law in connection with any claim,
action, suit, investigation or proceeding arising out of or relating to
performance by the Manager of services for, or action of the Manager as a
director, officer or employee of the Company or any parent, subsidiary or
affiliate of the Company, or of any other person or enterprise at the Company’s
request.  Expenses incurred by the Manager in defending such a claim, action,
suit or investigation or criminal proceeding shall be paid by the Company in
advance of the final disposition thereof upon the receipt by the Company of an
undertaking by or on behalf of the Manager to repay said amount unless it shall
ultimately be determined that the Manager is entitled to be indemnified
hereunder; provided, however, that this shall not apply to a nonderivative
action commenced by the Company against the Manager.


 


                IN WITNESS WHEREOF, the Manager has hereunto set his
hand and, pursuant to the authorization from its Board of Directors, the
Company has caused these presents to be executed in its name and on its behalf
and attested by its Secretary or Assistant Secretary, all as of the day and
year first above written.


 


                                                                                                MANAGER


 


                                                                                                /s/
Mary Dean Hall                                                                             


 


                                                                                                QUAKER
CHEMICAL CORPORATION


 


                                                                                                By:         /s/
Michael F. Barry                                            


 


                                                                                                Title:       Chairman,
CEO & President                             


ATTEST:


 


/s/ Robert T. Traub                                              


 


 







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