Document:

Exhibit
10.5

 

CONFIDENTIAL

 

AMENDMENT
TO

EXECUTIVE CHANGE IN CONTROL AGREEMENT

 

On
January 27, 2003, Michael R.
Imbriani was appointed Executive Vice President of PQ Corporation and President
— Chemical Groups. On August 15, 2000, an Executive Change in Control Agreement
(“the Agreement”) was executed by and between PQ Corporation and its
wholly-owned subsidiary, Potters Industries Inc., (collectively the “Employer”)
and Michael Imbriani (the “Employee”).

 

In
order to account for this appointment, the second paragraph on the first page
of the August 15, 2000 Agreement is deleted in its entirety and replaced with
the following:

 

The
Board of Directors of PQ Corporation (the “Board”) has determined that it is in
the best interests of Employer and its shareholders to assure that Employer and
its subsidiaries will have the continued dedication of Employee in his capacity
as Executive Vice President of PQ Corporation and President — Chemical Groups,
notwithstanding the possibility, threat or occurrence of a Change in Control of
Employer. The Board believes it is imperative to diminish the inevitable
distraction of Employee by virtue of the personal uncertainties and risks
created by a pending or threatened Change in Control, to encourage Employee’s
full attention and dedication to Employer currently and in the event of any
threatened or pending Change in Control, and to provide Employee with
compensation arrangements upon a Change in Control that offer Employee
individual financial security competitive with those of other corporations. In
order to accomplish these objectives, the Board has caused Employer to enter
into this Agreement.

 

All
other terms and conditions of this Agreement will remain in full force and
effect.

 

IN
WITNESS WHEREOF, Employee has hereunto set his hand, and pursuant to the
authorization from its Board of Directors, Employer has caused these presents
to be executed in its name and on its behalf, all as of the 12th
day of May, 2003.

 

	
   

  	
  /s/
  Michael R. Imbriani

  
	
   

  	
  Michael
  R. Imbriani

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Date:

  	
  Sept 9, 2004

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  PQ CORPORATION

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ William E Fruhan

  	
   

  
	
   

  	
   

  	
  William
  E Fruhan, Jr.

  Chairman, Board of Directors

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Date:

  	
  May 12, 2003

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  Attest:

  	
  /s/ [ILLEGIBLE]

  	
   

  	
   

  
	
   

  	
  SecretaryExhibit 10.6

 

	
  

  	
  The PQ Corporation

  	
  Corporate Headquarters

  P.O. Box 840

  
	
   

  	
   

  	
  Valley Forge, PA 19482-0840

  (610) 651-4200

  

 

November 18,
2004

 

Mr.
Erwin Goede

J.
van Woensel Kooylaan 38

1411
JZ Naarden

The
Netherlands

 

Dear
Erwin:

 

Thank
you for your patience until the Total Compensation Review, regarding the new
role you have undertaken, was able to be completed.

 

The
Compensation Committee of the PQ Board reviewed with us the recommended
elements for your compensation. I am pleased to confirm them to you as described
below:

 

Base Salary -
Effective August 1, 2004, your new base rate will be 235,829 Euros. This
10% adjustment is retroactive and accounts for both your scheduled merit
adjustment, plus adjustment for the new role and accompanying responsibility.
Your next salary review will be scheduled for August 1 , 2005 and as
always will continue to be based on job performance. The midpoint for the new
role, as validated by survey data from both ORC (Organization Research
Consultants) and Mercer is 229,900 Euros.

 

For
your information, Mercer is the compensation consulting firm used by PQ and the
Board to review executive compensation for the Top 5 paid executive group.

 

Your
position midpoint and total compensation targeted levels will be placed on the
same bi-annual review schedule as the Top 5, with the next review targeted
for the fourth quarter of 2006 barring any significant changes to the current
role.

 

Your
Short Term Bonus Incentive (ARC) target for the 2005 plan year is 94,332 Euros,
which equates to 40% of your new base pay level. As the program provides,
actual bonus payout will be subject to the Company Performance Metrics and
approval process currently associated with the ARC Plan.

 

You
will continue to participate in the PQ Corporation 2002 Stock Option and Stock
Award Plan and will receive confirmation of 2005 grants as approved by the
Board and as provided by the Plan.

 

 

Erwin,
the above confirms the details of your compensation changes. Under separate
letter, I will authorize Paul Notermans to initiate the base pay change and
update the records as to your mid midpoint. Should you have any questions
please let me know.

 

Regards,

 

	
  /s/ Michael Imbriani

  	
   

  
	
  Michael Imbriani

  
	
  Executive Vice
  President & President

  
	
  Chemical Groups

  
	
   

  
	
   

  
	
  c:

  	
  J.
  Sheridan 

  
	
   

  	
  K.
  Doran

  
			

 

2Exhibit
10.7

 

TAX
SHARING AGREEMENT

 

THIS TAX
SHARING AGREEMENT (“Agreement”) is made this 11th day of February 2005 and
shall be effective as of the Effective Time (as defined below), by and between
Niagara Holdings, Inc., a Delaware corporation (“Holdings”) and PQ Corporation,
a Pennsylvania corporation (“PQ”).

 

WHEREAS, PQ,
Holdings and Niagara Acquisition, Inc., a Delaware corporation and a
wholly-owned subsidiary of Holdings (“Acquisition Sub”) are parties to that
certain Agreement and Plan of Merger dated as of December 15, 2004 (the “Merger
Agreement”), pursuant to which Acquisition Sub will be merged with and into PQ,
with PQ remaining as the surviving corporation (“Merger”);

 

WHEREAS, at
the Effective Time, PQ will be a wholly-owned subsidiary of Holdings;

 

WHEREAS, at
the Effective Time, Holdings and PQ will be members of an affiliated group of
corporations within the meaning of Section 1504(a) of the Internal Revenue
Code of 1986, as amended (the “Code”), of which Holdings will be the common
parent corporation (the “PQ Group”); and

 

WHEREAS,
Holdings and PQ desire to provide for the sharing and allocation of taxes in
accordance with this Agreement.

 

WHEREAS, PQ,
if it were not a subsidiary of Holdings and member of the PQ Group, would be
the common parent of an affiliated group of corporations within the meaning of Section 1504(a)
of the Code (such affiliated group of corporations and any other corporations
which may become members of such group) being the “Subsidiary Consolidated
Group”).

 

NOW, THEREFORE,
in consideration of the mutual covenants contained herein, the parties hereto
agree as follows:

 

1.                                       Filing
of Returns.

 

PQ, on behalf
of itself and each of its domestic subsidiaries, consents to the filing by
Holdings of consolidated federal income tax returns for all taxable periods in
which it is eligible to be a member of the PQ Group. Holdings agrees to file
such consents, elections, tax returns and other documents, and to take such
other actions as may be necessary or appropriate to file a consolidated federal
income tax return for each taxable period for which the PQ Group is required or
permitted to file a consolidated federal income tax return.  Any taxable period ending after the date of
this Agreement for which PQ is included in a consolidated federal income tax
return filed by the PQ Group is referred to herein as a “Consolidated Return
Year.”

 

 

2.                                       Sharing
and Settlement of U.S. Federal Consolidated Income Taxes.

 

For all
relevant taxable periods, PQ shall pay to Holdings the amount of federal income
tax liability (including, if applicable, alternative minimum tax liability) it
would have had on such due date if it had filed a separate consolidated federal
income tax return for the Subsidiary Consolidated Group for all Consolidated
Return Years (the “Group Liability”).

 

3.                                       State,
Local or Foreign Income Taxes.

 

In the event
Holdings files combined, unitary or consolidated state, local or foreign income
or franchise tax returns with PQ and any of its domestic subsidiaries, the
provisions of Sections 1 and 2 hereof shall be applicable as if such combined,
unitary or consolidated income tax returns filed were consolidated federal
income tax returns.

 

4.                                       Franchise
Taxes.

 

For all
relevant taxable periods, PQ shall pay to Holdings the amount of any franchise
taxes for such periods incurred by Holdings in excess of the amount described
in Section 3.

 

5.                                       No
Other Tax Sharing Obligations.

 

No tax sharing
obligations between the parties to this Agreement shall arise out of any taxes
other than those taxes referred to in Sections 2, 3 and 4 hereof.

 

6.                                   Subsequent
Return Adjustments

 

In applying
the calculation referenced in Section 2 above, the appropriate frame of
reference shall be all tax years in which a consolidated tax return was or is
filed by Holdings on behalf of the PQ Group wherein PQ was a member.

 

In the event a
consolidated federal income tax return or any combined, unitary or consolidated
state, local or foreign income or franchise tax return is amended or adjusted
(whether by reason of the filing of an amended return, a claim for refund, or
otherwise), the tax liabilities and benefits of Holdings and PQ will be
redetermined, adjusted and settled on a basis consistent with the above
provisions.

 

In the event
the federal consolidated tax liability or any combined, unitary or consolidated
state, local or foreign income or franchise tax liability is redetermined or
adjusted pursuant to an audit or challenge by a taxing authority, or if a
voluntary tax payment is made to limit the accrual of interest on audit issues,
the liability of Holdings and PQ will be redetermined by Holdings in its sole
discretion, exercised in good faith. Payments reflecting such redeterminations
or adjustments shall be made when (a) a settlement (evidenced in writing or by
the payment of taxes) is entered into with the taxing authority, (b) a decision
of a court having jurisdiction in the matter becomes final and is not subject
to appeal, or (c) Holdings makes a voluntary tax payment with respect to a
consolidated federal income tax return or any combined, unitary or consolidated
state, local or foreign income or franchise tax return.

 

2

 

7.                                       Penalties
and Interest.

 

If penalties
or interest are imposed by the taxing authorities, or if a voluntary interest
payment is made, such payment will be allocated to and made by each responsible
corporation.  If any interest from the
taxing authorities is received by any corporation included in the consolidated
returns of the PQ Group, such interest shall be allocated by Holdings in its
sole discretion, exercised in good faith, and refunded to the attributable
corporation.

 

8.                                       Billing.

 

All cash
settlements of cash liabilities shall take place between Holdings and PQ at
least two (2) days prior to the date the related taxes are payable, whether for
estimated taxes or otherwise, and upon execution of this Agreement for taxes
due prior to the date of this Agreement (“Execution Payment”).  Late payments (if any) shall bear an annual
rate of interest equal to the statutory rate of interest for the underpayment
of taxes then in effect from the date such payments are due.

 

9.                                       Procedural
Matters.

 

So long as any
party to this Agreement remains part of the PQ Group for federal income tax
purposes, Holdings will prepare and file the consolidated returns, along with
any other documents or statements that are required to be filed with the taxing
authorities for U.S. federal income tax purposes related to consolidated
returns. The parties hereto acknowledge that, with respect to consolidated tax
returns which they have filed or will file, Holdings has the right, in its sole
discretion, to:

 

(a)                                  determine:

 

(i)                                     the
manner in which such returns, documents or statements are prepared and filed
including, without limitation, the manner in which any item of income gain,
loss, deduction or credit shall be reported;

 

(ii)                                   the
manner in which the consolidated tax liability will be allocated for the
purpose of determining the taxable earnings and profits of each corporation;

 

(iii)                                whether
any extensions may be requested; and

 

(iv)                               the
elections that are made by any corporation included in the PQ Group’s
consolidated returns;

 

(b)                                 contest,
compromise or settle any adjustment or deficiency proposed, asserted or assessed
as a result of any audit of such returns by the taxing authorities;

 

(c)                                  file,
prosecute, compromise or settle any claim for refund; and

 

(d)                                 determine
whether any refunds to which Holdings or its domestic

 

3

 

subsidiaries
may be entitled are paid by way of refund or credited against the tax liability
of the PQ Group.

 

Without
limiting its rights and obligations, PQ hereby irrevocably appoints Holdings as
its agent and attorney-in-fact to take such action (including the execution of
documents) as Holdings may deem appropriate to effect the foregoing.

 

10.                                 Miscellaneous
Provisions.

 

(a)                                  Notices.  Notices and other communications with respect
to this Agreement shall be in writing and shall be delivered by hand or
overnight courier service, or sent by telecopy. 
Unless other addresses or telecopy numbers are specified in writing
pursuant to this Section 10(a) to each party to this Agreement, such
notices or other communications shall be sent to the following addresses or
telecopy numbers, as the case may be:

 

(i)                                     if
to Holdings, to it at:

 

Niagara
Holdings, Inc.

c/o JPMorgan
Partners, LLC

1221 Avenue of
the Americas

39th
Floor

New York,
NY  10020-1080

Attention, Tim
Walsh

Facsimile:
212-899-3401

 

(ii)                                  if
to PQ, to it at:

 

PQ Corporation

1200 Swedesford Road

Berwyn, PA 19312

Attention: William Levy

Chief
Financial Officer 

Facsimile:
610-651-4504

 

(b)                                 Binding
Effect.  This Agreement shall be
binding upon and inure to the benefit of the parties hereto and their respective
successors and permitted assigns. Holdings shall cause each of its respective
affiliates to carry out any obligation of such affiliate specified herein.

 

(c)                                  Governing
Law.  The parties hereto hereby agree
that this Agreement shall be construed in accordance with and governed by the
laws of the State of New York, without regard to any other applicable conflict
of law provision.

 

(d)                                 Waivers;
Amendment; Modification.  Neither
this Agreement nor any provision hereof may be waived, amended or modified,
except pursuant to an agreement or agreements in writing entered into by all
the parties hereto.

 

(e)                                  Entire
Agreement.  This Agreement
constitutes the entire agreement

 

4

 

among the parties hereto with respect to the
subject matter hereof.

 

(f)                                    Severability.
 In the event any one or more of the
provisions contained in this Agreement should be held invalid, illegal or
unenforceable in any respect, the validity, legality and enforceability of the
remaining provisions contained herein shall not in any way be affected or
impaired thereby.

 

(g)                                 Counterparts.
 This Agreement may be executed in two or
more counterparts, each of which shall constitute an original but all of which,
when taken together, shall constitute but one contract.

 

(h)                                 Further
Actions.  The parties will execute
and deliver such further instruments and do such further acts and things
(including, without limitation, by causing their subsidiaries, if any, to do
such acts and things) as may be required to carry out the intent and purposes
of this Agreement.

 

(i)                                     Effective
Time.  This Agreement shall become
effective at the “Effective Time,” as defined in the Merger Agreement.

 

5

 

IN WITNESS WHEREOF, the
undersigned parties have caused this Agreement to be executed as of the date
first above written.

 

 

	
   

  	
  NIAGARA HOLDINGS, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Timothy Walsh

  
	
   

  	
   

  	
  Name:

  	
  Timothy Walsh 

  
	
   

  	
   

  	
  Title:

  	
  President

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  PQ CORPORATION

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Walter J. Stickley, Jr.

  
	
   

  	
   

  	
  Name:

  	
  Walter J. Stickley, Jr.

  
	
   

  	
   

  	
  Title:

  	
  Vice President and Secretary

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