SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934 (Amendment No. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Exchange Act Rule 14a-11 or 14a-12.
Quaker Chemical Corporation
---------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
Quaker Chemical Corporation
---------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement)
Payment of Filing Fee (Check the appropriate box):
[X] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(j)(2).
[ ] $500 per each party to the controversy pursuant to Exchange Act
Rule 14a-6(i)(3).
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
1) Title of each class of securities to which transaction applies:
------------------------------------------------------------------------
2) Aggregate number of securities to which transaction applies:
------------------------------------------------------------------------
3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11: (Footnote-1)
------------------------------------------------------------------------
4) Proposed maximum aggregate value of transaction:
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[ ] Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration
statement number, or the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
------------------------------------------------------------------------
2) Form, Schedule or Registration Statement No.:
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3) Filing Party:
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4) Date Filed:
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(1) Set forth the amount on which the filing fee is calculated and state
how it was determined.
<PAGE>
QUAKER CHEMICAL CORPORATION
ELM AND LEE STREETS
CONSHOHOCKEN, PENNSYLVANIA 19428
----------
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
----------
To the Shareholders of Quaker Chemical Corporation:
Notice is hereby given that the Annual Meeting of Shareholders of
Quaker Chemical Corporation ("Company") will be held in Salon A and B,
Philadelphia Marriott West, Matson Ford at Front Street, 111 Crawford
Avenue, West Conshohocken, Pennsylvania 19428, on Wednesday, May 4, 1994,
at 10:30 A.M., local time, for the following purposes:
1. To elect five (5) Class II Directors, each to serve for three
years and until his respective successor is elected and
qualified;
2. To consider and act upon ratifying the appointment of Price
Waterhouse as the Company's independent accountants for the
year 1994; and
3. To transact such other business as may properly come before the
Meeting or any adjournments thereof.
Only shareholders of record at the close of business on March 18,
1994 are entitled to notice of and to vote at the Meeting.
IT IS IMPORTANT THAT YOUR SHARES BE REPRESENTED AT THE MEETING. YOU
ARE CORDIALLY INVITED TO ATTEND THE MEETING IN PERSON. WHETHER OR NOT YOU
EXPECT TO ATTEND IN PERSON, YOU ARE URGED TO COMPLETE, SIGN, DATE, AND
RETURN THE ENCLOSED PROXY IN THE SELF-ADDRESSED ENVELOPE ENCLOSED FOR YOUR
CONVENIENCE; NO POSTAGE IS REQUIRED IF MAILED IN THE UNITED STATES.
By Order of the Board of Directors,
KARL H. SPAETH
Karl H. Spaeth
Vice President and Secretary
Dated: March 31, 1994
<PAGE>
QUAKER CHEMICAL CORPORATION
----------
PROXY STATEMENT
----------
The solicitation of the accompanying Proxy is made by and on behalf of
the Board of Directors of Quaker Chemical Corporation, a Pennsylvania
corporation ("Company"), whose principal executive offices are located at
Elm and Lee Streets, Conshohocken, Pennsylvania 19428, for use at the
Annual Meeting of Shareholders to be held on Wednesday, May 4, 1994 and at
any adjournments thereof. The meeting will be held in Salon A and B,
Philadelphia Marriott West, Matson Ford at Front Street, 111 Crawford
Avenue, West Conshohocken, Pennsylvania 19428 at 10:30 A.M., local time.
The approximate date on which this Proxy Statement and the accompanying
form of Proxy will first be sent or given to shareholders is March 31,
1994. Any shareholder executing and delivering the accompanying Proxy has
the power to revoke it at any time prior to its use by giving notice of its
revocation to the Secretary of the Company.
The Company will bear the cost of the solicitation of Proxies. Proxies
will be solicited by mail, telephone, facsimile, and personal contact by
certain officers and regular employees of the Company. The Company will,
upon the request of record holders, pay reasonable expenses incurred by
record holders who are brokers, dealers, banks or voting trustees, or their
nominees, for mailing proxy material and the Company's Annual Report to
shareholders to any beneficial holder of the Common Stock they hold of
record.
Proxies in the accompanying form which are properly executed, returned
to the Company, and not revoked will be voted in accordance with the
instructions thereon, or, in the absence of specific instruction, will be
voted for the election of all five (5) of the nominees named therein and
for ratification of the appointment of Price Waterhouse as the Company's
independent accountants for the year 1994.
As of March 18, 1994, the outstanding voting securities of the Company
consisted of 9,255,506 shares of Common Stock, $1.00 par value ("Common
Stock"). As more specifically provided in Article 5 of the Company's
Articles of Incorporation, shareholders who, as of March 18, 1994, held
shares of the Company's Common Stock beneficially owned since March 1, 1991
are entitled to cast 10 votes for each such share. Holders of shares the
beneficial ownership of which was acquired after March 1, 1991 are entitled
to cast 1 vote per share, subject to certain exceptions described in
Exhibit A hereto. Based on the information available to the Company on
March 18, 1994, the holders of 3,234,028 shares of Common Stock will be
entitled to cast 10 votes with respect to each such share, and the holders
of 6,021,478 shares of Common Stock, including, but not limited to, those
shares held in "street" or "nominee" name or by a broker, clearing agency,
voting trustee, bank, trust company, or other nominee which have been
presumed to have been acquired by the beneficial owner subsequent to March
1, 1991 in accordance with the terms and conditions of Article 5 of the
Company's Articles of Incorporation, will be entitled to cast 1 vote with
respect to each such share, representing an aggregate of 38,361,758 votes.
The aforementioned presumption that a share is entitled to 1 vote rather
than 10 is rebuttable upon presentation to the Company of written evidence
to the contrary, in accordance with the procedures established by the
Company and described in Exhibit A hereto. The effect of rebutting the
foregoing presumption will be to increase the number of votes that may be
cast at the meeting. Depending on the number of shares with respect to
which the aforementioned presumption is rebutted, the total number of votes
that may be cast at the meeting could be increased to as many as
92,555,060. The presence, in person or by proxy, of shareholders entitled
to cast at least a majority of the votes that all shareholders are entitled
to cast on a particular matter will constitute a quorum for the purpose of
considering such matter. Abstentions, and any shares as to which a broker
or nominee has indicated that it does not have discretionary authority to
vote, will be counted only for purposes of determining whether a quorum is
present at the meeting and, thus, will have the effect of a vote to
"Withhold Authority" in the election of directors or as an "Against" vote
on all other matters included in the Proxy.
Only shareholders of record at the close of business on March 18, 1994
are entitled to notice of and to vote at the Meeting or any adjournments
thereof.
1
<PAGE>
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
AND MANAGEMENT
CERTAIN BENEFICIAL OWNERS
The following table sets forth information, as of March 18, 1994, with
respect to persons known to the Company to be the beneficial owners of more
than five percent of its Common Stock (its only class of outstanding equity
securities). Peter A. Benoliel, Quest Advisory Corp., and Quest Management
Company have sole voting and dispositive power over the outstanding Common
Stock listed opposite their names. Invista Capital Management, Inc. has
shared power to vote and sole dispositive power over the Common Stock
listed opposite its name.
NUMBER
OF SHARES PERCENT NUMBER
NAME AND ADDRESS OWNED(1) OF CLASS(2) OF VOTES
- ---------------- --------- ----------- --------
Peter A. Benoliel 666,403(3) 7.2 5,803,531
130 Cornwall Lane
St. Davids, PA 19087
Quest Advisory Corp. and 620,114(4) 6.7 620,114(4)
Quest Management Company
1414 Avenue of the Americas
New York, N.Y. 10019
Invista Capital Management, Inc. 534,600(4) 5.8 534,600(4)
601 Locust, Suite 1150
Des Moines, IA 50309
- ----------
(1) Based upon information contained in filings made by the named person
with the Securities and Exchange Commission.
(2) Based upon 9,255,506 shares outstanding.
(3) Includes 56,367 shares subject to options that are currently
exercisable or will become exercisable within sixty (60) days of the
record date.
(4) These shares, which are held in street name, are presumed under Article
5 of the Company's Articles of Incorporation to be entitled to one (1)
vote per share. Each such share for which the aforementioned
presumption is rebutted in accordance with applicable procedures shall
be entitled to ten (10) votes per share or up to an aggregate of
6,201,140 votes in the case of Quest Advisory Corp. and Quest
Management Company, and 5,346,000 votes in the case of Invista Capital
Management, Inc.
2
<PAGE>
DIRECTORS AND OFFICERS
The following table sets forth information, as of March 18, 1994, with
respect to beneficial ownership of the Company's Common Stock by each
director, each nominee for director, each executive officer named in the
Summary Compensation Table, and all directors and executive officers of the
Company as a group. Each director, nominee, and executive officer has sole
voting and dispositive power over the Common Stock listed opposite his
name.
NUMBER
OF SHARES PERCENT NUMBER OF
NAME OWNED(1) OF CLASS(2) VOTES
---- --------- ------------ ---------
Peter A. Benoliel 666,403(3) 7.2 5,803,531
Joseph B. Anderson, Jr. 100 -- 100
Patricia C. Barron 160(4) -- 1,500
William L. Batchelor 217,277 2.4 2,172,770
Lennox K. Black 750 -- 7,500
Edwin J. Delattre 125 -- 800
Francis J. Dunleavy 3,000 -- 30,000
Robert P. Hauptfuhrer 7,200 -- 72,000
Frederick Heldring 7,800(5) -- 78,000
Sigismundus W. W. Lubsen 132,789(6) 1.4 115,983
Ronald J. Naples 150 -- 1,500
Alex Satinsky 1,500 -- 15,000
D. Robert Yarnall, Jr. 4,927 -- 49,270
Marcus C. J. Meijer 46,000(7) -- 1,550
John E. Burrows, Jr. 49,647(8) -- 647
Ira R. Dolich 56,873(9) -- 94,260
All directors and executive
officers as a group
(20 persons) 1,329,535(10) 14.4(10) 8,469,748(11)
- ----------
(1) Does not include an aggregate of 1,890 shares held of record by the
spouses of directors and executive officers.
(2) Based upon 9,255,506 shares outstanding. The percentage is less than
1%, except as otherwise indicated.
(3) Includes 56,367 shares subject to options that are currently
exercisable or will become exercisable within sixty (60) days of the
record date.
(4) Includes 10 shares held in an indirect trust account for child.
(5) Includes 6,600 shares held jointly with his wife.
(6) Includes 103,440 shares subject to options that are currently
exercisable or will become exercisable within sixty (60) days of the
record date plus 3,186 shares held in a trust account for children.
(7) Includes 44,450 shares subject to options that are currently
exercisable or will become exercisable within sixty (60) days of the
record date.
(8) Includes 49,000 shares subject to options that are currently
exercisable or will become exercisable within sixty (60) days of the
record date plus 53 shares held in a trust account for a child.
(9) Includes 46,988 shares subject to options that are currently
exercisable or will become exercisable within sixty (60) days of the
record date.
(10) Includes 362,754 shares subject to options that are currently
exercisable or will become exercisable within sixty (60) days of the
record date. Also includes 6,600 shares held jointly with a spouse and
3,249 shares held in trust accounts for children of officers and
directors.
(11) Represents 22.1% of all votes entitled to be cast at the meeting,
based on information available on March 18, 1994.
Based solely (i) on the Company's review of certain reports filed with
the Securities and Exchange Commission ("SEC") pursuant to Section 16(a) of
the Securities Exchange Act of 1934, as amended, and (ii) written
representations of the Company's officers and directors, the Company
believes that all of such reports were filed on a timely basis, except for
one filing on Form 4 covering one transaction each for Mr. Benoliel and Mr.
Delattre.
3
<PAGE>
ELECTION OF DIRECTORS
The Articles of Incorporation, as amended, provide that the Company
shall have a Board of Directors that is divided into three classes, each
class to consist, as nearly as may be possible, of one-third of the total
number of directors. One class shall be elected each year to serve as
directors for a term of three (3) years. Directors elected to fill
vacancies and newly created directorships will be elected to serve for the
balance of the term of the Class to which they are elected. At the present
time, there are thirteen (13) directors including four (4) Class I
Directors, five (5) Class II Directors, and four (4) Class III Directors.
Five (5) Class II Directors are to be elected at the Meeting, with each
member to serve a three (3) year term expiring in 1997 and until his
successor is elected and qualified.
The Proxies will be voted in accordance with the instructions set forth
therein, and proxies for which no contrary instructions are given will be
voted for the Class II nominees, Lennox K. Black, Robert P. Hauptfuhrer,
Frederick Heldring, Ronald J. Naples, and Alex Satinsky. Each of the
nominees is presently serving as a director of the Company, having been so
elected by the shareholders at the Annual Meeting held on May 1, 1991. If
any nominee withdraws or otherwise becomes unable to serve, which is not
anticipated, the Proxies will be voted for a substitute nominee who will be
designated by the Board of Directors. The following table sets forth
information concerning the nominees and the Company's directors who will
continue to serve in that capacity following the Meeting:
FIRST BECAME PRINCIPAL OCCUPATION FOR
NAME AND (AGE) A DIRECTOR THE PAST FIVE YEARS
-------------- ------------ ------------------------
Class I -- Directors elected in 1993 to serve until the Annual Meeting
in 1996:
Peter A. Benoliel (62) 1961 Chairman of the Board and Chief
Executive Officer (to May 5, 1993)
of the Company.
William L. Batchelor (76) 1952 Retired Senior Vice President of
the Company.
Francis J. Dunleavy (79) 1980 Retired Vice Chairman of the Board
of International Telephone and
Telegraph Corporation, a
diversified company principally
directed to communications. Member
of the Board of Directors of Crown
Cork & Seal Company, AEL
Industries, Inc., Bird Inc., Selas
Corporation of America, and
ScanGraphics, Inc.
Sigismundus W. W. Lubsen (50) 1988 President and Chief Operating
Officer of the Company (to May 5,
1993); Chief Executive Officer
(since May 5, 1993); formerly
Managing Director, Quaker Chemical
(Holland) B.V. Member of the Board
of Directors of Teleflex
Incorporated.
Class II -- Directors nominated for election in 1994 to serve until the
Annual Meeting in 1997:
Lennox K. Black (64) 1985 Chairman of the Board and Chief
Executive Officer, Teleflex
Incorporated, a manufacturing and
service company which provides
engineered products and services
to specific technical and
commercial markets. Member of the
Board of Directors of Envirite
Corporation, Penn Virginia Corp.,
Westmoreland Coal Company, and Pep
Boys Manny, Moe and Jack.
Robert P. Hauptfuhrer (62) 1977 Chairman of the Board and Chief
Executive Officer, Oryx Energy
Company, an energy company.
4
<PAGE>
FIRST BECAME PRINCIPAL OCCUPATION FOR
NAME AND (AGE) A DIRECTOR THE PAST FIVE YEARS
-------------- ------------ ------------------------
Frederick Heldring (69) 1970 Chairman, Global Interdependence
Center; formerly Vice Chairman of
the Board of CoreStates Financial
Corporation, a bank holding
company, and Chairman and
President of The Philadelphia
National Bank, a commercial bank.
Ronald J. Naples (48) 1988 Chairman of the Board and Chief
Executive Officer, Hunt
Manufacturing Company, a producer
and distributor of office
products, office furniture, and
art/craft products. Member of the
Board of Directors of Advanta Corp.
Alex Satinsky (81) 1952 Partner, Fox, Rothschild, O'Brien &
Frankel, General Counsel to the
Company.
Class III -- Directors elected in 1992 to serve until the Annual Meeting
in 1995:
Edwin J. Delattre (52) 1984 Dean and Professor of Education and
Philosophy, Boston University;
formerly Bradley Distinguished
Fellow in Applied Ethics, American
Institute for Public Policy
Research, Washington, D. C.;
formerly President, St. John's
College, Annapolis, Maryland and
Santa Fe, New Mexico.
D. Robert Yarnall, Jr. (69) 1969 Chairman of the Board of Envirite
Corporation, an environmental
services firm; formerly Chairman
of the Board of Yarway
Corporation, a manufacturer of
engineered products for power and
process industries.
Patricia C. Barron (51) 1989 President, Xerox Engineering Systems
Division, Xerox Corporation.
Previous positions with Xerox
Corporation include Vice
President, Corporate Information
Management, Regional Sales
Manager for the Mid-Atlantic
Region, and Vice President and
Regional Manager, Eastern Region.
Member of the Board of Directors
of Rochester Telephone Co.
Joseph B. Anderson, Jr. (51) 1992 Former President and Chief
Executive Officer, Composite
Energy Management Systems Inc., a
manufacturer of bumpers for the
automotive industry. Formerly,
Director, Body Hardware Business
Unit, Inland Fisher Guide
Division, General Motors
Corporation. Previous positions
with General Motors Corporation
include Director of the Exterior
Systems Business Unit, Director of
Materials Management and Quality
Assurance.
There are no family relationships between any directors, executive
officers, or nominees for election as directors of the Company.
5
<PAGE>
COMMITTEES OF THE BOARD OF DIRECTORS
The Company has an Executive Committee whose principal functions are to
act for the Board of Directors in situations requiring prompt action when a
meeting of the full Board is not feasible and to implement specific action
for the Board where directed so to do. The current members of the
Committee, which did not meet in 1993, are P. A. Benoliel, S. W. W. Lubsen,
R. P. Hauptfuhrer, A. Satinsky, and D. R. Yarnall, Jr.
The Company has an Audit Committee whose principal functions are to
recommend the selection of independent accountants; approve the scope of
audit and specification of non-audit services provided by such accountants
and the fees for such services; and review audit results, internal
accounting procedures, and programs to comply with applicable laws and
regulations relating to financial accountability. The current members of
the Committee, which met three times in 1993, are F. J. Dunleavy, E. J.
Delattre, R. P. Hauptfuhrer, and F. Heldring.
The Company has a Compensation/Management Development Committee whose
principal functions are to review and recommend officers' compensation;
review the performance of officers and management development and
succession; review compensation levels throughout the Company; and play a
leading role in the nomination of directors. During 1993, the members of
the Committee, which met twice in 1993, were F. Heldring, P. C. Barron, E.
J. Delattre, and D. R. Yarnall, Jr.
The Company has a Long-Term Performance Incentive Plan Committee whose
principal function is to administer the Company's Long-Term Performance
Incentive Plan (the "Plan"). During 1993, the members of the Committee,
which met once in 1993, were F. Heldring, P. C. Barron, E. J. Delattre, and
D. R. Yarnall, Jr.
The Company has a Finance Committee whose principal functions are to
establish guidelines for the investment of Company funds and advise on
matters relating to the Company's financial condition, dividend policy, and
shareholder financial interests. The current members of the Committee,
which met twice in 1993, are L. K. Black, J. B. Anderson, Jr., R. J.
Naples, and A. Satinsky.
During the fiscal year ended December 31, 1993, six regular meetings of
the Board of Directors were held. During 1993, each of the directors was
in attendance at no less than 75% of the aggregate number of meetings of
the Board of Directors and Committees of the Board on which she or he then
served, except for R. J. Naples, who attended four of six Board meetings
and no meetings of the Committees to which he was assigned. The reasons
for his absences were known to and are satisfactory to the Board of
Directors.
6
<PAGE>
EXECUTIVE COMPENSATION
Summary of Cash and Certain Other Compensation
The following table sets forth certain summary information concerning
compensation paid or accrued by the Company and its subsidiaries for the
years ended December 31, 1991, 1992, and 1993 as to both Mr. Benoliel and Mr.
Lubsen, who each served as the Company's Chief Executive Officer last year,
and each of the Company's four most highly compensated officers, other than
Mr. Lubsen (but including Mr. Benoliel who served as the Company's Chief
Executive Officer until May 5, 1993), who were serving as executive
officers at December 31, 1993 (hereinafter referred to as the named
executive officers).
<TABLE>
SUMMARY COMPENSATION TABLE
<CAPTION>
LONG TERM COMPENSATION
-----------------------------
ANNUAL COMPENSATION AWARDS PAYOUTS
------------------------- -----------------------------
(A) (B) (C) (D) (E) (F) (G) (H) (I)
RESTRICTED SECURITIES
NAME AND OTHER ANNUAL STOCK UNDERLYING ALL OTHER
PRINCIPAL COMPENSATION AWARD(S) OPTIONS/ LTIP COMPENSATION
POSITION YEAR SALARY($) BONUS($) ($)(1)(2) ($) SARS(#)(3) PAYOUTS($) ($)(1)(4)
- --------- ---- ---------- -------- ------------ --------- ---------- ---------- ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Peter A. 1993 215,000 0 0 0 30,000 51,000 0
Benoliel, 1992 240,000 0 0 0 0 0 6,000
Chairman of 1991 225,000 0 0 32,000 237,000
Board, Chief
Executive
Officer
until May
5, 1993
Sigismundus 1993 359,000(5) 0 0 0 40,000 45,540 0
W. W. Lubsen 1992 360,000(5) 0 0 0 0 0 5,000
President, 1991 335,000(5) 0 0 28,000 0
Chief
Operating
Officer until
May 5, 1993;
and Chief
Executive
Officer
thereafter
Marcus C. J. 1993 170,000(6) 38,000 0 0 30,000 26,000 0
Meijer, Vice 1992 170,000(6) 75,000 0 0 0 0 0
President- 1991 167,000(6) 50,000 0 24,000 0
Europe
John E. 1993 149,000 17,000 0 0 25,000 0 0
Burrows, Jr., 1992 143,000 21,000 0 0 0 0 4,000
Vice Presi- 1991 141,000 13,000 0 24,000 0
dent-North
America
Ira R. Dolich, 1993 104,000 18,000 0 0 12,000 38,000 0
Vice Presi- 1992 101,000 11,000 0 0 0 0 3,000
dent-Quality 1991 98,000 6,000 0 12,000 143,000
and Training
- ----------
</TABLE>
(1) Information for the year ended December 31, 1991 has been omitted in
accordance with applicable regulations of the Securities and Exchange
Commission.
(2) During the year ended December 31, 1993, certain of the individuals
named in column (a) received personal benefits not reflected in the
amounts set forth for such individual in columns (c), (d), and (e) the
dollar value of which did not exceed the lesser of $50,000 or 10% of
the total of annual salary and bonus reported for such individual in
columns (c) and (d).
(3) Options to purchase shares of Common Stock.
(4) The amounts listed as "All Other Compensation" represent compensation
earned by each of the named executive officers pursuant to the terms of
the Company's Profit Sharing Plan.
(5) Includes for each of the years ended December 31, 1991, 1992, and 1993
the fair market value of 6,000 shares of Common Stock which were issued
during such year and an additional cash payment made during such
7
<PAGE>
year pursuant to a Restricted Stock and Cash Bonus Plan Agreement
between the Company and Mr. Lubsen (the "Lubsen Agreement"). The
aggregate values of the shares issued to Mr. Lubsen pursuant to the
Lubsen Agreement during 1991, 1992, and 1993 (based, with respect to
each year, on the last reported sale price for the Common Stock on the
Nasdaq National Market on December 31 of such year) were $123,000,
$126,000, and $95,250, respectively. For additional information
concerning the Lubsen Agreement, see "Employment Agreements with
Executive Officers," below.
(6) Mr. Meijer's compensation was paid or credited in Dutch Guilders. For
purposes of this presentation, Mr. Meijer's salary and bonus for each
year has been translated into U.S. Dollars using the applicable
exchange rate for the conversion of Dutch Guilders to U.S. Dollars on
December 31 of such year.
Options/SAR Grants in the Last Fiscal Year
During 1993, the Company granted stock options (without any related
stock appreciation rights) to the named executive officers as follows:
STOCK OPTION GRANTS LAST YEAR
POTENTIAL
REALIZABLE VALUE
AT ASSUMED
ANNUAL RATES OF
STOCK PRICE
APPRECIATION FOR
INDIVIDUAL GRANTS OPTION TERM
------------------- ----------------
(A) (B) (C) (D) (E) (F) (G)
NUMBER OF % OF
SECURITIES TOTAL
UNDERLYING GRANTED EXERCISE
OPTIONS TO EM- OR BASE EXPIRA-
GRANTED PLOYEES PRICE TION
NAME (#)(1) IN 1993 ($/SH)(2) DATE 5%($) 10%($)
---- --------- ------- --------- ------- ----- ------
Peter A. Benoliel 20,000 9.69 23.10 1/4/98 74,000 214,000
Peter A. Benoliel 10,000 4.84 24.20 5/5/98 39,000 112,000
Sigismundus
W. W. Lubsen 35,000 16.95 21.00 1/4/03 462,000 1,171,000
Sigismundus
W. W. Lubsen 5,000 2.42 22.00 5/5/03 69,000 175,000
Marcus C. J. Meijer 30,000 14.53 21.00 1/4/03 396,000 1,004,000
John E. Burrows, Jr. 25,000 12.11 21.00 1/4/03 330,000 837,000
Ira R. Dolich 12,000 5.81 21.00 12/31/96(3) 158,000 402,000
- ----------
(1) All of the options granted are exercisable on the first anniversary of
the option grant date.
(2) The purchase price of a share of Common Stock is the fair market value
of a share of Common Stock on the date of grant and, in the case of Mr.
Benoliel, is 110% of the fair market value of a share of Common Stock
on the date of grant.
(3) Mr. Dolich retired on December 31, 1993 and, therefore, the expiration
date of the options granted to him is three (3) years from the date of
retirement.
Aggregate Option/SAR Exercises in Last Fiscal Year and Fiscal Year-End
Option/SAR Values
The following table provides information related to options to purchase
the Company's Common Stock exercised by the named executive officers during
the year ended December 31, 1993 and the number and value of such options
held as of the end of such year. The Company does not have any outstanding
stock appreciation rights.
8
<PAGE>
<TABLE>
AGGREGATED OPTION/SAR EXERCISES IN LAST YEAR
AND YEAR-END OPTION/SAR VALUES
<CAPTION>
(A) (B) (C) (D) (E)
NUMBER OF SECURITIES VALUE OF UNEXERCISED
VALUE UNDERLYING UNEXERCISED IN-THE-MONEY OPTIONS
SHARES ACQUIRED REALIZED OPTIONS AT YEAR END(#) AT YEAR END ($)
NAME ON EXERCISE(#) ($)(1) EXERCISABLE UNEXERCISABLE EXERCISABLE/UNEXERCISABLE(2)
---- --------------- -------- ----------- ------------- ----------------------------
<S> <C> <C> <C> <C> <C>
Peter A. Benoliel 5,633 28,000 26,367 30,000 0/0
Sigismundus
W. W. Lubsen 0 0 39,140 40,000 111,000/0
Marcus C. J. Meijer 1,550 7,000 14,450 30,000 0/0
John E. Burrows 0 0 24,000 25,000 0/0
Ira R. Dolich 0 0 46,988 12,000 141,000/0
- -----------
</TABLE>
(1) Representing the fair market value of the shares acquired (based on
the last reported sale price for the Common Stock on the Nasdaq
National Market on the date of exercise) less the exercise price.
(2) Based on the last sale price on December 31, 1993 on the Nasdaq
National Market of $16.00 per share.
Long-Term Incentive Plan Awards in Last Fiscal Year
During 1993, the Company granted performance incentive units pursuant
to the Company's Long-Term Performance Incentive Plan to the named
executive officers as follows:
<TABLE>
LONG-TERM INCENTIVE PLAN -- AWARDS LAST YEAR
<CAPTION>
ESTIMATED FUTURE PAYOUTS
UNDER NON-STOCK PRICE-BASED PLAN
----------------------------------------
(A) (B) (C) (D) (E) (F)
PERFORMANCE
NUMBER OF OR OTHER
SHARES, UNITS PERIOD UNTIL
OR OTHER MATURATION OR THRESHOLD TARGET MAXIMUM
NAME RIGHTS (#)(1) PAYOUT ($ OR #)(2) ($ OR #)(2) ($ OR #)(2)
---- ------------- ------------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C>
Peter A. Benoliel 15,000 1993 through 1996 $0.00 $315,000 $630,000
Sigismundus
W. W. Lubsen 22,500 1993 through 1996 0.00 472,500 945,000
Marcus C. J. Meijer 15,000 1993 through 1996 0.00 315,000 630,000
John E. Burrows, Jr. 12,500 1993 through 1996 0.00 262,500 525,000
Ira R. Dolich 6,000 1993 through 1996 0.00 126,000 252,000
- ----------
</TABLE>
(1) Performance Incentive Units
(2) The value on maturation of a performance incentive unit is determined
by performance over a four (4) year period as plotted on a grid defined
by two axes; one axis sets forth variable rates of return on equity,
and one axis sets forth variable rates of income before tax as a
percentage of sales. Each performance unit is issued at the value of
the stock price of incentive stock options ($21.00), and the 1993
performance unit grid results in a zero payout for performance of less
than 9% return on equity and less than 7% income before tax as a
percentage of sales. A payout of $21.00 per unit will be made if
performance reaches the target, and a payout of $42.00 per unit will be
made if performance reached the maximum of the measurement scale. While
it is difficult to calculate the amount of any future payments using an
example where a return on equity is 10% and income before tax as a
percentage of sales is less than 7%, a minimum payment of $15,750,
$23,625, $15,750, and $13,125 would be payable to Messrs. Benoliel,
Lubsen, Meijer, and Burrows, respectively. Mr. Dolich retired on
December 31, 1993 and will be eligible to receive a 25% pro rata share
of the actual future minimum payout, currently estimated to be nil.
9
<PAGE>
Employment Agreements with Executive Officers
All executive officers of the Company are employed pursuant to
employment agreements, which agreements provide for each officer's salary
and the basis upon which his bonus (if any) is to be calculated.
Salary and the bonuses, if any, are adjusted annually by the
Compensation/Management Development Committee. Each employment agreement
is for an initial term of one (1) year and, thereafter, is automatically
renewed for successive one (1) year terms unless either party gives written
notice of termination at least ninety (90) days prior to the expiration of
the then current term. The agreements also provide for the payment by the
Company of an amount substantially equal to 150% of the officer's then
current annual rate of salary (except in the case of Mr. Lubsen whose
agreement provides for the payment of the greater of 200% of his then
current annual salary or $400,000) if the officer's employment by the
Company is terminated other than for cause or by reason of death,
disability, or normal retirement within three (3) years after the
occurrence of certain specified events that constitute a change or
potential change in control of the Company. The Company has also entered
into a Restricted Stock and Cash Bonus Agreement with Mr. Lubsen, effective
January 1, 1990, pursuant to which the Company will issue to Mr. Lubsen at
the end of each year during the five (5) year term of the agreement 6,000
shares of Common Stock, assuming Mr. Lubsen is employed by the Company on
December 31 of that year. Mr. Lubsen may elect each year to receive an
additional 1,500 shares representing an aggregate of 7,500 additional
shares over the five (5) year period or a cash payment in lieu thereof.
There are no contingencies to Mr. Lubsen receiving the additional 7,500
shares as they consist of an annual award of 1,500 shares which can be
taken in either stock or cash and are designed to assist Mr. Lubsen with
the income taxes generated from the annual grant of 6,000 shares. To date,
a cash payment totalling the value of 6,000 shares has been awarded on an
annual basis for the first four years of the agreement. Additionally, the
Company will pay annually during the five (5) year period a cash bonus
equal in amount to the difference between the dividend on 37,500 shares and
the number of shares theretofore eligible for payment and delivery to Mr.
Lubsen.
The Company has also entered into a retirement agreement with Mr.
Dolich, who retired on December 31, 1993 prior to achieving the age of 65,
pursuant to which the Company will provide separation payments designed to
provide a benefit substantially equal to what the benefit would have been
had Mr. Dolich retired at age 65.
Pension and Death Benefits
Substantially all of the Company's employees are covered by a
noncontributory qualified defined benefit retirement plan (the "Pension
Plan"). The method of funding the Pension Plan does not readily permit the
calculation of the required contribution, payment, or accrual applicable to
any covered individual. The formula for determining the annual pension
benefit is based upon two formulas, a past service formula for service
through November 30, 1989 and a future service formula for service
beginning December 1, 1989, as follows: (a) 1.1% of the employee's Highest
Average Earnings (HAE) (which means the employee's three highest
consecutive years of pay including overtime, shift differential, bonuses,
and commissions) before December 1, 1989 plus .5% of HAE over the
employee's Covered Compensation as defined in the Pension Plan (which
depends on the employee's birth date and is determined from an Internal
Revenue Service table which is updated each year) times the employee's
service up to December 1, 1989 and (b)(i) for the employee's service after
December 1, 1989 until past and future service total 35 years, 1.15% of
annual pay plus .6% of annual pay over the employee's Covered Compensation
and (ii) for the employee's service after December 1, 1989 beyond 35 years,
1.3% of annual pay.
Listed below for each of the persons named is the estimated annual
pension benefit payable to them and their credited service under the
Pension Plan. The estimate of the annual pension benefit was made by
adding to the accrued benefits as of November 30, 1993 and an estimate of
benefits that will be accrued from December 1, 1993 to age 65 based upon
W-2 or other information.
10
<PAGE>
YEARS
CREDITED
ESTIMATED ANNUAL SERVICE AS OF
PENSION BENEFIT (1) 12/31/93
------------------- -------------
Peter A. Benoliel $168,813 37
Sigismundus W. W. Lubsen 56,970 5
Marcus C. J. Meijer 72,105(2) 2
John E. Burrows, Jr. 50,416 3
Ira R. Dolich 56,148(3) 27
- ----------
(1) Some of the estimated annual pension benefits are in excess of the
maximum benefit limitations for 1993 stipulated in the Internal Revenue
Code. Payments made in any year after commencement of benefits will
not exceed the maximum benefit limitation applicable for such year.
(2) The pension benefit for Mr. Meijer is provided by a policy funded
through premiums paid to an insurance company. The premiums are
currently equal to 16.75% of Mr. Meijer's annual pensionable salary.
(3) Mr. Dolich retired on December 31, 1993. Benefit shown is actual
pension benefit payable.
The Company also provides supplemental retirement income in accordance
with the provisions of a Supplemental Retirement Income Program (the
"Program") which became effective on November 6, 1984. The Program, which
is a "non-qualified plan" for federal income tax purposes, is intended to
provide to executive officers of the Company elected to office by the Board
of Directors additional retirement income in certain cases. Generally
speaking, an officer who, as of age 65, has completed at least 30 years of
employment with the Company and/or its affiliated companies will qualify
for the maximum benefit under the Program which will entitle him to receive
annually from the date of retirement until death such payments, if any, as
are required to maintain his "net post-retirement income," as defined, at a
level equal to 80% of his "net pre-retirement income," as defined. For an
officer who otherwise qualifies to participate in the Program but, as of
age 65, has completed less than 30 years of employment, the maximum benefit
is reduced by 2% for each such full year of employment less than 30.
Because the benefits payable under the Program depend on various
post-retirement factors (e.g., defined benefit pension calculation, number
of years employed less than 30, social security benefit at age 65, state,
local, and federal income taxes on pension and social security benefits),
it is impossible to determine in advance the actual amount payable to any
participant under the program. Payments were made pursuant to the Program
during the fiscal year ended December 31, 1993 in the aggregate amount of
$164,000.
Listed below for each named executive officer is the estimated annual
payment to be made under the Program assuming that (a) the named executive
officer retires at age 65, (b) the officer's compensation (salary plus
incentive) remains at its current level, (c) the estimated pension benefit
is as set forth above, (d) social security benefits remain unchanged and at
the current level, and (e) there is no change to the current federal,
state, and local income tax rates applicable to pension and social security
benefits.
ESTIMATED PAYMENT
UNDER THE PROGRAM
-----------------
Peter A. Benoliel $77,394
Sigismundus W. W. Lubsen 52,032
Marcus C. J. Meijer --0--(1)
John E. Burrows, Jr. 27,163
Ira R. Dolich 27,197(2)
- ----------
(1) Mr. Meijer does not participate in the Corporate Defined Benefit
Pension Plan and, therefore, is not eligible for payments under the
Program.
(2) Mr. Dolich retired on December 31, 1993. Payment shown is the actual
annual amount payable.
The Company's executive officers are entitled to a death benefit if
employed by the Company at the time of death. The benefit, equal to 1-1/3
times the deceased officer's then current annual salary, plus $30,000, is
payable in installments at various times over a 40-month period after
death. The Company's policy is not to provide currently for this
contingent future liability.
11
<PAGE>
COMPENSATION OF DIRECTORS
Employees of the Company and persons affiliated with the Company's
General Counsel are not paid any fees for services as a director of the
Company. During 1993, directors of the Company, who were not employees or
affiliated with the Company's General Counsel, were paid a standard fee of
$13,000 each for the year plus $850 for each meeting attended except that
directors who are former employees received only the standard fee. In
addition, they received $850 for attending each meeting of a committee on
which they serve. Each committee chairman received an additional $100 for
each committee meeting chaired.
Alex Satinsky, a director of the Company, is a member of the law firm
Fox, Rothschild, O'Brien & Frankel, which was retained by the Company as
General Counsel during fiscal year 1993 and which is being retained by the
Company in such capacity during the current year.
COMPENSATION/MANAGEMENT DEVELOPMENT COMMITTEE AND LONG-TERM PERFORMANCE
INCENTIVE PLAN COMMITTEE REPORTON EXECUTIVE COMPENSATION
Introduction
The philosophy of the Company's executive officers' remuneration
program is to compensate on the basis of performance. Therefore, a
considerable portion of an executive officer's total compensation is
incentive based and tied directly to the achievement of business goals.
The Company's compensation program has three components: a base salary; an
annual incentive cash payment; and compensation realized from options
and/or performance incentive units issued under the Company's Long-Term
Performance Incentive Plan. Both the annual incentive payment and
compensation earned pursuant to the Company's Long-Term Performance
Incentive Plan are based on achievement of previously set financial
criteria targeted for the development of shareholder value. All components
combined are intended to attract, motivate, and retain executives.
Compensation Structured to Reward Excellence
The Company positions its executive officer pay levels at the median of
a broad cross section of both chemical and chemical specialty companies in
the United States derived from the data base of the compensation consulting
company HayGroup (some companies of which may be included in the companies
that are part of S&P Chemical (Specialty) Index) and as to foreign-based
executive officers, in the regions where such executive officers are
located. Pay, which includes incentive-based compensation, is sufficiently
variable that outstanding performance may result in total compensation in
the top quarter of the industry comparison group. The Compensation
Committee believes that the base salaries of the Company's executive
officers are generally lower than those of executive officers in comparable
positions and with comparable companies. The most recent survey data
places the Company's average base compensation in the lower half of the
companies surveyed.
The target compensation for the position of Chief Executive Officer
("CEO") is currently at the median of the chemical industry group. Because
of the Company's 1993 performance, the CEO's total cash compensation
(salary plus incentive) of both individuals serving as CEO during the last
year is expected to be below the median of the group.
Compensation Components
The base salary component is primarily used as a foundation upon which
to overlay the Company's annual and long-term incentive programs. Base
salary increases are determined by the Committee following extensive review
of each executive officer's performance during the past year. The
Committee's decision is based on achievement, as measured against
previously established goals, which include primary emphasis on attainment
of financial goals and non-financial objectives in such areas as
leadership, vision, and the management of cultural change. The financial
goals include a combination of overall corporate financial objectives such
as Profits Before Taxes ("PBT") as well as individual profit center goals,
which relate specifically to the particular officer's position within the
Company. The relative weight placed on any of the aforementioned goals by
the Committee varies as between each of the Company's officers. On
average, structural increases are made based on median increases in both
the national chemical industry as well as local general industry.
Individual salary increases are made based on performance in comparison to
the individual executive's penetration into his/her salary range. This
salary
12
<PAGE>
range is part of Quaker's overall salary structure, which is adjusted
as needed based on HayGroup data reflecting median increases in both the
national chemical industry as well as local general industry more closely
reflecting the competitiveness of positions that are not "national" in
nature. As a result of 1993 financial performance, there are no planned
salary increases for any Quaker officer, including the CEO, except for Mr.
Meijer whose salary increase is required by Dutch law.
The incentive component is paid on an annual basis in the form of a
cash bonus. It is primarily used to motivate executive officers to meet or
exceed previously established targets on a consistent basis. The measure
used in 1993 is the attainment of previously established PBT targets as
well as the accomplishment of non-financial (personal) goals linked
directly to the achievement of the Company's strategic plan. Payments are
made based on actual performance compared with target. Performance above
budget target is based on a formula which provides that for each additional
5% achievement of budgeted PBT, there will be an additional 20% increase in
the percentage of the financial incentive award. There is no payout for
performance against target of less than 81%. The total incentive award
amount is determined by multiplying the base salary compensation labor
grade midpoint of the position, based on data provided by the HayGroup, by
a previously established incentive award percentage. The greater the
weighting of the position and resultant impact on profitability of the
Company, the greater the percentage.
PBT targets have historically been established at levels which the
Committee believes have been aggressive. In 1993, since Company PBT
targets were not achieved, neither individual serving as CEO during the
past year received an incentive compensation award, and other executive
officers received only incentive payments resulting from achievement of
previously established non-financial objectives referred to as personal
goals.
The final component is compensation realized from the biannual grants
of incentive stock options, non-qualified options, and performance
incentive units issued under the Company's Long-Term Performance Incentive
Plan (the "Plan"). Awards under the Plan provide incentives to those
employees largely responsible for the long-term success of the Company.
The Plan is primarily used to retain and motivate executive officers to
improve stock market performance (i.e., total return to shareholders).
With stock options, executive officers receive gains only if the stock
price improves over the fair market value at the date of the grant. In the
case of Mr. Benoliel, the option price is 110% of this value. With
performance incentive units, the value of the award increases based on the
four-year average return on equity and income before tax as a percentage of
sales. Target value for performance units is $21.00 per incentive unit
based on the attainment of 100% of the target. A payment of $42.00 per
incentive unit will be made if performance reaches the maximum of the
measurement scale. The purpose of issuing both stock options and
performance incentive units is to motivate executive officers to make the
types of long-term changes in the business that will affect long-term total
return to shareholders. Past practice has been to grant stock options and
performance incentive units to executive officers in alternate years. The
amounts of the awards are based on the relative position of each executive
officer within the organizational structure of the Company and past
practice and performance factors independent of the terms and amount of
awards previously granted.
Section 162(m) of the Internal Revenue Code (the "Code"), enacted in
1993, generally imposes a $1,000,000 limit on the amount of compensation
deductible by the Company in regard to compensation paid to the Company's
Chief Executive Officer and the other four most highly compensated
executive officers. Since the amount of compensation paid in the last year
to the Company's Chief Executive Officer and each of the other four most
highly compensated officers was considerably less than $1,000,000, and it
is unlikely that compensation levels will dramatically increase in the
foreseeable future, the Company has not adopted any policy with respect to
qualifying compensation paid to executive officers for deductibility under
Section 162(m) of the Code.
Compensation/Management Development Committee
and Long-Term Performance Incentive Plan Committee
Frederick Heldring, Chairman
Patricia C. Barron
Edwin J. Delattre
D. Robert Yarnall, Jr.
13
<PAGE>
Performance Graph
Set forth below is a line graph comparing the yearly percentage change
in the cumulative total shareholder return on the Company's Common Stock
against the cumulative total return of the S&P Composite 500 Stock Index
and the S&P Chemical (Specialty) Index for the period of five (5) years
commencing December 31, 1988 and ending December 31, 1993.
COMPARISON OF FIVE-YEAR CUMULATIVE TOTAL RETURN*
AMONG THE COMPANY, THE S&P 500 INDEX,
AND THE S&P CHEMICALS (SPECIALTY) INDEX
ID: GRAPHIC (LINE CHART)
* $100 invested on 12/31/88 in stock or index -- including reinvestment of
dividends. Fiscal year ending December 31.
14
<PAGE>
APPOINTMENT OF INDEPENDENT ACCOUNTANTS
The Board of Directors of the Company has appointed Price Waterhouse,
independent accountants, to examine the accounts of the Company for the
year ending December 31, 1994 and to report on the Company's financial
statements for that period. The firm of Price Waterhouse has acted as
independent accountants for the Company since 1968. Representatives of
Price Waterhouse will be present at the Meeting to make a statement if they
desire to do so and to respond to appropriate questions.
There is no requirement that the appointment of Price Waterhouse as the
Company's independent accountants be submitted to the shareholders for
their approval. However, the Board of Directors believes that shareholders
should be provided an opportunity to express their views on the subject.
The Board of Directors will not be bound by a negative vote but will take
any negative vote into consideration in future years.
THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE IN FAVOR OF THE
RATIFICATION OF THE APPOINTMENT OF PRICE WATERHOUSE.
DEADLINE FOR RECEIPT OF SHAREHOLDER PROPOSALS
TO BE INCLUDED IN MANAGEMENT'S PROXY AND
PROXY STATEMENT FOR THE NEXT ANNUAL MEETING
OF SHAREHOLDERS
In order for a shareholder's proposal(s) to be set forth in the
Company's Proxy Statement and Proxy for the 1995 Annual Meeting of
Shareholders, the shareholder must present his proposal(s) to the Company
not later than December 2, 1994.
OTHER MATTERS
The Board of Directors does not know of any matters other than the
matters described herein and procedural matters to be presented at the
Meeting. If any other matters properly come before the Meeting, the
persons named in the accompanying Proxy will vote on such matters in
accordance with their best judgment.
By Order of the Board of Directors,
Karl H. Spaeth
Vice President and Secretary
Dated: March 31, 1994
15
<PAGE>
EXHIBIT A
---------
SHAREHOLDER VOTING ADMINISTRATIVE PROCEDURES
Voting Rights
At the Annual Meeting of shareholders held May 6, 1987, shareholders
approved an amendment to the Articles of Incorporation, pursuant to which
the holders of the Company's Common Stock, $1.00 par value, on May 7, 1987
(the "Effective Date") became entitled to 10 votes per share of Common
Stock with respect to such shares, and any shares of Common Stock acquired
after the Effective Date, subject to certain exceptions, shall only be
entitled to 1 vote per share until such shares have been owned beneficially
for a period of at least 36 consecutive calendar months, dating from the
first day of the first full calendar month on or after the date the holder
acquires beneficial ownership of such shares (the "Holding Period"). Each
change in beneficial ownership with respect to a particular share will
begin a new "1 vote" Holding Period for such share. A change in beneficial
ownership will occur whenever any change occurs in the person or group of
persons having or sharing the voting and/or investment power with respect
to such shares within the meaning of Rule 13d-3 of the General Rules and
Regulations under the Securities Exchange Act of 1934. Under the
amendment, a share of Common Stock held of record on a record date shall be
presumed to be owned beneficially by the record holder and for the period
shown by the shareholder records of the Company. A share of Common Stock
held of record in "street" or "nominee" name by a broker, clearing agency,
voting trustee, bank, trust company, or other nominee shall be presumed to
have been held for a period of less than the required 36 month Holding
Period. The foregoing presumptions are rebuttable upon presentation to the
Company of satisfactory evidence to the contrary. The amendment also
provides that no change in beneficial ownership will be deemed to have
occurred solely as a result of any of the following:
(1) a transfer by any gift, devise, bequest, or otherwise through the
laws of inheritance or descent;
(2) a transfer by a trustee to a trust beneficiary under the terms of
the trust;
(3) the appointment of a successor trustee, guardian, or custodian with
respect to a share; or
(4) a transfer of record or a transfer of a beneficial interest in a
share where the circumstances surrounding such transfer clearly
demonstrate that no material change in beneficial ownership has
occurred.
Maintaining Records
The Company's registrar and transfer agent, American Stock Transfer &
Trust Company, maintains the Company's register of shareholders. A single
register is maintained, but individual holdings are coded so as
automatically to indicate the number of votes that each shareholder is
entitled to cast. Internal mechanisms automatically convert the voting
rights by a 10-to-1 ratio for those shareholders who have held their shares
for the required Holding Period. Additionally, the register can be
adjusted manually, in order to respond to shareholders whose shares were
held in "street" or "nominee" if shares acquired were held by the same
party for the required Holding Period.
Proxy Administration
As indicated above, record ownership proxy administration is relatively
simple. The transfer agent will mail proxy cards to all shareholders, and
each proxy card will reflect the number of votes that the shareholder is
entitled to cast, not the number of shares held. If shareholders have
deposited shares with brokers, clearing agencies, voting trusts, banks, and
other nominees, such shareholders will normally be entitled to 1 vote per
share. If they can provide evidence that they have held their shares for
the Holding Period, they can increase the number of votes that may be cast
to 10 votes per share, by proper notification to the Company. Equally, if
a shareholder believes that he or she is entitled to 10 votes per share by
virtue of falling within one of the exceptions set forth above, that can be
accomplished through proper notification to the Company. Acceptable
substantiation will in most cases be a letter from the shareholder
explaining the circumstances and stating why he or she feels that the
common shares held by such shareholder are entitled to 10 votes per share,
either because the shares have been held for the required Holding Period or
because the shareholder falls within one of the exceptions set forth above.
The Company reserves the right to change what it deems to be acceptable
substantiation at
16
<PAGE>
any time if it appears from experience that the present definition is
inadequate or is being abused, and further reserves the right at any time
to require that a particular shareholder provide additional evidence that
one of the exceptions is applicable.
Where evidence is presented that is satisfactory, the shareholder
records will be manually adjusted as appropriate. The shareholder
submitting the evidence will be advised as to any action taken or not
taken, which will be posted by ordinary mail to the shareholder's
registered address.
Special proxy cards are not used, and no special or unusual procedures
are required in order properly to execute and deliver the proxy card for
tabulation by the transfer agent.
Summary
The procedures set forth above have been reviewed with representatives
of various brokers and banks, as well as counsel to the Company. Those
representatives have made helpful and valuable suggestions, which have been
incorporated in the procedures.
The Company is confident that these procedures are efficient in
addressing the complications of multi-vote casting and tabulating, but the
Company is prepared to revise them if experience dictates the need for
revision.
APPENDIX OF GRAPHIC AND IMAGE MATERIAL OMITTED FROM ELECTRONIC FORMAT
DOCUMENT PURSUANT TO RULE 304 OF REGULATION S-T
Performance graph comparing cumulative total shareholder return on Quaker
Chemical Corporation's Common Stock against the S&P Index and the S&P
Chemicals (Specialty) Index appearing on page 14 of the Definitive Proxy
Statement.
COMPARISON OF FIVE-YEAR CUMULATIVE TOTAL RETURN
AMONG THE COMPANY, THE S&P INDEX, AND THE S&P CHEMICALS
(SPECIALTY) INDEX
This chart is a five-year line graph which plots points depicting the
investment of $100 in Quaker Chemical Corporation Common Stock on December 31,
1988 and compares the results with $100 invested in the S&P 500 with $100
invested the S&P Chemicals (Specialty) Index on that same date. Reinvestment
of dividends is also included.
The x-axis of the graph represents years and spans the period from
December 31, 1988 to December 31, 1993. The y-axis of the graph is indexed in
dollars, ranging from 0 to $250 and represents the year-end cumulative return
on the initial $100 investment for each year.
The initial plot point for Quaker Chemical Corporation, the S&P Index, and
the S&P Chemicals (Specialty) Index is 100 at December 31, 1988. Starting in
1989, the plot points, which represent the $100 investment plus dividends, are
as follows:
1989 1990 1991 1992 1993
---- ---- ---- ---- ----
Quaker Chemical Corporation 108 153 174 183 144
S&P 500 132 128 166 179 197
S&P Chemicals (Specialty) 100 102 144 153 174
17
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18
<PAGE>
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19
<PAGE>
[THIS PAGE INTENTIONALLY LEFT BLANK]
20
QUAKER CHEMICAL CORPORATION
ELM AND LEE STREETS, CONSHOHOCKEN, PA 19428
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints William L. Batchelor, Peter A. Benoliel,
and Alex Satinsky, and each of them (or if more than one is present, then a
majority of those present) proxies of the undersigned, to attend the Annual
Meeting of Shareholders of Quaker Chemical Corporation, a Pennsylvania
corporation (the "Company"), to be held in West Conshohocken, Pennsylvania, on
May 4, 1994, or any adjournment thereof, and with all powers the undersigned
would possess if present, to vote:
1. ELECTION OF FOR all nominees
DIRECTORS listed below (Box) WITHHOLD AUTHORITY (Box)
(except as marked to vote for all
to the contrary below) nominees listed below
Lennox K. Black, Robert P. Hauptfuhrer, Frederick Heldring, Ronald J.
Naples, and Alex Satinsky
(Instruction: To withhold authority to vote for any individual nominee,
write that nominee's name on the space provided below.)
----------------------------------------------------------------------------
2. PROPOSAL TO RATIFY THE APPOINTMENT OF PRICE WATERHOUSE AS THE COMPANY'S
INDEPENDENT ACCOUNTANTS FOR 1994.
(Box) FOR (Box) AGAINST (Box) ABSTAIN
(CONTINUED ON REVERSE SIDE)
(CONTINUED FROM REVERSE SIDE)
3. IN THEIR DISCRETION UPON SUCH OTHER MATTERS AS MAY COME BEFORE THE
MEETING OR ANY ADJOURNMENT THEREOF.
THIS PROXY, WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED
HEREIN BY THE UNDERSIGNED SHAREHOLDER. IF NO DIRECTION IS MADE, THIS
PROXY WILL BE VOTED FOR PROPOSALS 1 AND 2.
The undersigned hereby also acknowledges receipt of the Notice of
Annual Meeting of Shareholders dated March 31, 1994, the Proxy Statement
with respect to said Meeting, and the Company's Annual Report for the
year ended December 31, 1993.
Dated: 1994
-------------------------------------
(Signature)
(Signature should be exactly as name or
names appear on this Proxy.)
PLEASE DATE, SIGN, AND RETURN PROMPTLY
<PAGE>
(QUAKER LOGO)
March 31, 1994
Dear Quaker Shareholder:
Your enclosed proxy card shows the number of votes you are entitled to
cast not the number of shares that you own.
This reflects the action taken at the Annual Meeting of Shareholders on
May 6, 1987 when shareholders approved an amendment to the Articles of
Incorporation by which holders of Common Stock became entitled to 10 votes
per share of Common Stock for shares which were held at that date. The
amended Articles also provide that as to shares acquired after May 6,
1987, all shares are entitled to 1 vote per share until such shares are held
for 36 consecutive months. After 36 months, each share is entitled to 10
votes.
There are some exceptions to the above, and those exceptions are listed in
Exhibit A "Shareholder Voting Administrative Procedures" to the enclosed
Proxy Statement.
Because we have no means of tracking ownership of shares held in "street"
or "nominee" name, such shares are presumed to have been held for a period
of less than 36 consecutive months.
Please look at the number of votes which are listed for you. For all shares
purchased by you before March 1, 1991 (36 months before the record date), you
are entitled to 10 votes per share. For all shares purchased by you after
March 1, 1991, you are entitled to one vote per share.
If you feel that the votes listed do not accurately reflect the number of
votes you think you are entitled to cast, Exhibit A to the enclosed Proxy
Statement outlines procedures by which you may seek change. If you have any
questions, please call Kathleen Mague at 610-832-4119.
To allow sufficient time to research your questions or act on your requests,
please contact either Kathleen Mague at Quaker Chemical or our transfer
agent, American Stock Transfer and Trust Company, as soon as possible.
Thank you.
