QUAKER CHEMICAL
CORPORATION


RETIREMENT
SAVINGS PLAN


 


 


(As Amended and Restated
Effective January 1, 2016)


 


 


 


 


 


 


 


 


 


 


 


 


 


 














                                                                                                           












Table
of Contents


 


Page


 





ARTICLE I......... DEFINITIONS................................................................................................ 1


1.1...... “AC
Participant”.................................................................................................... 1


1.2...... “AC Products
Discretionary Contributions”.......................................................... 1


1.3...... “Administrator”...................................................................................................... 1


1.4...... “Affiliated
Employer”............................................................................................ 1


1.5...... “Aggregate
Account”............................................................................................. 1


1.6...... “Bargaining
Component Plan” .............................................................................. 1


1.7...... “Base
Compensation”............................................................................................. 2


1.8...... “Beneficiary”.......................................................................................................... 2


1.9...... “Catch-Up
Contributions”...................................................................................... 2


1.10.... “Catch-Up
Eligible Employee”.............................................................................. 2


1.11.... “Code”.................................................................................................................... 2


1.12.... “Company”............................................................................................................. 2


1.13.... “Company
Securities”............................................................................................ 2


1.14.... “Compensation”
..................................................................................................... 2


1.15.... “Contract”.............................................................................................................. 3


1.16.... “Deferred
Compensation”...................................................................................... 3


1.17.... “Effective
Date”..................................................................................................... 3


1.18.... “Elective
Contributions”........................................................................................ 4


1.19.... “Eligible
Employee”............................................................................................... 4


1.20.... “Employee”............................................................................................................ 5


1.21.... “Employer”............................................................................................................. 5


1.22.... “Entry Date”........................................................................................................... 5


1.23.... “Epmar
Participant” ............................................................................................... 5


1.24.... “ERISA”................................................................................................................ 5


1.25.... “Excess
Aggregate Contributions”......................................................................... 5


1.26.... “Excess
Contributions”.......................................................................................... 5


1.27.... “Excess
Deferred Compensation”.......................................................................... 5


1.28.... “Fiduciary”............................................................................................................. 5


1.29.... “Forfeiture”............................................................................................................ 6


1.30.... “415
Compensation” ............................................................................................. 6


1.31.... “414(s)
Compensation” ......................................................................................... 6


1.32.... “G.W. Smith
Participant”....................................................................................... 6


1.33.... “Highly
Compensated Employee”......................................................................... 6


1.34.... “Hour of
Service”................................................................................................... 7


1.35.... “Investment
Manager”........................................................................................... 7


1.36.... “Key Employee”..................................................................................................... 8


1.37.... “Leased
Employee”................................................................................................ 8


1.38.... “Matching
Contribution”........................................................................................ 8


1.39.... “Nonelective
Contributions”.................................................................................. 8


1.40.... “Nonhighly
Compensated Employee”................................................................... 8


1.41.... “Non-Safe
Harbor Component Plan” .................................................................... 8


1.42.... “Normal Retirement
Age”...................................................................................... 8






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1.43.... “1-Year
Break in Service”...................................................................................... 8


1.44.... “Participant”........................................................................................................... 9


1.45.... “Participant’s
Account”.......................................................................................... 9


1.46.... “Participant’s
Elective Account”............................................................................ 9


1.47.... “Plan”..................................................................................................................... 9


1.48.... “Plan Year”........................................................................................................... 10


1.49.... “Quaker
Discretionary Contributions”................................................................. 10


1.50.... “Quaker Stock
Fund”........................................................................................... 10


1.51.... “Qualified
Military Service”................................................................................. 10


1.52.... “Qualified
Nonelective Contributions”................................................................ 10


1.53.... “Regulations”....................................................................................................... 10


1.54.... “Rollover
Account”.............................................................................................. 10


1.55.... “Rollover
Contribution”....................................................................................... 10


1.56.... “Roth Catch-Up
Contributions” .......................................................................... 10


1.57.... “Roth Elective
Contributions” ............................................................................ 10


1.58.... “Safe Harbor Component
Plan” .......................................................................... 10


1.59.... “Severance
from Employment”............................................................................ 11


1.60.... “Spouse” or
“Surviving Spouse”.......................................................................... 11


1.61.... “Stock Bonus
Plan”.............................................................................................. 11


1.62.... “Stock Bonus
Plan Account”............................................................................... 11


1.63.... “Summit
Participant”............................................................................................ 11


1.64.... “Top-Heavy
Plan”................................................................................................ 11


1.65.... “Top-Heavy
Plan Year”........................................................................................ 11


1.66.... “Total and Permanent
Disability”......................................................................... 11


1.67.... “Trustee”............................................................................................................... 11


1.68.... “Trust Fund”......................................................................................................... 11


1.69.... “Valuation
Date”.................................................................................................. 11


1.70.... “Vested”............................................................................................................... 12


1.71.... “Year of
Service”................................................................................................. 12


ARTICLE II........ TOP-HEAVY
RULES AND ADMINISTRATION.................................... 12


2.1...... TOP-HEAVY
PLAN REQUIREMENTS.......................................................... 12


2.2...... DETERMINATION
OF TOP-HEAVY STATUS.............................................. 13


ARTICLE III...... ELIGIBILITY............................................................................................... 15


3.1...... CONDITIONS OF
ELIGIBILITY..................................................................... 15


3.2...... PROCEDURE TO
BECOME ACTIVE PARTICIPANT.................................. 16


3.3...... DETERMINATION
OF ELIGIBILITY............................................................ 16


3.4...... CHANGE IN
ELIGIBILITY STATUS.............................................................. 16


3.5...... OMISSION OF
ELIGIBLE EMPLOYEE......................................................... 16


ARTICLE IV...... CONTRIBUTION
AND ALLOCATION.................................................... 17


4.1...... FORMULA FOR
DETERMINING EMPLOYER’S CONTRIBUTION......... 17


4.2...... PARTICIPANT’S
SALARY DEFERRAL ELECTION................................... 17


4.3...... CATCH-UP
CONTRIBUTIONS........................................................................ 20








	
   

  	
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4.4...... EMPLOYER
MATCHING AND DISCRETIONARY CONTRIBUTIONS    21


4.5...... EMPLOYER
NONELECTIVE CONTRIBUTIONS........................................ 22


4.6...... TIME OF
PAYMENT OF EMPLOYER’S CONTRIBUTION......................... 23


4.7...... ALLOCATION OF
CONTRIBUTION AND EARNINGS............................. 23


4.8...... ACTUAL
DEFERRAL PERCENTAGE TEST AND ACTUAL  CONTRIBUTION PERCENTAGE TEST......................................................................................... 26


4.9...... RETURN OF
EXCESS CONTRIBUTIONS, RETURN OF EXCESS  AGGREGATE CONTRIBUTIONS, AND SPECIAL
RULES.................................................. 27


4.10.... MAXIMUM ANNUAL
ADDITIONS............................................................... 31


4.11.... CORRECTION OF
EXCESS ANNUAL ADDITIONS................................... 32


4.12.... ROLLOVERS FROM
OTHER PLANS............................................................. 32


4.13.... INVESTMENT OF
AGGREGATE ACCOUNTS............................................. 34


ARTICLE V........ VALUATIONS............................................................................................. 37


5.1...... VALUATION OF
THE TRUST FUND............................................................. 37


5.2...... METHOD OF
VALUATION............................................................................. 37


ARTICLE VI...... DETERMINATION
AND DISTRIBUTION OF BENEFITS.................... 38


6.1...... VESTING............................................................................................................ 38


6.2...... DETERMINATION
OF BENEFITS UPON TERMINATION........................ 39


6.3...... DETERMINATION
OF BENEFITS UPON DEATH....................................... 40


6.4...... DETERMINATION
OF BENEFITS IN EVENT OF DISABILITY................ 41


6.5...... DISTRIBUTION
OF BENEFITS....................................................................... 41


6.6...... REQUIRED MINIMUM
DISTRIBUTIONS.................................................... 43


6.7...... LATEST DATE
OF COMMENCEMENT OF PAYMENTS............................ 47


6.8...... DISTRIBUTION
FOR MINOR BENEFICIARY............................................. 47


6.9...... LOCATION OF
PARTICIPANT OR BENEFICIARY UNKNOWN............. 47


6.10.... LIMITATIONS ON
BENEFITS AND DISTRIBUTIONS............................... 48


6.11.... HARDSHIP
DISTRIBUTIONS......................................................................... 48


6.12.... WITHDRAWALS OF
PREVIOUSLY CONTRIBUTED AMOUNTS........... 49


6.13.... LOANS................................................................................................................ 49


6.14.... DISTRIBUTIONS
FROM THE ROLLOVER ACCOUNT ............................. 51


6.15.... DISTRIBUTIONS
AT OR AFTER AGE 591⁄2................................................... 51


6.16.... DISTRIBUTIONS
OF G.W. SMITH ACCOUNTS.......................................... 51


6.17.... DISCLAIMER..................................................................................................... 51


ARTICLE VII..... ADMINISTRATION.................................................................................... 52


7.1...... POWERS AND
RESPONSIBILITIES OF THE COMPANY.......................... 52


7.2...... DESIGNATION
OF ADMINISTRATIVE AUTHORITY............................... 52


7.3...... ALLOCATION
AND DELEGATION OF RESPONSIBILITIES................... 52


7.4...... POWERS AND
DUTIES OF THE ADMINISTRATOR.................................. 53


7.5...... RECORDS AND
REPORTS.............................................................................. 54


7.6...... APPOINTMENT
OF ADVISERS...................................................................... 54


7.7...... INFORMATION
FROM EMPLOYER.............................................................. 54


7.8...... PAYMENT OF
EXPENSES............................................................................... 54








	
   

  	
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7.9...... MAJORITY
ACTIONS....................................................................................... 55


7.10.... CLAIMS
PROCEDURE..................................................................................... 55


7.11.... LIMITATIONS ON
ACTIONS.......................................................................... 57


7.12.... DISCRETIONARY
AUTHORITY.................................................................... 57


ARTICLE VIII... AMENDMENT,
TERMINATION AND MERGERS................................. 57


8.1...... RIGHT TO
AMEND........................................................................................... 57


8.2...... TERMINATION.................................................................................................. 58


8.3...... MERGER OR
CONSOLIDATION................................................................... 59


ARTICLE IX...... MISCELLANEOUS...................................................................................... 59


9.1...... PARTICIPANT’S
RIGHTS................................................................................ 59


9.2...... ALIENATION..................................................................................................... 59


9.3...... CONSTRUCTION
OF PLAN............................................................................ 60


9.4...... GENDER AND
NUMBER................................................................................. 60


9.5...... LEGAL ACTION................................................................................................ 61


9.6...... PROHIBITION
AGAINST DIVERSION OF FUNDS.................................... 61


9.7...... BONDING........................................................................................................... 61


9.8...... RECEIPT AND
RELEASE FOR PAYMENTS................................................. 62


9.9...... ACTION BY THE
EMPLOYER........................................................................ 62


9.10.... NAMED
FIDUCIARIES AND ALLOCATION OF RESPONSIBILITY...... 62


9.11.... HEADINGS......................................................................................................... 62


9.12.... ELECTRONIC
MEDIA...................................................................................... 63


9.13.... CLERICAL ERROR........................................................................................... 63


9.14.... UNIFORMITY.................................................................................................... 63


EXHIBIT A......... PARTICIPATING
EMPLOYERS AS OF JANUARY 1, 2015.................. 64















	
   

  	
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QUAKER
CHEMICAL CORPORATION RETIREMENT SAVINGS PLAN


 


(As Amended and
Restated Effective January 1, 2016)


 


            WHEREAS, Quaker Chemical Corporation (the
“Company”) maintains the Quaker Chemical Corporation Retirement Savings Plan
(the “Plan”) for the benefit of eligible employees of the Company and
participating affiliates;


 


            WHEREAS, the Plan was most recently amended
and restated effective January 1, 2015; and


            WHEREAS, the Company desires to amend and
restate the Plan in order to exclude certain items from the definition of
compensation thereunder, effective January 1, 2016; 


 


            NOW, THEREFORE, effective January 1, 2016
(except where other effective dates are specifically provided), the Plan is
hereby amended and restated, in its entirety, as follows:


 


ARTICLE I

DEFINITIONS


                        The following words and phrases,
as used in the Plan, shall have the following meanings unless the context
clearly indicates otherwise:


 


1.1             
“AC Participant” means a Participant who is employed
by AC Products, Inc., other than the individual who was the President of AC
Products, Inc. on January 1, 2006.


1.2             
“AC Products Discretionary Contributions” means the discretionary contributions, if any, made by AC Products, Inc. pursuant
to Section 4.4(c) and allocated pursuant to Section 4.7(b)(iv).


1.3             
“Administrator” means the committee designated by the
Company to administer the Plan on behalf of the Employer.


1.4             
“Affiliated Employer” means any corporation which is a
member of a controlled group of corporations (as defined in Code section
414(b)) which includes the Company; any trade or business (whether or not
incorporated) which is under common control (as defined in Code section 414(c))
with the Company; any organization (whether or not incorporated) which is a
member of an affiliated service group (as defined in Code section 414(m)) which
includes the Company; and any other entity required to be aggregated with the
Company pursuant to Regulations under Code section 414(o).


1.5             
“Aggregate Account” means, with respect to each
Participant, the value of all accounts maintained on behalf of the Participant,
whether attributable to Employer or Employee contributions.


1.6             
“Bargaining Component Plan”  means the component of
the Plan that covers Employees who are members of a collective bargaining unit.






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1.7             
“Base Compensation” means, with respect to any Employee,
the Compensation of the Employee, excluding overtime payments, shift
differential, commissions, all nonsalary and nonwage direct or indirect
compensation, Employer contributions to Social Security, contributions to this
or any other retirement plan or program, the value of any other fringe benefit
provided by or at the expense of the Employer, and any income realized upon the
receipt, exercise, or vesting of a grant of a stock option, performance
incentive unit, restricted stock, or other equity award pursuant to the
Company’s long-term performance incentive plan.


1.8             
“Beneficiary” means the person to whom the share of a
deceased Participant’s total account is payable, subject to the restrictions of
Sections 6.3 and 6.6.


1.9             
“Catch-Up Contributions” means additional contributions
that a Catch-Up Eligible Employee may elect to make, including Roth Catch-Up
Contributions, in accordance with Section 4.3 and Code section 414(v).


1.10         
“Catch-Up Eligible Employee” means, with respect to a
Plan Year, an Eligible Employee who is eligible to make Elective Contributions
under Section 4.2 and who has attained or will attain age 50 before the end of
such Plan Year.       


1.11         
“Code” means the Internal Revenue Code of 1986, as
amended or replaced from time to time, and any Regulations in effect
thereunder.


1.12         
“Company” means Quaker Chemical Corporation, a
Pennsylvania corporation, and any successor thereto.


1.13         
“Company Securities” means the common stock of the
Company. 


1.14         
“Compensation”  means, with respect to any Employee,
(a) the total remuneration earned or accrued on behalf of the Employee during
the time period to which reference is made, exclusive of: (i) remuneration paid
to any Participant after the date on which such Participant ceased to be
employed in a classification eligible for participation in this Plan, other
than remuneration with respect to services performed while the Participant was
an Eligible Employee that is paid prior to the later of the end of the Plan
Year in which the Participant’s Severance from Employment occurs or two and
one-half months after his or her Severance from Employment; (ii) for purposes
of determining Elective Contributions, amounts realized from the exercise of a
stock option, when restricted stock (or property) held by an Employee is
includible in the Employee’s gross income, or when a stock grant is made; (iii)
restricted stock dividends; (iv) taxable mileage; and (v) gift cards and other
remuneration not received in cash (and any gross-up payments made with respect
to such amounts); and (b) differential wage payments (within the meaning of
Code section 414(u)(12)).  For purposes of allocating AC Products Discretionary
Contributions and Quaker Discretionary Contributions pursuant to Section
4.7(b), only Compensation earned by an Employee while he or she is eligible to
receive such a Contribution shall be taken into account.  The determination of
Compensation shall be made by including Deferred Compensation and salary
reduction contributions made on behalf of an Employee to a plan maintained under
Code section 125 or to a qualified transportation fringe benefit program
described under Code section 132(f), but shall be exclusive of any
distributions attributable to unused “flex dollars” accumulated by the Employer
pursuant to the Quaker 



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Chemical Corporation Flexible
Benefits Program.  For purposes of determining Compensation, amounts under Code
section 125 include any amounts not available to a Participant in cash in lieu
of group health coverage because the Participant is unable to certify that he
or she has other health coverage.  An amount shall be treated as an amount
under Code section 125 only if the Employer does not request or collect
information regarding the Participant’s other health coverage as part of the
enrollment process for the health plan.


                        The annual Compensation of each
Employee taken into account in determining allocations under the Plan for any
Plan Year shall not exceed $265,000, as adjusted by the Commissioner of
Internal Revenue for increases in the cost-of-living in accordance with Code
section 401(a)(17)(B) for Plan Years after 2016.  Annual Compensation means
Compensation during the Plan Year or such other 12-consecutive-month period
over which Compensation is otherwise determined under the Plan (the
determination period).  The cost-of-living adjustment in effect for a calendar
year applies to annual Compensation for the determination period that begins
with or within such calendar year.  For purposes of determining a Participant’s
Elective Contributions and Matching Contributions, the limit set forth in this
paragraph shall be applied to a Participant’s Compensation on a Plan Year basis
(or on a determination period basis, if the determination period is other than
a Plan Year) and shall not be applied on a first-dollar basis.


 


                        Compensation, as defined above,
shall include the amount that a Participant would have received from the
Employer during a period of Qualified Military Service (or, if the amount of
such Compensation is not reasonably certain, the Employee’s average earnings
from the Employer or an Affiliated Employer for the 12-month period immediately
preceding the Employee’s period of Qualified Military Service or, if shorter,
the period of employment immediately preceding the Qualified Military Service);
provided, however, that the Employee returns to work within the period during
which his or her right to reemployment is protected by law.


 


1.15         
“Contract” means a life insurance policy or annuity
contract (group or individual) issued by the insurer as elected.


1.16         
“Deferred Compensation” means, with respect to any
Participant, that portion of the Participant’s total Compensation which has
been contributed to the Plan in accordance with the Participant’s salary
deferral election pursuant to Section 4.2.  The term “Deferred Compensation”
shall include Catch-Up Contributions except to the extent provided in Section
4.3, Code section 414(v), or final Regulations or other guidance issued by the
Internal Revenue Service.


1.17         
“Effective Date” means January 1, 2016, the effective
date of this amended and restated Plan, except as otherwise provided herein or
as otherwise required by applicable law. Except where an earlier effective date
is specified herein, the provisions of this amendment and restatement shall
apply only to Employees who complete an Hour of Service on or after the
Effective Date.  The rights of individuals who terminated employment prior to
the Effective Date shall otherwise be governed by the Plan as in effect on the
date of their termination from employment.  The original effective date of the
Plan was December 31, 1953.






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1.18         
“Elective Contributions” means the Employer’s
contributions to the Plan that are made pursuant to the Participant’s salary
deferral election provided in Section 4.2.  In addition, any Qualified
Nonelective Contribution shall be considered an Elective Contribution for
purposes of the Plan; provided, however, that Qualified Nonelective Contributions
used to satisfy the Actual Contribution Percentage Test of Section 4.8(b) shall
not be used to satisfy the Actual Deferral Percentage Test of Section 4.8(a). 
The term “Elective Contributions” shall include (i) Roth Elective
Contributions, and (ii) Catch-Up Contributions, including Roth Catch-Up
Contributions, except to the extent provided in Section 4.3, Code section
414(v), or final Regulations or other guidance issued by the Internal Revenue
Service.


1.19         
“Eligible Employee” means any Employee, except as
follows:


(a)               
An Employee who is a member of UAW Local 174 shall be deemed an
“Eligible Employee” for purposes of being permitted to make Elective
Contributions, receiving Matching Contributions, and receiving an allocation of
Quaker Discretionary Contributions (if any) and Nonelective Contributions.


(b)              
Any other Employee 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 shall be
an “Eligible Employee” only to the extent such agreement expressly provides for
coverage under this Plan.


(c)               
An Employee of an Affiliated Employer shall not be eligible to
participate in this Plan unless such Affiliated Employer has specifically
adopted this Plan in writing.


(d)              
A Leased Employee shall not be eligible to participate in this Plan.


(e)               
A nonresident alien who receives no earned income (within the meaning of
Code section 911(d)(2)) which constitutes United States source income (within
the meaning of Code section 861(a)(3)) shall not be eligible to participate in
this Plan.


(f)               
A person shall not be eligible to participate in this Plan if he or she
provides services to an Employer or Affiliated Employer pursuant to an
agreement with a leasing organization (including, but not limited to, a Leased
Employee), or if he or she is classified by an Employer or Affiliated Employer
(i) as an independent contractor, or (ii) in any other category which is not a
common law employee, as reflected in the official payroll and personnel records
of the Employer or Affiliated Employer.  The exclusion set forth in this
subsection shall be based solely on the classification by the Employer or
Affiliated Employer regardless of how such individual is classified by any
government or regulatory authority or by any court.  If an Employer or an
Affiliated Employer reclassifies an individual as an Employee, such
reclassification shall apply prospectively from the date of such
reclassification (and not retroactively to the date on which he or she was
found to have first become an employee for any other purpose), unless the
Employer or Affiliated Employer specifically provides otherwise.


(g)              
Effective with respect to an Employee hired after 2010, an Employee
shall not be eligible to participate in this Plan if he or she is (i) employed
by an Employer for a 



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temporary or periodic basis or
without a regular work schedule pursuant to which the Employee accepts a job
assignment having a fixed and limited duration, and (ii) classified by the
Employer as a temporary employee.


1.20         
“Employee” means any person who is employed by the
Employer or an Affiliated Employer, and shall also include a Leased Employee.


1.21         
“Employer” means the Company and any Affiliated
Employer that has adopted this Plan in writing and joins in the corresponding
trust agreement.  The Affiliated Employers participating in the Plan as of
January 1, 2016, are listed in Exhibit A. 


1.22         
“Entry Date” means the date as of which an Eligible
Employee is eligible to become a Participant in the Plan, as provided in
Section 3.1(a).


1.23         
“Epmar Participant”  means a Participant who is
employed by Epmar Corporation.


1.24         
“ERISA” means the Employee Retirement Income Security
Act of 1974, as it may be amended from time to time.


1.25         
“Excess Aggregate Contributions” means, with respect
to any Plan Year, the excess of the aggregate amount of the Matching
Contributions made on behalf of Highly Compensated Employees for such Plan
Year, over the maximum amount of such contributions permitted under the
limitations of Section 4.8(b).  Excess Aggregate Contributions shall be treated
as an “annual addition” pursuant to Section 4.10.


1.26         
“Excess Contributions” means, with respect to any Plan
Year, the excess of Elective Contributions made on behalf of Highly Compensated
Employees for such Plan Year over the maximum amount of such contributions
permitted under Section 4.8(a).  Excess Contributions shall be treated as an
“annual addition” pursuant to Section 4.10.


1.27         
“Excess Deferred Compensation” means, with respect to
any taxable year of a Participant, the aggregate amount of the Participant’s
Deferred Compensation claimed by the Participant (pursuant to Section
4.2(d)(i)) or deemed to be claimed by the Participant (pursuant to Section
4.2(d)(ii)) as exceeding the dollar limitation provided for in Code section
402(g), which is incorporated herein by reference.  Excess Deferred
Compensation distributed pursuant to Section 4.2(d)(iv) shall not be treated as
an “annual addition” pursuant to Section 4.10.


1.28         
“Fiduciary” means any person or entity who (a)
exercises any discretionary authority or discretionary control respecting
management of the Plan or exercises any authority or control respecting
management or disposition of its assets, (b) renders investment advice for a
fee or other compensation, direct or indirect, with respect to any monies or
other property of the Plan or has any authority or responsibility to do so, or
(c) has any discretionary authority or discretionary responsibility in the
administration of the Plan, including, but not limited to, the Trustee, the
Company and its representative body, and the Administrator.


 






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1.29         
“Forfeiture” means removing that portion of the
Participant’s Account that is not Vested from the Participant’s Account. 
Forfeiture shall occur on the earlier of (a) the date on which distribution is
made to the Participant of the Participant’s Vested Aggregate Account, or (b)
the last day of the Plan Year in which the Participant incurs five consecutive
1-Year Breaks in Service.  In addition, the term Forfeiture shall also include
amounts deemed to be Forfeitures pursuant to any other provision of this Plan. 
If a Participant’s Vested Aggregate Account is $0, the Participant shall be
deemed to receive a distribution of his or her Vested Aggregate Account on his
or her Severance from Employment.


1.30         
“415 Compensation”  means “compensation” as such word
is defined in Regulation sections 1.415(c)-2(b) and (c) (including differential
wage payments within the meaning of Code section 414(u)(12)).  415 Compensation
shall not include compensation paid following a Participant’s Severance from
Employment with the Company and any Affiliated Employers, except as otherwise
required by Regulation section 1.415(c)-2(e)(3)(i).  In no event shall a Participant’s
415 Compensation for any limitation year (as defined in Section 4.10(c)) exceed
the annual compensation limit of Code section 401(a)(17) for such year.


1.31         
“414(s) Compensation” means 415 Compensation, but
excluding (i) restricted stock dividends; (ii) taxable mileage; and (iii) gift
cards and other remuneration not received in cash.


1.32         
“G.W. Smith Participant” means a Participant who is
employed by G.W. Smith & Sons, Inc.


1.33         
“Highly Compensated Employee” means, with respect to a
Plan Year, an Employee who:  


(a)               
was a 5% owner (as defined in Code section 416(i)(1)) of the Employer or
an Affiliated Employer at any time during the current or the preceding Plan
Year; or 


(b)              
for the immediately preceding Plan Year had 415 Compensation from the
Employer and Affiliated Employers in excess of $120,000 (as adjusted by the
Secretary of Treasury pursuant to Code section 414(q) for Plan Years after
2015) and was in the top-paid group of Employees for such preceding year.


                        An Employee is in the top-paid
group of Employees for the year if such Employee is in the group consisting of
the top 20% of employees when ranked on the basis of 415 Compensation paid
during such year.  The determination of who is a Highly Compensated Employee,
including the determination of 415 Compensation and of the number and identity
of Employees in the top-paid group, shall be made in accordance with Code
section 414(q) and the Regulations thereunder.


 


                        In determining who is a Highly
Compensated Employee, Employees who are nonresident 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.  All Affiliated Employers, however,
shall be taken into account as a single employer. 






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1.34         
“Hour of Service” means (a) each hour for which an
Employee is directly or indirectly compensated or entitled to compensation by
the Employer for the performance of duties during the applicable computation
period; (b) each hour for which an Employee is directly or indirectly
compensated or entitled to compensation by the Employer (irrespective of
whether the employment relationship has terminated) for reasons other than
performance of duties (such as vacation, holidays, sickness, jury duty,
disability, layoff, military duty, or leave of absence) during the applicable
computation period; (c) each hour for which back pay is awarded or agreed to by
the Employer without regard to mitigation of damages; and (d) each hour that
constitutes part of the Employee’s customary work week during any period of
Qualified Military Service, provided the Employee returns to service while his
or her reemployment rights are protected by law.  For purposes of subsection
(c), these hours shall be credited to the Employee for the computation period
or periods to which the award or agreement pertains rather than the computation
period in which the award, agreement, or payment is made.  The same Hours of
Service shall not be credited both under subsection (a) or (b), as the case may
be, and under subsection (c) or (d), as the case may be.


                        Notwithstanding the above, (i)
except with respect to subsection (d), no more than 501 Hours of Service shall
be credited to an Employee on account of any single continuous period during
which the Employee performs no duties (whether or not such period occurs in a
single computation period); (ii) an hour for which an Employee is directly or
indirectly paid, or entitled to payment, on account of a period during which no
duties are performed shall not be credited to the Employee if such payment is
made or due under a plan maintained solely for the purpose of complying with
applicable workers’ compensation, unemployment compensation, or disability
insurance laws; and (iii) Hours of Service shall not be credited for a payment
which solely reimburses an Employee for medical or medically related expenses
incurred by the Employee.


 


                        For purposes of this Section, a
payment shall be deemed to be made by or due from the Employer regardless of
whether such payment is made by or due from the Employer directly, or
indirectly through, among others, a trust fund or insurer, to which the
Employer contributes or pays premiums, and regardless of whether contributions
made or due to the trust fund, insurer, or other entity are for the benefit of
particular Employees or are on behalf of a group of Employees in the aggregate.


 


                        An Hour of Service must be counted
for the purposes of determining a Year of Service, a 1-Year Break in Service,
and employment commencement date (or reemployment commencement date).  In
addition, Hours of Service shall be credited for employment with other
Affiliated Employers for all purposes under the Plan other than Section
4.7(b)(iii) and (iv) (regarding eligibility to receive an AC Products
Discretionary Contribution or a Quaker Discretionary Contribution).  The
provisions of 29 CFR §2530.200b-2(b) and (c) are incorporated herein by
reference.


 


1.35         
“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 or other person or entity
described in ERISA section 3(38).






 -7-



 












 


 





1.36         
“Key Employee” means any Employee or former Employee (and
the beneficiaries of such Employee) who at any time during the Plan Year that includes
the Determination Date (as defined in Section 2.2(d)) was:


(a)               
an officer of an Employer or any Affiliated Employer having annual 415 Compensation
from the Employer and the Affiliated Employer greater than $170,000 (as
adjusted under Code section 416(i)(1) for Plan Years beginning after December
31, 2016);


(b)              
a 5% owner of an Employer or any Affiliated Employer; or


(c)               
a 1% owner of an Employer or any Affiliated Employer who has annual 415
Compensation from an Employer and the Affiliated Employer for a Plan Year of
more than $150,000.


 


The determination of who is a Key Employee shall be made
in accordance with Code section 416(i) and applicable Regulations and other
guidance of general applicability issued thereunder.


 


1.37         
“Leased Employee” means any person (other than a
common law employee of the recipient) who, pursuant to an agreement between the
recipient and any other person (“leasing organization”), has performed services
for the recipient (or for the recipient and related persons determined in
accordance with Code section 414(n)(6)) on a substantially full-time basis for
a period of at least one year, if such services are performed under the primary
direction or control by the recipient.  Contributions or benefits provided to a
Leased Employee by the leasing organization which are attributable to services
performed for the recipient employer shall be treated as provided by the
recipient employer.  


1.38         
“Matching Contribution” means the amount authorized by
the Administrator as described in Section 4.4(a) and contributed in cash or
Company Securities by the Employer.


1.39         
“Nonelective Contributions” means the amount described
in Section 4.5 and contributed in cash or Company Securities by the Employer.


1.40         
“Nonhighly Compensated Employee” means an Empoyee who
is not a Highly Compensated Employee.


1.41         
“Non-Safe Harbor Component Plan”  means the component
of the Plan that covers Employees who (a) are not members of a collective
bargaining unit, and (b) have either not completed a Year of Service (for
purposes of Section 3.1) or not attained age 21.


1.42         
“Normal Retirement Age” means the Participant’s 65th
birthday.


1.43         
“1-Year Break in Service” means the applicable
computation period during which an Employee has not completed more than 500
Hours of Service with the Employer or an Affiliated Employer.  Further, solely
for the purpose of determining whether a Participant has incurred a 1-Year
Break in Service, Hours of Service shall be recognized for authorized leaves of
absence and maternity and paternity leaves of absence. Years of Service and
1-Year Breaks in Service shall be measured using the same computation period. 
In addition, an Employee on 



 -8-



 












 


 





Qualified Military Service
shall not incur a 1-Year Break in Service, provided he or she returns to
service while his or her employment rights are protected by law.


                        “Authorized leave of absence”
means an unpaid, temporary cessation from active employment with the Employer
pursuant to an established nondiscriminatory policy, whether occasioned by
illness, military service, or any other reason.


 


                        A “maternity or paternity leave of
absence” means an absence from work for any period by reason of the Employee’s
pregnancy, birth of the Employee’s child, placement of a child with the Employee
in connection with the adoption of such child, or any absence for the purpose
of caring for such child for a period immediately following such birth or
placement.  For an individual who is absent from work for maternity or
paternity reasons, the 12-consecutive-month period beginning on the date of
such absence or the first anniversary of such absence shall not constitute a
1-Year Break in Service.


 


1.44         
“Participant” means an Eligible Employee who is
included in the Plan as provided in Article III.


1.45         
“Participant’s Account” means the account established
and maintained by the Administrator for each Participant with respect to his or
her total interest in the Plan and Trust resulting from AC Products
Discretionary Contributions, Quaker Discretionary Contributions, Matching
Contributions, and Nonelective Contributions.  A separate accounting shall be
maintained with respect to that portion of the Participant’s Account
attributable to Nonelective Contributions for Plan Years prior to 2008,
Nonelective Contributions for Plan Years after 2007, Matching Contributions, AC
Products Discretionary Contributions, and Quaker Discretionary Contributions.


1.46         
“Participant’s Elective Account” means the account
established and maintained by the Administrator for each Participant with
respect to his or her total interest in the Plan and Trust resulting from
Elective Contributions which are not directed by the Participant to the Quaker
Stock Fund.  A separate accounting shall be maintained with respect to that portion
of the Participant’s Elective Account attributable to (i) pre-tax Elective
Contributions pursuant to Section 4.2 or 4.3, (ii) Roth Elective Contributions
(including Roth Catch-Up Contributions) pursuant to Section 4.2 or 4.3, and
(iii) any Qualified Nonelective Contributions made pursuant to Section 4.9(f).


1.47         
“Plan” means the Quaker Chemical Corporation
Retirement Savings Plan as set forth herein, including all amendments thereto. 
The Plan was formerly known as the “Quaker Chemical Corporation Profit Sharing
and Retirement Plan.”  With the exception of the Stock Bonus Plan portion of
the Plan, the Plan is intended to be a profit-sharing plan under Code section
401(a)(27).


 


 


 






 -9-



 












 


 





1.48         
“Plan Year” means the Plan’s accounting year of 12 months
commencing on January 1 of each year and ending the following December 31.


1.49         
“Quaker Discretionary Contributions” means the
discretionary contributions, if any, made by the Employer pursuant to Section
4.4(b) and allocated pursuant to Section 4.7(b)(iii).


1.50         
“Quaker Stock Fund” means a fund that invests in
Company Securities.


1.51         
“Qualified Military Service” means any service in the
uniformed services (as defined in chapter 43 of title 38, United States Code)
where the Employee’s right to reemployment is protected by law.


1.52         
“Qualified Nonelective Contributions” means the
Employer’s contributions to the Plan that are made pursuant to Section 4.9(f)
and as described in Code section 401(m)(4)(C).  Such contributions shall be
subject to the provisions of Section 4.2(b) and (c), and either (a) considered
Elective Contributions for the purposes of the Plan and used to satisfy the
Actual Deferral Percentage Test of Section 4.8(a), or (b) used to satisfy the
Actual Contribution Percentage Test of Section 4.8(b).


1.53         
“Regulations” means the regulations promulgated by the
Secretary of the Treasury from time to time.


1.54         
“Rollover Account” means the accounts or subaccounts
established and maintained by the Administrator for each Participant with
respect to his or her Rollover Contributions Roth Rollover Contributions. The
term Rollover Account shall include Roth Rollover Contributions unless
expressly distinguished or otherwise required under the Code, Regulations, or
other guidance.  To the extent necessary for applicable tax and recordkeeping
purposes, a separate Roth Rollover subaccount shall be established.


1.55         
“Rollover Contribution” means a contribution or direct
rollover made pursuant to Section 4.12.


1.56         
“Roth Catch-Up Contributions”  means Catch-Up
Contributions that are includible in a Participant’s gross income at the time
deferred and have been irrevocably designated as Roth Catch-Up Contributions by
the Participant, as described in Section 4.3.


1.57         
“Roth Elective Contributions”  means Elective
Contributions that are includible in a Participant’s gross income at the time
deferred and have been irrevocably designated as Roth Elective Contributions by
the Participant, as described in Section 4.2.  The term Roth Elective
Contributions shall include Roth Catch-Up Contributions except to the extent
provided in Section 4.3, Code section 414(v), or final Regulations or other
guidance issued by the Internal Revenue Service.


1.58         
“Safe Harbor Component Plan”  means the component of
the Plan that covers employees who (a) are not members of a collective
bargaining unit, (b) have completed a Year of Service (for purposes of Section
3.1), and (c) have attained age 21.






 -10-



 












 


 





1.59         
“Severance from Employment” means a severance from
employment within the meaning of Code section 401(k)(2)(B)(i)(I), applicable Regulations
thereunder, and other guidance of general applicability issued thereunder.


1.60         
“Spouse” or “Surviving Spouse” shall mean the
person to whom the Participant is legally married for purposes of Federal law,
provided that a former spouse shall be treated as the Spouse or Surviving Spouse
to the extent provided under a qualified domestic relations order, as defined
in Code section 414(p).


1.61         
“Stock Bonus Plan” means the portion of the Plan meant
to qualify as a stock bonus plan under Code section 401(a) that invests
primarily in Company Securities.


1.62         
“Stock Bonus Plan Account” means the account
established and maintained by the Administrator for each Participant with
respect to his or her Elective Contributions, Matching Contributions, AC
Products Discretionary Contributions, Quaker Discretionary Contributions, and
Nonelective Contributions invested in the Quaker Stock Fund.  A separate
accounting shall be maintained with respect to that portion of a Participant’s
Stock Bonus Plan Account attributable to (a) pre-tax Elective Contributions,
(b) Roth Elective Contributions (including Roth Catch-Up Contributions), (c)
Matching Contributions, (d) AC Products Discretionary Contributions, (e) Quaker
Discretionary Contributions, and (f) Nonelective Contributions.


1.63         
“Summit Participant” means a Participant who is
employed by Summit Lubricants Inc.


1.64         
“Top-Heavy Plan” means a plan described in Section
2.2(a).


1.65         
“Top-Heavy Plan Year” means a Plan Year during which
the Plan is a Top-Heavy Plan.


1.66         
“Total and Permanent Disability” means, (a) with
respect to an Epmar Participant who has amounts transferred to the Plan
pursuant to Article X, a physical or mental condition of the Participant
resulting from bodily injury, disease, or mental disorder which renders such
Participant incapable of continuing any gainful occupation and which condition
constitutes total disability under the Federal Social Security Acts, and (b)
with respect to a Participant not described in subsection (a), a physical or
mental condition of the Participant resulting from bodily injury, disease, or
mental disorder that continues for a period of at least 24 consecutive months
and that renders him or her eligible for disability benefits under Title II of
the Social Security Act.


1.67         
“Trustee” means the person(s) or entity named as
trustee herein or in any separate trust forming a part of this Plan, and any
successors.


1.68         
“Trust Fund” or “Fund” means the assets of the
Plan and Trust as the same shall exist from time to time.


1.69         
“Valuation Date” means any business day that the New
York Stock Exchange is open for trading.






 -11-



 












 


 





1.70         
“Vested” means the nonforfeitable portion of any account
maintained on behalf of a Participant.


1.71         
“Year of Service” means:


(a)               
For all purposes of this Plan except for purposes of Section 3.1, a Plan
Year during which an Employee completes 1,000 or more Hours of Service; and


(b)              
For purposes of Section 3.1, the 12-consecutive-month period beginning
with the date the Employee’s employment with the Employer or any Affiliated
Employer commenced (such date being the first day for which the Employee is
credited with an Hour of Service) if, during such consecutive 12-month period,
the Employee completes 1,000 Hours of Service; provided, however, that if,
during such 12-consecutive-month period, the Employee does not complete 1,000
Hours of Service, then “Year of Service” shall mean any Plan Year beginning
after the Employee’s date of employment during which the Employee completes
1,000 or more Hours of Service.


(c)               
For purposes of Section 3.1, a Year of Service is not completed until
the end of the 12-consecutive-month period or the Plan Year, as the case may
be, without regard to when during that period the 1,000 Hours of Service are
completed, and in determining a Participant’s Years of Service the Employee
shall receive credit for his or her Hours of Service for the Employer or any
Affiliated Employer whether or not he or she was an Eligible Employee at the
time such Hours of Service were completed.


(d)              
For purposes of this Plan, service with AC Products, Inc. shall be
deemed to constitute service with the Employer.


(e)               
For purposes of this Plan, service with United Lubricants Corporation
prior to March 1, 2002, shall be deemed to constitute service with the
Employer.


(f)               
For purposes of this Plan, service with D.A. Stuart prior to July 16,
2010, shall be deemed to constitute service with the Employer.


(g)              
For purposes of this Plan, all service credited under the G.W. Smith
Plan or the Summit Plan shall also be credited as service under this Plan.


 


 


ARTICLE II

TOP-HEAVY RULES AND ADMINISTRATION


2.1             
TOP-HEAVY PLAN REQUIREMENTS


                        For any Top-Heavy Plan Year, the
special minimum allocation requirements of Code section 416(c) set forth in
Section 4.7(d) of the Plan shall apply.






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2.2             
DETERMINATION OF TOP-HEAVY STATUS


(a)               
Top-Heavy Plan.  This Plan shall be a Top-Heavy Plan for any Plan
Year in which, as of the Determination Date, the present value of accrued
benefits of Key Employees and the sum of the Aggregate Accounts of Key
Employees under this Plan and all plans of an Aggregation Group exceeds 60% of
the present value of accrued benefits and the sum of the Aggregate Accounts of
all Key Employees and non-Key Employees under this Plan and all plans of an
Aggregation Group.


                        If any Participant is a non-Key
Employee for any Plan Year, but such Participant was a Key Employee for any
prior Plan Year, the present value of such Participant’s accrued benefit and
such Participant’s Aggregate Account balance shall not be taken into account
for purposes of determining whether this Plan is a Top-Heavy Plan (or whether
any Aggregation Group which includes this Plan is a Top-Heavy Group).  In
addition, the accrued benefits and accounts of any individual who has not
performed services for an Employer during the one-year period ending on the
Determination Date shall not be taken into account.


 


(b)              
Aggregate Account.  A Participant’s Aggregate Account for
purposes of this Article II only shall be defined as the sum of the following
as of the Determination Date:


(i)                
The balance of his or her Aggregate Account as of the most recent
valuation occurring within a 12-month period ending on the Determination Date.


(ii)              
An adjustment for any contributions due as of the Determination Date,
which adjustment shall be the amount of any contributions actually made after
the most recent Valuation Date but due on or before the Determination Date,
except for the first Plan Year of the Plan when such adjustment shall also
reflect the amount of any contributions made after the Determination Date that
are allocated as of a date in that first Plan Year.


(iii)            
Any Plan distributions made with respect to the Employee under the Plan
and any Plan aggregated with the Plan under Code section 416(g)(2) during the
one-year period ending on the Determination Date.  The preceding sentence shall
also apply to distributions under a terminated plan which, had it not been
terminated, would have been aggregated with the Plan under Code section 416(g)(2)(A)(i). 
In the case of a distribution made for a reason other than separation from
service, death, or disability, this provision shall be applied by substituting “five-year
period” for “one-year period.”


(iv)            
Any Employee contributions, whether voluntary or mandatory.  However,
amounts attributable to tax-deductible, qualified voluntary Employee
contributions shall not be considered to be a part of the Participant’s
Aggregate Account balance.


(v)              
With respect to unrelated rollovers (ones which are both initiated by
the Employee and made from a plan maintained by one employer to a plan
maintained by another employer), if this Plan permits the rollovers, it shall
always consider such rollovers as a distribution for the purposes of this
Section.





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(vi)            
With respect to related rollovers and ones either not initiated by the
Employee or made to a plan maintained by the same employer, if this Plan
permits the rollovers, they shall not be counted as distributions for purposes
of this Section.  If this Plan is the plan accepting such rollovers, it shall
consider such rollovers as part of the Participant’s Aggregate Account balance,
irrespective of the date on which such rollovers are accepted.


(vii)          
For the purposes of determining whether two employers are to be treated
as the same employer in paragraphs (v) and (vi) above, all employers aggregated
under Code section 414(b), (c), (m), and (o) shall be treated as the same
employer.


(c)               
“Aggregation Group” means either a Required Aggregation Group or
a Permissive Aggregation Group as hereinafter determined.


(i)                
Required Aggregation Group:  In determining a Required
Aggregation Group hereunder, each plan of the Employer in which a Key Employee
is a Participant in the Plan Year containing the Determination Date or any of
the four preceding Plan Years, and each other plan of the Employer which
enables any plan in which a Key Employee participates to meet the requirements
of Code sections 401(a)(4) or 410, shall be required to be aggregated.  Such
group shall be known as a “Required Aggregation Group.”


                                    In the case of a
Required Aggregation Group, each plan in the group shall be considered a
Top-Heavy Plan if the Required Aggregation Group is a Top-Heavy Group.  No plan
in the Required Aggregation Group shall be considered a Top-Heavy Plan if the Required
Aggregation Group is not a Top-Heavy Group.


 


(ii)              
Permissive Aggregation Group:  The Employer may also include any
other plan not required to be included in the Required Aggregation Group,
provided the resulting group, taken as a whole, would continue to satisfy the
provisions of Code sections 401(a)(4) and 410.  Such group shall be known as a
“Permissive Aggregation Group.”


                                    In the case of a
Permissive Aggregation Group, only a plan that is part of the Required
Aggregation Group shall be considered a Top-Heavy Plan if the Permissive
Aggregation Group is a Top-Heavy Group.  No plan in the Permissive Aggregation
Group shall be considered a Top-Heavy Plan if the Permissive Aggregation Group
is not a Top-Heavy Group.


 


(iii)            
Only those plans of the Employer in which the Determination Dates fall
within the same calendar year shall be aggregated in order to determine whether
such plans are Top-Heavy Plans.


(iv)            
An Aggregation Group shall include any terminated plan of the Employer
if it was maintained within the last five years ending on the Determination
Date.


(d)              
“Determination Date” means (i) the last day of the preceding Plan
Year, or (ii) in the case of the first Plan Year, the last day of such Plan
Year.





 -14-



 












 


 





(e)               
“Present Value of Accrued Benefit” means, in the case of a defined
benefit plan, the present value of the accrued benefit for a Participant other
than a Key Employee, determined using the single accrual method used for all
plans of the Employer and Affiliated Employers, or, if no such single method
exists, using a method which results in benefits accruing not more rapidly than
the slowest accrual rate permitted under Code section 411(b)(1)(C).  The
present value of the accrued benefit shall be determined as of the most recent
Valuation Date that falls within or ends with the 12-month period ending on the
Determination Date, except as provided in Code section 416 and the Regulations
thereunder for the first and second plan years of a defined benefit plan.


(f)               
“Top-Heavy Group” means an Aggregation Group in which, as of the
Determination Date, the sum of:


(i)                
the present value of accrued benefits of Key Employees under all defined
benefit plans included in the group; and


(ii)              
the Aggregate Accounts of Key Employees under all defined contribution
plans included in the group, 


exceeds 60% of a similar sum determined for all Key
Employees and non-Key Employees under this Plan and all plans of the
Aggregation Group.


 


 


ARTICLE III

ELIGIBILITY


3.1             
CONDITIONS OF ELIGIBILITY


(a)               
Elective Contributions and Matching Contributions.  An Eligible
Employee who was a Participant in the Plan on December 31, 2015, shall continue
to be eligible to participate in the Plan, and to make Elective Contributions
to the Plan and receive Matching Contributions, on January 1, 2016.  Any other
Eligible Employee shall be eligible to become a Participant in the Plan and to
make Elective Contributions to the Plan and receive Matching Contributions on
the date on which the Eligible Employee’s employment with the Employer
commences or as soon as administratively practicable thereafter.


(b)              
Discretionary Contributions and Nonelective Contributions.  An
Eligible Employee who was a Participant in the Plan and was eligible to receive
an allocation of AC Products Discretionary Contributions, Quaker Discretionary
Contributions, or Nonelective Contributions on December 31, 2015, shall
continue to be eligible to receive such contributions on January 1, 2016.  Any
other Eligible Employee shall be eligible to receive an allocation of AC
Products Discretionary Contributions, Quaker Discretionary Contributions, or
Nonelective Contributions only upon completing one Year of Service. Upon
completing one Year of Service, an Eligible Employee shall begin to participate
in the Plan for purposes of Nonelective Contributions as of the first day of
the month coincident with or next following the date on which the Eligible
Employee meets the one Year of Service requirement.  






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3.2             
PROCEDURE TO BECOME ACTIVE PARTICIPANT


                        An Eligible Employee who was a
Participant in the Plan on December 31, 2015, shall continue to be a
Participant on the Effective Date.  Any other Eligible Employee shall become an
active Participant effective as of his or her Entry Date by completing such
forms and providing such data as are reasonably required by the Administrator
at such time in advance as the Administrator may prescribe.  If the Eligible
Employee declines to make an Elective Contribution pursuant to Section 4.2
effective as of his or her Entry Date, he or she may thereafter elect to make
Elective Contributions on the first day of any subsequent pay period on which
he or she is an Eligible Employee.  


 


3.3             
DETERMINATION OF ELIGIBILITY


                        The Administrator shall determine
the eligibility of each Employee for participation in the Plan based upon
information furnished by the Employer.  Such determination shall be conclusive
and binding upon all persons, as long as the same is made pursuant to the Plan
and ERISA.


 


3.4             
CHANGE IN ELIGIBILITY STATUS


(a)               
Return to Eligible Status.  In the event a Participant is no
longer an Eligible Employee and becomes ineligible to participate, such
Employee shall become eligible to participate immediately upon again becoming
an Eligible Employee.


(b)              
Change to Eligible Status.  In the event an Employee who is not
an Eligible Employee becomes an Eligible Employee, such Employee shall (i) be
eligible to make Elective Contributions to the Plan and receive Matching
Contributions immediately, and (ii) be eligible to receive an AC Products
Discretionary Contribution (as described in Section 4.4(c)), Quaker
Discretionary Contribution (as described in Section 4.4(b)), or a Nonelective
Contribution (as described in Section 4.5) if he or she has satisfied the one Year
of Service requirement.  Otherwise, such an Eligible Employee shall participate
on the date determined under Section 3.1.


3.5             
OMISSION OF ELIGIBLE EMPLOYEE


                        If, in any Plan Year, any Employee
who should be included as a Participant in the Plan is erroneously omitted and
discovery of such omission is not made until after a contribution by his or her
Employer for the year has been made, the Employer shall make a subsequent
contribution with respect to the omitted Employee in the amount which the
Employer would have contributed with respect to him or her had he or she not
been omitted.  Such contribution shall be made regardless of whether it is
deductible in whole or in part in any taxable year under applicable provisions
of the Code.





 -16-



 












 


 





 


 


ARTICLE IV

CONTRIBUTION AND ALLOCATION


4.1             
FORMULA FOR DETERMINING EMPLOYER’S CONTRIBUTION


(a)               
Contributions.  For each Plan Year, the Employer shall contribute
to the Plan as follows:


(i)                
The amount of the total salary deferral elections of all Participants
made pursuant to Section 4.2(a), which amount shall be deemed the Employer’s
Elective Contribution.


(ii)              
Matching Contributions made pursuant to Section 4.4(a).


(iii)            
Such discretionary amounts, if any, made pursuant to Section 4.4(b) and
Section 4.4(c), which amount shall be deemed a Quaker Discretionary
Contribution or an AC Products Discretionary Contribution, respectively.


(iv)            
Qualified Nonelective Contributions made pursuant to Section 4.9(f).


(v)              
Catch-Up Contributions made pursuant to Section 4.3.


(vi)            
Nonelective Contributions made pursuant to Section 4.5.


(b)              
Limit on Contributions.  Notwithstanding the foregoing, the
Employer’s contributions for any Plan Year shall not exceed the maximum amount
allowable as a deduction to the Employer under the provisions of Code section
404, except as provided in Section 3.5 and to the extent necessary to provide
the Top-Heavy minimum allocations.


(c)               
Form of Contributions.  All contributions by the Employer shall
be made in cash or newly issued or treasury stock, or in such property as is
acceptable to the Trustee.


4.2             
PARTICIPANT’S SALARY DEFERRAL ELECTION


(a)               
Deferral Election.  Each Participant may elect to defer his or
her Compensation which would have been received in the Plan Year, but for this
deferral election, by any whole percentage up to 50%.  A deferral election (or
modification of an earlier election) may not be made with respect to
Compensation which is available on or before the date the Participant executed
such election.  A deferral election shall specify the portion of the
Participant’s Elective Contribution that is made on a pre-tax basis and the
portion of such contribution that is made on a Roth basis.  Elective
Contributions contributed to the Plan as made on a pre-tax basis may not later
be reclassified as made on Roth basis and vice versa.


                        The amount by which the
Participant’s Compensation is reduced shall be the Participant’s Deferred
Compensation and shall be treated as an Elective Contribution and 



 -17-



 












 


 





allocated to the Participant’s Elective Account, unless
the Participant directs all or part of his or her Elective Contributions to the
Quaker Stock Fund.  If the Participant directs all or part of his or her
Elective Contributions to the Quaker Stock Fund, such Elective Contributions
shall be allocated to the Stock Bonus Plan Account.


 


(b)              
Full Vesting.  The balance in each Participant’s Elective Account
and Stock Bonus Plan Account attributable to Elective Contributions shall be
fully vested at all times and shall not be subject to forfeiture for any
reason.


(c)               
Limits on Distributions.  Elective Contribution amounts held in
the Participant’s Elective Account and Stock Bonus Plan Account may not be
distributable earlier than:


(i)                
the Participant’s Severance from Employment, Total and Permanent
Disability, or death;


(ii)              
the Participant’s attainment of age 591⁄2 (only if permitted under any
other Section of the Plan);


(iii)            
upon hardship with respect to the Participant (pursuant to Section 6.11);
or


(iv)            
the termination of the Plan without establishment or maintenance of
another defined contribution plan (other than an employee stock ownership plan
as defined in Code section 4975(e)(7)) as described in Code section 401(k)(10).


(d)              
Maximum Amount.  No Participant shall be permitted to have
elective deferrals made under this Plan or any other qualified plan maintained
by the Employer during any taxable year in excess of the dollar limitation
contained in Code section 402(g) in effect for such taxable year, except to the
extent permitted under Section 4.3 and Code section 414(v), if applicable (the “402(g)
limit”).


(i)                
If the Participant’s Deferred Compensation made under this Plan (reduced
by Deferred Compensation previously distributed or returned to the Participant)
and the Participant’s other elective deferrals to a plan or arrangement
described in Code section 402(g)(3) (whether or not maintained by the Employer
or an Affiliated Employer) exceed the maximum amount described in this
subsection, the Participant shall allocate to the Plan or to such other plan or
arrangement described in Code section 402(g)(3) the Excess Deferred
Compensation.  The Participant shall notify the Administrator of such
allocation in writing no later than the March 1 following the Participant’s
taxable year in which the Excess Deferred Compensation was made.


(ii)              
A Participant shall be deemed to have made a claim for distribution of
Excess Deferred Compensation from the Plan to the extent that the Participant’s
Deferred Compensation together with the Participant’s elective deferrals under
any other plan or arrangement maintained by the Employer or an Affiliated
Employer exceeds the Code section 402(g) limit.  





 -18-



 












 


 





(iii)            
A Participant’s Excess Deferred Compensation shall be reduced, but not
below zero, by any distribution of Excess Contributions pursuant to Section 4.9
for the Plan Year beginning with or within the taxable year of the
Participant.  


(iv)            
Notwithstanding any other provisions of the Plan, not later than the
April 15 following the close of the taxable year, the Administrator shall cause
the Trustee to distribute to the Participant the Excess Deferred Compensation
allocated (or deemed to be allocated) to the Plan by the Participant pursuant
to this Section.  Any Excess Deferred Compensation shall be distributed as
follows: (i) Deferred Compensation to which Matching Contributions do not
relate shall be distributed before Deferred Compensation to which Matching
Contributions relate and (ii) for any year in which a Participant makes
Elective Contributions on a pre-tax and on a Roth basis, the distribution of
any Excess Deferred Compensation shall be made first from the portion of the
Participant’s Elective Contributions that is attributable to pre-tax
contributions and second from the portion of the Participant’s Elective
Contributions that is attributable to Roth contributions.  The amount so
returned shall include the income and loss allocable thereto for the calendar
year during which such elective deferrals were made as determined pursuant to
Regulations, using a uniformly applicable written determination by the
Administrator.


(v)              
Any Matching Contributions, with earnings thereon, attributable to such
Excess Deferred Compensation shall be forfeited and, in the discretion of the
Administrator, (A) used to pay any reasonable administrative expenses of the
Plan or (B) used to reduce the Employer’s obligation to making Matching
Contributions under Section 4.4.        


(e)               
Suspension on Hardship Distribution.  In the event a Participant
has received a hardship distribution pursuant to Regulation 1.401(k)-1(d)(3)
(or any successor thereto) from this or any other plan maintained by the
Employer, then the suspension rules set forth in Section 6.11(c)(ii) shall
apply.


(f)               
Deferral Elections; Changes in Deferral Elections.  The Employer
and the Administrator shall implement the Participant’s salary deferral
elections provided for herein in accordance with the following:


(i)                
A Participant may commence making Deferred Compensation contributions to
the Plan as of the Participant’s Entry Date.  If the Participant fails to make
an initial salary deferral election prior to such time, then such Participant
may thereafter make a salary deferral election effective as of any subsequent
payroll period.  The Participant shall make such an election by filing a salary
deferral election in accordance with procedures established by the
Administrator.


(ii)              
A Participant may increase or decrease the percentage of his or her
Compensation to be deferred and make a new election by providing the
Administrator with notice of such modification in the manner prescribed by the
Administrator.  Such new election shall initially be effective beginning with
the pay period following the acceptance of the notice by the Administrator or
as soon as practicable thereafter.  Any modification shall not have retroactive
effect and shall remain in force until revoked.





 -19-



 












 


 





(iii)            
A Participant may elect to revoke his or her salary reduction agreement
prospectively in its entirety at any time during the Plan Year by providing the
Administrator with notice of such revocation in the manner prescribed by the
Administrator.  Such revocation shall become effective as of the beginning of
the first pay period coincident with or next following the date of notice or as
soon as practicable thereafter.  Furthermore, the Participant’s Severance from
Employment, change in status to other than Eligible Employee, or the cessation
of participation for any reason, shall 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.


(iv)            
The Administrator may, in its sole discretion, from time to time
prohibit or limit the amount of Elective Contributions made to the Plan on
behalf of Highly Compensated Employees to the extent necessary to satisfy
either the Actual Deferral Percentage Test set forth in Section 4.8(a) or the
Actual Contribution Percentage Test set forth in Section 4.8(b).  Any such
limit on the amount of Elective Contributions made to the Plan on behalf of
Highly Compensated Employees, as determined by the Administrator, shall be
deemed an amendment to the Plan for purposes of Regulation 1.401-1, but the adoption
of such limit shall not be subject to Section 8.1.


(g)              
Qualified Military Service.  Notwithstanding any provisions of
this Plan to the contrary, all contributions with respect to periods of
Qualified Military Service shall be provided in a manner consistent with Code
section 414(u) as follows:


(i)                
The Employer shall permit a reemployed Participant to make additional
Deferred Compensation contributions during the period which begins on the date
of the reemployment of such Participant and has the same length as the lesser
of the product of three and the period of Qualified Military Service which
resulted in such rights, or five years.


(ii)              
The amount of additional Deferred Compensation contributions permitted
under this subsection is the maximum amount of the Deferred Compensation
contributions that the Participant would have been permitted to make under the
Plan during the period of Qualified Military Service if the Participant had
continued to be employed by the Employer during such period and received
Compensation.  Proper adjustment shall be made to the amount determined under
the preceding sentence for any Deferred Compensation contributions actually
made during the period of such Qualified Military Service.


4.3             
CATCH-UP CONTRIBUTIONS


(a)               
In General.  A Catch-Up Eligible Employee shall be eligible to
make Catch-Up Contributions in accordance with, and subject to the limitations
of, Code section 414(v).  Such Catch-Up Contributions shall not be taken into
account for purposes of the provisions of the Plan implementing the required
limitations of Code sections 402(g) and 415.  Furthermore, the Plan shall not
be treated as failing to satisfy the provisions of the Plan implementing the
requirements of Code sections 401(k)(3), 401(k)(11), 401(k)(12), 410(b), or
416, as applicable, by reason of the making of such Catch-Up Contributions.





 -20-



 












 


 





(b)              
Rules Regarding Catch-Up Contributions.  The Plan shall be
administered in accordance with final Regulations and other guidance issued by
the Internal Revenue Service under Code section 414(v).  Subject to such Regulations
and other guidance, the following provisions shall apply with respect to
Catch-Up Contributions:


(i)                
A Catch-Up Eligible Employee shall be given an opportunity to elect to
make Catch-Up Contributions for a Plan Year.  Such election shall be made at
such time and in such manner as prescribed by the Administrator and shall
specify the portion of the Participant’s Catch-Up Contribution that is made on
a pre-tax basis and the portion of such contribution that is made on a Roth
basis.  Catch-Up Contributions contributed to the Plan as made on a pre-tax
basis may not later be reclassified as made on Roth basis and vice versa.


(ii)              
No Employer Matching Contributions shall be made with respect to
Catch-Up Contributions.


(iii)            
Except as otherwise provided in this Section, Catch-Up Contributions and
earnings thereon shall be treated in the same manner as Elective Contributions
made pursuant to Section 4.2 (and earnings thereon) and Deferred Compensation.


4.4             
EMPLOYER MATCHING AND DISCRETIONARY CONTRIBUTIONS


(a)               
Matching Contributions.  For each Participant who makes Elective
Contributions with respect to one or more payroll periods for which a Matching
Contribution has been authorized by the Administrator pursuant to this
subsection (the “Match Period”), the Employer shall make a Matching
Contribution to the Plan on behalf of such Participant in the amount (if any)
authorized by the Administrator, in its sole discretion; provided, however,
that:


(i)                
The amount of Matching Contribution authorized by the Administrator
shall not exceed 50% of such Participant’s Deferred Compensation (other than
Catch-Up Contributions) during the Match Period up to the first 6% of such
Participant’s Compensation during such period, plus a “true-up” Matching
Contribution equal to the excess (if any) of (A) 50% of the Participant’s
Deferred Compensation (other than Catch-Up Contributions) for the Match Period
(or, if less, 3% of the Participant’s Compensation for the period he or she is
eligible to participate in the Plan during such Match Period), over (B) the
Matching Contribution already contributed to the Plan on behalf of the
Participant for such Match Period;


(ii)              
With respect to a Participant who is a member of a unit of Employees
covered by a collective bargaining unit, the Administrator shall not have the
authority to decrease the Matching Contribution to less than the amount (if
any) required by such collective bargaining agreement; and


(iii)            
With respect to a period of Qualified Military Service, the
Administrator shall not have the authority to decrease the Matching
Contribution to less than the amount (if any) required by Code section 414(u).


The entire Matching Contribution or
any portion thereof may be made in cash or Company Securities in the sole
discretion of the Administrator.  If the entire amount of a Matching 



 -21-



 












 


 





Contribution is made in cash, 50% of such contribution
shall be automatically invested in the Quaker Stock Fund, subject to any
subsequent reapportionment direction of the Participant, Beneficiary, or
alternate payee under Section 4.13(e).  To the extent a Matching Contribution
is made in Company Securities, the contribution shall be invested in the Quaker
Stock Fund, subject to any subsequent reapportionment direction of the
Participant, Beneficiary, or alternate payee under Section 4.13(e).


(b)              
Quaker Discretionary Contributions. The Employer shall make such
contributions to the Fund in respect of each calendar year during which this
Plan is in effect as are determined in accordance with such formula as may from
time to time be approved by the Board of Directors, in its absolute
discretion.  Such contributions shall be referred to as Quaker Discretionary
Contributions.  This subsection shall not be construed as requiring the
Employer to make contributions in any specific calendar year, whether or not
there exists net income out of which such contributions could be made. 
Notwithstanding the foregoing, no Quaker Discretionary Contributions shall be
made on behalf of or allocated to the account of any AC Participant, Epmar
Participant, G.W. Smith Participant, or Summit Participant.


(c)               
AC Products Discretionary Contributions.  AC Products, Inc. shall
make such contributions to the Fund in respect of each calendar year during
which this Plan is in effect as are determined in accordance with such formula
as may from time to time be approved by the Board of Directors of AC Products,
Inc., in its absolute discretion.  This provision shall not be construed as
requiring AC Products, Inc. to make contributions in any specific calendar
year, whether or not there exists Net Income out of which such contributions
could be made.  For purposes of this subsection, “Net Income” shall mean the
profit from operations of AC Products, Inc., as determined by the Board of
Directors of AC Products, Inc., from the internal financial statements of AC
Products, Inc. for the calendar year.


4.5             
EMPLOYER NONELECTIVE CONTRIBUTIONS


(a)               
Eligibility Requirements.  Nonelective Contributions shall be
made on behalf of each Participant who (i) is not included in a unit of
Employees covered by a collective bargaining agreement, except to the extent
that the applicable collective bargaining agreement so provides, and (ii) has
met the conditions of eligibility set forth in Section 3.1(b).


(b)              
Amount of Contribution.  Subject to the limitations of Section
4.10, the Employer shall make Nonelective Contributions to the Fund for a Plan
Year in an amount equal to 3% of the Compensation of each Participant who
satisfied the eligibility requirements of subsection (a) at any time during
such Plan Year; provided, however, that Compensation with respect to any period
in which the Participant does not meet the eligibility requirements of
subsection (a) shall be disregarded for purposes of determining the amount of
the Nonelective Contribution.  


(c)               
Company Securities.  The entire Nonelective Contribution or any
portion thereof may be made in cash or Company Securities in the sole
discretion of the Administrator.  To the extent made in Company Securities, the
contribution shall be invested in the Quaker Stock Fund, subject to any
subsequent reapportionment direction of the Participant, Beneficiary, or
alternate payee under Section 4.13(e).






 -22-



 












 


 





4.6             
TIME OF PAYMENT OF EMPLOYER’S CONTRIBUTION


                        The Employer shall pay to the
Trustee Elective Contributions accumulated through payroll deductions as of the
earliest date on which such contributions can be reasonably segregated from the
general assets, and such amounts shall be segregated no later than the 15th
business day of the month following the month in which Elective Contributions
were deducted from the Participant’s Compensation.  The Employer shall pay to
the Trustee Matching Contributions, AC Products Discretionary Contributions,
Quaker Discretionary Contributions, and Nonelective Contributions for any Plan
Year under this Article IV no later than the last day on which amounts so paid
may be deducted for Federal income tax purposes for the taxable year of the
Employer in which the Plan Year ends.  Any additional contributions made by the
Employer that are allocable to a Participant’s Elective Account for a Plan Year
shall be paid to the Plan no later than the end of the 12- month period
immediately following the close of the Plan Year in which the contributions
were made. 


 


4.7             
ALLOCATION OF CONTRIBUTION AND EARNINGS


(a)               
Accounts. The Administrator shall establish and maintain an
account in the name of each Participant to which the Administrator shall credit
all amounts allocated to each such Participant as set forth herein.


(b)              
Allocation of Contributions.  The Employer shall provide the
Administrator with all information required by the Administrator to make a
proper allocation of the Employer’s contributions for each Plan Year. Within a
reasonable period of time after the date of receipt by the Administrator of
such information and sufficient funding, the Administrator shall allocate such
contributions as follows:


(i)                
Elective Contributions.  With respect to the Elective
Contributions made pursuant to Section 4.2(a) or Section 4.3, to each
Participant’s Elective Account and Stock Bonus Plan Account, as applicable, in
an amount equal to each such Participant’s Deferred Compensation for the year.


(ii)              
Matching Contributions.  With respect to Matching Contributions
made pursuant to Section 4.4(a), to each Participant’s Account and Stock Bonus
Plan Account, as applicable, in an amount equal to the Matching Contribution
made by the Employer to the applicable account on behalf of the Participant as
set forth in Section 4.4(a).


(iii)            
Quaker Discretionary Contributions.  Quaker Discretionary
Contributions, if any, made pursuant to Section 4.4(b) for a Plan Year shall be
allocated to each eligible Participant’s account in the same proportion that
each eligible Participant’s Base Compensation for such Plan Year bears to the
total Base Compensation of all Participants who are eligible to receive the
Quaker Discretionary Contribution for such Plan Year, such amount to be
allocated to the Participant’s Account and Stock Bonus Plan Account, as
applicable.  Except as provided in Section 4.7(b)(vi), only those Participants
who (A) have completed a Year of Service during the Plan Year; (B) are actively
employed on the last day of the Plan Year; and (C) are not AC Participants or
Epmar Participants, shall be eligible to share in the allocation of the Quaker
Discretionary Contributions for the Plan Year.





 -23-



 












 


 





(iv)            
AC Products Discretionary Contributions.  The AC Products
Discretionary Contributions, if any, made pursuant to Section 4.4(c) for a Plan
Year shall be allocated to each eligible AC Participant’s account in the same
proportion that each eligible AC Participant’s Compensation for such Plan Year
bears to the total Compensation of all Participants who are eligible to receive
the AC Products Discretionary Contribution for such Plan Year, such amount to
be allocated to the Participant’s Account and Stock Bonus Plan Account, as
applicable.  Except as provided in Section 4.7(b)(vi), only AC Participants
who: (A)  have completed a Year of Service during the Plan Year; and (B) are
actively employed on the last day of the Plan Year, shall be eligible to
receive an allocation of the AC Products Discretionary Contributions for the
Plan Year.


(v)              
Nonelective Contributions.  Nonelective Contributions made
pursuant to Section 4.5 shall be allocated to each eligible Participant’s
Account in an amount equal to the Nonelective Contribution made by the Employer
on behalf of the Participant as set forth in Section 4.5.


(vi)            
Exception to Last Day of Year Requirement.  Notwithstanding the
foregoing, Participants who are not actively employed on the last day of the
Plan Year due to Retirement (Normal or Late), Total and Permanent Disability,
or death shall share in the allocation of Quaker Discretionary Contributions or
AC Products Discretionary Contributions for that Plan Year.


(c)               
Allocation of Earnings and Losses.  As of the last day of each
Plan Year or other Valuation Date, before allocation of Employer contributions,
any earnings or losses (net appreciation or net depreciation) of the Fund shall
be allocated in the same proportion that each Participant’s nonsegregated
accounts bear to the total of all Participants’ nonsegregated accounts as of
such date.  Each segregated account maintained on behalf of a Participant shall
be credited or charged with its separate earnings and losses.


(d)              
Top-Heavy Plan Year.   


(i)                
Notwithstanding the foregoing, for any Top-Heavy Plan Year, the sum of
the Employer’s contributions and forfeitures allocated to the Aggregate Account
of each non-Key Employee shall be equal to at least 3% of such non-Key
Employee’s 415 Compensation (reduced by contributions and forfeitures, if any,
allocated to each non-Key Employee in any defined contribution plan included
with this Plan in a Required Aggregation Group).  However, if (i) the sum of
the Employer’s contributions and forfeitures allocated to the Aggregate Account
of each Key Employee for such Top-Heavy Plan Year is less than 3% of each Key
Employee’s 415 Compensation and (ii) this Plan is not required to be included
in an Aggregation Group to enable a defined benefit plan to meet the
requirements of Code section 401(a)(4) or 410, the sum of the Employer’s
contributions and Forfeitures allocated to the Aggregate Account of each
non-Key Employee shall be equal to the largest percentage allocated to the Aggregate
Account of any Key Employee.  Employer Matching Contributions shall be taken
into account for purposes of satisfying the minimum contribution requirements
of Code section 416(c)(2) and this subsection.  Employer Matching Contributions
that are used to satisfy the minimum contribution requirements shall be treated
as Matching Contributions for purposes of the actual contribution percentage
test set forth in Section 4.8(b) and other requirements of Code section 401(m). 




 -24-



 












 


 





However, no such minimum allocation shall be required
in this Plan for any non-Key Employee who participates in another defined
contribution plan subject to Code section 412 that is included with this Plan
in a Required Aggregation Group.


(ii)              
For purposes of the minimum allocations set forth above, the percentage
allocated to the Aggregate Account of any Key Employee shall be equal to the
ratio of the sum of the Employer’s contributions and Forfeitures allocated on
behalf of such Key Employee divided by the 415 Compensation for such Key Employee.


(iii)            
For any Top-Heavy Plan Year, the minimum allocations set forth above
shall be allocated to the Aggregate Accounts of all non-Key Employees who are
Participants and who are employed by the Employer on the last day of the Plan
Year, including non-Key Employees who have (A) failed to complete a Year of
Service; and (B) declined to make mandatory contributions (if required) or, in
the case of a cash or deferred arrangement, Elective Contributions to the Plan.


(iv)            
For the purposes of this Section, 415 Compensation shall be limited by
and adjusted in such manner as permitted under Code section 415(d).


(e)               
Matching Contributions – No Hour of Service Requirement. 
Notwithstanding anything herein to the contrary, a Participant who terminates
employment for any reason during the Plan Year, has made Elective Contributions
for the Plan Year, and is otherwise eligible to receive an allocation of
Matching Contributions, shall share in an allocation of the Matching
Contribution made by the Employer for the year of termination without regard to
the Hours of Service credited.


(f)               
Forfeitures.  As of the last day of each Plan Year, any amounts
which become a Forfeiture during such Plan Year shall, in the discretion of the
Administrator, be used to (i) reduce the Employer’s obligation to make Matching
Contributions, AC Products Discretionary Contributions, Quaker Discretionary
Contributions, and/or Nonelective Contributions, or (ii) pay any administrative
expenses of the Plan.


(g)              
Reemployment after Break in Service.  If a Participant is
reemployed after five consecutive 1-Year Breaks in Service, then separate
accounts shall be maintained as follows:


(i)                
one account for nonforfeitable benefits attributable to pre-break
service; and


(ii)              
one account representing his or her status in the Plan attributable to
post-break service.


(h)              
Restoration of Forfeitures.  If a Participant is reemployed as an
Eligible Employee, any Forfeiture of his or her Participant’s Account that has
occurred under Section 1.29(a) shall be restored to his or her Participant’s
Account by the Employer if the Participant repays to the Plan in full the
amount of the distribution he or she received; provided such repayment is made
not later than the earlier of (i) the close of the first period of five
consecutive 1-Year Breaks in Service commencing after the distribution, or (ii)
five years after the date on which the Participant again becomes an Eligible
Employee.






 -25-



 












 


 





4.8             
ACTUAL DEFERRAL PERCENTAGE TEST AND ACTUAL    CONTRIBUTION
PERCENTAGE TEST


(a)               
Actual Deferral Percentage Test.  This subsection shall be
applied separately with respect to the Non-Safe Harbor Component Plan and the
Bargaining Component Plan, and the term “Plan” as used in this subsection shall
refer to the component plan being tested.  The safe harbor set forth in Code
section 401(k)(12) shall apply to the Safe Harbor Component Plan.


                                    (i)         The actual
deferral percentage for Highly Compensated Employees who have met the Plan’s
eligibility requirements shall not be less than or equal two at least one of
the following:


(A)       The actual deferral
percentage for such Plan Year for all Nonhighly Compensated Employees who have
met the Plan’s eligibility requirements, multiplied by 1.25; or


(B)       The actual deferral
percentage for such Plan Year for all Nonhighly Compensated Employees who have
met the Plan’s eligibility requirements, multiplied by 2.0, provided that the
actual deferral percentage for Highly Compensated Employees who have met the
Plan’s eligibility requirements does not exceed the actual deferral percentage
for Nonhighly Compensated Employees who have met the Plan’s eligibility
requirements by more than two percentage points.


                                    (ii)        For
purposes of this Section, the term “actual deferral percentage” as applied to a
specified group of Employees who have met the Plan’s eligibility requirements
shall mean the average of the ratios, calculated separately for each such
Employee in such group, of:


 


(A)       The amount of Deferred
Compensation paid to the Plan on behalf of each such Employee for such Plan
Year (excluding (A) any amount of Deferred Compensation paid to the Plan by a Nonhighly
Compensated Employee in excess of the Code section 402(g) limit for such Plan
Year, and (B) Deferred Compensation made pursuant to Code section 414(u) by
reason of a Participant’s qualified military service (provided, however, that
the portion of Deferred Compensation contributed from differential wage
payments (within the meaning of Code section 414(u)(12)) shall be disregarded
only if the nondiscrimination requirement set forth in Code section
414(u)(12)(C) is satisfied); to


(B)       The Participant’s 414(s)
Compensation for such Plan Year; provided, however, that the Administrator may
determine, for any Plan Year, to consider only that Compensation paid to an
Employee while he or she is eligible to participate in the Plan.


(b)              
Actual Contribution Percentage Test.  The Plan shall satisfy the
“actual contribution percentage test,” which shall mean the numerical test set
forth in subsection (a), revised by disregarding any reference to component
plans and substituting for the term “actual deferral percentage” the term
“actual contribution percentage”; provided, however, that pursuant to
Regulation section 1.401(m)-1(b)(2), the Actual Contribution Test shall not
apply to the Bargaining Component Plan.  The term “actual contribution
percentage” as applied to a specified 



 -26-



 












 


 





group of
Employees shall mean the average of the ratios, calculated separately for each
Employee in such group who, if he or she made Elective Deferrals, would have
Matching Contributions allocated to his or her account for the year, of:


(i)                
the amount of Matching Contributions (excluding (A) Matching
Contributions forfeited pursuant to Section 4.2(d) or Section 4.9(c), and (B)
Matching Contributions made pursuant to Code section 414(u) by reason of a
Participant’s qualified military service (provided, however, that the portion
of the Matching Contribution that is made with respect to any Deferred
Compensation contributed from differential wage payments (within the meaning of
Code section 414(u)(12)) shall be disregarded only if the nondiscrimination
requirement set forth in Code section 414(u)(12)(C) is satisfied) paid to the
Plan on behalf of such Employee for such Plan year; to 


(ii)              
the Participant’s 414(s) Compensation for such Plan Year; provided,
however, that the Administrator may determine, for any Plan Year, to consider
only that Compensation paid to an Employee while he or she is eligible to
participate in the Plan.


(c)               
Nonaggregation.  Pursuant to Regulation sections
1.401(k)-1(b)(4)(iii)(B) and 1.401(m)-1(b)(4)(iii)(B), the Plan cannot be
tested on an aggregate basis with any other cash or deferred arrangement that
uses a methodology to satisfy the actual deferral percentage test or the actual
contribution percentage test that is inconsistent with the Plan’s methodology
to satisfy these tests.


4.9             
RETURN OF EXCESS CONTRIBUTIONS, RETURN OF EXCESS       AGGREGATE
CONTRIBUTIONS, AND SPECIAL RULES


                        Subsections (a) and (c) shall be
applied separately to Highly Compensated Employees who are covered by the
Non-Safe Harbor Component Plan and Highly Compensated Employees who are covered
by the Bargaining Component Plan, and such subsections shall apply only to the
extent of the Highly Compensated Employee’s contributions under such Component
Plan.  Subsections (a) and (c) shall not apply to the Safe Harbor Component
Plan.


 


(a)               
Determination of Aggregate Amount of Excess Contributions. 
Excess Contributions shall be returned to Highly Compensated Employees in the manner
set forth in subsection (c) if the limitations under Section 4.8(a) are
exceeded.  Excess Contributions to be returned to Highly Compensated Employees
shall be determined by:


(i)                
reducing the actual deferral percentage of the Highly Compensated
Employee with the highest actual deferral percentage until the applicable
nondiscrimination test of Section 4.8(a) has been satisfied or until the actual
deferral percentage of such Highly Compensated Employee is equal to the actual
deferral percentage of the Highly Compensated Employee with the next highest
actual deferral percentage;


(ii)              
repeating the process in paragraph (i) above until the applicable
nondiscrimination test of Section 4.8(a) is satisfied;





 -27-



 












 


 





(iii)            
converting into a dollar amount any reduction in the actual deferral
percentage of each affected Highly Compensated Employee; and


(iv)            
adding together the dollar amounts of the excess Deferred Compensation
determined under paragraph (iii) above for each affected Highly Compensated
Employee.


(b)              
Determination of Aggregate Amount of Excess Aggregate Contributions. 
The amount of excess Matching Contributions (“Excess Aggregate Contributions”)
to be returned to Highly Compensated Employees shall be determined in the
manner set forth in subsection (a).  Excess Aggregate Contributions, if any,
shall be returned to Highly Compensated Employees in the manner set forth in
subsection (d).


(c)               
Determination of Individual Amount of Excess Contributions. 
Should the actual deferral percentage of Highly Compensated Employees for a
Plan Year exceed the restrictions described in Section 4.8(a), the Excess
Contribution shall be distributed to Highly Compensated Employees from the
Elective Account (and Stock Bonus Plan Account), starting with the Highly
Compensated Employee with the greatest dollar amount of Deferred Compensation
for the Plan Year or until the Deferred Compensation made by such Highly
Compensated Employee equals the Deferred Compensation made by the Highly
Compensated Employee with the next greatest dollar amount of Deferred Compensation
for the Plan Year.  For purposes of the preceding sentence, any Excess
Contributions shall be distributed as follows: (i) Distributions to any Highly
Compensated Employee shall first be made with respect to Deferred Compensation
that is not taken into account in determining Matching Contributions pursuant
to Section 4.4(a); and (ii) for any year in which a Participant makes Elective
Contributions on a pre-tax and on a Roth basis, the distribution of any Excess
Contribution  shall be made first from the portion of the Participant’s
Elective Contributions that is attributable to pre-tax contributions and second
from the portion of the Participant’s Elective Contributions that is
attributable to Roth contributions.  This process shall be repeated until all
the excess Deferred Compensation attributable to the applicable test has been
distributed.  Any Matching Contributions attributable to such Excess
Contributions (regardless of whether such Excess Contributions are attributable
to Elective Contributions made on a pre-tax or on a Roth basis) distributed to
Highly Compensated Employees shall be forfeited in accordance with subsection
(e).


(d)              
Determination of Individual Amount of Excess Aggregate Contributions. 
Should the actual contribution percentage of Highly Compensated Employees for a
Plan Year exceed the restrictions described in Section 4.8(b) the Excess
Aggregate Contributions shall be forfeited, if forfeitable, or, if not
forfeitable, distributed, starting with the account of the Highly Compensated
Employee with the greatest dollar amount of Matching Contributions in the
manner described in subsection (c).


(e)               
Timing of Distribution/Forfeiture.  The distribution or
forfeiture made pursuant to subsections (c) and (d) above shall be made within
two and one-half months following the close of such Plan Year, if
administratively practicable, but in no event later than the last day of the
12-month period following the close of such Plan Year.  Any distribution or
forfeiture for purposes of the preceding sentence shall be determined after
taking into account income or loss for the applicable Plan Year. Any Matching
Contributions, with earnings thereon, 



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that have been
allocated to a Participant on account of Excess Contributions shall be
forfeited.  Amounts forfeited shall, at the discretion of the Administrator, be
(i) used to pay any administrative expenses of the Plan, or (ii) used to reduce
the Employer’s obligation to make Matching Contributions allocated under
Section 4.4(a).


(f)               
Special Rules. 


(i)                
Qualified Nonelective Contribution.  Notwithstanding anything to
the contrary herein, within 12 months after the end of the applicable Plan
Year, the Employer may make a special Qualified Nonelective Contribution in an
amount that does not exceed the minimum amount necessary to satisfy the test(s)
set forth in Section 4.8(a) and/or 4.8(b).  Such Qualified Nonelective
Contribution shall be allocated to the Elective Accounts of the minimum
necessary number of Nonhighly Compensated Employees who met the Plan’s
eligibility requirements for the applicable Plan Year, starting with the Nonhighly
Compensated Employee with the lowest Compensation for such Year, and shall be
such percentage of the Nonhighly  Compensated Employee’s Compensation for the
year that (i) results in the lowest aggregate amount of Qualified Nonelective
Contributions, and (ii) satisfies the rule against disproportionate
contributions set forth in Regulation section 1.401(k)-2(a)(6)(iv).  For
purposes of applying this subsection to Section 4.8(a), the term “Plan” shall
refer to the Non-Safe Harbor Component Plan or the Bargaining Component Plan,
as applicable.


(ii)              
Other Contributions Taken Into Account for ACP Test.  For
purposes of determining the actual contribution percentage and the amount of
Excess Aggregate Contributions pursuant to Section 4.8(b), only Matching
Contributions credited on behalf of an eligible Employee in accordance with
Regulation section 1.401(m)-2(a) for the applicable Plan Year shall be
counted.  In addition, the Administrator may elect to take into account
elective contributions and qualified nonelective contributions (as defined in
Regulation section 1.401(m)-2(a)) contributed to any plan maintained by the
Employer in determining the actual contribution percentage for each applicable
Employee for the applicable Plan Year, provided such amounts comply with the
provisions of Regulation section 1.401(m)-2(a).  Elective contributions under
the Plan shall not be taken into account for purposes of Section 4.8(b).


(iii)            
Ratios.  All ratios and averages of ratios calculated hereunder
shall be calculated to the nearest 1/100 of 1%.


(iv)            
Highly Compensated Employee Participating in Multiple Plans.  For
purposes of Section 4.8(a), the actual deferral percentage of a Highly
Compensated Employee who is eligible to have elective deferrals (or
contributions treated as elective deferrals) allocated to his or her accounts
under two or more arrangements described in Code section 401(k), that are
maintained by the Employer or an Affiliated Employer, shall be determined as if
such elective deferrals (or contributions treated as elective deferrals) were
made under a single arrangement.  If a Highly Compensated Employee participates
in two or more cash or deferred arrangements of the Employer or an Affiliated
Employer that have different plan years, all elective deferrals made during the
Plan Year under all such arrangements shall be aggregated.  For purposes of
Section 4.8(b), the actual contribution  percentage of a Highly Compensated
Employee who is eligible to have matching contributions or employee
contributions (or contributions treated as matching or employee contributions)
allocated to his or her accounts 



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under two or more
plans described in Code section 401(a), or arrangements described in Code
section 401(k) that are maintained by the Employer or an Affiliated Employer,
shall be determined as if the total of such matching contributions or employee
contributions (or contributions treated as matching or employee contributions)
were made to each plan and arrangement.  If a Highly Compensated Employee
participates in two or more such plans or arrangements that have different plan
years, all matching contributions or employee contributions (or contributions
treated as matching or employee contributions) made during the Plan Year under
all such plans and arrangements shall be aggregated.  Notwithstanding the
foregoing, certain plans shall be treated as separate if mandatorily
disaggregated under Regulations under Code section 401(k) or Code section
401(m).  


(v)              
Aggregation of Plans.  For purposes of Sections 4.8 and 4.9, the
Plan shall be aggregated and treated as a single plan with other plans
maintained by the Employer and an Affiliated Employer to the extent that the
Plan is aggregated with any such other plan for purposes of satisfying Code
sections 401(a)(4) and 410(b) (other than Code section 410(b)(2)(A)(ii)).  In
addition, if this Plan is permissively aggregated with any other plan of the
Company or an Affiliated Employer for purposes of satisfying Code section
401(k) or 401(m), this Plan and such other plan or plans shall satisfy Code
section 401(a)(4) and 410(b) as if this Plan and such other plan or plans were
a single plan.  


(vi)            
Prior Year Testing.  Notwithstanding anything herein to the
contrary, in accordance with applicable Regulations and applicable guidance,
the Employer may elect to apply the tests set forth in Sections 4.8(a) and (b)
using the actual deferral percentage and the actual contribution percentage, as
applicable, for the preceding Plan Year for Nonhighly Compensated Employees who
have met the Plan’s eligibility requirements in lieu of such percentages for
the current Year.


(vii)          
Early Participation Rule.  For purposes of Sections 4.8(a) and 4.8(b),
with respect to any Plan Year for which the Employer elects to apply Code
section 410(b)(4)(B) in determining whether the requirements of Code section
401(k)(3)(A)(i) (for purposes of Section 4.8(a)) or Code section 410(b) (for
purposes of Section 4.8(b)) are met, the Employer may elect to exclude from
consideration all Eligible Employees who are Nonhighly  Compensated Employees
and who have not attained age 21 and completed at least one year of eligibility
service.  In no event, however, shall the early participation rule described in
this subsection apply to the Safe Harbor Component Plan or the Non-Safe Harbor
Component Plan for purposes of Section 4.8(a).





 






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4.10         
MAXIMUM ANNUAL ADDITIONS


(a)               
Limit on Allocations.  Except to the extent permitted under
Section 4.3 and Code section 414(v), if applicable, the maximum annual addition
that may be contributed or allocated to a Participant’s accounts under the Plan
for any limitation year shall not exceed the lesser of:


(i)                
$53,000, as adjusted for increases in the cost-of-living under Code
section 415(d) for limitation years after 2016; or


(ii)              
100% of the Participant’s 415 Compensation for such limitation year.


The compensation limit referred to in paragraph (ii) shall
not apply to any contribution for medical benefits after separation from
service (within the meaning of Code section 401(h) or 419(A)(f)(2)) which is
otherwise treated as an annual addition.


 


(b)              
Annual Additions.  For purposes of applying the limitations of
Code section 415, “annual additions” means the sum of all contributions by the
Participant, other than rollover contributions, or by the Employer or an
Affiliated Employer hereunder or under any defined contribution plan maintained
by either, all forfeitures allocated to the Participant’s accounts under such
plans, and amounts treated as part of an annual addition under the limitations
of Code sections 415(l) and 419A(d)(2).


                        For purposes of applying the
limitations of Code section 415, a Rollover Contributions is not an annual
addition.  In addition, the following are not Employee contributions for
purposes of this subsection:  (i) rollover contributions (as defined in Code
sections 402(c), 403(a)(4), 403(b)(8), and 408(d)(3)); (ii) repayments of loans
made to a Participant from the Plan; (iii) repayments of distributions received
by an Employee pursuant to Code section 411(a)(7)(B) (cashouts); (iv)
repayments of distributions received by an Employee pursuant to Code section
411(a)(3)(D) (mandatory contributions); and (v) Employee contributions to a
simplified employee pension excludable from gross income under Code section
408(k)(6).


 


(c)               
Limitation Year.  For purposes of applying the limitations of
Code section 415, the “limitation year” shall be the Plan Year.


(d)              
Aggregation Rules.   


(i)                
For the purpose of this Section, all qualified defined contribution
plans (whether terminated or not) ever maintained by the Employer shall be
treated as one defined contribution plan.


(ii)              
For the purpose of this Section, if the Employer is a member of a
controlled group of corporations, trades or businesses under common control (as
defined by Code section 1563(a) or Code sections 414(b) and (c) as modified by
Code section 415(h)), is a member of an affiliated service group (as defined by
Code section 414(m)), or is a member of a 



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group of
entities required to be aggregated pursuant to Regulations under Code section
414(o), all Employees of such Employers shall be considered to be employed by a
single Employer.


(iii)            
If a Participant participates in more than one defined contribution plan
maintained by the Employer and such plans have different Plan Years, the
maximum annual additions under this Plan shall equal the maximum annual
additions for the limitation year minus any annual additions previously
credited to such Participant’s accounts during the limitation year.


(iv)            
If a Participant participates in both a defined contribution plan
subject to Code section 412 and a defined contribution plan not subject to Code
section 412 maintained by the Employer which have the same Plan Year, annual
additions shall be credited to the Participant’s accounts under the defined
contribution plan subject to Code section 412 prior to crediting annual
additions to the Participant’s accounts under the defined contribution plan not
subject to Code section 412.


(v)              
If a Participant participates in more than one defined contribution plan
not subject to Code section 412 maintained by the Employer and such plans have
the same Plan Year, the maximum annual additions under this Plan shall equal
the product of (A) the maximum annual additions for the limitation year minus
any annual additions previously credited above, multiplied by (B) a fraction
(I) the numerator of which is the annual additions which would be credited to
such Participant’s Account under this Plan without regard to the limitations of
Code section 415 and (II) the denominator of which is such annual additions for
all plans described in this subsection.


4.11         
CORRECTION OF EXCESS ANNUAL ADDITIONS


                        If there is
an excess annual addition with respect to a Participant for a limitation year,
such excess annual addition shall be corrected in accordance with the Internal
Revenue Service Employee Plans Compliance Resolution System or as otherwise
permitted by applicable law and Regulations.


4.12         
ROLLOVERS FROM OTHER PLANS


(a)               
Rollover Contributions Accepted.  With the consent of the
Administrator, the Plan shall accept an eligible rollover distribution by a
Participant from the following:  


(i)                
a qualified plan described in Code section 401(a) or 403(a), excluding
after-tax employee contributions, except to the extent permitted under Section
11.4(c); 


(ii)              
an annuity contract described in Code section 403(b), excluding
after-tax contributions; 


(iii)            
an eligible plan under Code section 457(b) which is maintained by a
state, political subdivision of a state, or any agency or instrumentality of a
state or political subdivision of a state;





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(iv)            
the portion of a distribution from an individual retirement account or
annuity described in Code section 408(a) or 408(b) that would otherwise be
includable in gross income; and


(v)              
the portion of a distribution from a designated Roth account under an
applicable retirement plan described in Code section 402A, but only to the
extent that (i) it is a direct rollover and (ii) is not includible in income
when determined without regard to the rollover; provided, however that (A) the
rollover will not jeopardize the tax-exempt status of the Plan or Trust or
create adverse tax consequences for the Employer, and (B) a distribution to
which the Participant is entitled as a Surviving Spouse shall not be rolled
over to the Plan.  If the Administrator determines the rollover amount contains
an invalid rollover amount, such amount plus any earnings shall be distributed
within a reasonable time after such determination.  The amounts transferred
shall be set up in a separate account herein referred to as a Participant’s
Rollover Account.  Such account shall be fully vested at all times and shall
not be subject to forfeiture for any reason.


(b)              
Withdrawals and Distributions Limited.  Amounts in a
Participant’s Rollover Account shall be held by the Trustee pursuant to the
provisions of this Plan and may not be withdrawn by or distributed to the
Participant, in whole or in part, except as provided in subsection (c).


(c)               
Distributions.  On such date as the Participant or his or her
Beneficiary shall be entitled to receive benefits, the fair market value of the
Participant’s Rollover Account shall be used to provide additional benefits to
the Participant or his or her Beneficiary.  Any distributions of amounts held
in a Participant’s Rollover Account shall be made in a manner which is
consistent with and satisfies the provisions of Section 6.5, including, but not
limited to, all notice and consent requirements of Code section 411(a)(11) and
the Regulations thereunder.  Furthermore, such amounts shall be considered as
part of a Participant’s benefit in determining whether an involuntary cash-out
of benefits without the Participant’s consent may be made.


(d)              
Evidence of Rollover Eligibility.  Prior to accepting any
rollovers to which this Section applies, the Administrator may require the
Employee to establish that the amounts to be transferred to this Plan meet the
requirements of this Section and may also require the Employee to provide an
opinion of counsel satisfactory to the Employer that the amounts to be
transferred meet the requirements of this Section.


 






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4.13         
INVESTMENT OF AGGREGATE ACCOUNTS


(a)               
Participant Directed.  Every Participant, Beneficiary, and
alternate payee shall have the right to designate the investment category or
categories in which the Trustee is to invest his or her Aggregate Account
including, pursuant to Section 4.13(e), any contributions that have been
automatically invested in the Quaker Stock Fund at the time of contribution
pursuant to Section 4.4(a) or Section 4.5(c).


(b)              
ERISA Section 404(c) Plan.  This Plan is intended to constitute a
plan described in section 404(c) of ERISA, and regulations thereunder.  Neither
the Employer, nor the Administrator, nor the Trustee nor any other Fiduciary
shall be liable for any losses which are the result of investment instructions
provided by any Participant, Beneficiary, or alternate payee. The Administrator
shall designate the available investment categories to which a Participant,
Beneficiary, or alternate payee may direct the investment of amounts credited
to his or her Aggregate Account.  The Administrator, in its discretion, may
from time to time designate additional investment categories of the same or
different types or modify, cease to offer, or eliminate any existing investment
categories, subject to the requirements of section 404(c) of ERISA and the
regulations thereunder.


(c)               
Investment Direction – Future Contributions.  Each Participant
may designate the percentage of future contributions to be invested in any
investment category, and change such designation, on any business day by giving
notice, in the manner prescribed by the Trustee; provided, however, that any
such designation or change with respect to future contributions  shall not apply
to the Matching Contributions and Nonelective Contributions that have been
automatically invested in the Quaker Stock Fund at the time of contribution
pursuant to Section 4.4(a) or Section 4.5(c).  Any designation or change in
designation of investment categories shall be in increments of at least 1%.


(d)              
Default Fund.  In the absence of any current written (or
electronic) designation of investment category(ies) from a Participant, the
Trustee shall automatically invest such funds (other than Matching Contributions
and Nonelective Contributions that have been automatically invested in the
Quaker Stock Fund at the time of contribution pursuant to Section 4.4(a) or
Section 4.5(c)) in the default investment fund(s) designated by the
Administrator.


(e)               
Investment Direction – Reapportionment of Aggregate Account.  A
Participant, Beneficiary, or alternate payee may on any business day, by giving
notice in the manner prescribed by the Trustee, transfer all or any portion of
the assets held on his or her  behalf in any investment category or categories
to any other category or categories then provided, including any contributions
that have been automatically invested in the Quaker Stock Fund at the time of
contribution pursuant to Section 4.4(a) or Section 4.5(c).


(f)               
Reinvestment of Income, Etc.  All interest, dividends, capital
gains, distributions, and other income received with respect to any shares of
an investment category credited to the separate accounts of a Participant,
Beneficiary, or alternate payee under the Plan shall be reinvested by the
Trustee in additional shares of the same investment fund and credited to the
Participant’s, Beneficiary’s, or alternate payee’s separate accounts.





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(g)              
Company Securities – Rights and Equity Restructuring.  Each
Participant, Beneficiary, or alternate payee shall have the right to direct the
Trustee as to the exercise or sale of any rights to purchase Company Securities
allocated to his or her Stock Bonus Plan Account, and his or her Aggregate
Account (or Stock Bonus Plan Account) shall be appropriately credited.  Company
Securities received by the Trustee by reason of a stock split, stock dividend,
or other distribution shall be appropriately allocated to accounts holding
interests in the Quaker Stock Fund.


(h)              
Company Securities – Voting Rights.  Each Participant,
Beneficiary, or alternate payee shall have the right to direct the Trustee as
to the exercise of voting rights with respect to Company Securities allocated
to his or her Stock Bonus Plan Account.  As soon as practicable prior to the occasion
for the exercise of such voting rights, the Employer shall deliver or cause to
be delivered to each Participant, Beneficiary, or alternate payee all notices,
prospectuses, financial statements, proxies, and proxy soliciting material
relating to shares of Company Securities allocated to his or her Stock Bonus
Plan Account.  Instructions by Participants, Beneficiaries, or alternate payees
to the Trustee shall be on such form or in such other manner and pursuant to
such regulations as the Administrator shall prescribe.  Any such instructions
shall remain in the strict confidence of the Trustee.  Any shares of Company
Securities for which no instructions are received by the Trustee within such
time specified in the notice shall not be voted, except to the extent that the
Trustee determines otherwise consistent with the Trustee’s duties under ERISA. 
Any shares of Company Securities which are not allocated to Participants’,
Beneficiaries’, or alternate payees’ Stock Bonus Plan Accounts shall be voted
in the same proportions as the shares of Company Securities for which timely
instructions were received from Participants, Beneficiaries, and alternate
payees except to the extent that the Trustee determines otherwise consistent
with the Trustee’s duties under ERISA.


(i)                
Company Securities – Confidentiality.  The Administrator is
responsible for ensuring that:


(i)                
procedures are maintained by the Plan to safeguard the confidentiality
of information relating to the purchase, holding, and sale of the Company
Securities and the exercise of voting, tender, and similar rights with respect
to the Company Securities by Participants, Beneficiaries, and alternate payees;


(ii)              
the procedures described in paragraph (i) are sufficient to maintain
confidentiality, except to the extent necessary to comply with Federal law or
state laws not preempted by ERISA;


(iii)            
an independent fiduciary is appointed to carry out activities relating
to any situations involving a potential for Employer influence upon
Participants, Beneficiaries, or alternate payees with regard to the direct or
indirect exercise of shareholder rights; and 


(iv)            
each Participant, Beneficiary, and alternate payee is afforded the
appropriate number of votes with respect to the Company Securities allocated to
his or her Stock Bonus Plan Accounts.





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(j)                
Company Securities – Tender Offer.  In the event of a tender
offer or a self tender by the Employer for any Company Securities held in the
Plan, the Employer shall as promptly as practicable request or cause to be
requested of each Participant, Beneficiary, and alternate payee instructions as
to the tender offer response desired by him or her in connection with the
shares of Company Securities allocated to his or her Stock Bonus Plan Account
and the Trustee shall be bound by the instructions received.  Any such
instructions shall remain in the strict confidence of the Trustee.  Any shares
of Company Securities for which no instructions are received by the Trustee
within such time specified in the notice shall not be tendered, except to the
extent that the Trustee determines otherwise consistent with the Trustee’s
duties under ERISA.  Any shares of Company Securities which are not allocated
to Participants’, Beneficiary’s, or alternate payee’s Stock Bonus Plan Accounts
shall be tendered by the Trustee in the same proportion as the shares for which
timely instructions were received by the Trustee, except to the extent that the
Trustee determines otherwise consistent with the Trustee’s duties under ERISA. 


(k)              
Form and Manner of Distribution.  At the time of distribution or
withdrawal of assets held in an Aggregate Account by a Participant, he or she
shall be entitled to receive one lump-sum payment; provided, however, that the
portion of a Participant’s Stock Bonus Plan Account invested in the Quaker
Stock Fund shall be distributed in full shares of Company Securities unless the
Participant elects to take such distribution in cash in an amount realized from
converting such full shares of Company Securities in the Participant’s Stock
Bonus Plan Account to cash.  Any fractional shares of common stock of the
Company shall be distributed in cash.  The Employer does not guarantee that the
fair market value of Company Securities will be equal to the purchase price of
such stock or that the total amount withdrawable in cash with respect to any
period will be equal to or greater than the amount of the Participant’s
contributions for such period.


(l)                
Change in Market Value.  Each Participant assumes all risk in
connection with any decrease in the market price of the Company Securities,
other investments or cash allocated to his or her Stock Bonus Plan Account in
accordance with the Plan.


(m)            
Company Securities – Securities Laws.  Any transaction involving
Company Securities held in the account of a Participant who is subject to Section
16(b) of the Securities Exchange Act of 1934 shall be subject to all applicable
laws, rules, and regulations and to such approvals by stock exchanges or
governmental agencies as may be deemed necessary or appropriate by the
Administrator.  Each Participant may be required to give the Employer a written
representation that he or she will not violate any state or Federal securities
laws, including the Securities Act of 1933 and the Securities Exchange Act of
1934, as amended; the form of such written representation shall be prescribed
by the Administrator.


(n)              
Inappropriate Trading Practices.  In the event of extraordinary
transactions or excessive trading, the Administrator reserves the right to
adjust the Aggregate Accounts of Participants who initiated the extraordinary
transactions or excessive trading to reflect the actual trades executed to fund
the activity.  Such adjustment may include, but shall not be limited to,
adjustment to the unit price, the number of shares or units, or both.  If such
practices continue, the Administrator reserves the right to take further action
to limit the ability of a Participant to engage in extraordinary transactions
or excessive trading. The Administrator, in its sole 



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discretion,
shall determine which activities constitute extraordinary transactions or
excessive trading.  In addition, all designations of investment categories by a
Participant, Beneficiary, or alternate payee under this Section shall be
subject to procedures established by the Administrator.  Such procedures may
include limitations of frequency of trading (including limitations that cause
otherwise available daily elections to be unavailable), circumstances under
which investment instructions will not be implemented, redemption fees, and
other mechanisms intended to inhibit excessive or inappropriate trading
practices, whether instituted by the Administrator or the investment fund.


 


ARTICLE V

VALUATIONS


5.1             
VALUATION OF THE TRUST FUND


                        The Administrator shall direct the
Trustee, as of the Valuation Date, to determine the net worth of the assets
comprising the Trust Fund as it exists on the Valuation Date prior to taking
into consideration any contribution not yet allocated.  In determining such net
worth, the Trustee shall value the assets comprising the Trust Fund at their
fair market value as of the Valuation Date and shall deduct all expenses for
which the Trustee has not yet obtained reimbursement from the Employer or the
Trust Fund.


 


5.2             
METHOD OF VALUATION


                        In determining the fair market
value of securities held in the Trust Fund which are listed on a registered
stock exchange, the Administrator shall direct the Trustee to value the same at
the prices 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 shall be valued at the
prices at which they were last traded prior to the Valuation Date.  Any
unlisted security held in the Trust Fund shall be valued at its bid price next
preceding the close of business on the Valuation Date, which bid price shall be
obtained from a registered broker or an investment banker.  In determining the
fair market value of assets other than securities for which trading or bid
prices can be obtained, the Trustee may appraise such assets itself, or in its
discretion employ one or more appraisers for that purpose and rely on the value
established by such appraiser or appraisers.


 


 


 


 


 


 






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ARTICLE VI

DETERMINATION AND DISTRIBUTION OF BENEFITS


6.1             
VESTING 


(a)               
Vesting. 


(i)                
Full Vesting.  A Participant’s Elective Account and Rollover
Account shall be fully vested at all times.  The portion of a Participant’s Stock
Bonus Plan Account attributable to Elective Contributions shall be fully vested
at all times.  Except as provided in paragraph (iii), the portion of a
Participant’s Account attributable to AC Products Discretionary Contributions,
Quaker Discretionary Contributions, and Matching Contributions shall be fully
vested at all times.


(ii)              
Nonelective Contributions.  Nonelective Contributions for Plan
Years beginning before 2008 that had not become a Forfeiture before January 1,
2008, became fully vested on January 1, 2008.  Nonelective Contributions for
Plan Years beginning on and after January 1, 2008, shall be fully vested at all
times.  (Before January 1, 2008, a Participant’s Nonelective Contributions were
0% vested if the Participant had completed fewer than three Years of Service
and 100% vested if the Participant had completed at least three Years of
Service.)


(iii)            
Complete Vesting.  A Participant shall be 100% vested in his or
her Participant’s Account in the event of his or her attainment of Normal
Retirement Age prior to Severance from Employment, Total and Permanent
Disability prior to Severance from Employment, or death prior to Severance from
Employment.


(b)              
Effect of Amendment on Nonforfeitable Percentage.  The
computation of a Participant’s nonforfeitable percentage of his or her interest
in the Plan shall not be reduced as the result of any direct or indirect
amendment to this Plan.  For this purpose, the Plan shall 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 election period may elect to have his or her
nonforfeitable percentage computed under the Plan without regard to such
amendment. If a Participant fails to make such election, then such Participant
shall be subject to the new vesting schedule.  The Participant’s election
period shall commence on the adoption date of the amendment and shall end 60
days after the latest of:


(i)                
the adoption date of the amendment;


(ii)              
the effective date of the amendment; or


(iii)            
the date the Participant receives written notice of the amendment from
the Employer or Administrator.


(c)               
Effect of Break in Service.  If a Participant is reemployed after
a 1-Year Break in Service has occurred, Years of Service shall include Years of
Service prior to his or her 1-Year Break in Service subject to the following
rules:





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(i)                
If a Participant has a 1-Year Break in Service, his or her pre-break and
post-break service shall be used for computing Years of Service for vesting
purposes only after he or she has been employed for one Year of Service
following the date of his or her reemployment with the Employer;


(ii)              
A Participant who under the Plan does not have a nonforfeitable right to
any interest in the Plan resulting from Employer contributions shall lose
credits otherwise allowable under (i) above if his or her consecutive 1-Year
Breaks in Service equal or exceed the greater of (A) five or (B) the aggregate
number of his or her pre-break Years of Service; and


(iii)            
After five consecutive 1-Year Breaks in Service, a Participant’s Vested
Account balance attributable to pre-break service shall not be increased as a
result of post-break service.


(d)              
Years of Service Excluded.  In determining Years of Service for
purposes of vesting under the Plan, Years of Service prior to the vesting
computation period in which an Employee attained his or her 18th birthday shall
be excluded.


(e)               
Distribution Before Fully Vested.  If a distribution is made at a
time when a Participant is not fully Vested in his or her Participant’s Account
and the Participant may increase the Vested percentage in such account:


(i)                
A separate account shall be established for the Participant’s interest
in the Plan as of the time of the distribution;


(ii)              
At any relevant time, the Participant’s Vested portion of the separate
account shall be equal to an amount (“X”) determined by the formula:


                                    X equals P(AB plus
(RxD)) – (RxD)


For purposes of applying the formula: P is the Vested
percentage at the relevant time, AB is the account balance at the relevant
time, D is the amount of distribution, and R is the ratio of the account
balance at the relevant time to the account balance after distribution.


 


6.2             
DETERMINATION OF BENEFITS UPON TERMINATION


Upon a Participant’s Severance from Employment, the
Participant’s Aggregate Account shall be subject to the Participant’s
investment directions in accordance with Section 4.13 and shall share in
allocations of earnings and losses pursuant to Section 4.7(c) until such time
as a distribution is made to the Participant.  Distribution of the
Participant’s Vested Aggregate Account shall be made as soon as practicable
following the Participant’s Severance from Employment; provided, however, that
in the case of a Participant whose Vested Aggregate Account balance exceeds
$1,000, no distribution shall be made without the written consent of the
Participant, subject to Section 6.6 (regarding Required Minimum Distributions).


                        Any distribution under this
subsection shall be made in a manner which is consistent with and satisfies the
provisions of Section 6.5, including, but not limited to, all notice and
consent requirements of Code section 411(a)(11) and the Regulations thereunder.





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                        If the value of a Participant’s
Vested Aggregate Account does not exceed $1,000, the Administrator shall direct
the Trustee to cause the entire benefit to be paid to such Participant in a
single lump sum.


 


6.3             
DETERMINATION OF BENEFITS UPON DEATH


(a)               
Distribution.  Upon the death of a Participant all Vested amounts
credited to such Participant’s Aggregate Account shall be distributed, in
accordance with the provisions of Section 6.5(e), to the deceased Participant’s
Beneficiary.


(b)              
Loans.  Any security interest held by the Plan by reason of an
outstanding loan to a deceased Participant shall be taken into account in
determining the amount of the death benefit.


(c)               
Proof of Death.  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 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.


(d)              
Beneficiary.  The Beneficiary of the death benefit payable
pursuant to this Section shall be the Participant’s Spouse, except, however,
the Participant may designate a Beneficiary other than his or her Spouse if:


(i)                
the Spouse has waived the right to be the Participant’s Beneficiary;


(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);


(iii)            
the Participant has no Spouse; or


(iv)            
the Spouse cannot be located.


                        In such event, the designation of
a Beneficiary shall be made on a form satisfactory to the Administrator.  A
Participant may at any time revoke his or her designation of a Beneficiary or
change his or her Beneficiary by filing written notice of such revocation or
change with the Administrator.  However, the Participant’s Spouse must again
consent in writing to any change in Beneficiary unless the original consent
acknowledged that the Spouse had the right to limit consent only to a specific
Beneficiary and that the Spouse voluntarily elected to relinquish such right. 
In the event no valid designation of a Beneficiary exists at the time of the
Participant’s death, the death benefit shall be payable to his or her estate.


 


(e)               
Spousal Consent.  Any consent by the Participant’s Spouse to
waive any rights to the death benefit must be in writing, must acknowledge the
effect of such waiver, and must be witnessed by a Plan representative or a
notary public.  Further, the Spouse’s consent must be irrevocable and must
acknowledge the specific nonspouse Beneficiary.





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(f)               
Death While Performing Qualified Military Service. 
Notwithstanding any provision of the Plan to the contrary, and in accordance
with Code section 401(a)(37), in the case of a Participant who dies while
performing qualified military service (as defined in Code section 414(u)), the
Participant’s survivors shall be entitled to any additional benefits (other
than contributions relating to the period of qualified military service)
provided under the Plan had the Participant resumed and then terminated
employment on account of death.


6.4             
DETERMINATION OF BENEFITS IN EVENT OF DISABILITY


                        In
the event of a Participant’s Total and Permanent Disability prior to his or her
Severance from Employment, all amounts credited to such Participant’s Aggregate
Account shall become fully Vested, and the Trustee, in accordance with
the provisions of Sections 6.5 and 6.7, shall, at the election of the
Participant, distribute to such Participant all amounts credited to such
Participant’s Aggregate Account as though he or she had retired.


 


6.5             
DISTRIBUTION OF BENEFITS


(a)               
Distribution.  Subject to subsections (b) and (f), the
Administrator shall direct the Trustee to distribute to the Participant or his
or her Beneficiary any amount to which he or she is entitled under the Plan in
one lump-sum payment in cash.  


(b)              
Participant Consent Required.  Except as provided in Section 6.6,
any distribution to a Participant who has a Vested Aggregate Account balance
which exceeds $1,000 shall require such Participant’s consent.  


(c)               
Required Distributions.  Notwithstanding any provision in the
Plan to the contrary, the distribution of a Participant’s benefits shall comply
with Section 6.6.  


(d)              
Direct Rollovers.  Notwithstanding any provision of the Plan to
the contrary that would otherwise limit a distributee’s election under this
Article VI, a distributee may elect, at the time and in the manner prescribed
by the Administrator, to have all or a portion of an eligible rollover
distribution paid directly to an eligible retirement plan specified by the
distributee in a direct rollover.


(i)                
For purposes of this subsection, “eligible rollover distribution” shall
mean any distribution of all or any portion of the balance to the credit of the
distributee, except that an eligible rollover distribution shall not include:
(i) any distribution that is one of a series of substantially equal periodic
payments made (not less frequently than annually) for the life (or life
expectancy) of the distributee or the joint lives (or joint life expectancy) of
the distributee and the distributee’s designated Beneficiary, or for a
specified period of ten years or more; (ii) any distribution to the extent such
distribution is required under Code section 401(a)(9); and (iii) any amount
that is distributed on account of hardship.  A portion of a distribution shall
not fail to be an eligible rollover distribution merely because the portion
consists of after-tax employee contributions which are not includible in gross
income.  However, such portion may be transferred only to an individual
retirement account or annuity described in Code sections 408(a) or (b), or to a
qualified defined contribution plan described in Code section 401(a) or Code
section 403(a) or an annuity contract described in Code section 403(b), that 



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agrees to separately account for amounts so transferred,
including separately accounting for the portion of such distribution which is
includible in gross income and the portion of such distribution which is not so
includible.


(ii)              
For purposes of this subsection, “eligible retirement plan” means any of
the following that accepts the distributee’s eligible rollover distribution: an
individual retirement account described in Code section 408(a), a Roth IRA
described in Code section 408A provided the applicable conversion requirements
are met, an individual retirement annuity described in Code section 408(b), an
annuity plan described in Code section 403(a), a qualified trust described in
Code section 401(a), an annuity contract described in Code section 403(b), or
an eligible plan under Code section 457(b) which is maintained by a state,
political subdivision of a state, or any agency or instrumentality of a state
or political subdivision of a state which agrees to separately account for
amounts transferred into such plan from this Plan.  If any portion of an
“eligible rollover distribution” is attributable to payments or distributions
from a designated Roth account, an eligible retirement plan with respect to
such portion shall include only another designated Roth account of the individual
from whose account the payments or distributions were made, or a Roth IRA of
such individual, his or her Surviving Spouse or his or her Beneficiary.


(iii)            
For purposes of this subsection, “distributee” shall include an Employee
or former Employee.  In addition, the Employee’s or former Employee’s Surviving
Spouse and the Employee’s or former Employee’s Spouse or former Spouse who is
the alternate payee under a qualified domestic relations order (as defined in
Code section 414(p)) are distributees with regard to the interest of the Spouse
or former spouse.  The Beneficiary of a deceased Participant who is not the
Surviving Spouse of the Participant is a distributee with respect to (A) a
direct rollover to an individual retirement account or annuity under Code
section 408(a) or Code section 408(b) established for the purpose of receiving
such distribution and which will be treated as an inherited IRA pursuant to
Code section 402(c)(11) and (B) a direct rollover to a Roth IRA described in
Code section 408A, subject to the rules and provisions set forth in Code
section 408A(e) and any related guidance issued by the Treasury Department
thereunder, if such distribution otherwise meets the requirements set forth in
(i) above.


(iv)            
For purposes of this subsection, “direct rollover” shall mean a payment
by the Plan to the eligible retirement plan specified by the distributee.


(e)               
Death Benefit.  Except as provided in subsection (f), the death
benefit payable pursuant to Section 6.3 shall be paid to the Participant’s
Beneficiary in one lump-sum payment in cash as soon as practicable after the
Participant’s death, subject to the rules of Section 6.6.  


(f)               
Distribution of Company Securities.  Notwithstanding anything to
the contrary herein, the portion of a Participant’s Stock Bonus Plan Account
invested in the Quaker Stock Fund shall be distributed in full shares of
Company Securities; provided, however, that the Participant or Beneficiary may
elect to take such distribution in cash in an amount realized from converting
such full shares of Company Securities in the Participant’s Stock Bonus Plan
Account to cash.  Any fractional shares of common stock of the Company shall be
distributed in cash.






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6.6             
REQUIRED MINIMUM DISTRIBUTIONS 


(a)               
Precedence.  The requirements of this Section shall take
precedence over any inconsistent provisions of the Plan to the extent required
to satisfy Code section 401(a)(9) and the Regulations thereunder.  The
requirements set forth in this Section repeat the requirements set forth in
Code section 401(a)(9), including requirements which may not apply to the Plan
because, for example, the Plan does not permit a particular form of
distribution or does not permit deferral beyond a particular date.  Any such
requirement shall not be read as giving a Participant or Beneficiary a form of
benefit or deferral not otherwise provided under the Plan.


(b)              
Requirements of Regulations Incorporated.  All distributions
required under this Section shall be determined and made in accordance with the
Regulations under Code section 401(a)(9).


(c)               
Time and Manner of Distribution.   


(i)                
Required Beginning Date.  The Participant’s entire interest shall
be distributed, or begin to be distributed, to the Participant no later than
the Participant’s Required Beginning Date.


(ii)              
Death of Participant Before Distributions Begin.  If the
Participant dies before distributions begin, the Participant’s entire interest shall
be distributed, or begin to be distributed, no later than as follows:


(A)            
If the Participant’s Surviving Spouse is the Participant’s sole Designated
Beneficiary, then distributions to the Surviving Spouse shall begin by December
31 of the calendar year immediately following the calendar year in which the
Participant died, or by December 31 of the calendar year in which the
Participant would have attained age 701⁄2, if later.


(B)             
If the Participant’s Surviving Spouse is not the Participant’s sole
Designated Beneficiary, then distributions to the Designated Beneficiary shall
begin by December 31 of the calendar year immediately following the calendar
year in which the Participant died.


(C)             
If there is no Designated Beneficiary as of September 30 of the year
following the year of the Participant’s death, the Participant’s entire
interest shall be distributed by December 31 of the calendar year containing
the fifth anniversary of the Participant’s death.


(D)            
If the Participant’s Surviving Spouse is the Participant’s sole
Designated Beneficiary and the Surviving Spouse dies after the Participant but
before distributions to the Surviving Spouse begin, this paragraph (ii), other
than paragraph (ii)(A), shall apply as if the Surviving Spouse were the
Participant.


For purposes of this paragraph (ii) and Section 6.6(e),
unless paragraph (ii)(D) applies, distributions are considered to begin on the
Participant’s Required Beginning Date.  If paragraph (ii)(D) applies,
distributions are considered to begin on the date distributions are required to




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begin to the Surviving Spouse under paragraph
(ii)(A).  If distributions under an annuity purchased from an insurance company
irrevocably commence to the Participant before the Participant’s Required
Beginning Date (or to the Participant’s Surviving Spouse before the date
distributions are required to begin to the Surviving Spouse under paragraph
(ii)(A)), the date distributions are considered to begin is the date
distributions actually commence.


 


(iii)            
Forms of Distribution.  Unless the Participant’s interest is
distributed in the form of an annuity purchased from an insurance company or in
a single sum on or before the Required Beginning Date, as of the first
Distribution Calendar Year distributions shall be made in accordance with
Section 6.6(d) and Section 6.6(e).  If the Participant’s interest is
distributed in the form of an annuity purchased from an insurance company,
distributions thereunder shall be made in accordance with the requirements of
Code section 401(a)(9) and the Regulations.


(d)              
Required Minimum Distributions During Participant’s Lifetime.   


(i)                
Amount of Required Minimum Distributions For Each Distribution Calendar
Year.  During the Participant’s lifetime, the minimum amount that shall be
distributed for each Distribution Calendar Year is the lesser of:


(A)            
The quotient obtained by dividing the Participant’s Account Balance by
the distribution period in the Uniform Lifetime Table set forth in Regulation 
section 1.401(a)(9)-9, using the Participant’s age as of the Participant’s
birthday in the Distribution Calendar Year; or


(B)             
If the Participant’s sole Designated Beneficiary for the Distribution
Calendar Year is the Participant’s Spouse, the quotient obtained by dividing
the Participant’s Account Balance by the number in the Joint and Last Survivor
Table set forth in Regulation section 1.401(a)(9)-9, using the Participant’s
and Spouse’s attained ages as of the Participant’s and Spouse’s birthday in the
Distribution Calendar Year.


(ii)              
Lifetime Required Minimum Distributions Continue Through Year of
Participant’s Death.  Required minimum distributions shall be determined
under this subsection beginning with the first Distribution Calendar Year and
up to and including the Distribution Calendar Year that includes the
Participant’s date of death.


(e)               
Required Minimum Distributions After Participant’s Death. 


(i)                
Death On or After Date Distributions Begin. 


(A)            
Participant Survived by Designated Beneficiary.  If the
Participant dies on or after the date distributions begin and there is a
Designated Beneficiary, the minimum amount that shall be distributed for each
Distribution Calendar Year after the year of the Participant’s death is the
quotient obtained by dividing the Participant’s Account Balance by the longer
of the remaining Life Expectancy of the Participant or the remaining Life
Expectancy of the Participant’s Designated Beneficiary, determined as follows:





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(I)               
The Participant’s remaining Life Expectancy is calculated using the age
of the Participant in the year of death, reduced by one for each subsequent
year.


(II)            
If the Participant’s Surviving Spouse is the Participant’s sole
Designated Beneficiary, the remaining Life Expectancy of the Surviving Spouse
is calculated for each Distribution Calendar Year after the year of the
Participant’s death using the Surviving Spouse’s age as of the Spouse’s
birthday in that year.  For Distribution Calendar Years after the year of the Surviving
Spouse’s death, the remaining Life Expectancy of the Surviving Spouse is
calculated using the age of the Surviving Spouse as of the Spouse’s birthday in
the calendar year of the Spouse’s death, reduced by one for each subsequent
calendar year.


(III)         
If the Participant’s Surviving Spouse is not the Participant’s sole
Designated Beneficiary, the Designated Beneficiary’s remaining Life Expectancy
is calculated using the age of the beneficiary in the year following the year
of the Participant’s death, reduced by one for each subsequent year.


(B)             
No Designated Beneficiary.  If the Participant dies on or after
the date distributions begin and there is no Designated Beneficiary as of
September 30 of the year after the year of the Participant’s death, the minimum
amount that shall be distributed for each Distribution Calendar Year after the
year of the Participant’s death is the quotient obtained by dividing the
Participant’s Account Balance by the Participant’s remaining Life Expectancy
calculated using the age of the Participant in the year of death, reduced by
one for each subsequent year.


(ii)              
Death Before Date Distributions Begin. 


(A)            
Participant Survived by Designated Beneficiary.  If the
Participant dies before the date distributions begin and there is a Designated
Beneficiary, the minimum amount that shall be distributed for each Distribution
Calendar Year after the year of the Participant’s death is the quotient
obtained by dividing the Participant’s Account Balance by the remaining life
expectancy of the Participant’s designated beneficiary, determined as provided
in Section 6.6(e)(i).


(B)             
No Designated Beneficiary.  If the Participant dies before the
date distributions begin and there is no Designated Beneficiary as of September
30 of the year following the year of the Participant’s death, distribution of
the Participant’s entire interest shall be completed by December 31 of the
calendar year containing the fifth anniversary of the Participant’s death.


(C)             
Death of Surviving Spouse Before Distributions to Surviving Spouse
are Required to Begin.  If the Participant dies before the date
distributions begin, the Participant’s Surviving Spouse is the Participant’s
sole designated beneficiary, and the Surviving Spouse dies before distributions
are required to begin to the Surviving Spouse under Section 6.6(c)(ii)(A), this
paragraph (ii) shall apply as if the Surviving Spouse were the Participant.





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(f)               
Distribution Forms.  This Section shall not entitle the
Participant or beneficiary to any form of distribution not otherwise available
under the Plan, or delay the date as of which any benefit is to be paid under
any other provision of the Plan.


(g)              
Definitions. 


(i)                
Designated Beneficiary.  The individual who is designated as the
Beneficiary under Section 1.8 and is the designated beneficiary under Code
section 401(a)(9) and Regulation section 1.401(a)(9)-1, Q&A-4.


(ii)              
Distribution Calendar Year.  A calendar year for which a minimum
distribution is required.  For distributions beginning before the Participant’s
death, the first Distribution Calendar Year is the calendar year immediately
preceding the calendar year which contains the Participant’s Required Beginning
Date.  For distributions beginning after the Participant’s death, the first
Distribution Calendar Year is the calendar year in which distributions are
required to begin under Section 6.6(c)(ii).  The required minimum distribution
for the Participant’s first Distribution Calendar Year shall be made on or
before the Participant’s Required Beginning Date.  The required minimum
distribution for other Distribution Calendar Years, including the required
minimum distribution for the Distribution Calendar Year in which the
Participant’s Required Beginning Date occurs, shall be made on or before
December 31 of that Distribution Calendar Year.


(iii)            
Life Expectancy.  Life expectancy as computed by use of the
Single Life Table in Regulation section 1.401(a)(9)-9.


(iv)            
Participant’s Account Balance.  The balance in the Participant’s
Aggregate Account as of the last valuation date in the calendar year
immediately preceding the Distribution Calendar Year (“Valuation Calendar Year”)
increased by the amount of any contributions made and allocated or forfeitures
allocated to the Participant’s Aggregate Account as of dates in the Valuation
Calendar Year after the valuation date and decreased by distributions made in
the Valuation Calendar Year after the valuation date.  The balance in the
Participant’s Aggregate Account for the Valuation Calendar Year includes any
amounts rolled over or transferred to the Plan either in the Valuation Calendar
Year or in the Distribution Calendar Year if distributed or transferred in the
Valuation Calendar Year.


(v)              
Required Beginning Date.  Effective for Participants who attain
age 701⁄2 on or after January 1, 1997, a Participant’s Required Beginning Date
shall mean the April 1 following the later of (i) the calendar year in which
the Participant attains age 701⁄2 or (ii) the calendar year in which the
Participant retires; provided, however, that the Required Beginning Date for a
Participant who is a 5% owner (as defined in Code section 416(i)) at any time
during the five Plan Year period ending in the calendar year in which he or she
attains age 701⁄2, or in the case of a Participant who becomes a 5% owner during any
subsequent Plan Year, shall be the April 1 following the calendar year in which
he or she attains age 701⁄2.  Notwithstanding the foregoing, a Participant (who
is not a 5% owner) who attained age 701⁄2 on or after January 1, 1997, but prior
to January 1, 2002, may elect to commence distribution on the April 1 of the
calendar year following the calendar year in which he or she attains age 701⁄2.






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6.7             
LATEST DATE OF COMMENCEMENT OF PAYMENTS


                        Unless
the Participant elects otherwise, the payments of benefits shall occur not
later than (a) the 60th day after the close of the Plan Year in which the
Participant attains his or her Normal Retirement Age, (b) the tenth anniversary
of the year in which the Participant commenced participation in the Plan, or
(c) the date the Participant terminates his or her service with the Employer. 
A Participant’s failure to apply for benefits shall be deemed an election to
defer commencement of benefits for purposes of this Section.


 


6.8             
DISTRIBUTION FOR MINOR BENEFICIARY


                        In the event a distribution is to
be made to a minor, the Administrator may direct that such distribution be paid
to the legal guardian or, if none, to a parent of such Beneficiary or a
responsible adult with whom the Beneficiary maintains his or her residence, or
to the custodian for such Beneficiary under the Uniform Transfers to Minors
Act, if such is permitted by the laws of the state in which such Beneficiary
resides.  Such a payment to the legal guardian, custodian or parent of a minor
Beneficiary shall fully discharge the Trustee, Employer, and Plan from further
liability on account thereof.


 


6.9             
Location of Participant or
Beneficiary Unknown


                        In the event that all, or any
portion, of the distribution payable to a Participant or his or her Beneficiary
hereunder shall, at his or her 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 or her
Beneficiary, the amount so distributable shall be forfeited and used as
provided in Section 4.7(f).  In the event a Participant or Beneficiary is
located subsequent to his or her benefit being reallocated, such benefit shall
be restored.









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6.10         
Limitations on Benefits
and Distributions


                        All rights and benefits, including
elections, provided to a Participant in this Plan shall be subject to the
rights afforded to any alternate payee under a qualified domestic relations
order.  Furthermore, a distribution to an alternate payee shall 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.  For the purposes of this Section, “alternate payee,” “qualified domestic
relations order,” and “earliest retirement age” shall have the meanings set
forth under Code section 414(p).


 


6.11         
Hardship Distributions  


(a)               
In General.  Distributions of Elective Contributions (other than
Qualified Nonelective Contributions) may be made to a Participant in the event
of hardship.  For the purposes of this Section, hardship is defined as an
immediate and heavy financial need of the Participant where such Participant
lacks other available resources.  Hardship distributions shall be made in the
minimum amount of $1,000 or to the extent of all available Elective
Contributions, if less.


(b)              
Immediate and Heavy Financial Need.  For purposes of this Section,
an “immediate and heavy financial need,” as such term is defined under Code
section 401(k) and the Regulations thereunder, shall include the following: (i)
expenses incurred or necessary for medical care that would be deductible under
Code section 213(d) (determined without regard to whether the expenses exceed
7.5% of adjusted gross income); (ii) costs directly related to the purchase
(excluding mortgage payments) of a principal residence for the Participant;
(iii) payment of tuition, room and board, and related educational fees for up
to the next 12 months of post-secondary education for the Participant,
Participant’s Spouse, children, or dependents (as defined in Code section 152
without regard to Code sections 152(b)(1), (b)(2), and (d)(1)(B)); (iv)
payments necessary to prevent the eviction of the Participant from, or a
foreclosure on the mortgage of, the Participant’s principal residence; (v)
payment of burial or funeral expenses for the Participant’s deceased parent, Spouse,
children, or dependents (as defined in Code section 152 without regard to Code
section 152(d)(1)(B)); (vi) expenses for the repair of damage to the
Participant’s principal residence that would qualify for the casualty deduction
under Code section 165 (determined without regard to whether the loss exceeds
10% of adjusted gross income); and (vii) any other type of immediate and heavy
financial need permissible under Code section 401(k) and the Regulations
thereunder.


(c)               
Distribution Necessary to Satisfy Need.  A distribution shall be
considered as necessary to satisfy an immediate and heavy 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;





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(ii)              
all plans maintained by the Employer provide that the Participant’s
Elective Contributions (and any employee contributions) shall be suspended for six
months after the receipt of the hardship distribution; and


(iii)            
the distribution is not in excess of the amount of an immediate and
heavy financial need (including amounts necessary to pay any Federal, state, or
local income taxes or penalties reasonably anticipated to result from the
distribution).


(d)              
Investment Funds.  A distribution pursuant to this Section shall
be made from one or more of the investment categories designated by the
Participant for investment of his or her Account pursuant to Section 4.13.


6.12         
WITHDRAWALS OF PREVIOUSLY CONTRIBUTED AMOUNTS


                        With respect to Discretionary
Contributions made in Plan Years ending before January 1, 1992 only (“Pre-1992
Discretionary Contributions”), each Participant who has received an allocation
of such Pre-1992 Discretionary Contributions shall have the right to elect, in
writing on forms provided by the Administrator, to withdraw (i) 100%, (ii) 50%,
or (iii) 0% of the Pre-1992 Discretionary Contributions allocated to his or her
account.  Such permitted withdrawals shall be in cash and made as promptly as
practicable after the end of the Plan Year in which the election is made.  Such
amount shall 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.  All elections under this
Section shall be made on or before the November 30 preceding the date of the
withdrawal.  Failure to timely file a written election with respect to the
withdrawal privilege for the respective Plan Year shall constitute a binding
election to waive the right of withdrawal.


 


6.13         
LOANS 


(a)               
In General.  Loans to Participants shall be allowed if such loans
comply with this Section.  Subject to such uniform and nondiscriminatory rules
as may from time to time be adopted by the Administrator, the Trustee, upon
instructions from the Administrator, may make a loan or loans to a
Participant.  All loans to Participants shall be considered investments of the
Fund.  


(b)              
Limits on Loans.  A Participant’s loan (when added to the
outstanding balance of all other loans from the Plan) shall be limited to the
lesser of (i) $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
(ii) 50% of the vested interest in the Participant’s Aggregate Account as of
the date on which the loan is made.  For purposes of this limit, all loans from
all other plans maintained by the Employer or by any Affiliated Employer other
entity shall be considered as a loan from the Plan.


(c)               
Quaker Stock Fund Not Available for Loans.  Amounts invested in
the Quaker Stock Fund shall be taken into account in calculating the amount of
the loan, but such amounts may not be borrowed from the Plan.





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(d)              
No Offset Until Distributable Event.  In the event of default,
foreclosure on the note and attachment of security shall not occur until a
distributable event occurs under the terms of the Plan.


(e)               
Security.  All loans to Participants made by the Trustee shall be
secured by the pledge of no more than 50% of the Participant’s interest in the
Fund.


(f)               
Interest Rate.  Interest shall be charged at a reasonable rate
equal to the prevailing rate of interest charged for similar loans by lending
institutions in the community plus 1% on the date of the loan; provided,
however, that in no event shall the interest rate charged be in violation of
any applicable state usury law or 29 CFR §2550.408b-1(E).  Notwithstanding the
foregoing, in the case of a loan taken by a Participant prior to commencement
of “military service” (as defined for purposes of the Servicemembers Civil
Relief Act or any successor thereto), the interest charged on such loan shall
not exceed 6% for the duration of such military service.


(g)              
General Term of Loan.  The Administrator shall determine the term
of the loan (which, except as provided in subsection (h), may not be more than
five years).  To the extent that a Participant becomes entitled to payments of
benefits or withdraws all or a portion of the Participant’s Aggregate Account,
the payments or withdrawals, as the case may be, shall be immediately applied
against the balance outstanding, including interest on the loan, and such
amount shall then be deemed immediately due and payable.  Loans shall be
nonrenewable and nonextendable.


(h)              
Term of Principal Residence Loan.  To the extent that a loan to a
Participant is made for the express purpose of acquiring or constructing a
principal residence of the Participant, the loan shall generally be for a term
the Administrator determines to be appropriate, but in no event shall the term
exceed the maximum period of time prescribed by the Code and the rulings,
announcements, and Regulations issued thereunder.


(i)                
Amortization.  Loans shall be amortized in level payments not
less frequently than quarterly.  The level amortization requirement shall not
apply (A) for a period, not longer than one year, that a Participant is on a
bona fide leave of absence either without pay or at a rate of pay (after
applicable employment tax withholdings) that is less than the amount of the
installment payments required under the terms of the loan, and (B) during a
period the Participant is performing service in the uniformed services (as
defined in Chapter 43 of Title 38 of the United States Code), both as described
in Regulation section 1.72(p)-1.  


(j)                
Offset on Default.  Except as described in subsection (d), if a
loan is not paid as and when due, such outstanding loan or loans may be
deducted from any benefit which is or becomes payable to the
borrower-Participant, and any other security pledged shall be sold by the
Trustee at public or private sale as soon as is practicable after such
default.  The proceeds of any sale shall first be applied to pay the expenses
of conducting the sale, including reasonable attorneys’ fees, and then to pay
any sums due from the borrower-Participant to the Fund, with such payment to be
applied first to accrued interest and then to principal.  The Participant shall
remain liable for any deficiency, and any surplus remaining shall be paid to
the Participant.





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(k)              
Repayments.  All loan repayments shall be allocated to the
designated investment categories in accordance with the Participant’s
investment designation applicable at the time of the repayment.  The Employer
shall be permitted to implement salary withholding as a means of facilitating
the repayment of any loan.


(l)                
Loan Under Prior Plans.  Notwithstanding the foregoing, any loan
under a plan which is merged with and into the Plan (“Merged Plan”) which is outstanding
at the time of such merger shall continue in accordance with the terms of the
loan as made under the Merged Plan.


6.14         
DISTRIBUTIONS FROM THE ROLLOVER ACCOUNT    


(a)               
Timing of Distribution.  Amounts credited to a Participant’s
Rollover Account may be distributed at any time upon a request by the
Participant in accordance with the procedures established by the Administrator.


(b)              
Investment Funds.  A distribution pursuant to this Section shall
be made from one or more of the investment categories designated by the
Participant for investment of his or her Account pursuant to Section 4.13.


6.15         
DISTRIBUTIONS AT OR AFTER AGE 591⁄2.   


(a)               
Timing of Distribution.  Amounts credited to a Participant’s
Aggregate Account may be distributed at any time upon a request by the
Participant after attainment of age 591⁄2 in accordance with the procedures
established by the Administrator.


(b)              
Investment Funds.  A distribution pursuant to this Section shall
be made from one or more of the investment categories designated by the Participant
for investment of his or her Account pursuant to Section 4.13.


6.16         
DISTRIBUTIONS OF G.W. SMITH ACCOUNTS.  Notwithstanding any
other provision of the Plan to the contrary, any amounts attributable to
employer contributions under the G.W. Smith & Sons, Inc. 401(k) Profit
Sharing Plan (the “G.W. Smith Plan”) which (i) were transferred to this Plan in
connection with the merger of the G.W. Smith Plan with and into this Plan
effective January 1, 2014, and (ii) were available under the terms of the G.W.
Smith Plan for withdrawal at age 55 shall remain available for withdrawal at
age 55, provided that no more than two such withdrawals shall be permitted in
any 12-month period until attainment of age 591⁄2.  Separate subaccounts shall be
maintained under this Plan for such amounts to the extent necessary.


6.17         
DISCLAIMER.  An individual who has been designated as a Beneficiary
under this Article VI may disclaim the benefit payable to him or her under the
Plan by submitting a qualified disclaimer in accordance with Code section 2518.


 


 


 






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ARTICLE VII

ADMINISTRATION


7.1             
POWERS AND RESPONSIBILITIES OF THE COMPANY


(a)               
Appointment and Removal of Trustee and Administrator.  The
Company shall be empowered to appoint and remove the Trustee and the
Administrator from time to time as it deems necessary for the proper
administration of the Plan to assure that the Plan is being operated for the
exclusive benefit of the Participants and their Beneficiaries in accordance
with the terms of the Plan, the Code, and ERISA.


(b)              
Funding Policy and Method.  The Company shall establish a
“funding policy and method,” i.e., it shall determine whether the Plan has a
short-run need for liquidity (e.g., to pay benefits) or whether liquidity is a
long-run goal and investment growth (and stability of same) is a more current
need, or shall appoint a qualified person to do so.  The Company or its
delegate shall communicate such needs and goals to the Trustee, who shall
coordinate such Plan needs with its investment policy.  The communication of
such a funding policy and method shall not, however, constitute a directive to
the Trustee as to investment of the Trust Fund.  Such funding policy and method
shall be consistent with the objectives of this Plan and with the requirements
of Title I of ERISA.


(c)               
Periodic Review of Fiduciaries.  The Company shall periodically
review the performance of any Fiduciary or other person to whom duties have
been delegated or allocated by it under the provisions of this Plan or pursuant
to procedures established hereunder.  This requirement may be satisfied by
formal periodic review by the Company or by a qualified person specifically
designated by the Company, through day-to-day conduct and evaluation, or
through other appropriate ways.


7.2             
DESIGNATION OF ADMINISTRATIVE AUTHORITY


                        The Administrator shall consist of
a committee of two or more individuals appointed by the Company.  Any person,
including, but not limited to, an Employee of the Employer, shall be eligible
to serve on the committee.  Any person so appointed shall signify his or her
acceptance by filing written acceptance with the Company.  A member of the
committee may resign by delivering his or her written resignation to the
Company or be removed by the Company by delivery of written notice of removal,
to take effect at a date specified therein, or upon delivery to the committee
member if no date is specified.  The committee shall act in accordance with
bylaws or procedures adopted by the committee and approved by the Company.


 


                        The Company, upon the resignation
or removal of a committee member, shall promptly designate in writing a
successor to this position.  If the Company does not appoint a committee, the
Company shall function as the Administrator.


 


7.3             
Allocation and Delegation
of Responsibilities


                        If more than one person is
appointed as Administrator, the responsibilities of each Administrator may be
specified by the Company and accepted in writing by each Administrator. 



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In the event that no such delegation is made by the
Company, the Administrators may allocate the responsibilities among themselves,
in which event the Administrators shall notify the Company and the Trustee in
writing of such action and specify the responsibilities of each Administrator. 
The Trustee thereafter shall accept and rely upon any documents executed by the
appropriate Administrator until such time as the Company or the Administrators
file with the Trustee a written revocation of such designation.


 


7.4             
POWERS AND DUTIES OF THE ADMINISTRATOR


                        The primary responsibility of the
Administrator is to administer the Plan for the exclusive benefit of the
Participants and their Beneficiaries, subject to the specific terms of the
Plan.  The Administrator shall administer the Plan in accordance with its terms
and shall have the power and discretion to construe the terms of the Plan and
to determine all questions arising in connection with the administration,
interpretation, and application of the Plan.  Any such determination by the
Administrator shall be conclusive and binding upon all persons.  The
Administrator may establish procedures, supply any information, or reconcile
any inconsistency in such manner and to such extent as shall be deemed
necessary or advisable to carry out the purpose of the Plan; provided, however,
that any procedure, discretionary act, interpretation, or construction shall be
done in a nondiscriminatory manner based upon uniform principles consistently
applied and shall be consistent with the intent that the Plan shall continue to
be deemed a qualified plan under the terms of Code section 401(a), and shall
comply with the terms of ERISA and all regulations issued pursuant thereto. 
The Administrator shall have all powers necessary or appropriate to accomplish
his or her duties under its Plan.


 


                        The Administrator shall be charged
with the duties of the general administration of the Plan, including, but not
limited to, the following:


 


(a)               
the discretion to determine all questions relating to the eligibility of
an Employee to become a Participant or remain a Participant hereunder and to
receive benefits under the Plan;


(b)              
to correct any defect, reconcile any inconsistency, resolve any
ambiguity, or supply any omission with respect to the Plan;


(c)               
to make all other determinations, factual or otherwise, necessary or
advisable for the discharge of the Administrator’s duties under the Plan; 


(d)              
to compute, certify, and direct the Trustee with respect to the amount
and the kind of benefits to which any Participant shall be entitled hereunder;


(e)               
to authorize and direct the Trustee with respect to all nondiscretionary
or otherwise directed disbursements from the Trust;


(f)               
to maintain all necessary records for the administration of the Plan;


(g)              
to interpret the provisions of the Plan and to make and publish such
rules for regulation of the Plan as are consistent with the terms hereof;





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(h)              
to determine the size and type of any Contract to be purchased from any
insurer, and to designate the insurer from which such Contract shall be
purchased;


(i)                
to compute and certify to the Employer and to the Trustee from time to
time the sums of money necessary or desirable to be contributed to the Plan;


(j)                
to consult with the Company and the Trustee regarding the short- and
long-term liquidity needs of the Plan in order that the Trustee can exercise
any investment discretion in a manner designed to accomplish specific
objectives;


(k)              
to prepare and implement a procedure to notify Eligible Employees that
they may elect to have a portion of their Compensation deferred or paid to them
in cash;


(l)                
to assist any Participant regarding his or her rights, benefits, or
elections available under the Plan; and


(m)            
to determine whether any domestic relations order constitutes a
qualified domestic relations order, as defined in Code section 414(p), and to
take such action as the Administrator deems appropriate in light of such
domestic relation order.


7.5             
RECORDS AND REPORTS


                        The
Administrator shall keep a record of all actions taken and shall keep all other
books of account, records, and other data that may be necessary for proper administration
of the Plan and shall be responsible for supplying all information and reports
to the Internal Revenue Service, Department of Labor, Participants,
Beneficiaries and others as required by law.


 


7.6             
APPOINTMENT OF ADVISERS


                        The Administrator or Trustee, with
the consent of the Company, may appoint counsel, specialists, advisers, and
other persons as the Administrator or Trustee deems necessary or desirable in
connection with the administration of this Plan.


 


7.7             
INFORMATION FROM EMPLOYER


                        To
enable the Administrator to perform its functions, the Employer shall supply
full and timely information to the Administrator on all matters relating to the
Compensation of all Participants, their Hours of Service, their Years of
Service, their retirement, death, disability, or Severance from Employment and
such other pertinent facts as the Administrator may require; and the
Administrator shall advise the Trustee of such of the foregoing facts as may be
pertinent to the Trustee’s duties under the Plan.  The Administrator may rely
upon such information as is supplied by the Employer and shall have no duty or
responsibility to verify such information.


 


7.8             
PAYMENT OF EXPENSES


                        All expenses of administration may
be paid out of the Fund unless paid by the Employer.  Such expenses shall
include any expenses incident to the functioning of the Administrator,
including, but not limited to, fees of accountants, counsel, and other
specialists 



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and their agents, and other costs of
administering the Plan.  Until paid, the expenses shall constitute a liability
of the Fund.  However, the Employer may reimburse the Fund for any
administration expense incurred.  Any administration expense paid to the Fund
as a reimbursement shall not be considered an Employer contribution.


 


7.9             
MAJORITY ACTIONS


                        The members of the committee shall
act by a majority of their number, but may authorize one or more of them to
sign all papers on their behalf.


 


7.10         
CLAIMS PROCEDURE


(a)               
Initial Claim.  A Participant, Spouse, or Beneficiary
(“claimant”) who believes he or she is entitled to benefits hereunder, may
claim those benefits by submitting to the Administrator a written notification
of any claim of right to such benefits.  The Administrator shall make all
determinations as to the right of any person to receive benefits under the
Plan.  If such benefits are wholly or partially denied, the Administrator shall
notify the claimant of the denial of the claim.


(b)              
Notice of Denial of Claim.  Any notice of denial of a claim
shall:


(i)                
be in writing and sent to the claimant by registered or certified mail
(or by means of an electronic medium that satisfies the requirements of 29 CFR
§2520.104b-1(c)(1)(i), (iii), and (iv));


(ii)              
be written in a manner calculated to be understood by the claimant;


(iii)            
contain (A) the specific reason or reasons for the denial of the claim,
(B) specific reference to the pertinent provisions of the Plan upon which the
denial is based, (C) a description of the required documentation and procedures
necessary to perfect the claim, along with an explanation of why such material
or information is necessary, (D) an explanation of the claims review procedure,
including time limits applicable to the procedure, and (E) a statement of the
claimant’s right to bring a civil action under section 502(a) of the Act
following an adverse determination on review; and


(iv)            
be given to a claimant within 90 days after receipt of his or her claim
by the Administrator unless special circumstances require an extension of time
for processing of the claim.  If such extension of time for processing is
required, written notice of the extension shall be furnished to the claimant
prior to the termination of such 90-day period, and such notice shall indicate
the special circumstances which make the postponement appropriate and the date
the determination is expected.  In no event may the extension exceed a total of
180 days from the date of the original receipt of the claim.


(c)               
Procedure for Appeal.  In case of a denial as outlined in Section
7.10(b), the claimant or his or her representative shall have the opportunity
to appeal to the Administrator for review thereof by requesting such review in
writing to the Administrator; provided, however, that such written request must
be received by the Administrator (or his or her delegate to receive 



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such requests) within 60 days after receipt by the
claimant of written notification of the denial or limitation of the claim.  The
claimant or his or her representative shall have a right to review all
pertinent documents and submit comments in writing.  The claimant or his or her
duly authorized representative shall also be provided, upon request and without
charge, reasonable access to and copies of, all documents, records, or other
information relevant to the claim.  The claimant or his or her duly authorized
representative shall also be permitted to submit to the Administrator
documents, records, and other information relating to the claim.


(d)              
Decision on Appeal.  No later than 60 days after its receipt of
the request for review, the Administrator shall render a decision in writing
(or by means of an electronic medium that satisfies the requirements of 29 CFR
§2520.104b-1(c)(1)(i), (iii), and (iv)) stating specific reasons therefor and
citing specific Plan references. If special circumstances require extension,
and upon prior written notice to the claimant, the Administrator’s decision may
be given within 120 days after receipt of the request for review. The extension
notice shall indicate the special circumstances requiring an extension and the
date that the determination on review is expected. 


                        Notwithstanding the foregoing, if
the Administrator is a committee that holds regularly scheduled meetings at
least quarterly, an individual’s request for review shall be acted upon at the
meeting immediately following the receipt of the individual’s request, unless
such request is filed within 30 days preceding such meeting.  In such instance,
the decision shall be made no later than the date of the second meeting following
receipt of such request.  If special circumstances (such as a need to hold a
hearing) require a further extension of time for processing a request, a
decision shall be rendered not later than the third meeting of the
Administrator following the receipt of such request for review and written
notice of the extension shall be furnished to the individual prior to the
commencement of the extension. The extension notice shall indicate the special
circumstances requiring an extension and the date that the determination on
review will be made.  The Administrator shall notify the claimant or his or her
representative of the determination as soon as possible, but not later than
five days after the determination is made.


 


                        In the event that the decision
denies in whole or in part a claim on appeal, the notice furnished to the
claimant shall also specify that the claimant or his or her duly authorized
representative has a right to be provided, upon request and without charge,
reasonable access to, and copies of, all documents, records, or other
information relevant to the claim and specify that the claimant has a right to
bring a civil action under section 502(a) of the Act.  Claims for benefits
under the Plan may be filed in writing with the Administrator. Written notice
of the disposition of a claim shall be furnished to the claimant within 90 days
after the application is filed. In the event the claim is denied, the reasons
for the denial shall be specifically set forth in the notice in language
calculated to be understood by the claimant, pertinent provisions of the Plan
shall be cited, and, where appropriate, an explanation as to how the claimant
can perfect the claim shall be provided. In addition, the claimant shall be
furnished with an explanation of the Plan’s claims review procedure.  


 






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7.11         
LIMITATIONS ON ACTIONS


(a)               
A claimant (as defined in Section 7.10) shall have no right to bring any
action at law or in equity regarding a claim for benefits, unless and until he
or she exhausts his or her rights to review under Section 7.10 in accordance
with the time frames set forth in those procedures.


(b)              
No action at law or in equity shall be brought to recover benefits under
the Plan later than two years from the date of the final adverse benefit
determination of the claimant’s appeal of the denial of his or her claim for
benefits under Section 7.10.  Notwithstanding the foregoing, if the applicable,
analogous Pennsylvania statute of limitations has run or will run before the
aforementioned two-year period, the Pennsylvania statute of limitations is
controlling.


(c)               
No action at law or in equity shall be brought in connection with the
Plan except in Federal district court in Philadelphia, Pennsylvania.


7.12         
DISCRETIONARY AUTHORITY  


                        The
Administrator (or its designee, in the case of any delegated duties) shall have
sole discretion to carry out its responsibilities under this Article VII, to
construe and interpret the provisions of the Plan and to determine all
questions concerning benefit entitlements, including the power to construe and
determine disputed or doubtful terms.  To the maximum extent permissible under
law, the Administrator’s (or its designee’s) determinations on all such matters
shall be final and binding upon all persons involved.


 


ARTICLE VIII

AMENDMENT, TERMINATION AND MERGERS


8.1             
RIGHT TO AMEND


(a)               
By The Board of Directors.  The Board of Directors of the Company
shall have the right to amend the Plan at any time by resolution, subject to
the following limitations:


(i)                
No such amendment shall cause any part of the Trust assets to be used
for or diverted to any purpose other than the exclusive benefit of the
Participants or their Beneficiaries, except as provided in Section 9.6(b).


(ii)              
No such amendment shall cause any reduction in the amount of any
Participant’s accrued benefit.  For purposes of this paragraph, an amendment
which has the effect of (A) eliminating or reducing an early retirement benefit
or a retirement-type subsidy, or (B) eliminating an optional form of benefit,
with respect to benefits attributable to service before the amendment, shall be
treated as reducing accrued benefits except as provided in Code section
411(d)(6) and the Regulations thereunder.


(iii)            
No such amendment shall change any vesting schedule unless, in the case
of an Employee who is a Participant on:





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(A)            
The date the amendment is adopted; or


(B)             
The date the amendment is effective, if later, 


the vested percentage of such
Participant’s right to his or her Aggregate Account is not less than such
percentage computed under the Plan without regard to such amendment. 
Furthermore, no such amendment shall otherwise change any vesting schedule
unless each Participant having three or more Years of Service is permitted to
elect, in accordance with the Code and applicable Regulations, to have the
vested percentage of his or her Aggregate Account determined under the Plan
without regard to such amendment; provided, however, that no election shall be
given to any Participant whose vested percentage under the Plan as amended
cannot at any time be less than such percentage determined without regard to
such amendment.


(b)              
By the Administrator.  The Administrator shall have the right to
amend the Plan at any time, subject to the limitations set forth in Section
8.1(a), except to the extent the Board of Directors of the Company has retained
amendment authority.  The Board has retained amendment authority with respect
to (i) any increase in the rate of Matching Contributions under the Plan
(except as provided in Section 4.4(a)), (ii) any increase in the rate of
Nonelective Contributions above 3% of Compensation, (iii) any new type of
employer contribution under the Plan, (iv) any increase in the amount of any
benefit payable to a terminated Participant or Beneficiary, and (v) any
amendment authorizing one or more new groups of employees to become
Participants in the Plan if the aggregate number of Participants added is 5% or
more of the number of Participants at the beginning of the Plan Year, except,
in the case of clauses (i) and (ii), to the extent such amendment is required under
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.  The Administrator shall supply the Secretary of the Board of
Directors of the Company with copies of all Plan amendments adopted by the
Administrator as well as signed resolutions adopting such amendment.


8.2             
TERMINATION 


(a)               
Right to Terminate.  The Company shall have the right to
terminate the Plan at any time and for any reason by delivering to the Trustee
and Administrator written notice of such termination.  Upon any full or partial
termination or complete discontinuance of the Employer’s contributions to the
Plan, all amounts credited to the affected Participants’ Aggregate Accounts
shall be 100% Vested and shall not thereafter be subject to forfeiture, and any
unallocated amounts shall be allocated to the accounts of all Participants in
accordance with the provisions hereof.


(b)              
Distribution Upon Termination.  Upon the full termination of the
Plan, the Company shall direct the distribution of the assets of the Fund to
Participants in a manner which is consistent with and satisfies the provisions
of Section 6.5, except that Participant consent shall not be required if not
required under applicable Regulations.  Distributions to a Participant shall be
made in cash or through the purchase of irrevocable nontransferable deferred
commitments from an insurer.  Except as permitted by Regulations, the
termination of the Plan shall not result in the reduction of section 411(d)(6)
protected benefits.  Notwithstanding the foregoing, amounts 



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held
by a Participant’s Aggregate Account that are attributable to Nonelective
Contributions for a Plan Year beginning on or after January 1, 2008 or Elective
Contributions shall not be distributed on termination of the Plan unless (i)
distribution is permitted under another Section of the Plan (e.g., on account
of Severance from Employment), or (ii) distribution may be made pursuant to
Regulation section 1.401(k)-1(d)(4) (or any successor thereto).


8.3             
MERGER OR CONSOLIDATION


                        This Plan and Trust may be merged
or consolidated with, or its assets and/or liabilities may be transferred to,
any other plan and trust only if the benefits which would be received by a
Participant of this Plan, in the event of a termination of the Plan immediately
after such transfer, merger or consolidation, are at least equal to the
benefits the Participant would have received if the Plan had terminated
immediately before the transfer, merger or consolidation, and such transfer,
merger or consolidation does not otherwise result in the elimination or
reduction of any section 411(d)(6) protected benefits.


 


ARTICLE IX

MISCELLANEOUS


9.1             
PARTICIPANT’S RIGHTS


                        This Plan shall not be deemed to
constitute a contract between the Employer and any Participant or to be a
consideration or an inducement for the employment of any Participant or
Employee.  Nothing contained in this Plan shall be deemed to give any
Participant or Employee the right to be retained in the service of the Employer
or to interfere with the right of the Employer to discharge any Participant or
Employee at any time regardless of the effect which such discharge shall have
upon him or her as a Participant of this Plan.


 


9.2             
ALIENATION 


(a)               
In General.  Subject to the exceptions provided below, no benefit
which shall be payable under the Plan to any person (including a Participant or
his or her Beneficiary) shall be subject in any manner to anticipation,
alienation, sale, transfer, assignment, pledge, encumbrance, or charge, and any
attempt to anticipate, alienate, sell, transfer, assign, pledge, encumber, or
charge the same shall be void; and no such benefit shall in any manner be
liable for, or subject to, the debts, contracts, liabilities, engagements, or
torts of any such person, nor shall it be subject to attachment or legal
process for or against such person, and the same shall not be recognized by the
Trustee, except to such extent as may be required by law.


(b)              
Loans.  Subsection (a) shall not apply to the extent a
Participant or Beneficiary is indebted to the Plan as a result of a loan from
the Plan.  At the time a distribution is to be made to or for a Participant’s
or Beneficiary’s benefit, such proportion of the amount distributed as shall
equal such loan indebtedness shall be paid by the Trustee to the Trustee or the
Administrator, at the direction of the Administrator, to apply against or
discharge such loan indebtedness.  Prior to making a payment, however, the
Participant or Beneficiary must be given written notice by the Administrator
that such loan indebtedness is to be so paid in whole or part from his or her
Aggregate Account.  If the Participant or Beneficiary does not agree that the
loan 



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indebtedness is a valid claim against his or her
Aggregate Account, he or she shall be entitled to a review of the validity of
the claim in accordance with procedures provided in Section 7.10.


(c)               
Qualified Domestic Relations Orders.  Subsection (a) shall not
apply to a qualified domestic relations order as defined in Code section
414(p), and those other domestic relations orders permitted to be so treated by
the Administrator under the provisions of ERISA.  The Administrator shall
establish a written procedure to determine the qualified status of domestic
relations orders and to administer distributions under such qualified orders. 
Further, to the extent provided under a qualified domestic relations order, a
former spouse of a Participant shall be treated as the Spouse or Surviving
Spouse for all purposes under the Plan.


(d)              
Other Exceptions to Nonalienation.  Subsection (a) shall not
apply to an amount necessary to satisfy a Federal tax levy made pursuant to
Code section 6331 or, subject to the provisions of Code section 401(a)(13), a
judgment relating to the Participant’s conviction of a crime involving the
Plan, to a judgment, order, decree, or settlement agreement between the
Participant and the Secretary of Labor relating to a violation (or an alleged
violation) of part 4 of subtitle B of title I of ERISA.  Notwithstanding
anything in the Plan or this Section to the contrary, this Section is intended
to address the requirements of Code section 401(a)(13) and Section 206 of ERISA
and Federal rulings and regulations issued thereunder, and to permit action by
Plan fiduciaries (including, but not limited to, the recovery of benefit
overpayments by reducing Plan benefits or the withholding of taxes from Plan
benefits) that do not violate the principles of Code section 401(a)(13) or
section 206 of ERISA as described in such rulings and regulations.


 


9.3             
CONSTRUCTION OF PLAN


                        Construction,
validity, and administration of this Plan shall be governed by the laws of the
Commonwealth of Pennsylvania (without reference to principles of conflicts of
laws) except to the extent that such laws have been superseded by ERISA.


 


 


9.4             
GENDER AND NUMBER


                        Wherever any words are used herein
in the masculine, feminine, or neuter gender, they shall be construed as though
they were also used in another gender in all cases where they would so apply,
and whenever any words are used herein in the singular or plural form, they
shall be construed as though they were also used in the other form in all cases
where they would so apply.


 









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9.5             
LEGAL ACTION


                        In the event any claim, suit, or
proceeding is brought regarding the Trust and/or Plan established hereunder to
which the Trustee or the Administrator may be a party, and such claim, suit, or
proceeding is resolved in favor of the Trustee or Administrator, the Trustee or
Administrator shall be entitled to be reimbursed from the Trust Fund for any
and all costs, attorneys’ fees, and other expenses pertaining thereto incurred
by the Trustee or Administrator for which the Trustee or Administrator shall
have become liable.


 


9.6             
PROHIBITION AGAINST DIVERSION OF FUNDS


(a)               
Exclusive Benefit Rule.  Except as provided below and otherwise
specifically permitted by law, it shall be impossible by operation of the Plan
or of the Trust, by termination of either, by power of revocation or amendment,
by the happening of any contingency, by collateral arrangement, or by any other
means, for any part of the corpus or income of any trust fund maintained
pursuant to the Plan or any funds contributed thereto to be used for, or
diverted to, purposes other than the exclusive benefit of Participants or their
Beneficiaries.


(b)              
Exceptions.   


(i)                
In the event the Employer shall make an excessive contribution under a
mistake of fact pursuant to ERISA section 403(c)(2)(A), the Employer may demand
repayment of such excessive contribution at any time within one year following
the time of payment and the Trustee shall return such amount to the Employer
within the one year period.  Earnings of the Plan attributable to the excess
contributions may not be returned to the Employer but any losses attributable
thereto must reduce the amount so returned.


(ii)              
Notwithstanding any provision of the Plan to the contrary, except
Section 3.5, any contribution by the Employer to the Trust Fund is conditioned
upon the deductibility of the contribution by the Employer under the Code and,
to the extent any such deduction is disallowed, the Employer may, within one
year following the disallowance of the deduction, demand repayment of such
disallowed contribution, and the Trustee shall return such contribution within
one year following the disallowance.  Earnings of the Plan attributable to the
excess contribution may not be returned to the Employer, but any losses attributable
thereto must reduce the amount so returned.


9.7             
BONDING 


                        Every Fiduciary, except a bank or
an insurance company, unless exempted by ERISA and the regulations thereunder,
shall be bonded in an amount required by law and in a form required by law. 
Notwithstanding anything in the Plan to the contrary, the cost of such bonds
shall be an expense of and may, at the election of the Administrator, be paid
from the Fund or by the Employer.  No bonding in excess of the amount required
by law shall be considered required by the Plan.


 






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9.8             
RECEIPT AND RELEASE FOR PAYMENTS


                        Any payment to any Participant,
his or her legal representative, Beneficiary, or to any guardian or committee
appointed for such Participant or Beneficiary in accordance with the provisions
of the Plan, shall, to the extent thereof, be in full satisfaction of all
claims hereunder against the Trustee and the Employer, either of whom may
require such Participant, legal representative, Beneficiary, guardian, or
committee, as a condition precedent to such payment, to execute a receipt and
release thereof in such form as shall be determined by the Trustee or Employer.


 


9.9             
ACTION BY THE EMPLOYER


                        Whenever the Employer under the
terms of the Plan is permitted or required to do or perform any act or matter
or thing, it shall be done and performed by a person duly authorized by its
legally constituted authority.


 


9.10         
NAMED FIDUCIARIES AND ALLOCATION OF RESPONSIBILITY


                        The “Named Fiduciaries” of this
Plan are (1) the Company, (2) the Administrator, and (3) the Trustee.  The
Named Fiduciaries shall have only those specific powers, duties,
responsibilities, and obligations as are specifically given them under the
Plan.  In general, the Company (and any other Employer) shall have the sole
responsibility for making the contributions provided for under Section 4.1. 
The Company shall have the sole authority to appoint and remove the Trustee and
the Administrator, to formulate the Plan’s funding policy and method, and to
amend or terminate, in whole or in part, the Plan.  The Administrator shall
have the sole responsibility for the administration of the Plan, which
responsibility is specifically described in the Plan.  The Trustee shall have
the sole responsibility for the management of the assets held under the Trust,
except those assets the management of which has been assigned to an Investment
Manager, who shall be solely responsible for the management of the assets
assigned to it, all as specifically provided in the Plan.  Each Named Fiduciary
warrants that any directions given, information furnished, or action taken by
it shall be in accordance with the provisions of the Plan, authorizing or
providing for such direction, information, or action.  Furthermore, each Named
Fiduciary may rely upon any such direction, information, or action of another
Named Fiduciary as being proper under the Plan, and is not required under the
Plan to inquire into the propriety of any such direction, information, or
action.  It is intended under the Plan that each Named Fiduciary shall be
responsible for the proper exercise of its own powers, duties,
responsibilities, and obligations under the Plan.  No Named Fiduciary shall
guarantee the Trust Fund in any manner against investment loss or depreciation
in asset value.  Any person or group may serve in more than one fiduciary
capacity.  


 


9.11         
HEADINGS 


                        The headings and subheadings of
this Plan have been inserted for convenience of reference and are to be ignored
in any construction of the provisions hereof.






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9.12         
ELECTRONIC MEDIA


                        Whenever elections, notices,
consents, or other communications are required to be in writing herein, the
Administrator may designate that such elections, notices, consents, or other
communications shall be by other means, including the use of electronic media,
if such use is permitted by law; provided, however, that such elections,
notices, consents, or other communications shall be in such form as the
Administrator shall specify and approve.


 


9.13         
CLERICAL ERROR


                        If any fact pertaining to
eligibility for an amount of benefits payable under the Plan to a Participant
or other payee has been misstated, or in the event of clerical error, the
benefits shall be adjusted by the Committee or its delegate on the basis of the
correct facts in a manner precluding individual selection.


 


9.14         
UNIFORMITY 


                        All
provisions of this Plan shall be interpreted and applied in a uniform,
nondiscriminatory manner.  In the event of any conflict between the terms of
this Plan and any Contract purchased hereunder, the Plan provisions shall
control.


 


IN WITNESS WHEREOF, Quaker
Chemical Corporation has caused these presents to be duly executed on this             8th      
day of    December    , 2015.


 


 


 


 


 


                                                                                    QUAKER
CHEMICAL CORPORATION


 


Attest: /s/ Irene M.
Kisleiko                            By:        /s/ Ronald S. Ettinger                                                                                                                        Ronald
S. Ettinger


                                                                                    Vice
President, Human Resources


 















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EXHIBIT A


 


PARTICIPATING EMPLOYERS


AS OF JANUARY 1, 2016


 


The following Affiliated
Employers were participating in the Plan as of January 1, 2016:


 


                                                AC
Products, Inc.


                                                Epmar
Corporation


                                                G.W.
Smith & Sons, Inc.


                                                Summit
Lubricants Inc.


 







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