Pennsylvania | 23-0993790 | |
(State or other jurisdiction of | (IRS Employer | |
incorporation) | Identification No.) |
[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Information to be included in the report
Due to the negative impact of a 2005 restructuring charge and a tax charge related to repatriation of foreign earnings, participants in the original 2004-2006 pr ogram did not earn an incentive award under the 2004-06 program. As was the then current practice, the Company awarded for the 2004-06 plan period options, performance-based stock and cash incentive awards, with the latter two items being subject to the same performance criteria. The performance criteria for calculating the stock and cash awards for the three-year period was a mix, with 55% determined on the Company's relative average return on assets ("ROA") as compared to the S&P SmallCap 600 Materials Group and 45% on the Company's average earnings per share ("EPS"). To qualify for any award under either the EPS or the ROA criteria, average EPS had to be at least 50% of the targeted EPS. After adjusting for the aforementioned charges, the EPS qualifier was met, but EPS fell short of meeting the criteria for the EPS portion of the award. The criteria for the ROA portion of the award should be met.
The Company's Compensation/Management Development Commi ttee (the "Committee") felt that not adjusting for the unanticipated restructuring and tax charges would be an inequitable result for plan participants. But since no provision was made at the time of grant for adjusting the result for one-time events, no payment can be made under the 2001 LTIP with respect to the original 2004-06 program. Following extensive discussion, the Committee recommended to the Board and the Board approved a discretionary award adjusting earnings for the items noted above. This discretionary award, if earned, will be paid in cash. Since the ROA benchmark data will not be available until April, award amounts, if any, cannot be determined at this time.
QUAKER CHEMICAL CORPORATION | ||||||||
Date: February 07, 2007 | By: | /s/ D. Jeffry Benoliel | ||||||
D. Jeffry Benoliel | ||||||||
Vice President, Secretary and General Counsel | ||||||||