SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 11-K
ANNUAL REPORT
Pursuant to Section 15(d) of the
Securities Exchange Act of 1934
[ X ] ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934 [FEE REQUIRED].
For the fiscal year ended December 31, 1996
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 [NO FEE REQUIRED].
For the transition period from ________ to ________
Commission file number 0-7154
A. Full title of the plan and the address of the plan, if different from
that of the issuer named below:
QUAKER CHEMICAL CORPORATION PROFIT SHARING
AND RETIREMENT SAVINGS PLAN
B. Name of issuer of the securities held pursuant to the plan and the
address of its principal executive office:
QUAKER CHEMICAL CORPORATION
Elm and Lee Streets
Conshohocken, Pennsylvania 19428
Profit Sharing and
Retirement Savings
Plan of Quaker
Chemical Corporation
Financial Statements and
Additional Information
December 31, 1996
Profit Sharing and Retirement Savings Plan of
Quaker Chemical Corporation
Index to the Financial Statements
December 31, 1996
Page(s)
Report of Independent Accountants 1
Statement of Net Assets Available for Benefits, with Fund
Information at December 31, 1996 and 1995 2 - 3
Statement of Changes in Net Assets Available for Benefits,
with Fund Information for the Years Ended
December 31, 1996 and 1995 4 - 5
Notes to Financial Statements 6 - 8
Additional Information:*
Schedule I - Schedule of Assets Held for Investment
at December 31, 1996 9
Schedule II - Schedule of Reportable Transactions
for the Year Ended December 31, 1996 10
* Other schedules required by Section 2520.103-10 of the Department of Labor
Rules and Regulations for Reporting and Disclosure under ERISA have been
omitted because they are not applicable.
Report of Independent Accountants
May 8, 1997
To the Participants and Administrator;
Profit Sharing and Retirement Savings Plan of
Quaker Chemical Corporation
In our opinion, the accompanying statements of net assets available for
benefits and the related statements of changes in net assets available for
benefits present fairly, in all material respects, the net assets available
for benefits of the Profit Sharing and Retirement Savings Plan of Quaker
Chemical Corporation at December 31, 1996 and 1995 and the changes in net
assets available for benefits for the years then ended, in conformity with
generally accepted accounting principles. These financial statements are the
responsibility of the plan's management; our responsibility is to express an
opinion on these financial statements based on our audits. We conducted our
audits of these statements in accordance with generally accepted auditing
standards which require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements, assessing
the accounting principles used and significant estimates made by management,
and evaluating the overall financial statement presentation. We believe that
our audits provide a reasonable basis for the opinion expressed above.
Our audits were performed for the purpose of forming an opinion on the basic
financial statements taken as a whole. The additional information included in
Schedules I and II is presented for purposes of additional analysis and is
not a required part of the basic financial statements but is additional
information required by ERISA. The Fund Information in the statement of net
assets available for benefits and the statement of changes in net assets
available for benefits is presented for purposes of additional analysis
rather than to present the net assets available for plan benefits and changes
in net assets available for benefits of each fund. Schedules I and II and the
Fund Information have been subjected to the auditing procedures applied in
the audits of the basic financial statements and, in our opinion, are fairly
stated in all material respects in relation to the basic financial statements
taken as a whole.
1
CAPTION>
Profit Sharing and Retirement Savings Plan of Quaker Chemical Corporation
Statement of Net Assets Available for Benefits, with Fund Information
December 31, 1996
- ----------------------------------------------------------------------------------------------------------------------------------
Fund Information
-------------------------------------------------------------------------------------------------------
Quaker
Chemical
Guaranteed Bond and Corporation
Interest U.S. Stock Mortgage Common Participant
Fund Fund Fund Stock Fund Notes Other Total
- ----------------------------------------------------------------------------------------------------------------------------------
Investments at fair value:
Common Stock Fund $9,986,849* $715,932 $10,702,781
Bond and Mortgage Fund $2,759,029* 2,759,029
Guaranteed Interest Fund $2,022,914* 2,022,914
Participant notes receivable $8,056 8,056
Cash surrender value of life
insurance contracts $91,443 91,443
Cash equivalents 1,524 1,524
---------- ----------- ----------- --------- ------ -------- -----------
Total investments 2,022,914 9,986,849 2,759,029 715,932 8,056 92,967 15,585,747
Employer contribution
receivable 50,407 244,284 72,966 38,052 405,709
---------- ----------- ----------- --------- ------ -------- -----------
Net assets available
for benefits $2,073,321 $10,231,133 $2,831,995 $753,984 $8,056 $92,967 $15,991,456
========== =========== ========== ======== ====== ======= ===========
* Represents greater than 5% of net assets available for benefits.
The accompanying notes are an integral part of these financial statements.
2
Profit Sharing and Retirement Savings Plan of Quaker Chemical Corporation
Statement of Net Assets Available for Benefits, with Fund Information
December 31, 1995
- ----------------------------------------------------------------------------------------------------------------------------------
Fund Information
-------------------------------------------------------------------------------------------------------
Quaker
Chemical
Guaranteed Bond and Corporation
Interest U.S. Stock Mortgage Common Participant
Fund Fund Fund Stock Fund Notes Other Total
- ----------------------------------------------------------------------------------------------------------------------------------
Investments at fair value:
Common Stock Fund $7,743,647* $552,241 $8,295,888
Bond and Mortgage Fund $2,758,665* 2,758,665
Guaranteed Interest Fund $2,544,396* 2,544,396
Participant notes receivable $4,960 4,960
Cash surrender value of life
insurance contracts $111,587 111,587
Cash equivalents 1,481 1,481
---------- ----------- ----------- --------- ------ -------- -----------
Total investments 2,544,396 7,743,647 2,758,665 552,241 4,960 113,068 13,716,977
---------- ----------- ----------- --------- ------ -------- -----------
Net assets available
for benefits $2,544,396 $7,743,647 $2,758,665 $552,241 $4,960 $113,068 $13,716,977
========== =========== ========== ======== ====== ======= ===========
* Represents greater than 5% of net assets available for benefits.
The accompanying notes are an integral part of these financial statements.
3
Profit Sharing and Retirement Savings Plan of
Quaker Chemical Corporation
Statements of Changes in Net Assets Available For Benefits, with Fund Information
December 31, 1996
- ----------------------------------------------------------------------------------------------------------------------------------
Fund Information
-------------------------------------------------------------------------------------------------------
Quaker
Chemical
Guaranteed Bond and Corporation
Interest U.S. Stock Mortgage Common Participant
Fund Fund Fund Stock Fund Notes Other Total
- ----------------------------------------------------------------------------------------------------------------------------------
Additions to net assets
attributed to:
Net investment income $121,627 $1,929,896 $108,072 $29,928 $1,759 $73 $2,191,355
Participant contributions 81,658 630,825 208,175 93,220 1,013,878
Employer contributions 73,862 317,961 98,534 48,906 539,263
Rollovers 1,409 6,495 4,381 704 12,989
Unrealized appreciation of
investments 130,144 130,144
Other 6,032 6,032
---------- ----------- ---------- -------- ------ -------- -----------
284,588 2,885,177 419,162 302,902 1,759 73 3,893,661
---------- ----------- ---------- -------- ------ -------- -----------
Deductions from net assets
attributed to:
Participant benefits 517,007 385,209 626,560 47,511 15,867 1,592,154
Life insurance premiums 1,889 3,663 1,302 30 6,884
Net participant loan activity 5,542 9,938 1,724 (17,204)
Decrease in cash surrender
value of insurance contracts 20,144 20,144
Interfund transfers 231,225 (1,119) (283,754) 53,648
---------- ----------- ---------- -------- ------ -------- -----------
755,663 397,691 345,832 101,159 (1,337) 20,174 1,619,182
---------- ----------- ---------- -------- ------ -------- -----------
Net increase (decrease) (471,075) 2,487,486 73,330 201,743 3,096 (20,101) 2,274,479
Net assets at beginning of year 2,544,396 7,743,647 2,758,665 552,241 4,960 113,068 13,716,977
---------- ----------- ---------- -------- ------ -------- -----------
Net assets at end of year $2,073,321 $10,231,133 $2,831,995 $753,984 $8,056 $ 92,967 $15,991,456
========== =========== ========== ======== ====== ======== ===========
The accompanying notes are an integral part of these financial statements.
4
Profit Sharing and Retirement Savings Plan of
Quaker Chemical Corporation
Statements of Changes in Net Assets Available For Benefits, with Fund Information
December 31, 1995
- ----------------------------------------------------------------------------------------------------------------------------------
Fund Information
-------------------------------------------------------------------------------------------------------
Quaker
Chemical
Guaranteed Bond and Corporation
Interest U.S. Stock Mortgage Common Participant
Fund Fund Fund Stock Fund Notes Other Total
- ----------------------------------------------------------------------------------------------------------------------------------
Additions to net assets
attributed to:
Net investment income $140,813 $1,912,169 $411,953 $22,946 $959 $751 $2,489,591
Participant contributions 91,350 493,395 191,000 119,483 895,228
Employer contributions 15,497 43,252 21,099 13,904 93,752
Transfers in from Subsidiaries'
Plan 212,340 212,340
Rollovers 3,827 11,489 7,564 1,769 24,649
Increase in cash surrender
value of insurance contracts 2,483 2,483
Loan distributions (3,467) (3,467)
Other (227) 1,974 1,974 3,721
---------- ----------- ----------- --------- ------ -------- -----------
251,260 2,462,279 633,590 158,102 (2,508) 215,574 3,718,297
---------- ----------- ----------- --------- ------ -------- -----------
Deductions from net assets
attributed to:
Participant benefits 96,459 247,186 67,271 20,675 431,591
Life insurance premiums 406 7,360 7,766
Net participant loan activity (2,762) (7,007) 1,410 (111) 8,470
Interfund transfers (335,777) 45,348 96,517 (19,070) 212,982
Unrealized depreciation
of investments 170,173 170,173
---------- ----------- ----------- --------- ------ -------- -----------
(242,080) 285,933 165,198 171,667 8,470 220,342 609,530
---------- ----------- ----------- --------- ------ -------- -----------
Net increase (decrease) 493,340 2,176,346 468,392 (13,565) (10,978) (4,768) 3,108,767
Net assets at beginning of year 2,051,056 5,567,301 2,290,273 565,806 15,938 117,836 10,608,210
---------- ----------- ----------- --------- ------ -------- -----------
Net assets at end of year $2,544,396 $7,743,647 $ 2,758,665 $552,241 $4,960 $113,068 $13,716,977
========== =========== ========== ======== ====== ======= ===========
The accompanying notes are an integral part of these financial statements.
5
Profit Sharing and Retirement Savings Plan of
Quaker Chemical Corporation
Notes to Financial Statements
December 31, 1996 and 1995
- -----------------------------------------------------------------------------
1. Description of Plan
The following description of the Quaker Chemical Corporation Profit
Sharing and Retirement Savings Plan (the "Plan") provides only general
information. Participants should refer to the Plan document for a more
complete description of the Plan's provisions.
General
The Plan is a defined contribution plan for all employees of the Quaker
Chemical Corporation (the "Company") except for employees compensated in
whole or in part by commissions on sales. Eligible employees, including
employees compensated in whole or in part by commissions on sales, may
choose to make elective contributions to the Plan on a "before tax" basis.
Effective July 1, 1995 the profit sharing plan of AC Products, Inc., a
subsidiary of Quaker Chemical Corporation, was merged into the Company's
Plan. The Plan is administered by a six-member committee appointed by the
Company's Board of Directors.
Effective March 1, 1996, employees become eligible for participation in
the Plan on the first day of the month following employment commencement,
unless the employee is hired on the first day of the month in which case
the employee is eligible immediately. Prior to March 1, 1996, employees
were eligible to participate in the plan after one year of service. Plan
participants are immediately vested in their account balance. All
administrative expenses of the Plan are paid by the Company.
Contributions
The Company's Board of Directors, at its discretion, determines the
amount, if any, of the contribution to the Plan for each Plan year. The
Company's 1996 profit sharing contribution was $404,709 and was based on
the level of domestic company profit from operations (as defined) versus
the target profit (as defined). No contribution was made in 1995. The
target profit is determined as the average of the prior three years'
domestic company profit from operations increased by 15%.
Participants of the Plan may elect to contribute any whole percentage of
their compensation, up to 8%, during the year. Each year, the Company
makes a matching contribution of $150 for each whole percentage of the
participant's compensation contributed to the Plan during the Plan year,
with the Company's matching contribution for each individual participant
limited to $450 in any calendar year.
Payment of Benefits
Participants are entitled to receive their account balance upon retirement
or termination from the Company.
In the event of Plan termination, the Plan provides that the assets shall
continue to be held by the Trustees (currently, CoreStates Bank, N.A. and
Principal Mutual Life Insurance Company "PML") for normal distribution.
6
Profit Sharing and Retirement Savings Plan of
Quaker Chemical Corporation
Notes to Financial Statements
December 31, 1996 and 1995
- -----------------------------------------------------------------------------
Investment Options
Participants in the Plan may elect to invest their pro-rata share of the
Company's contribution in any of the following pooled investment funds of
PML: Guaranteed Interest, U.S. Stock and/or Bond and Mortgage.
Participants may also elect to invest in Quaker Chemical Corporation
common stock.
The Plan includes a provision whereby PML, if so instructed by the Plan
administrator, shall invest an amount less than 50% of the employer's
current contribution allocable to each participant for the year in whole
life insurance contracts. These contracts are owned by PML and may be
borrowed against by PML. The Plan is the sole beneficiary of the
contracts.
Investment income
PML, a Plan trustee, is unable to separately report interest and dividends
and net appreciation (depreciation) in the market value of investments.
Therefore, all such amounts are included in net investment income.
2. Summary of Accounting Policies
Method of accounting
The Plan's financial statements are prepared on the accrual basis of
accounting.
Income recognition
Purchases and sales of securities are recorded on a trade-date basis.
Interest income is recorded on the accrual basis. Dividends are recorded
on the ex-dividend date.
Participant notes receivable
Participant notes receivable are valued at cost, which approximates fair
value.
Payment of benefits
Benefits are recorded when paid.
Use of estimates
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets at the date of the
financial statements and the reported amounts of additions and deductions
during the reporting period. Actual results could differ from those
estimates.
Investments
Investments in pooled investment funds are valued at the Plan's pro rata
share of the market value of the funds. Market value is determined using
the daily net asset value quoted by the trustee based on the published
market prices of the underlying securities in the funds. The market value
of Quaker Chemical stock is based on the closing price as listed on the
New York Stock Exchange.
7
Profit Sharing and Retirement Savings Plan of
Quaker Chemical Corporation
Notes to Financial Statements
December 31, 1996 and 1995
- -----------------------------------------------------------------------------
3. Participant Notes Receivable
At December 31, 1996 and 1995, outstanding loans were $8,056 and $4,960
with original principal of $29,177 and $45,900, respectively. Interest
rates on loans approximate the prime rate in effect at loan inception. The
Plan has certain limitations on loans that can be made to Plan
participants. Participants should refer to the Plan document for a
complete description of these limitations.
4. Tax Status of the Plan
The Plan has received a tax determination letter from the Internal Revenue
Service dated August 18, 1995 indicating that the Plan is a qualified plan
under Section 401 of the Internal Revenue Code ("IRC"). The Plan has been
amended since receiving the determination letter. However, the Plan
administrator believes that the Plan is designed and is currently being
operated in compliance with the applicable requirements of the IRC.
Accordingly, no provision for income taxes has been recorded in the
financial statements.
5. Related Party Transactions
Certain Plan assets are invested in shares of separate accounts managed by
Principal Mutual Life Insurance Company. Principal Mutual Life Insurance
Company is a trustee as defined by the Plan and, therefore, these
investments qualify as party-in-interest.
8
Profit Sharing and Retirement Savings Plan Schedule I
of Quaker Chemical Corporation
Item 27a Form 5500 - Schedule of Assets Held for Investment Purposes
December 31, 1996
- ----------------------------------------------------------------------------------------------------------------------------------
Units of Interest Market
participation Description rate Maturity value Cost
- ----------------------------------------------------------------------------------------------------------------------------------
Principal Mutual Life Pooled Investment Funds:
2,022,914 Guaranteed Interest Fund various 2/28/97 - 2/28/01 $ 2,022,914 $ 1,899,579
32,759 U.S. Stock Fund n/a n/a 9,986,849 5,354,279
6,642 Bond and Mortgage Fund n/a n/a 2,759,029 2,083,108
Quaker Chemical Corporation
42,248 Common Stock n/a n/a 715,932 747,501
- Participant Notes 8% - 9.75% n/a 8,056 8,056
----------- -----------
$15,492,780 $10,092,523
=========== ===========
9
Profit Sharing and Retirement Savings Plan of Schedule II
Quaker Chemical Corporation
Item 27d Form 5500 - Schedule of Reportable (5%) Transactions*
Year Ended December 31, 1996
- ----------------------------------------------------------------------------------------------------------------------------------
Current
value of asset
Number of Purchase Selling Cost of on transaction
Party Involved Description of asset transactions price price asset date Net gain
- ----------------------------------------------------------------------------------------------------------------------------------
Series of transactions:
Principal Mutual Life
Insurance Co. U.S. Stock Fund 36 $963,497 - $963,497 $963,497 -
U.S. Stock Fund 40 - $650,192 370,459 650,192 $279,733
Principal Mutual Life
Insurance Co. Guaranteed Interest Fund 30 635,724 - 635,724 635,724 -
Guaranteed Interest Fund 42 - 1,278,862 1,278,862 1,278,862 -
Principal Mutual Life
Insurance Co. Bond and Mortgage Fund 38 608,895 - 608,895 608,895 -
Bond and Mortgage Fund 34 - 716,603 531,469 716,603 185,134
*Transactions or series of transactions in excess of 5 percent of the current value of the Plan's assets as of December 31, 1995
as defined in Section 2520.103-6 of the Department of Labor Rules and Regulations for Reporting and Disclosure under ERISA.
10
SIGNATURES
The Plan. Pursuant to the requirements of the Securities Exchange Act of
1934, the Committee which acts as Plan Administrator has duly caused this
Annual Report to be signed on its behalf by the undersigned hereunto duly
authorized.
QUAKER CHEMICAL CORPORATION PROFIT
SHARING AND RETIREMENT SAVINGS PLAN
June 30, 1997 /s/ Irving H. Tyler
--------------------------
Irving H. Tyler,
Chairman of the Committee
June 30, 1997 /s/ Richard J. Fagan
--------------------------
Richard J. Fagan,
Member of the Committee
June 30, 1997 /s/ Donald F. Fahey
--------------------------
Donald F. Fahey,
Member of the Committee
June 30, 1997 /s/ Joseph C. Hudson
--------------------------
Joseph C. Hudson,
Member of the Committee
June 30, 1997 /s/ Howard Wilson
-------------------------
Howard Wilson,
Member of the Committee
11
Exhibit 23
Consent of Independent Accountants
We hereby consent to the incorporation by reference in the Registration
Statement on Form S-8 (No. 33-54158) of the Quaker Chemical Corporation
Profit Sharing and Retirement Savings Plan of our report dated May 8, 1997,
appearing on page 1 of the Annual Report of the Quaker Chemical Corporation
Profit Sharing and Retirement Savings Plan on Form 11-K for the year ended
December 31, 1996.
Price Waterhouse LLP
Philadelphia, Pennsylvania
June 26, 1997
