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AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON OCTOBER 30, 1996
REGISTRATION NO. 33-54158
=============================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
--------------------
POST-EFFECTIVE AMENDMENT NO. 4
TO
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
--------------------
QUAKER CHEMICAL CORPORATION
(EXACT NAME OF ISSUER AS SPECIFIED IN ITS CHARTER)
PENNSYLVANIA 23-0993790
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) IDENTIFICATION NO.)
ELM AND LEE STREETS, CONSHOHOCKEN, PENNSYLVANIA 19428
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)
QUAKER CHEMICAL CORPORATION PROFIT
SHARING AND RETIREMENT SAVINGS PLAN
(FULL TITLE OF THE PLAN)
KARL H. SPAETH, ELM AND LEE STREETS
CONSHOHOCKEN, PENNSYLVANIA 19429
(NAME AND ADDRESS OF AGENT FOR SERVICE)
(610) 832-4112
(TELEPHONE NUMBER, INCLUDING AREA CODE, OF AGENT FOR SERVICE)
Copy to:
Ramon R. Obod, Esquire
Fox, Rothschild, O'Brien & Frankel
2000 Market Street, Tenth Floor
Philadelphia, PA 19103
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QUAKER CHEMICAL CORPORATION
CROSS-REFERENCE SHEET
PURSUANT TO RULE 404 AND ITEM 501 OF REGULATION S-K
FORM S-8 ITEM NO. HEADING IN PROSPECTUS
- ----------------- ---------------------
1. Plan Information
(a) General Plan Information..... Cover Page; General Information;
Definitions; The Plan--General;
The Plan--Purpose; The Plan--Amendment
and Termination; The Plan--
Administration; The Plan--Description
of Investment Options; Applicable
Requirements of ERISA; Reports of the
Company; Incorporation of Certain
Documents by Reference
(b) Securities to be Offered..... Cover Page
(c) Employees Who May Participate
in the Plan.................. Definitions; The Plan--Eligibility
(d) Purchase of Securities Pursuant
to the Plan and Payments for
Securities Offered........... The Plan--Contributions; The Plan--
Limitations on Contributions; The Plan--
Change of Contributions; The Plan--
Accounts; The Plan--Investment of
Contributions
(e) Resale Restrictions.......... The Plan--Assignment; Liens
(f) Tax Effects of Plan
Participation................ Federal Tax Aspects
(g) Investment of Funds.......... The Plan--Investment of Contributions
(h) Withdrawal from the Plan;
Assignment of Interest....... The Plan--Withdrawals of Profit-Sharing
Contributions; The Plan--Distribution of
Benefits; The Plan--Assignment; Liens;
The Plan--Change of Contributions
(i) Forfeitures and Penalties..... The Plan--Contributions, --Limitations
on Contributions and --Investment of
Contributions
(j) Charges and Deductions and
Liens Therefor............... The Plan--Investment of Contributions
2. Registrant Information and
Employee Plan Annual Information. Reports of the Company; Incorporation
of Certain Documents by Reference
PROSPECTUS
- ----------
QUAKER CHEMICAL CORPORATION
100,000 Shares
of
Common Stock
($1.00 Par Value)
--------------
QUAKER CHEMICAL CORPORATION
PROFIT SHARING AND RETIREMENT SAVINGS PLAN
--------------
This Prospectus covers interests in the Quaker Chemical Corporation
Profit Sharing and Retirement Savings Plan (the "Plan") as well as
100,000 shares of Common Stock, $1.00 par value ("Common Stock"), of Quaker
Chemical Corporation (the "Company") which may be acquired pursuant to
the Plan as more fully set forth herein.
None of the Company's Common Stock purchased pursuant to the Plan
will be purchased from the Company. Accordingly, the Company will not
receive any proceeds on account of any purchase of its Common Stock
pursuant to the Plan. See "The Plan -- Description of Investment
Options."
--------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION NOR HAS THE COMMISSION PASSED UPON
THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRE-
SENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
--------------
The date of this Prospectus is October 30, 1996.
ADDITIONAL INFORMATION
The Company has filed a Registration Statement with the Securities
and Exchange Commission (the "Commission") under the Securities Act of
1933, as amended, with respect to the shares offered hereby. This
Prospectus does not contain all of the information set forth in the
Registration Statement, certain items of which are contained in
schedules and exhibits to the Registration Statement as permitted by the
rules and regulations of the Commission. For further information,
reference is made to the Registration Statement, including the financial
schedules and exhibits filed or incorporated as a part thereof. Items
of information omitted from this Prospectus but contained in the
Registration Statement may be inspected and copies may be obtained (at
prescribed rates) at the Commission's Public Reference Section at 450
Fifth Street, N.W., Washington, D.C. 20549.
The Company is subject to the informational requirements of the
Securities Exchange Act of 1934 and, in accordance therewith, files
reports, proxy statements and other information with the Commission. Such
reports, proxy statements and other information can be inspected and copied
(at prescribed rates) at the Public Reference Section offices of the
Commission at 450 Fifth Street, N.W., Washington, D.C. 20549, and at the
Commission's regional offices at Citicorp Center, 500 West Madison Street,
Suite 1400, Chicago, Illinois 60661-2511; and Seven World Trade Center,
13th Floor, New York, New York 10048. The Company files its reports and
other information electronically with the Commission. The Commission
maintains a Web site that contains reports, proxy and information
statements and other information regarding registrants that file
electronically with the Commission. The address of such site is
http://www.sec.gov. Such reports and other information may also be
inspected at the offices of the New York Stock Exchange at 20 Broad
Street, New York, New York 10005.
No person is authorized to give any information or to make any
representations not contained in this Prospectus in connection with the
offer described herein, and any information or representation not
contained herein must not be relied upon as having been authorized by
the Company. This Prospectus does not constitute an offer to sell these
securities in any state to any person to whom it is unlawful to make
such offer in such state. Neither the delivery of this Prospectus nor
any sale made hereunder shall, under any circumstances, create an
implication that information herein is correct as of any time subsequent
to its date.
GENERAL INFORMATION
This Prospectus relates to interests in the Plan and its
participating subsidiaries, and to shares of the Company's Common Stock,
which may be purchased by the Trustee (as defined) pursuant to the Plan.
The Company is a Pennsylvania corporation having its principal executive
offices located at Elm and Lee Streets, Conshohocken, Pennsylvania 19428
(telephone number 610-832-4000). The principal provisions of the Plan
are summarized in this Prospectus.
2
DEFINITIONS
The following terms, as used in this Prospectus, have the following
meanings:
"Account" means, with respect to each Participant, the accounts
established and maintained by the Administrator for such Participant
pursuant to the Plan, and to which all contributions on behalf of such
Participant are credited in accordance with the provisions of the Plan.
"Act" means the Employee Retirement Income Security Act of 1974, as
it may be amended from time to time.
"Administrator" means the committee designated by the Employer to
administer the Plan on behalf of the Employer.
"Anniversary Date" means the last day of each Plan Year or such
other date(s) designated as such by the Administrator.
"Base Compensation" with respect to any Employee means the
Compensation of the Employee, excluding overtime payments, bonuses,
shift differential, commissions, all non-salary and non-wage direct or
indirect compensation, Employer contributions to Social Security,
contributions to this or any other retirement plan or programs, salary
reduction contributions made on behalf of such Employee to a plan
maintained under Code Section 125, the value of any other fringe benefit
provided by or at the expense of the Employer, or any income realized
upon the receipt or exercise of a grant of a Stock Option, Stock
Appreciation Right, or Performance Incentive Unit pursuant to the Quaker
Chemical Corporation Long-Term Performance Incentive Plan.
"Beneficiary" means the person to whom the share of a deceased
Participant's Account is payable, subject to certain restrictions.
"Code" means the Internal Revenue Code of 1986, as amended or
replaced from time to time.
"Compensation" with respect to any Employee means the total
remuneration earned by, or accrued on behalf of, the Employee during the
time period to which reference is made exclusive of Compensation paid to
any Participant after the date on which such Participant ceased to be
employed in a classification eligible for participation in this Plan.
Only Compensation earned by an Employee while a Participant will be
considered for purposes of determining the Employer's Profit Sharing
Contribution and the allocation of the Employer's Profit Sharing
Contribution made under the Plan.
The determination of Compensation shall also be made by including
salary reduction contributions made on behalf of an Employee to a plan
maintained under Code Section 125.
Compensation in excess of $150,000 shall be disregarded. Such
amount shall be adjusted at the same time and in such manner as
permitted under Code Section 415(d). In applying these limitations, the
family group of a Highly Compensated Participant who is subject to the
Family Member aggregation rules of Code Section 414(q)(6) because such
Participant is either a "five percent owner" of the Employer or one of
the ten (10) Highly Compensated Employees paid the greatest "415
Compensation" during the year, shall be treated as a single Participant,
except that for this purpose Family Members shall include only the
affected Participant's spouse and any lineal descendants who have not
attained age nineteen (19) before the close of the year. If, as a
result of the application of such rules the adjusted dollar limitation
is exceeded, then the limitation shall be prorated among the affected
Family Members in proportion to each such Family Member's Compensation
prior to the application of this limitation.
"Contract" means the Group Annuity Contract No. GA 83729, effective
as of December 30, 1988, between Principal Mutual Life Insurance Company
(formerly Bankers Life) and the Company.
"Deferred Compensation" with respect to any Participant means that
portion of the Participant's total Compensation which has been
contributed to the Plan as an Elective Contribution in accordance with
the Participant's deferral election.
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"Early Retirement Date" means the date on which a Participant
satisfies both of the following requirements:
(a) Attains age 60; and
(b) Completes ten (10) Years of Service.
"Elective Contribution" means the Employer's contributions to the
Plan that is made pursuant to the Participant's deferral election
provided under the Plan. In addition, any Employer Qualified Non-
Elective Contribution shall be considered an Elective Contribution for
purposes of the Plan.
"Eligible Employee" means any Employee, except as follows:
(a) Employees whose employment is governed by the terms of a
collective bargaining agreement between employee representatives
(within the meaning of Code Section 7701(a)(46)) and the Employer
under which retirement benefits were the subject of good faith
bargaining between the parties, unless such agreement expressly
provides for such coverage in the Plan, will not be eligible to
participate in this Plan; and
(b) Employees of Affiliated Employers shall not be eligible to
participate in this Plan unless such Affiliated Employers have
specifically adopted this Plan in writing.
"Employee" means any person who is employed by the Employer or
Affiliated Employer, but excludes any person who is an independent
contractor. Employee shall include Leased Employees within the meaning
of Code Sections 414(n)(2) and 414(o)(2) unless such Leased Employees
are covered by a plan described in Code Section 414(n)(5) and such
Leased Employees do not constitute more than 20% of the recipient's
non-highly compensated workforce. For any Plan Year in which the Plan
is deemed to be a Top Heavy Plan, no Key Employee shall be permitted to
participate in the Plan.
"Employer" means Quaker Chemical Corporation, a Pennsylvania
corporation, any successor which maintains the Plan and any Affiliated
Employer (as defined in the Plan) that has adopted the Plan in writing.
"Family Member" means, with respect to an affected Participant, such
Participant's spouse, such Participant's lineal descendants and
ascendants and their spouses, all as described in Code Section
414(q)(6)(B).
"Highly Compensated Employee" means an Employee described in Code
Section 414(q) and the Regulations thereunder, and generally means an
Employee who performed services for the Employer during the
"determination year" and is in one or more of the following groups:
(a) Employees who at any time during the "determination year"
or "look-back year" were "five percent owners".
(b) Employees who received "415 Compensation" during the
"look-back year" from the Employer in excess of $75,000.
(c) Employees who received "415 Compensation" during the
"look-back year" from the Employer in excess of $50,000 and were in
the Top Paid Group of Employees for the Plan Year.
(d) Employees who during the "look-back year" were officers of
the Employer (as that term is defined within the meaning of the
Regulations under Code Section 416) and received "415 Compensation"
during the "look-back year" from the Employer greater than 50
percent of the limit in effect under Code Section 415(b)(1)(A) for
any such Plan Year. The number of officers shall be limited to the
lesser of (i) 50 employees; or (ii) the greater of 3 employees or 10
percent of all employees. If the Employer does not have at least
one officer whose annual "415 Compensation" is in excess of 50
percent of the Code Section 415(b)(1)(A) limit, then the highest
paid officer of the Employer will be treated as a Highly Compensated
Employee.
(e) Employees who are in the group consisting of the 100
Employees paid the greatest "415 Compensation" during the
"determination year" and are also described in (b), (c) or (d) above
when these paragraphs are modified to substitute "determination
year" for "look-back year".
The "look-back year" shall be the calendar year ending with or
within the Plan Year for which testing is being performed, and the
"determination year" (if applicable) shall be the period of time, if
any, which extends beyond the "look-back year" and ends on the last day
of the Plan Year for which testing is being performed (the "lag period").
4
If the "lag period" is less than twelve months long, the dollar
threshold amounts specified in (b), (c) and (d) above shall be prorated
based upon the number of months in the "lag period".
For purposes of this Section, the determination of "415
Compensation" shall be made by including amounts that would otherwise be
excluded from a Participant's gross income by reason of the application
of Code Sections 125, 402(a)(8), 402(h)(1)(B) and, in the case of
Employer contributions made pursuant to a salary reduction agreement, by
including amounts that would otherwise be excluded from a Participant's
gross income by reason of the application of Code Section 403(b).
Additionally, the dollar threshold amounts specified in (b) and (c)
above shall be adjusted at such time and in such manner as is provided
in Regulations. In the case of such an adjustment, the dollar limits
which shall be applied are those for the calendar year in which the
"determination year" or "look-back year" begins.
In determining who is a Highly Compensated Employee, Employees who
are non-resident aliens and who received no earned income (within the
meaning of Code Section 911(d)(2)) from the Employer constituting United
States source income within the meaning of Code Section 861(a)(3) shall
not be treated as Employees. Additionally, all Affiliated Employers
shall be taken into account as a single employer and Leased Employees
within the meaning of Code Sections 414(n)(2) and 414(o)(2) shall be
considered Employees unless such Leased Employees are covered by a plan
described in Code Section 414(n)(5) and are not covered in any qualified
plan maintained by the Employer. The exclusion of Leased Employees for
this purpose shall be applied on a uniform and consistent basis for all
of the Employer's retirement plans. Highly Compensated Former Employees
shall be treated as Highly Compensated Employees without regard to
whether they performed services during the "determination year".
"Highly Compensated Former Employee" means a former Employee who had
a separation year prior to the "determination year" and was a Highly
Compensated Employee in the year of separation from service or in any
"determination year" after attaining age 55. Notwithstanding the
foregoing, an Employee who separated from service prior to 1987 will be
treated as a Highly Compensated Former Employee only if during the
separation year (or year preceding the separation year) or any year
after the Employee attains age 55 (or the last year ending before the
Employee's 55th birthday), the Employee either received "415
Compensation" in excess of $50,000 or was a "five percent owner". For
purposes of this Section, "determination year", "415 Compensation" and
"five percent owner" shall be determined in accordance with Section
1.26. Highly Compensated Former Employees shall be treated as Highly
Compensated Employees. The method set forth in this Section for
determining who is a "Highly Compensated Former Employee" shall be
applied on a uniform and consistent basis for all purposes for which the
Code Section 414(q) definition is applicable.
"Highly Compensated Participant" means any Highly Compensated
Employee who is eligible to participate in the Plan.
"Insurer" means the Principal Financial Group, a diversified family
of financial services companies headquartered in Des Moines, Iowa, and
any other insurance company or companies selected by the Trustee or the
Employer.
"Investment Manager" means an entity that (a) has the power to
manage, acquire, or dispose of Plan assets and (b) acknowledges
fiduciary responsibility to the Plan in writing. Such entity must be a
person, firm, or corporation registered as an investment adviser under
the Investment Advisers Act of 1940, a bank, or an insurance company.
"IRS" means the Internal Revenue Service of the United States
Department of the Treasury.
"Late Retirement Date" means the first day of the month coinciding
with or next following a Participant's actual Retirement Date after
having reached his Normal Retirement Date.
"Net Income" means the profit from operations, adjusted in
accordance for items approved from time to time by the Board of
Directors of the Company for the Company's fiscal year, based upon the
Company's domestic operations and/or such other operations as the
Company's Board of Directors shall from time to time consider
appropriate, as determined from the Company's internal financial
statements for such operations.
"Non-Highly Compensated Participant" means any Participant who is
neither a Highly Compensated Employee nor a Family Member.
5
"Normal Retirement Age" means the Participant's 65th birthday.
"Normal Retirement Date" means the first day of the month subsequent
to the Participant's Normal Retirement Age.
"Participant" means any Eligible Employee who participates in the
Plan in accordance with its terms, and has not for any reason become
ineligible to participate further in the Plan.
"Plan Year" means the Plan's accounting year of twelve (12) months
commencing on January 1st of each year and ending the following December
31st.
"Profit-Sharing Contribution" means the Employer's discretionary
contributions to the Plan from Net Income.
"Regulation" means the Income Tax Regulations as promulgated by the
Secretary of the Treasury or his delegate, and as amended from time to
time.
"Retirement Date" means the date as of which a Participant retires
for reasons other than Total and Permanent Disability, whether such
retirement occurs on a Participant's Early Retirement Date, Normal
Retirement Date or Late Retirement Date.
"Terminated Participant" means a person who has been a Participant,
but whose employment has been terminated other than by death, Total and
Permanent Disability or retirement.
"Top Heavy Plan" means a plan described in Section 2.2(a) of the
Plan.
"Top Heavy Plan Year" means a Plan Year during which the Plan is a
Top Heavy Plan.
"Total and Permanent Disability" means a physical or mental
condition of a Participant resulting from bodily injury, disease, or
mental disorder continuing for at least twenty-four (24) consecutive
months and which renders him eligible for disability benefits under
Title II of the Federal Social Security Acts. The disability of a
Participant shall be determined by a licensed physician chosen by the
Administrator. The determination shall be applied uniformly to all
Participants.
"Trustee" means CoreStates Bank, which will hold and invest the
assets in the Quaker Stock Fund, a separate trust forming a part of the
Plan.
"Trust Fund" or "Fund" means the Principal Financial Group or the
assets of the Plan and Trust as the same shall exist from time to time.
"Year of Service" means the computation period of twelve (12)
consecutive months, herein set forth, during which an Employee has at
least 1,000 Hours of Service. Years of Service with any Affiliated
Employer shall be recognized as Years of Service with the Employer.
6
THE PLAN
GENERAL
The Quaker Chemical Corporation Profit Sharing and Retirement
Savings Plan, as amended (the "Plan"), originally effective December 31,
1953, covers the Eligible Employees of the Company and of each
"Affiliated Employer" (as defined in the Plan) which has adopted the
Plan.
The Plan was amended and restated on November 3, 1992, effective as
of January 1, 1989, to comply with the provisions of the Tax Reform Act
of 1986 and subsequent legislation. This amendment and restatement also
contains provisions, effective January 1, 1993, incorporating into the
Plan a qualified cash or deferred arrangement under Section 401(k) of
the Code. The Company has received a letter of favorable determination
from the IRS that the Plan, as amended and restated, meets the
requirements of a qualified profit sharing plan under Section 401(a) of
the Code and a qualified cash or deferred arrangement under Section
401(k) of the Code and that the Trust is exempt from Federal income tax
under Section 501(a) of the Code.
PURPOSE
The Plan is designed to provide Eligible Employees with retirement
benefits and an opportunity to increase their retirement savings by
offering the advantages of a qualified cash or deferred arrangement
under Section 401(k) of the Code. See "Federal Tax Aspects." In
general, an Employee who meets the Plan's eligibility requirements
becomes a Participant. A Participant may authorize the Company to make
an Elective Contribution (as described under "Contributions," below) by
reducing the Participant's Compensation by an amount not in excess of 8%
of his Compensation. Subject to limitations set forth in the Plan, the
Company will make Matching Contributions which will partially match
Elective Contributions. The Company further may choose to make Profit
Sharing Contributions. A Participant may direct the investment of all
of his or her Elective Contributions, together with Matching
Contributions and any Profit Sharing Contributions into one or more of
four investment options in accordance with the provisions of the Plan.
See "Investment of Contributions," below.
ADMINISTRATION
The Administrator, a committee of two or more individuals appointed
by the Board of Directors of the Company, is responsible for the
administration of the Plan for the exclusive benefit of the Participants
and their Beneficiaries, subject to the terms of the Plan. The
Administrator is a "named fiduciary" as such term is defined in the
Employee Retirement Income Security Act of 1974, as amended ("ERISA").
The Administrator has the power and the duty to take all action and to
make all decisions necessary or proper to carry out the Plan. The
determination of the Administrator as to any question involving the
general administration and interpretation of the Plan is conclusive and
binding on any person making a claim under the Plan. The Administrator
may make and enforce rules and regulations relating to the Plan. In
administering the Plan, the Administrator must act in a
nondiscriminatory manner.
The assets of the Plan will be held pursuant to the terms of the
Contract with the Insurer and, with respect to the Quaker Stock Account,
in the Trust Fund. The Administrator has no duty with respect to the
investment of the funds held under the Contract or in the Trust Fund.
The Insurer makes investment decisions with respect to assets held under
the Contract. The Trustee has powers and responsibilities with respect
to the administration of the Quaker Stock Account, including (i) initial
investment of the funds deposited in the Quaker Stock Account, (ii)
reinvestment, sale, exchange or other disposition of all or any portion
of each such Account's assets, (iii) exercise of the voting rights
associated with any securities constituting a part of such Account's
assets, (iv) disbursement from such Account in accordance with
instructions from the Administrator, and (v) the valuation of such
Account.
In connection with its control and management of the Quaker Stock
Account, the Trustee selects brokers to effect particular securities
transactions resulting in the most favorable net results for the Plan by
taking into account such factors as price, commission, size of order and
execution by the broker. Factors such as the brokers' execution and
capital commitment capabilities, initiation of trades and securities
syndication are evaluated by the Trustee in selecting a broker.
Brokerage transactions are not directed to brokers because of their
research services. The Trustee periodically evaluates the
reasonableness of brokerage commissions paid by the Quaker Stock Account
by reviewing such factors as the competitive negotiated rate structure
at the time the commission was charged and the effectiveness of the
brokers' executions. The Trustee may pay a brokerage commission in
excess of that which another
7
broker might have charged for effecting the same transaction in
recognition of the value of the brokerage execution services performed
by the selected broker.
The expenses of administration of the Plan are payable out of the
assets of the Contract and the Trust Fund unless paid by the Company.
Except as otherwise described in this Prospectus, the expenses of the
administration of the Plan, including compensation payable to the
Trustee and the Insurer, the compensation of any investment manager and
the expenses incurred by the Administrator in discharging its duties,
will be paid or provided for by the Company. Notwithstanding the
foregoing, no excise tax or other liability imposed upon the Trustee,
the Insurer, the Administrator or anyone else for failure to comply with
the provisions of any Federal law shall be subject to payment or
reimbursement from the assets of the Plan. For information regarding
certain fees to be paid out of the assets of the Plan, see "Description
of Investment Options," below.
ELIGIBILITY
Each Eligible Employee will become a Participant in the Plan as of the
first day of the 12th month following the month in which the Employee's
employment with an Employer commences, unless such employment commenced on
the first day of a month, in which case such Employee will become a
Participant on the first anniversary of such commencement of employment
(the "Entry Date"), provided, in either case, that the Employee is employed
by an Employer throughout the period and is so employed as of such Entry
Date. If not employed on such date, an Eligible Employee is entitled to
become a Participant effective as of the Entry Date subsequent to his or
her date of rehire. An Eligible Employee may become a Participant in the
Plan solely to make Elective Contributions as of the first day of the month
following the month in which the Employee's employment with the Employer
commences, unless such employment commenced on the first day of the month,
in which case the Employee may become a Participant immediately. All such
Elective Contributions shall be made in accordance with the terms and
conditions of the Plan. An Employee's participation in the Plan will not
be terminated by such Employee's transfer of employment among the Company
and Affiliated Employers who are participating in the Plan, provided such
Employee retains the status as an Eligible Employee. If a Participant
transfers to an Affiliated Employer which has not adopted the Plan, no
further contributions to the Plan may be made on his or her behalf unless
and until he or she resumes the status of an Eligible Employee. However,
amounts credited to such Participant's Account will remain invested. The
Administrator has the sole responsibility under the Plan for determining
the eligibility of each Employee for participation in the Plan based upon
information furnished by the Employer. A determination regarding the
eligibility of an Employee which is made in accordance with the Plan and
the Act will be conclusive and binding upon all persons.
In the event a Participant ceases to be a member of an eligible
class of Employees and thus becomes ineligible to participate in the
Plan, such Employee will be entitled to resume the status of a
Participant immediately upon his return to an eligible class of
Employees. In the event an Employee who is not a member of an eligible
class of Employees becomes a member of an eligible class, such Employee
will be entitled to become a Participant immediately, provided such
Employee has satisfied the minimum age and service requirements and
would have otherwise previously become a Participant.
Effective June 1, 1993, Employees represented by Local 174 of the
International Union, United Automobile, Aerospace & Agricultural
Implement Workers of America, became eligible to make Elective
Contributions and receive Matching Contributions and, effective January 1,
1997, will be eligible to receive Profit Sharing Contributions.
An Eligible Employee may, subject to the approval of his Employer,
elect not to participate in the Plan. An election not to participate in
the Plan must be communicated to the Company, in writing, at least 30
days before the beginning of a Plan Year.
The number of employees eligible to participate in the Plan as of
September 30, 1996 was approximately 321.
CONTRIBUTIONS
As described below, a Participant may elect to have Elective
Contributions made for his account, and the Employer will make Matching
Contributions and may make discretionary Profit-Sharing Contributions,
in accordance with the provisions of the Plan.
Elective Contributions. A Participant may elect to have Elective
Contributions made to the Plan for his account pursuant to Section
401(k) of the Code. A Participant who desires to have Elective
Contributions made to his account must select the amount of his
Compensation for the Plan Year which he wishes to defer the receipt of
(a "deferral election"). Under the terms of the Plan, the amount of a
deferral may equal any whole percentage up to
8
8%, subject to an annually adjusted dollar limitation ($9,500 for
1996). See "Limitations on Contributions," below. The Employer will
make the appropriate reduction in the salary of the Participant and
contribute a corresponding amount as an Elective Contribution for the
account of the Participant.
A Participant may commence making deferral elections as of the first
day of the month coincident with or next following the Participant's Entry
Date. If a Participant fails to make an initial salary deferral election
within such time, then he may thereafter make an election effective as of
any January 1 or July 1 thereafter. Each Participant must indicate the
amount of his deferral election in a written salary reduction agreement
between the Participant and Administrator executed and in effect prior to
the first day of the first pay period to which it applies. A deferral
election may be changed or suspended by a new election effective as of the
first day of any January, April, July or October during the Plan Year by
filing a written notice with the Administrator no later than 30 days prior
to the pay period for which such modification is to be effective. An
Elective Contribution is made through a payroll deduction and must be paid
by the Employer to the Plan within a reasonable period after it is withheld
from the Participant's pay, and in no event later than 30 days after the
date on which the deferred amount would otherwise have been payable to the
Participant in cash.
Elective Contributions made to the Account of a Participant are
fully (100%) vested and nonforfeitable, and are invested in accordance
with the Participant's investment election. See "Investment of
Contributions," below.
If the percentage of Compensation specified in the deferral election
of a Participant would result in an Elective Contribution in excess of
an applicable dollar limit, the applicable Elective Contribution and the
corresponding deferral of income will be reduced to the permitted limit
without further action of the Participant. However, the amount of a
deferral election will not be increased unless the Participant formally
changes his election. Because the deferral election of a Participant is
a specified percentage of his Compensation, any increase or decrease in
such Participant's Compensation at any time will automatically result in
a corresponding adjustment to the Participant's Elective Contribution in
accordance with the Plan, except to the extent any applicable dollar
limitation precludes such increase or decrease.
Matching Contributions. A Matching Contribution is made by the
Employer for each Plan Year for each Participant who makes a deferral
election (other than an Employee eligible to receive Incentive Bonuses
from the Employer). The Matching Contribution made on behalf of a
Participant for a Plan Year is an amount equal to $150.00 for each whole
percentage of such Participant's Compensation deferred as an Elective
Contribution in such Plan Year, provided, however, that the Matching
Contribution for a Participant in any Plan Year may not exceed $450.00.
The following table sets forth the respective percentages of
Compensation that a Participant may elect to defer and have credited as
an Elective Contribution and the corresponding Matching Contributions:
PERCENTAGE OF AMOUNT OF
COMPENSATION MATCHING
DEFERRAL CONTRIBUTION
------------- ------------
1% $150.00
2% 300.00
3% or more 450.00
Each Matching Contribution is made at the time the corresponding
Elective Contribution is made. Matching Contributions made to the
Account of a Participant are fully (100%) vested and nonforfeitable, and
are invested in accordance with the Participant's investment election.
See "Investment of Contributions," below.
Profit-Sharing Contributions. Profit-Sharing Contributions may be
made by the Employer, out of Net Income, at its discretion. Any
Profit-Sharing Contribution made in a Plan Year will be allocated among
the Employees eligible to participate in the contribution pro rata in
accordance with the respective levels of their Base Compensation for
such Plan Year. Pursuant to the terms of the Plan, a Profit-Sharing
Contribution may not be made or allocated to the Account of any Employee
designated by the Company as a Sales Process Engineer, and, generally,
an Employee will be entitled to share in a Profit-Sharing Contribution
for a Plan Year only if he completes a Year of Service with at least
1,000 Hours of Service during that Plan Year and is employed by the
Employer on the last day of the Plan Year. Notwithstanding the
foregoing a Participant will be entitled to participate in a Profit-
Sharing Contribution if he is not actively employed on the last day of
the Plan Year due to Retirement (Early, Normal or Late), Total and
Permanent Disability or death.
9
Profit-Sharing Contributions made to the Account of a Participant
are fully (100%) vested and nonforfeitable, and are invested in
accordance with the Participant's investment election. See "Investment
of Contributions."
Top Heavy Rules. If the Plan becomes "top heavy" as defined in
Section 416 of the Code, certain limitations may be placed on
contributions made on behalf of "key employees" as defined in Section
416 and certain minimum contributions may be required on behalf of
certain other Participants as set forth in the Plan.
ROLLOVER CONTRIBUTIONS
Any Participant of the Plan, at any time, may submit a written
application requesting the Administrator to direct the Trustee or
Insurer to accept a Rollover contribution. A Rollover accepted by the
Administrator will be placed in a Rollover Account established for the
Participant and will become part of the Fund. The amount placed in a
Rollover Account, which will be fully vested at all times and will not
be subject to forfeiture for any reason, will be invested in accordance
with the contributing Participant's instructions. See "Investment of
Contributions," below. Rollover contributions are not subject to the
limits outlined under "Limitations on Contributions," below.
LIMITATIONS ON CONTRIBUTIONS
Section 401(k) of the Code establishes maximum percentages of
compensation which may be contributed as Elective Contributions by
Participants in the Plan who constitute Highly Compensated Employees.
Under the Plan, the Actual Deferral Percentage for the group of Highly
Compensated Employees for a Plan Year, based upon Elective
Contributions, may not exceed the Actual Deferral Percentage for the
group of all other eligible employees, multiplied by 1.25.
Alternatively, the excess of the Actual Deferral Percentage for the
group of Highly Compensated Employees for a Plan Year over the Actual
Deferral Percentage for the group of all other eligible employees may
not exceed two percentage points or such lesser amount as may be
established by applicable regulations; and the Actual Deferral
Percentage for the group of Highly Compensated Employees may not exceed
the Actual Deferral Percentage for the group of all other eligible
employees, multiplied by two. Amounts contributed in violation of these
limits must be returned to the Participants on whose behalf the excess
Elective Contributions were made, as provided in Section 401(k) of the
Code.
Under Section 401(k) of the Code, no Participant's Elective
Contributions for any Plan Year may exceed an annually adjustable dollar
limitation, which is $9,500 for 1996. Any Elective Contribution in
excess of this limit must be returned to the Participant making such
contribution, as provided in Section 401(k) of the Code.
Under Section 415 of the Code, the total of all Elective, Matching
and Profit-Sharing Contributions allocated to a Participant's Account
for any year generally may not exceed the lesser of (a) $30,000 or (b)
25% of his Compensation for the year. The $30,000 limitation is subject
to cost of living adjustments. If, for any year, these limitations are
exceeded, the Plan currently provides that the excess will be deemed
first to consist of Profit-Sharing Contributions (to the extent that the
Participant would have been entitled to Profit-Sharing Contributions in
the absence of these limitations), which will be allocated to the
Accounts of Participants who have not yet reached their respective
Section 415 limits.
CHANGE OF CONTRIBUTIONS
A Participant may elect to increase or decrease the amount of his
Elective Contribution effective as of the first day of any January,
April, July or October during a Plan Year, by filing a written notice
with the Administrator no later than 30 days prior to the pay period for
which such modification is to be effective. A modification will not
have a retroactive effect and will remain in force until revoked.
A Participant may elect to prospectively revoke his salary reduction
agreement in its entirety at any time during the Plan Year by providing
the Administrator with 30 days written notice of such revocation (or
upon such shorter notice period as may be acceptable to the
Administrator). Such a revocation will become effective as of the
beginning of the first pay period coincident with or next following the
expiration of the notice period. Furthermore, the termination of the
Participant's employment, or the cessation of his participation in the
Plan for any reason, will be deemed to revoke any salary reduction
agreement then in effect, effective immediately following the close of
the pay period within which such termination or cessation occurs.
10
ACCOUNTS
The accounts and records of the Plan are maintained by the
Administrator and disclose the status of the Account of each
Participant. Each Participant will be advised from time to time, at
least once each year, of the balance of his Account.
Each Participant's Account under the Plan represents the
Participant's interest in the Funds established under the Plan and any
insurance policies on his life purchased pursuant to the Plan.
INVESTMENT OF CONTRIBUTIONS
Generally, each Participant must direct how his Elective
Contributions, and his portion of Matching Contributions, and
Profit-Sharing Contributions and Rollover Account are to be allocated
among the investment options available under the Plan. The Plan
provides that in the event a Participant does not specifically designate
the investment option or options for all or part of his Account, the
Insurer shall invest such funds in the Guaranteed Interest Account until
a designation can be obtained from the Participant.
A Participant may change his investment election with respect to the
investment of future contributions or transfer previously contributed
amounts among the available investment options described below.
However, a Participant may not change investment options other than as
of the first January 1, April 1, July 1 or October 1, following 30-days
advance notice of such change. The Plan Administrator will accept a
Participant's written notice of a change in investment options.
Neither the Trustee, the Insurer, any investment advisors to the
Funds, the Plan Administrator, nor any officer or employee of the
Company is empowered to advise a Participant as to the manner in which
his Account should be invested. THE FACT THAT A PARTICULAR INVESTMENT
OPTION IS AVAILABLE TO PARTICIPANTS FOR INVESTMENT UNDER THE PLAN SHALL
NOT BE CONSTRUED AS A RECOMMENDATION FOR INVESTMENT IN SUCH INVESTMENT
OPTION. A PARTICIPANT ASSUMES ALL RISKS IN CONNECTION WITH CHANGES IN
THE VALUE OF THE INVESTMENT OPTION OR OPTIONS IN WHICH HE ELECTS TO
INVEST. EARNINGS, IF ANY, OF EACH INVESTMENT OPTION WILL BE REINVESTED
IN THE SAME INVESTMENT OPTION, AND LOSSES, IF ANY, WILL BE ALLOCATED
ONLY TO THE INVESTMENT OPTION INCURRING THE LOSS.
DESCRIPTION OF INVESTMENT OPTIONS
There currently are four investment options available to
Participants under the Plan. Set forth below is information concerning
each of such investment options.
I. QUAKER STOCK ACCOUNT
This investment option is a trust the assets of which are invested
by the Trustee primarily in the Common Stock of the Company, subject to
the right of the Trustee to invest such assets or any part thereof in
short-term fixed income investments. The Trustee has discretion as to
the timing and manner of purchasing shares. Such purchases may include
open-market or privately negotiated transactions. Cash dividends, if
any, on the shares held in this trust will be retained by the trust and
invested in the same manner as the other assets of the trust, and any
stock dividends or shares issued pursuant to a stock split on the shares
held in this trust will become part of the trust's assets. For
information concerning the declaration of dividends on the Company's
Common Stock during the past two fiscal years, see the Supplemental
Financial Information included in the Company's most recent Annual
Report to Shareholders. The payment of dividends on the Company's
Common Stock is in the discretion of the Company's Board of Directors
and the dividends paid by the Company in the past are not necessarily
indicative of the dividends that will be paid in the future.
Participants investing in the Quaker Stock Account will not have any
voting rights with respect to the shares held in the trust. The voting
rights with respect to such shares are vested in the Trustee.
The value of the Quaker Stock Account will be increased or decreased
as the market price of the Company's Common Stock increases or
decreases. Accordingly, as the market price of the Common Stock
fluctuates up or down so will the value of a Participant's share of this
trust. Commissions paid on account of transactions by this
11
trust are not paid by the Company but are charged against the assets
of the trust. Accordingly, the value of a Participant's share of this
trust could be less than the amount of the contributions to the trust.
Since the Quaker Stock Account is not diversified, it has a higher
degree of risk than the other stock funds which are diversified.
The Company's Common Stock is listed on the NYSE. Prior to August 23,
1996, the Common Stock was traded on the NASDAQ National Market. The
following table sets forth for the calendar quarters shown the range of
high and low sales prices for the Common Stock as quoted on the NASDAQ
National Market and as reported by the NYSE, as the case may be. On
October 25, 1996, the last reported sale price of the Common Stock on the
NYSE was $14.75 per share.
1993 Low High
---- --- ----
First Quarter............................ 20-3/4 24-1/2
Second Quarter........................... 17-3/4 23
Third Quarter............................ 16-1/2 20
Fourth Quarter........................... 14-1/4 18-1/4
1994
----
First Quarter............................ 14-3/4 19-1/2
Second Quarter........................... 16 18-3/4
Third Quarter............................ 17-1/4 18-3/4
Fourth Quarter .......................... 17-1/4 18-3/4
1995
----
First Quarter............................ 14-1/2 19
Second Quarter........................... 14-1/2 18
Third Quarter............................ 15 17-1/2
Fourth Quarter........................... 11 18-1/2
1996
----
First Quarter............................ 12-3/4 15
Second Quarter........................... 11-3/4 14-1/2
Third Quarter............................ 11-3/4 15-1/4
Fourth Quarter (through October 25)...... 14-3/4 15-3/4
None of the Company's Common Stock purchased for the Quaker Stock
Account pursuant to the Plan will be purchased from the Company.
Because all of the Company's Common Stock purchased for the Quaker Stock
Account will be previously issued and outstanding, the Company will not
receive any proceeds on account of any purchase of its Common Stock for
the Quaker Stock Account.
In order to facilitate compliance with Section 16 of the Securities
Exchange Act of 1934 (the "1934 Act") and the regulations promulgated
thereunder, a Participant in the Plan who is subject to the reporting
requirements of Section 16(a) of the 1934 Act (i.e., an "officer" of the
Company, within the meaning of Rule 16a-1(f) under the 1934 Act, a
director of the Company or the beneficial owner of 10% or more of the
issued and outstanding shares of the Company's Common Stock, within the
meaning of Rule 16a-1(a)(1) under the 1934 Act) will not be permitted to
invest in the Quaker Stock Account.
II. GUARANTEED INTEREST ACCOUNT
Under the Contract, amounts allocated to this account are invested
in Guaranteed Interest Accounts ("GIA") of the Insurer and constitute
part of the general account of the Insurer. The investments of the
Insurer's general account emphasize privately-placed loans such as bonds
and commercial mortgages with maturities that generally parallel the
Insurer's guarantees under its GIAs. The Insurer's GIAs offer
guaranteed principal and interest for different length guarantee periods
selected by the Administrator. The guarantee periods of two and five
years are available to Participants. All contributions received during
the first year (hereinafter referred to as the "Deposit Year") of each
guarantee period become part of that year's GIA. Each contribution made
during a Deposit Year receives the then available guaranteed interest
rate for the guarantee period selected, as declared from time to time by
the Insurer. At the end of the Deposit Year, the average guaranteed
rate (weighed by the size and timing of each deposit) is determined.
The average guaranteed rate is then credited and compounded annually to
the account balance for the
12
remaining years of the guarantee period. At the end of each Deposit
Year, that GIA is closed and no additional contributions are made to it.
Contributions made in the next Deposit Year become part of a new
guarantee period with its length of guarantee period determined in the
same manner. A GIA matures at the end of its guarantee period and then
may be reinvested (without penalty or adjustment) in a current GIA or be
transferred to any other type of investment available under the Plan.
Any transfer out of a GIA prior to the end of its guarantee period
(other than for benefit payments at retirement, death, disability, or
termination of employment) will be subject to a charge if the guaranteed
interest rate for an account with the same guarantee period on the
surrender date is greater than the guaranteed interest rate being
credited to the GIA from which the transfer is being made. The charge,
a percentage of the amount being withdrawn, is the difference between
the guaranteed interest rate for new deposits to an account with the
same guarantee period and the guaranteed interest rate being credited to
the GIA from which the transfer is being made, multiplied by the number
of years and fractions (to the nearest day) remaining in the guarantee
period of the GIA from which the transfer is being made. If the
guaranteed interest rate for new deposits to an account with the same
guarantee period is equal to or less than the average credited rate for
the GIA from which the transfer is being made, the transfer will involve
no charge. If a Participant has more than one GIA and does not specify
the GIA from which the transfer is to be made, the transfer will
automatically be made from the newest GIA first, working back to the
oldest GIA until the amount requested has been transferred.
The following table sets forth, as of the first day of each of the
months indicated, the annualized rate (net after deduction of investment
expenses, which are not paid by the Company but are charged against the
assets of this account) credited to deposits to GIAs with a two-year
term.
MONTH 1992 1993 1994 1995 1996
----- ---- ---- ---- ---- ----
January.................. 5.00% 4.70% 4.20% 7.30% 4.75%
February................. 5.50% 4.45% 3.90% 6.90% 4.50%
March.................... 5.75% 4.05% 4.55% 6.40% 5.00%
April.................... 6.10% 4.00% 5.25% 6.40% 5.10%
May...................... 5.80% 3.90% 5.85% 6.10% 5.40%
June..................... 5.45% 4.30% 5.90% 5.40% 5.65%
July..................... 5.05% 4.25% 6.00% 5.35% 5.50%
August................... 4.55% 4.15% 5.90% 5.60% 5.55%
September................ 4.55% 3.85% 6.10% 5.50% 5.75%
October.................. 3.80% 3.75% 6.40% 5.50% 5.50%
November................. 4.65% 4.15% 6.75% 5.25% -
December................. 5.05% 4.30% 7.35% 5.05% -
The following table sets forth, as of the first day of each of the
months indicated, the annualized rate (net after deduction of investment
expenses, which are not paid by the Company but are charged against the
assets of this account) credited to deposits to GIAs with a five-year
term.
MONTH 1992 1993 1994 1995 1996
----- ---- ---- ---- ---- ----
January.................. 6.55% 6.45% 5.55% 7.80% 5.15%
February................. 7.10% 6.00% 5.25% 7.55% 5.05%
March.................... 7.40% 5.50% 5.90% 7.05% 5.60%
April.................... 7.75% 5.50% 6.65% 7.05% 5.95%
May...................... 7.55% 5.40% 6.95% 6.75% 6.25%
June..................... 7.10% 5.65% 7.00% 5.95% 6.60%
July..................... 6.75% 5.40% 7.05% 5.80% 6.40%
August................... 6.20% 4.45% 6.95% 6.10% 6.40%
September................ 6.20% 5.15% 7.10% 6.00% 6.65%
October.................. 5.65% 4.95% 7.45% 5.95% 6.40%
November................. 6.35% 5.15% 7.75% 5.65% -
December................. 6.70% 5.60% 8.05% 5.40% -
13
The foregoing information concerning the Insurer's GIA's is a
summary of information provided to the Company by the Insurer, and such
summary is qualified in its entirety by reference to such information
which may be obtained from the Company by any Participant upon written
or oral request directed to the Company's Corporate Controller, Quaker
Chemical Corporation, Elm and Lee Streets, Conshohocken, Pennsylvania
19428 (610-832-4000).
III. U.S. STOCK ACCOUNT
This investment option is an account the assets of which are
invested in the U.S. Stock Account (Separate Account A), a pooled
investment account invested in U.S. securities, primarily common stocks
("Separate Account A"). Separate Account A is managed by Invista
Capital Management, Inc., a registered investment adviser ("Invista").
Invista is the wholly-owned subsidiary of Principal Mutual Life
Insurance Company, which owns the assets of Separate Account A.
According to information provided to the Company by the Insurer, the
objective of Separate Account A is to earn a long-term rate of return
greater than the average rate of return for stocks in general. However,
Participants should understand that there can be no assurance that the
objective of Separate Account A will be achieved.
The following table sets forth for the respective periods indicated
the ending value of a single $10,000 invested in Separate Account A at
the beginning of the period, compared with the corresponding values for
the Dow Industrials and the Standard & Poors 500 ("S&P 500").
PERIOD ENDED SEPARATE DOW
SEPTEMBER 30, 1996 ACCOUNT A* INDUSTRIALS* S&P 500*
------------------ ---------- ------------ --------
3 months.................... $10,443 $10,462 $10,309
12 months................... 12,352 12,562 12,033
5 years..................... 20,417 22,317 20,314
10 years.................... 36,358 45,210 40,426
- ---------------
* The amounts reflected for the Dow Industrials and S&P 500 do not
have any investment or brokerage expense deducted from them, while the
amounts reflected for Separate Account A are net of the applicable
investment management fee which is not paid by the Company but is
charged against the assets of Separate Account A.
The following table sets forth as of December 31, 1995, 1994 and
1993, respectively, information provided to the Company by the Insurer
concerning the ending values of a single $10,000 invested in Separate
Account A on the respective investment dates indicated:
ENDING VALUE AT
INVESTMENT DATE INVESTMENT PERIOD DECEMBER 31, 1995
--------------- ----------------- -----------------
January 1, 1995.............. One Year $13,304
January 1, 1994.............. Two Years 13,344
January 1, 1993.............. Three Years 14,607
ENDING VALUE AT
INVESTMENT DATE INVESTMENT PERIOD DECEMBER 31, 1994
--------------- ----------------- -----------------
January 1, 1994.............. One Year $10,026
January 1, 1993.............. Two Years 10,975
January 1, 1992.............. Three Years 12,006
ENDING VALUE AT
INVESTMENT DATE INVESTMENT PERIOD DECEMBER 31, 1993
--------------- ----------------- -----------------
January 1, 1993.............. One Year $10,943
January 1, 1992.............. Two Years 11,970
January 1, 1991.............. Three Years 16,500
According to information provided to the Company by the Insurer,
except for small amounts held in money market investments for normal
cash flow purposes, Separate Account A is kept fully invested in stocks
through all
14
market cycles, without any attempt to anticipate future stock market
direction or to hold cash during market declines. A "top-down" approach
to stock selection is employed in which fundamental shifts in the
economy are identified and, based on these factors, industries that are
expected to benefit are selected and reviewed to identify companies that
are believed to be undervalued by the market.
According to the investment policy for Separate Account A, the
primary investment objectives for Separate Account A are long-term
capital appreciation and realization of increasing dividend income.
Assets of Separate Account A will normally be invested in a diversified
portfolio of equities consisting primarily of common stocks. In
choosing common stock investments there is a particular concern for
long-term earnings prospects and the relationship of then-current stock
prices to such prospects. Short-term trading is not intended, but
occasional investments may be made for the purpose of seeking short-term
or medium-term capital appreciation. In periods when the general level
of prices for equity investments or general economic conditions appear
to warrant such action, some of the assets of Separate Account A may be
invested in government bonds, corporate bonds, debentures or other
evidences of indebtedness whether or not convertible into stocks or
carrying stock warrants, notes, or other evidences of indebtedness
secured by mortgages or deeds of trust on real property or pledges of
personal property, and preferred stocks, or be retained in cash. To the
extent feasible, assets of Separate Account A will be kept fully
invested, but from time to time reasonable amounts may be maintained in
cash or short-term obligations such as, but not limited to, United
States Treasury bills, bankers' acceptances, certificates of deposit,
and commercial paper. Investments will be diversified among various
industries. Except for U.S. Government and Agency obligations,
investments in securities of any one issuer are limited to no more than
8% of the value of the assets in the account. The purchase and sale of
real estate will not be a principal activity, and not more than 10% of
the assets of Separate Account A will be invested in real estate (which,
for this purpose, excludes investments in notes or other evidences of
indebtedness secured by mortgages or deeds of trust on real property).
The assets of Separate Account A will not be invested for the purpose of
exercising control or management of any company. Securities will not be
purchased for Separate Account A on margin, except for such short-term
credits as are necessary for the clearance of transactions; short sales
of securities will not be made; puts or calls will not be issued; and no
commodity trading will be conducted.
The foregoing is a summary of the investment policy for Separate
Account A provided to the Company by the Insurer. A copy of such
investment policy may be obtained from the Company upon request to the
Company's Corporate Controller in the manner described under
"Incorporation of Certain Documents by Reference."
Investments in Separate Account A are represented by units. The
number of units acquired for an investment in Separate Account A or
relinquished upon a withdrawal from Separate Account A is determined
based on the per unit value of Separate Account A at the close of
business on the date the investment or withdrawal is made. The total
dollar value of Separate Account A is determined at the end of each
business day, based on the closing prices of the stocks then held in
Separate Account A. The "value" of a unit of interest in Separate
Account A is determined at the close of each business day by dividing
the total dollar value of Separate Account A at the close of such day by
the total number of units in Separate Account A.
Separate Account A is a separate account (not part of the Insurer's
General Account). Accordingly, realized and unrealized gains and losses
from the assets in Separate Account A are credited to or charged against
Separate Account A without regard to other income, gains or losses of
the Insurer.
While withdrawals from Separate Account A are normally processed
within seven days after receipt by the Insurer of a withdrawal request,
the Insurer reserves the right to defer payment for up to 270 days.
When transfers of more than $20 million are requested within any three
year period, the amount over $20 million may be transferred over a
period of up to three years.
For its services in managing Separate Account A, Invista is entitled
to receive an annual investment management fee. As of October 1, 1996,
such fee was equal to .45% of Separate Account A's assets, charged
daily. Invista reserves the right to change this fee at any time upon
30 days advanced written notice. All expenses in connection with the
purchase, holding, or sale of securities for Separate Account A, as well
as fees and taxes associated with transfer of securities will be
deducted from the assets of Separate Account A or added to securities
costs. These expenses and the aforementioned investment management fee
are reflected as a reduction in the value of Separate Account A's units
and are in addition to the regular expenses associated with the Contract
which are paid by the Company.
15
Participants who elect to invest in this investment option will not
have any voting rights with respect to the shares in Separate Account A.
The voting rights with respect to such shares are vested in the Insurer.
Stocks as a category of securities are generally accepted as
involving more risk than many other types of investments. Any
Participant considering an investment in Separate Account A should
evaluate the risks involved. THERE IS NO GUARANTEE AS TO THE
PERFORMANCE OF SEPARATE ACCOUNT A. Stocks have high volatility, so the
risk of decline in value at the time cash is needed is greater than it
is for most other types of investments. While past results may be
helpful in decision making, they cannot guarantee future results.
The description of Separate Account A is a summary of information
concerning Separate Account A which has been provided to the Company by
the Insurer, and such description is qualified by reference to such
information which may be obtained from the Company by any Participant
upon written or oral request directed to the Company's Corporate
Controller, Quaker Chemical Corporation, Elm and Lee Streets,
Conshohocken, Pennsylvania 19428 (610-832-4000).
IV. BOND & MORTGAGE FUND
This investment option is an account the assets of which are
invested in the Bond & Mortgage Account (Primart Separate Account), a
pooled investment account invested in intermediate-term fixed-income
loans (the "Bond & Mortgage Fund"). Principal Mutual Life Insurance
Company ("Principal Life") owns and manages the assets of the Bond &
Mortgage Fund.
All loans made by the Bond & Mortgage Fund are reviewed by the
Investment Committee of Principal Life and the Securities Division of
its Investment Department is responsible for the acquisition, sale and
continuing evaluation and supervision of all investments held in the
Bond & Mortgage Fund.
The objective of the Bond & Mortgage Fund is to obtain an
above-average rate of return in the lending market, with safety
appropriate for retirement plan assets, at the lowest possible expense
level. The investment objective is intended to be met over long periods
of time (several market cycles) and not over short periods of time such
as one or two years. However, Participants should understand that there
can be no assurance that the objective of the Bond & Mortgage Fund will
be achieved with respect to any investment period.
To meet its objective, the Bond & Mortgage Fund is invested
primarily in private market investments, such as private placement loans
and commercial mortgages. Private market investments have traditionally
given a premium yield over publicly-traded bonds. The Bond & Mortgage
Fund may also invest in Government National Mortgage Association (GNMA)
pass-through certificates and publicly-traded bonds. Short-term money
instruments will be used to keep funds fully invested.
The following table sets forth as of December 31, 1995, 1994 and
1993, respectively, information provided to the Company by the Insurer
concerning the ending values of a single $10,000 invested in the Bond &
Mortgage Fund on the respective investment dates indicated:
ENDING VALUE AT
INVESTMENT DATE INVESTMENT PERIOD DECEMBER 31, 1995
--------------- ----------------- -----------------
January 1, 1995............. One Year $11,835
January 1, 1994............. Two Years 11,593
January 1, 1993............. Three Years 12,831
ENDING VALUE AT
INVESTMENT DATE INVESTMENT PERIOD DECEMBER 31, 1994
--------------- ----------------- -----------------
January 1, 1994............. One Year $ 9,971
January 1, 1993............. Two Years 10,836
January 1, 1992............. Three Years 11,735
ENDING VALUE AT
INVESTMENT DATE INVESTMENT PERIOD DECEMBER 31, 1993
--------------- ----------------- -----------------
January 1, 1993............. One Year $11,063
January 1, 1992............. Two Years 11,098
January 1, 1991............. Three Years 11,138
16
The Bond & Mortgage Fund does not attempt to anticipate short-term
changes in interest rates. However, long-term changes are considered in
structuring the portfolio. Modest trading takes place to take advantage
of anticipated rating changes, quality yield spreads and slope of the
yield curve. Other important considerations involved in the selection
of investments are frequency of payment, call protection, sinking fund
provisions, if any, and the conditions under which interest rates can be
adjusted.
The portfolio of the Bond & Mortgage Fund is structured so that it
has an intermediate-term average maturity long enough to provide higher
interest rates and short enough to allow for reinvestment of matured
loans at new rates.
Assets held in the Bond & Mortgage Fund are valued at the close of
each business day based on their market value, using a computer
valuation system provided by an outside securities valuation service.
Investments in the Bond & Mortgage Fund are represented by units and the
number of units acquired for each investment or relinquished upon each
withdrawal is determined based on the Bonds & Mortgage Fund's per unit
value at the close of business on the date the investment is made.
Since the Bond & Mortgage Fund is a separate account (not part of
Principal Life's General Account), realized and unrealized gains and
losses from assets in the Bond & Mortgage Fund are credited to or
charged against the Bond & Mortgage Fund without regard to other income,
gains, or losses of Principal Life.
While withdrawals from the Bond & Mortgage Fund are normally
processed within seven days after receipt by Principal Life of a
withdrawal request, Principal Life reserves the right to defer payment
for up to 270 days.
For its services in managing the Bond & Mortgage Fund, Principal
Life is entitled to receive an annual investment management fee which is
not paid by the Company but is charged daily against the Bond & Mortgage
Fund's assets. As of October 1, 1996, such fee was equal to .45% of the
Fund's assets. Principal Life reserves the right to change this fee at
any time upon 30 days advance written notice. The investment management
fee is reflected as a reduction in the unit value of the Bond & Mortgage
Fund and is in addition to the regular expenses of the Contract which
are paid by the Company.
THE BOND & MORTGAGE FUND IS A MARKET-VALUED FUND AND PROVIDES NO
GUARANTEE OF INVESTMENT PERFORMANCE. SINCE MARKET VALUE CHANGES CAN
RESULT IN WIDELY FLUCTUATING RETURNS OVER A SHORT PERIOD OF TIME, THE
BOND & MORTGAGE FUND IS BEST USED FOR LONG-TERM INVESTMENT.
The description of the Bond & Mortgage Fund is a summary of
information concerning the Bond & Mortgage Fund which has been provided
to the Company by the Insurer, and such description is qualified by
reference to such information which may be obtained from the Company by
any Participant upon written or oral request directed to the Company's
Corporate Controller, Quaker Chemical Corporation, Elm and Lee Streets,
Conshohocken, Pennsylvania 19428 (610-832-4000).
VALUATION OF THE FUND
The Plan provides for the determination by the Trustee and Insurer,
as of each Anniversary Date, and as of such other date or dates deemed
necessary by the Administrator (each a "Valuation Date"), of the net
worth of the assets comprising the Fund and the Contract as it exists on
the Valuation Date, prior to taking into consideration any contribution
to be allocated for that Plan Year and Contract. In determining such
net worth, the assets comprising the Fund and the Contract are to be
included at their fair market value as of the Valuation Date and all
expenses for which the Trustee and Insurer have not yet obtained
reimbursement from the Employer or the Fund are to be deducted.
In determining the fair market value of securities held in the Fund
which are listed on a registered stock exchange, such shares are to be
valued at the price they were last traded on such exchange preceding the
close of business on the Valuation Date. If such securities were not
traded on the Valuation Date, or if the exchange on which they are
traded was not open for business on the Valuation Date, then the
securities are to be valued at the prices at which they were last traded
prior to the Valuation Date. Any unlisted security held in the Fund is
to be valued at its bid price next preceding the close of business on
the Valuation Date. In determining the fair market value of assets
other than securities for which trading or bid prices can be obtained,
the Trustees and Insurer may appraise such assets themselves, or in
their discretion, employ one or more appraisers for that purpose and
rely on the values established by such appraiser or appraisers.
17
VESTING
A Participant will be 100% vested in all amounts allocated to his
Account at all times. The computation of a Participant's nonforfeitable
percentage of his interest in the Plan may not be reduced as the result
of any direct or indirect amendment to the Plan. For this purpose, the
Plan will be treated as having been amended if the Plan provides for an
automatic change in vesting due to a change in top heavy status. In the
event that the Plan is amended to change or modify any vesting schedule,
a Participant with at least three Years of Service as of the expiration
date of the below-described election period may elect to have his
nonforfeitable percentage computed under the Plan without regard to such
amendment. In such event, if a Participant fails to make such an
election, such Participant will be subject to the new vesting schedule.
The election period referred to in the preceding sentence will commence
on the date of adoption of an amendment and end 60 days after the latest
of (i) such date of adoption, (ii) the effective date of the amendment,
or (iii) the date the Participant receives written notice of the
amendment from the Employer or the Administrator.
BENEFITS UNDER THE PLAN
Retirement Benefits. Under the terms of the Plan, on a
Participant's Retirement Date, all amounts credited to such
Participant's account under the Plan become distributable in accordance
with the provisions of the Plan. Upon a Participant's Retirement Date,
or as soon thereafter as is practicable, the Trustee and Insurer are
obligated to distribute all amounts credited to such Participant's
Account in accordance with the provisions of the Plan.
Death Benefits. Upon the death of a Participant before his
Retirement Date or other termination of his employment, all amounts
credited to his Combined Account shall be distributed, in accordance
with the provisions of the Plan to the deceased Participant's
Beneficiary. Upon the death of a Former Participant, the Administrator
shall direct the Trustee and Insurer to distribute any remaining amounts
credited to the accounts of a deceased Former Participant to such Former
Participant's Beneficiary. In determining the amount of the death
benefit, any security interest held by the Plan by reason of an
outstanding loan to the Participant or Former Participant will be taken
into account. The Administrator may require such proper proof of death
and such evidence of the right of any person to receive payment of the
value of the account of a deceased Participant or Former Participant as
the Administrator may deem desirable. The Administrator's determination
of death and of the right of any person to receive payment shall be
conclusive.
With certain limited exceptions, the Beneficiary of the death
benefit payable pursuant to the Plan shall be the Participant's spouse.
The Participant may designate a Beneficiary other than his spouse in
accordance with the terms of the Plan if (i) the spouse has waived the
right to be the Participant's Beneficiary in accordance with the terms
of the Plan, or (ii) the Participant is legally separated or has been
abandoned (within the meaning of local law) and the Participant has a
court order to such effect (and there is no "qualified domestic
relations order" as defined in Code Section 414(p) which provides
otherwise), or (iii) the Participant has no spouse, or (iv) the spouse
cannot be located. A Participant may at any time revoke his designation
of a Beneficiary or change his Beneficiary by filing written notice of
such revocation or change with the Administrator, subject to the written
consent of the Participant's spouse unless the original consent of the
spouse acknowledges that the spouse has the right to limit consent only
to a specific Beneficiary and the spouse voluntarily elects to
relinquish such right. In the event no valid designation of Beneficiary
exists at the time of the Participant's death, the death benefit shall
be payable to his estate.
Disability Benefits. In the event of a Participant's Total and
Permanent Disability prior to his Retirement Date or other termination
of his employment, the Trustee and Insurer, in accordance with the
provisions of the Plan, are required to distribute to such Participant
all amounts credited to such Participant's Combined Account as though he
had retired.
Benefits Upon Termination. On or before the Anniversary Date
coinciding with or subsequent to the termination of a Participant's
employment for any reason other than death, Total and Permanent
Disability or retirement, the Administrator may direct the Trustee or
Insurer to segregate such Terminated Participant's Combined Account and
invest the aggregate amount thereof in a separate, federally insured
savings account, certificate of deposit, common or collective trust fund
of a bank or a deferred annuity. In the event the Participant's
Combined Account is not segregated, the amount shall remain in a
separate account for the Terminated Participant and share in allocations
pursuant to the Plan until such time as a distribution is made to the
Terminated Participant.
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In the event that the amount of the Terminated Participant's
Combined Account equals or exceeds the fair market value of any
insurance contracts of the Terminated Participant, the Trustee or
Insurer, when so directed by the Administrator and agreed to by the
Terminated Participant, shall assign, transfer, and set over to such
Terminated Participant all contracts on his life in such form or with
such endorsements so that the settlement options and forms of payment
are consistent with the provisions of the Plan relating to the
distribution of benefits. In the event that the Terminated
Participant's Combined Account does not at least equal the fair market
value of the contracts of the Terminated Participant, if any, the
Terminated Participant may pay over to the Trustee or Insurer the sum
needed to make the distribution equal to the value of the contracts
being assigned or transferred, or the Trustee or Insurer, pursuant to
the Participant's election, may borrow the cash value of the Contracts
from the insurer so that the value of the Contracts is equal to the
Vested portion of the Terminated Participant's Account and then assign
the contracts to the Terminated Participant.
Distribution of the funds due to a Terminated Participant shall be
made on the occurrence of an event which would result in the
distribution had the Terminated Participant remained in the employ of
the Employer (upon the Participant's death, Total and Permanent
Disability or Retirement).
DISTRIBUTION OF BENEFITS
General. At the election of the Participant, any amount to which he
is entitled under the Plan will be distributable in one lump sum payment
in cash. However, a Participant or Terminated Participant becoming
eligible to receive benefits may request that, in lieu of a lump sum
distribution, his interest be paid in installments over a fixed period
if such payments do not constitute an "annuity" within the meaning of
Section 205 of Title I of the Act or Section 401(a) of the Code. If the
Administrator agrees to make such installment distributions in its
discretion, the following rules shall apply:
(i) The payment period shall not exceed the life expectancy of
the Participant at the time of benefit commencement; or, if the
Participant is married at the time of benefit commencement, the
joint life expectancy of the Participant and his spouse;
(ii) Payments shall be made in installments which are as nearly
equal as possible, and shall be made not less frequently than
annually nor more frequently than monthly, as determined by the
Administrator; and
(iii) At any time during the installment period, the
Administrator may accelerate the remaining installments by paying
the balance of such account to the distributee.
Any distribution to a Participant who has a benefit which exceeds,
or has ever exceeded, $3,500 at the time of any prior distribution shall
require such Participant's consent if such distribution occurs prior to
his Normal Retirement Age.
Subject to applicable provision of the Code and the Regulations
thereunder, and except as otherwise required by the Plan, a
Participant's benefits generally are to be distributed to him not later
than April 1 of the calendar year following the later of (i) the
calendar year in which the Participant attains age 70-1/2 or (ii) the
calendar year in which the Participant retires, provided, however, that
this clause (ii) shall not apply in the case of a Participant who is a
"five (5) percent owner" at any time during the five (5) Plan Year
period ending in the calendar year in which he attains age 70-1/2 or, in
the case of a Participant who becomes a "five (5) percent owner" during
any subsequent Plan Year, clause (ii) shall no longer apply and the
required beginning date shall be April 1 of the calendar year following
the calendar year in which such subsequent Plan Year ends.
Notwithstanding the foregoing, clause (ii) above shall not apply to any
Participant unless the Participant had attained age 70-1/2 before January
1, 1988 and was not a "five (5) percent owner" at any time during the
Plan Year ending with or within the calendar year in which the
Participant attained age 66-1/2 or any subsequent Plan Year.
Distributions to a Participant and his Beneficiaries shall only be
made in accordance with the incidental death benefit requirements of
Code Section 401(a)(9)(G) and the Regulations thereunder.
Any annuity contract acquired pursuant to the Plan shall be
non-transferable when distributed. Furthermore, the terms of any
annuity contract purchased and distributed to a Participant or spouse
shall comply with all of the requirements of the Plan.
19
Any Participant, Terminated Participant or Beneficiary may direct
the Administrator to authorize the Trustee or Insurer to pay any
"eligible rollover distribution" (as defined in Code Section
402(f)(2)(A)) otherwise payable to the Participant, Terminated
Participant or Beneficiary pursuant to the Plan to any "eligible
retirement plan" (as defined in Code Section 401(a)(31)(D)).
Death Benefits. Except as otherwise required by the Code and the
Regulations thereunder and the Plan, death benefit payable pursuant to
the Plan will be paid to the Participant's Beneficiary in one lump sum
payment in cash. If a Participant dies after the distribution of his
interest has begun and before his entire interest has been distributed
to him, the remaining portion of such interest will be distributed at
least as rapidly as under the method of distribution being utilized as
of his date of death. If a Participant dies before he has begun to
receive any distributions of his interest under the Plan or before
distributions are deemed to have begun pursuant to the Regulations, then
his death benefit will be distributed to his Beneficiaries no later than
December 31 of the calendar year in which the fifth anniversary of his
date of death occurs.
Except as otherwise required by the Plan, whenever the Trustee or
Insurer is to make a distribution on or as of an Anniversary Date, the
Plan provides that the distribution shall be made on such date or as
soon thereafter as is practicable. However, unless a Former Participant
elects in writing to defer the receipt of benefits (such election may
not result in a death benefit that is more than incidental), the payment
of benefits shall commence not later than the 60th day after the close
of the Plan Year in which the latest of the following events occurs: (i)
the date on which the Participant attains the age of 65; (ii) the 10th
anniversary of the year in which the Participant commenced participation
in the Plan; or (iii) the date the Participant terminates his service
with the Employer.
In the event that all, or any portion, of the distribution payable
to a Participant or his Beneficiary hereunder shall, at the later of the
Participant's attainment of age 62 or his Normal Retirement Age, remain
unpaid solely by reason of the inability of the Administrator, after
sending a registered letter, return receipt requested, to the last known
address, and after further diligent effort, to ascertain the whereabouts
of such Participant or his Beneficiary, the amount so distributable
shall be forfeited and treated as an additional Employer Profit-Sharing
contribution and allocated pursuant to the Plan. In the event a
Participant or Beneficiary is located subsequent to his benefit being
reallocated, such benefit shall be restored.
Qualified Domestic Relations Orders. All rights and benefits,
including elections, provided to a Participant in the Plan will be
subject to the rights afforded to any "alternate payee," as defined in
the Code, under a "qualified domestic relations order," as defined in
the Code. Furthermore, a distribution to an "alternate payee" will be
permitted if such distribution is authorized by a "qualified domestic
relations order," even if the affected Participant has not reached the
"earliest retirement age" under the Plan.
Hardship Distributions. Distributions of Elective Contributions in
the minimum amount of $1,000 may be made to a Participant in the event
of an immediate and significant financial need of the Participant where
such Participant lacks other available resources (a "hardship
distribution"). A hardship distribution is subject to the spousal
consent requirements contained in Sections 401(a)(11) and 417 of the
Code, if applicable.
The following are the only financial needs which will be deemed
immediate and significant for purposes of determining whether the basis
for a hardship distribution exists: (i) expenses incurred or necessary
for medical care, described in Section 213(d) of the Code, of the
Participant, the Participant's spouse, children, or dependents; (ii) the
purchase (excluding mortgage payments) of a principal residence for the
Participant; (iii) payment of tuition and related educational fees for
the next 12 months of post-secondary education for the Participant, the
Participant's spouse, children or dependents; or (iv) the need to
prevent the eviction of the Participant from, or a foreclosure on the
mortgage of, the Participant's principal residence. A distribution will
be considered as necessary to satisfy an immediate and significant
financial need of the Participant only if:
(i) The Participant has obtained all distributions, other than
hardship distributions, and all nontaxable loans under all plans
maintained by the Employer;
(ii) All plans maintained by the Employer provide that the
Participant's Elective Contributions (and any Employee
Contributions) will be suspended for twelve months after the receipt
of the hardship distribution;
(iii) The distribution is not in excess of the amount of an
immediate and significant financial need (including amounts
necessary to pay any federal, state or local income taxes or
penalties reasonably anticipated to result from the distribution);
and
20
(iv) All plans maintained by the Employer provide that the
Employee may not make Elective Contributions for the Participant's
taxable year immediately following the taxable year of the hardship
distribution in excess of the applicable limit under Section 402(g)
of the Code for such taxable year less the amount of such
Participant's Elective Contributions for the taxable year of the
hardship distribution.
WITHDRAWALS OF PROFIT-SHARING CONTRIBUTIONS
Each Participant has the right to elect, in writing on forms
provided by the Administrator, to withdraw (i) 100%, (ii) 50% or (iii)
no part of that portion of any Profit-Sharing Contribution allocated to
his or her Account in respect of such Plan Year provided the effective
date of such election is within two (2) years of such Plan Year. Such
right of withdrawal will not be available with respect to any
Profit-Sharing Contributions made on account of Plan Years ending on or
after January 1, 1992. Permitted withdrawals are to be made in cash as
promptly as practicable after the end of the Plan Year in which the
election is made. Such amount to be adjusted (as of the last day of the
calendar year preceding the date of the withdrawal) to the fair market
value of the assets of the Fund attributable to such deferred, allocated
amount. To be effective, a withdrawal election must be made on or
before the November 30 preceding the date of the withdrawal. Failure to
timely file a written election with respect to a withdrawal for a Plan
Year will constitute a binding election to waive the right of
withdrawal.
LOANS TO PARTICIPANTS
Subject to such uniform and nondiscriminatory rules as may from time
to time be adopted by the Administrator, after it has been determined
that loans to Participants shall be allowed, the Trustee or Insurer,
upon direction from the Administrator, may make a loan or loans to a
Participant for the purpose of enabling the Participant to meet
financial needs of the Participant which are deemed to be immediate and
heavy, as described under "Hardship Distributions," above. Any loan
pursuant to the Plan is to be in the amount of not less than $1,000, for
a non-renewable and non-extendable term of not more than three years and
amortized in level payments not less frequently than quarterly.
A Participant's loan (when added to the outstanding balance of all
of the Participant's other loans from the Plan) will be limited to the
lesser of: (1) $50,000 reduced by the excess, if any, of the highest
outstanding balance of loans during the one year period ending on the
day before the loan is made over the outstanding balance of loans on the
date the loan is made or (2) the greater of one-half (1/2) of the vested
interest in the Participant's Accounts as of the date on which the loan
is made or $10,000. Notwithstanding the foregoing, no Participant
shall, under any circumstance, be entitled to loans in excess of
one-half (1/2) of the vested interest in such Participant's Accounts as
of the Valuation Date coincident with or immediately preceding the date
on which the loan is made, reduced by any amounts withdrawn from such
Account since the Valuation Date of reference. To the extent that a
Participant loan exceeds the aforementioned limitation, such excess
amounts will be treated as a taxable distribution to the Participant.
Any amount withdrawn by a Participant while a loan is outstanding, and
any amount becoming distributable to a Participant or beneficiary while
a loan is outstanding against the Account from which such distribution
is to be made, shall be immediately applied to reduce the amount of
accrued interest and the principal amount of such loan.
For purposes of the aforementioned limitation on the amount of
Participant loans, loans from the Plan are deemed to include all loans
from all other plans maintained by the Employer or by any other entity
which, together with the Employer, constitute elements of either: (i) a
controlled group of corporations (within the meaning of Section 414(b)
of the Code); (ii) a group of trades or businesses under common control
(within the meaning of Section 414(c) of the Code); or (iii) an
affiliated service group (within the meaning of Section 414(m) of the
Code).
With the exception of reasonable distinctions among prospective
borrowers on the basis of credit worthiness, any loans to Participants
are to be made on a reasonably equivalent basis. Loans shall not be
made available to highly compensated Participants in an amount greater
than the amount available to other Participants. Thus, the same
percentage of a Participant's Account balance may be loaned to
Participants with large and small Account balances, if such Account is
security (or partial security) for repayment of the loan.
All loans to Participants will be considered fixed income
investments of the Trust Fund. Accordingly, all loans to Participants
made by the Trustee are required to be secured by the pledge of no more
than one-half of the Participant's interest in the Trust Fund and by the
pledge of such further collateral as the Trustee or Insurer, in its
discretion, deems necessary to assure repayment of the borrowed amount
and all interest to be accrued thereon in
21
accordance with the terms of the loan. Interest will be charged at
a reasonable rate comparable to the prevailing rate of interest charged
for similar loans by lending institutions in the community on the date
of the loan subject to applicable legal limits. To the extent a
Participant or beneficiary becomes entitled to payments of benefits or
withdraws all or a portion of the borrower's Account, the payments or
withdrawals, as the case may be, are required to be applied immediately
against the balance outstanding. If not paid as and when due, the
outstanding balance of a loan may be deducted from any benefit which is
or becomes payable to the borrower or a beneficiary, and any other
security pledged may be sold by the Trustee at public or private sale as
soon as is practicable after such default. A Participant will remain
liable for any deficiency remaining after application of any sale
proceed in the manner provided in the Plan.
ASSIGNMENT; LIENS
A Participant or his beneficiary may not alienate, sell, transfer,
assign, pledge, encumber or charge his interest in the Plan. No
interest in the Plan may be attached or subjected to other legal process
except to the extent provided in the Plan or as may be required by law.
Pursuant to the Retirement Equity Act of 1984 amending Section
401(a)(13) of the Code, a "qualified domestic relations order" will not
be treated as an illegal assignment or attachment. In addition, an
Internal Revenue Service levy on an Account will not be considered an
illegal assignment or attachment.
AMENDMENT AND TERMINATION
Subject to the limitations set forth in the Plan, the Company may
amend the Plan at any time. No amendment to the Plan will be effective
if it authorizes or permits any part of the Trust Fund (other than such
part as is required to pay taxes and administration expenses) to be used
for or diverted to any purpose other than for the exclusive benefit of
the Participants or their Beneficiaries or estates, or causes any
reduction in the amount credited to the Account of any Participant, or
causes or permits any portion of the Fund to revert to or become
property of the Employer. Except as permitted by the Regulations, no
Plan amendment or transaction having the effect of a Plan amendment
(such as a merger, plan transfer or similar transaction) will be
effective if it eliminates or reduces any "Section 411(d)(6) protected
benefit" (i.e., a benefit described in Code Section 411(d)(6)(A), an
early retirement benefit or a retirement-type subsidy or optional form
of benefit) or adds or modifies conditions relating to a "Section
411(d)(6) protected benefit" the result of which is a further
restriction on such benefit unless such protected benefit is preserved
with respect to benefits accrued as of the later of the adoption date or
effective date of the amendment.
While the Company anticipates that the Plan will continue
indefinitely as a qualified plan under the Code, it reserves the right
to terminate the Plan at any time by action of the Board of Directors of
the Company. Upon any full or partial termination of the Plan, all
amounts credited to the affected Participants' Accounts will be 100%
vested and may not thereafter be subject to forfeiture, and any
unallocated amounts will be allocated to the Accounts of all
Participants in accordance with the provisions of the Plan. Upon the
full termination of the Plan, the Company will direct the distribution
of the assets of the Fund to Participants in accordance with the terms
of the Plan. Such distributions will be made in cash or through the
purchase of irrevocable nontransferable deferred commitments from an
insurer. Except as permitted by the Regulations, the termination of the
Plan may not result in the reduction of any "Section 411(d)(6) protected
benefit."
REFERENCE TO THE PLAN
The above summary of the Plan does not purport to be complete and is
subject in all respects to the provisions of the Plan, a copy of which
is available from the Company on request and which has been filed with
the Securities and Exchange Commission as an exhibit to the Company's
Registration Statement of which this Prospectus is a part. (SEC File
No. 33-54158).
FEDERAL TAX ASPECTS
The Company has received a letter of determination that the Plan, as
amended and restated meets the requirements of a qualified profit sharing
plan under Section 401(a) of the Code, a qualified cash or deferred
arrangement under Section 401(k) of the Code and that the Trust is exempt
from Federal income tax under Section 501(a) of the Code. So long as the
Code requirements continue to be met, the amounts contributed by the
Company on behalf of
22
a Participant will be deductible by the Company for Federal income tax
purposes and amounts contributed by the Company as Elective Contributions
on behalf of a Participant who has executed a salary reduction agreement
will be excluded from the Participant's gross income. Contributions made
on a Participant's behalf and the income and appreciation on Employer
contributions will not be subject to income tax while held by the Insurer
or in the Trust Fund and will not be includable in the Participant's
taxable income until distributed to him.
If an amount in a Participant's Account is withdrawn, the
amount withdrawn will be taxable to him as ordinary income.
Any withdrawal prior to age 59-1/2 will be subject to a 10% excise
tax unless an exemption from such excise tax is applicable. If a
Participant rolls the distribution over into an IRA or another eligible
qualified plan, the excise tax will not be imposed on the portion of the
distribution that is rolled over. The excise tax also will not be
imposed if the Participant is over age 59-1/2 when the distribution is
received, or if he is over age 55 and has retired. Any distribution
made after the death of the Participant is exempt from the 10% excise
tax regardless of the age of the Participant. Also, any distribution to
a spouse, former spouse, child or other dependent of the Participant
pursuant to a qualified domestic relations order will be exempt from the
excise tax.
Upon distribution of a Participant's entire Account in a lump sum by
reason of his death or other termination of employment, or after his
attainment of age 59-1/2, the distribution will constitute taxable
(ordinary) income to the Participant which may qualify for special
five-year forward income averaging if the Participant has been a
Participant in the Plan for five or more taxable years. The
availability of the election to be taxed under the five-year forward
averaging provision is subject to a number of limitations including the
limitations that the election be made only once, and that it be made
only after attaining age 59-1/2. Certain Participants who attained the
age of 50 before January 1, 1986 may elect to be taxed under ten-year
forward income averaging as in effect immediately prior to the adoption
of the Tax Reform Act of 1986.
If a Participant receives a lump sum distribution from the Plan by
reason of termination of employment or termination of the Plan or after
attainment of age 59-1/2, he may transfer on or before the 60th day after
the day on which he receives such distribution, all or part of the
distribution to: (i) another exempt employees' trust which as part of a
"qualified" plan for Federal income tax purposes, (ii) an "annuity" plan
described in Section 401(a) of the Code or (iii) an "individual
retirement account" or an "individual retirement annuity" as such terms
are described in the Code, and thereby avoid current taxation of the
portion of the distribution so transferred. Moreover, if the spouse of
a Participant receives a lump sum distribution by reason of the
Participant's death, the spouse may transfer, within the period
described in the preceding sentence, all or a portion of such
distribution to an "individual retirement plan" and thereby avoid
current taxation on the portion of the distribution so transferred.
If a Participant is entitled to receive a lump sum distribution
from the Plan as described above, the Participant may direct the
Administrator to request that the Insurer and Trustee pay such
distribution directly to the trustee or custodian of another qualified
retirement plan or individual retirement account. The Company is
required to impose income tax withholding on all lump sum
distributions unless such distributions are paid directly to another
qualified retirement plan or individual retirement account. The
amount of withholding required will equal 20% of the amount
distributed and will be imposed even if the Participant subsequently
elects to transfer such distribution to a qualified retirement plan or
individual retirement plan.
If a distribution during a calendar year to a Participant exceeds
$155,000, it may be subject to a 15% excise tax on the portion of the
distribution that is in excess of that amount. In determining whether
the $155,000 threshold has been reached, all distributions from all
"qualified" plans, certain similar types of plans, and IRAs are
aggregated. The $155,000 amount is subject to cost of living
adjustments, and also may be a different amount for certain individuals
who filed a "grandfather election" with their 1988 federal income tax
returns. The excise tax on any lump sum distribution from the Plan that
is made on account of termination of employment or termination of the
Plan, or that is made after attainment of age 59-1/2, may be avoided for
the year of distribution by rolling the distribution over into another
"qualified" plan, "annuity" plan or IRA on or before the 60th day after
receipt of the distribution. This 15% excise tax will be suspended for
distributions received in 1997, 1998 and 1999.
23
With respect to Federal estate tax, distributions under the Plan
made as a result of the death of a Participant or former Participant
will generally be included in determining the taxable amount of the
Participant's estate. However, amounts payable to the deceased
Participant's spouse may be eligible for the Federal estate tax marital
deduction. For Federal income tax purposes, amounts distributed to the
beneficiary or estate of a Participant will be treated in substantially
the same way as if distributed to a Participant after termination of
employment.
If a Participant dies with an accumulation that exceeds a threshold
determined under Section 4980A of the Code, the Participant's estate may
be subject to a 15% excise tax on the amount of the "excess
accumulation." This excise tax cannot be avoided by a rollover to an
IRA, although in certain circumstances the Participant's surviving
spouse may have the right, if the spouse is the beneficiary of
substantially all of the Participant's "qualified" plan, "annuity" plan
and IRA death benefits, to make an election to convert the Participant's
accumulation to the spouse's distribution for purposes of this excise
tax. In the event that the spouse makes such an election and then
receives a lump sum distribution, the spouse may avoid the excise tax
for the year of distribution by rolling the distribution over into an
IRA on or before the 60th day after receipt of the distribution.
Spousal rollovers to other "qualified" or "annuity" plans are not
permitted.
The foregoing description of tax effects is intended to be general
in nature, and is based on interpretations of present Federal statutory
and regulatory authority which may be subject to change. Each
Participant should discuss specific questions with his own tax adviser
or attorney. In addition, there may be tax considerations under
foreign, state and local laws applicable to Participants.
Any material changes in the tax effects of participation in the Plan
will be described in a Supplement to this Prospectus.
APPLICABLE REQUIREMENTS OF ERISA
The Plan is a "defined contribution plan" as described in Section
3(34) of ERISA. As such, the Plan is subject to the applicable
provisions set forth in Part 1 (Reporting and Disclosure), Part 2
(Participation and Vesting), Part 4 (Fiduciary Responsibility) and Part
5 (Administration and Enforcement) of Subtitle B of Title I of ERISA
which relate to employee pension benefit plans which are defined
contribution plans.
The Plan is not subject to Part 3 (Funding) of Subtitle B of Title I
of ERISA nor is it subject to any of the provisions of Title IV of
ERISA. Those portions of ERISA pertain to "money purchase plans" and
"defined benefit plans."
AMENDMENTS AND OTHER CHANGES AFFECTING THIS PROSPECTUS
After the date hereof, the Plan may from time to time be amended and
certain other changes in respect of the Plan, such as changes in
applicable law, may also occur. Any such amendments or changes that are
material for purposes of this Prospectus shall be reflected in a
Supplement to this Prospectus.
REPORTS OF THE COMPANY
The Company's Quarterly and Annual Reports to Shareholders, proxy
soliciting material and other communications distributed to the
Company's shareholders generally will be provided to all Participants of
the Plan whether or not such Participants are shareholders of the
Company. If a Participant does not for some reason receive a copy of
any such reports, material or other communications, he may obtain copies
of the same which the Company will provide promptly without charge upon
written or oral request made to the Company's Corporate Controller in
the manner described under "Incorporation of Certain Documents by
Reference."
24
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed with the Commission are incorporated
in the Prospectus by reference:
(a) The Company's Annual Report on Form 10-K for the year ended
December 31, 1995 filed pursuant to Section 13(a) of the Exchange Act;
(b) The Company's Quarterly Reports on Form 10-Q for the
quarters ended March 31, 1996 and June 30, 1996, respectively, filed
pursuant to Section 13(a) of the Exchange Act;
(c) All other reports of the Company filed pursuant to Section
13 or 15(d) of the Exchange Act since June 30, 1996;
(d) The Company's definitive proxy statement dated March 29,
1996 filed pursuant to Section 14 of the Exchange Act in connection
with the Company's 1996 Annual Meeting of Shareholders;
(e) The description of the Common Stock contained in the
Company's Form 8-A Registration Statements dated April 27, 1973 and
August 2, 1996, any amendments or reports filed for the purpose of
updating such description; and
(f) The Plan's Annual Report on Form 11-K for the year ended
December 31, 1995 filed pursuant to Section 15(d) of the Exchange Act.
All documents filed by the Company or the Plan pursuant to Sections
13(a), 13(c), 14 and 15(d) of the Exchange Act subsequent to the date of
this Prospectus and prior to the filing of a post-effective amendment
which indicates that all securities offered hereby have been sold or
which deregisters all securities offered hereby then remaining unsold
shall be deemed to be incorporated herein by reference and to be a part
hereof from the date of filing of such documents.
Copies of the documents incorporated by reference herein, except for
the exhibits to such documents (unless such exhibits are specifically
incorporated by reference into the documents which this Prospectus
incorporates), and copies of any other documents to which a Participant
is entitled as described in this Prospectus, are available to any
Participant receiving a copy of this Prospectus upon written or oral
request. Such request should be directed to the Company's Corporate
Controller, Quaker Chemical Corporation, Elm and Lee Streets,
Conshohocken, Pennsylvania 19428 (610-832-4000). See "Additional
Information."
EXPERTS
The financial statements incorporated by reference to the Company's
Annual Report on Form 10-K for the year ended December 31, 1995 have
been so incorporated in reliance on the report (which contains an
explanatory paragraph relating to a change in the method of accounting
for income taxes and postretirement benefits other than pensions as
discussed in Notes 5 and 6 to the financial statements) of Price
Waterhouse LLP, independent accountants, given on the authority of said
firm as experts in auditing and accounting.
25
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26
==================================== =====================================
NO PERSON IS AUTHORIZED TO GIVE
ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS IN CONNECTION WITH
THE OFFER MADE BY THIS PROSPECTUS
OTHER THAN THOSE CONTAINED IN THIS
PROSPECTUS, AND, IF GIVEN OR MADE,
SUCH INFORMATION OR REPRESENTATION
MUST NOT BE RELIED UPON AS HAVING
BEEN AUTHORIZED. THIS PROSPECTUS
DOES NOT CONSTITUTE AN OFFER TO
SELL OR A SOLICITATION OF AN OFFER
TO BUY ANY OF THESE SECURITIES IN
ANY STATE TO ANY PERSON TO WHOM IT
IS UNLAWFUL TO MAKE SUCH OFFER OR
SOLICITATION IN SUCH STATE.
----------------
TABLE OF CONTENTS
PAGE QUAKER CHEMICAL
---- CORPORATION
Additional Information......... 2
General Information............ 2
Definitions.................... 3
The Plan....................... 7
General...................... 7
Purpose...................... 7
Administration............... 7 ------------
Eligibility.................. 8
Contributions................ 8 QUAKER CHEMICAL CORPORATION
Rollover Contributions....... 10 PROFIT SHARING AND RETIREMENT
Limitations on Contributions. 10 SAVINGS PLAN
Change of Contributions...... 10
Accounts..................... 11 ------------
Investment of Contributions.. 11
Description of Investment PROSPECTUS
Options.................... 11
Valuation of the Fund........ 17 ------------
Vesting...................... 18
Benefits Under the Plan...... 18
Distribution of Benefits..... 19
Withdrawals of Profit-Sharing
Contributions.............. 21
Loans to Participants........ 21
Assignment; Liens............ 22
Amendment and Termination.... 22
Reference to the Plan........ 22
Federal Tax Aspects............ 22
Applicable Requirements
of ERISA..................... 24
Amendments and Other Changes
Affecting this Prospectus.... 24
Reports of the Company......... 24
Incorporation of Certain
Documents By Reference....... 25
Experts........................ 25
----------------
NEITHER THE DELIVERY OF THIS
PROSPECTUS NOR ANY SALE MADE
HEREUNDER SHALL UNDER ANY OCTOBER 30, 1996
CIRCUMSTANCES CREATE ANY
IMPLICATION THAT THERE HAS BEEN NO
CHANGE IN THE AFFAIRS OF THE
COMPANY OR THE PLAN SINCE THE DATE
HEREOF.
==================================== =====================================
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE.
Reference is made to the information appearing under the heading
"Incorporation of Certain Documents by Reference" in the Prospectus
constituting a part of this Registration Statement, which information is
incorporated herein by this reference.
ITEM 4. DESCRIPTION OF SECURITIES.
Not applicable.
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL.
Not applicable.
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Subchapter D of Chapter 17 of the Pennsylvania Business Corporation
Law of 1988 provides as follows:
Section 1741. Third-Party actions. Unless otherwise
restricted in its bylaws, a business corporation shall have the
power to indemnify any person who was or is a party or is threatened
to be made a party to any threatened, pending or completed action or
proceeding, whether civil, criminal, administrative or investigative
(other than an action by or in the right of the corporation), by
reason of the fact that he is or was a representative of the
corporation, or is or was serving at the request of the corporation
as a representative of another domestic or foreign corporation for
profit or not-for-profit, partnership, joint venture, trust or other
enterprise, against expenses (including attorneys' fees), judgments,
fines and amounts paid in settlement actually and reasonably
incurred by him in connection with the action or proceeding if he
acted in good faith and in a manner he reasonably believed to be in,
or not opposed to, the best interests of the corporation and, with
respect to any criminal proceeding, had no reasonable cause to
believe his conduct was unlawful. The termination of any action or
proceeding by judgment, order, settlement or conviction or upon a
plea of nolo contendere or its equivalent shall not of itself create
a presumption that the person did not act in good faith and in a
manner that he reasonably believed to be in, or not opposed to, the
best interests of the corporation and, with respect to any criminal
proceeding, had reasonable cause to believe that his conduct was
unlawful.
Section 1742. Derivative and corporate actions. Unless
otherwise restricted in its bylaws, a business corporation shall
have power to indemnify any person who was or is a party, or is
threatened to be made a party, to any threatened, pending or
completed action by or in the right of the corporation to procure a
judgment in its favor by reason of the fact that he is or was a
representative of the corporation or is or was serving at the
request of the corporation as a representative of another domestic
or foreign corporation for profit or not-for-profit, partnership,
joint venture, trust or other enterprise against expenses (including
attorneys' fees) actually and reasonably incurred by him in
connection with the defense or settlement of the action if he acted
in good faith and in a manner he reasonably believed to be in, or
not opposed to, the best interests of the corporation.
Indemnification shall not be made under this section in respect of
any claim, issue or matter as to which the person has been adjudged
to be liable to the corporation unless and only to the extent that
the court of common pleas of the judicial district embracing the
county in which the registered office of the corporation is located
or the court in which the action was brought determines upon
application that, despite the adjudication of liability but in view
of all the circumstances of the case, such person is fairly and
reasonably entitled to indemnity for the expenses the court of
common pleas or other court deems proper.
Section 1743. Mandatory indemnification. To the extent that a
representative of a business corporation has been successful on the
merits or otherwise in defense of any action or proceeding referred
to in Section 1741 (relating to third-party actions) or 1742
(relating to derivative and corporate actions) or in defense of any
claim, issue or matter therein, he shall be indemnified against
expenses (including attorney fees) actually and reasonably incurred
by him in connection therewith.
II-1
Section 1744. Procedure for effecting indemnification. Unless
ordered by a court, any indemnification under section 1741 (relating
to third-party actions) or 1742 (relating to derivative or corporate
actions) shall be made by the business corporation only as
authorized in the specific case upon determination that
indemnification of the representative is proper in the circumstances
because he has met the applicable standard of conduct set forth in
those sections. The determination shall be made:
(1) by the board of directors by a majority vote of a
quorum consisting of directors who were not parties to such
action or proceeding;
(2) if such a quorum is not obtainable or if obtainable
and a majority vote of a quorum of disinterested directors so
directs, by independent legal counsel in a written opinion; or
(3) by the shareholders.
Section 1745. Advancing expenses. Expenses (including
attorneys' fees) incurred in defending any action or proceeding
referred to in this subchapter may be paid by a business corporation
in advance of the final disposition of the action or proceeding upon
receipt or an undertaking by or on behalf of the representative to
repay the amount if it is ultimately determined that he is not
entitled to be indemnified by the corporation as authorized in this
subchapter or otherwise.
Section 1746. Supplementary coverage.
(a) General rule. The indemnification and advancement of
expenses provided by, or granted pursuant to, the other sections of
this subchapter shall not be deemed exclusive of any other rights to
which a person seeking indemnification or advancement of expenses
may be entitled under any by-law, agreement, vote of shareholders or
disinterested directors or otherwise, both as to action in his
official capacity and as to action in another capacity while holding
such office. Sections 1728 (relating to interested directors or
officers; quorum) and, in the case of a registered corporation,
section 2538 (relating to approval of transactions with interested
shareholders) shall be applicable to any bylaw, contract or
transaction authorized by the directors under this section. A
corporation may create a fund of any nature, which may, but need not
be, under the control of a trustee, or otherwise secure or insure in
any manner its indemnification obligations, whether arising under or
pursuant to this section or otherwise.
(b) When indemnification is not to be made. Indemnification
pursuant to subsection (a) shall not be made in any case where the
act or failure to act giving rise to the claim for indemnification
is determined by a court to have constituted willful misconduct or
recklessness. The articles may not provide for indemnification in
the case of willful misconduct or recklessness.
(c) Grounds. Indemnification pursuant to subsection (a) under
any bylaw, agreement, vote of shareholders or directors or otherwise
may be granted for any action taken and may be made whether or not
the corporation would have the power to indemnify the person under
any other provision of law except as provided in this section and
whether or not the indemnified liability arises or arose from any
threatened, pending or completed action by or in the right of the
corporation. Such indemnification is declared to be consistent with
the public policy of this Commonwealth.
Section 1747. Power to purchase insurance. Unless otherwise
restricted in its bylaws, a business corporation shall have power to
purchase and maintain insurance on behalf of any person who is or
was a representative of the corporation or is or was serving at the
request of the corporation as a representative of another domestic
or foreign corporation for profit or not-for-profit, partnership,
joint venture, trust or other enterprise against any liability
asserted against him and incurred by him in any such capacity, or
arising out of his status as such, whether or not the corporation
would have the power to indemnify him against that liability under
the provisions of this subchapter. Such insurance is declared to be
consistent with the public policy of this Commonwealth.
Section 1750. Duration and extent of coverage. The
indemnification and advancement of expenses provided by, or granted
pursuant to, this subchapter shall, unless otherwise provided when
authorized or ratified, continue as to a person who has ceased to be
a representative of the corporation and shall inure to the benefit
of the heirs and personal representative of that person.
II-2
Section 7.1 of the Company's By-Laws also contains provisions
allowing for indemnification of directors and officers to the extent
permitted under Subchapter D of Chapter 17 of the Pennsylvania
Business Corporation Law of 1988.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED.
Not applicable.
ITEM 8. EXHIBITS.
4(a) Quaker Chemical Corporation Profit Sharing and Retirement Savings
Plan.*
4(b) Agreement of Trust, dated as of November 3, 1992, between Quaker
Chemical Corporation and CoreStates Bank.*
4(c) Group Annuity Contract No. 83729, effective as of December 30,
1988, between Principal Financial Group (formerly Bankers Life)
and Quaker Chemical Corporation.*
5 Opinion of Fox, Rothschild, O'Brien & Frankel, Philadelphia,
Pennsylvania.*
23(a) Consent of Fox, Rothschild, O'Brien & Frankel. Reference is made
to Exhibit 5 hereto.
23(b) Consents of Independent Accountants--Incorporated by reference to
Exhibit 23 to Quaker Chemical Corporation's Annual Report on Form 10-K
for the year ended December 31, 1995 and Exhibit 23 to Quaker Chemical
Corporation Profit Sharing and Retirement Savings Plan's Annual
Report on Form 11-K for the year ended December 31, 1995.
24 Power of Attorney.*
- ----------------
*Previously filed as an exhibit to this Registration Statement.
Quaker Chemical Corporation undertakes that it has and will submit
the Plan and any amendents thereto to the Internal Revenue Service (the
"IRS") in a timely manner and will make all changes required by the IRS
in order to qualify the Plan under Section 401 of the Internal Revenue
Code of 1986, as amended.
ITEM 9. UNDERTAKINGS.
The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are
being made, a post-effective amendment to this Registration
Statement:
(i) To include any prospectus required by Section 10(a)(3)
of the Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events
arising after the effective date of the Registration Statement
(or the most recent post-effective amendment thereof) which,
individually or in the aggregate, represent a fundamental
change in the information set forth in the Registration
Statement;
(iii) To include any material information with respect to
the plan of distribution not previously disclosed in the
Registration Statement or any material change to such
information in the Registration Statement;
provided, however, that paragraphs (i) and (ii) above, do not
apply if the Registration Statement is on Form S-3 or Form S-8, and
the information required to be included in a post-effective
amendment by those paragraphs is contained in periodic reports filed
by the registrant pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934 that are incorporated by reference in the
Registration Statement.
(2) That, for the purpose of determining any liability under
the Securities Act of 1933, each such post-effective amendment shall
be deemed to be a new Registration Statement relating to the
securities offered therein, and the offering of such securities at
that time shall be deemed to be the initial bona fide offering
thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold
at the termination of the offering.
II-3
The undersigned registrant hereby undertakes that, for purposes
of determining any liability under the Securities Act of 1933, each
filing of the registrant's annual report pursuant to Section 13(a)
or Section 15(d) of the Securities Exchange Act of 1934 (and, where
applicable, each filing of an employee benefit plan's annual report
pursuant to Section 15(d) of the Securities Exchange Act of 1934)
that is incorporated by reference in the Registration Statement
shall be deemed to be a new Registration Statement relating to the
securities offered therein, and the offering of such securities at
that time shall be deemed to be the initial bona fide offering
thereof.
Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and
controlling persons of the registrant pursuant to the foregoing
provisions, or otherwise, the registrant has been advised that in
the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the Act and
is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by
the registrant of expenses incurred or paid by a director, officer
or controlling person of the registrant in the successful defense of
any action or proceeding) is asserted by such director, officer or
controlling person in connection with the securities being
registered, the registrant will, unless in the opinion of its
counsel the matter has been settled by controlling precedent, submit
to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the
Act and will be governed by the final adjudication of such issue.
II-4
SIGNATURES
The Registrant. Pursuant to the requirements of the Securities Act
of 1933, the registrant certifies that it has reasonable grounds to
believe that it meets all of the requirements for filing on Form S-8 and
has duly caused this Amendment to the Registration Statement to be
signed on its behalf by the undersigned, thereunto duly authorized, in
Conshohocken, Pennsylvania, on the 30th day of October, 1996.
QUAKER CHEMICAL CORPORATION
By: /s/ RONALD J. NAPLES
-------------------------------------
Ronald J. Naples
President and Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1933, this
Amendment has been signed below by the following persons in the capacities
and on the dates indicated.
SIGNATURE TITLE DATE
--------- ----- ----
/s/ PETER A. BENOLIEL Chairman of the Board October 30, 1996
- ------------------------------
Peter A. Benoliel
/s/ RONALD J. NAPLES President, Chief Executive October 30, 1996
- ------------------------------ Officer and Director
Ronald J. Naples
/s/ THOMAS F. KIRK Vice President and Chief October 30, 1996
- ------------------------------ Financial Officer
Thomas F. Kirk
* Director October 30, 1996
- ------------------------------
Joseph B. Anderson, Jr.
/s/ PATRICIA C. BARRON Director October 30, 1996
- ------------------------------
Patricia C. Barron
* Director October 30, 1996
- ------------------------------
William L. Batchelor
/s/ LENNOX K. BLACK Director October 30, 1996
- ------------------------------
Lennox K. Black
* Director October 30, 1996
- ------------------------------
Edwin J. Delattre
/s/ ROBERT P. HAUPTFUHRER Director October 30, 1996
- ------------------------------
Robert P. Hauptfuhrer
II-5
/s/ FREDERICK HELDRING Director October 30, 1996
- ------------------------------
Frederick Heldring
/s/ ROBERT H. ROCK Director October 30, 1996
- ------------------------------
Robert H. Rock
/s/ ALEX SATINSKY Director October 30, 1996
- ------------------------------
Alex Satinsky
*By PETER A. BENOLIEL
ATTORNEY-IN-FACT
/s/ PETER A. BENOLIEL
- ------------------------------ October 30, 1996
Peter A. Benoliel
The Plan. Pursuant to the requirements of the Securities Act of
1933, the Plan Committee which administers the Plan has caused the
Amendment to the Registration Statement to be signed on behalf of the
Plan by the undersigned, thereunto duly authorized in Conshohocken,
Pennsylvania, on October 30th, 1996.
QUAKER CHEMICAL CORPORATION
PROFIT SHARING AND RETIREMENT
SAVINGS PLAN
/s/ IRVING H. TYLER
-----------------------------------------------
Irving H. Tyler, Committee Chairman
/s/ RICHARD J. FAGAN
-----------------------------------------------
Richard J. Fagan, Member of the Committee
/s/ DONALD F. FAHEY
-----------------------------------------------
Donald F. Fahey, Member of the Committee
/s/ JOSEPH C. HUDSON
-----------------------------------------------
Joseph C. Hudson, Member of the Committee
/s/ KEVIN M. JARRETT
-----------------------------------------------
Kevin M. Jarrett, Member of the Committee
/s/ HOWARD WILSON
-----------------------------------------------
Howard Wilson, Member of the Committee
II-6