<PAGE>
As Filed With the Securities and Exchange Commission on December 29, 1998
Registration No. 333-______
================================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-8
REGISTRATION STATEMENT
Under
THE SECURITIES ACT OF 1933
------------------------
PENNZOIL-QUAKER STATE COMPANY
(Exact name of issuer as specified in its charter)
<TABLE>
<S> <C>
DELAWARE 76-0200625
(State or other jurisdiction of incorporation or organization) (I.R.S. Employer Identification Number)
PENNZOIL PLACE, P.O. BOX 2967 77252-2967
HOUSTON, TEXAS (Zip Code)
(address of principal executive offices)
</TABLE>
------------------------
PENNZOIL-QUAKER STATE COMPANY
SAVINGS AND INVESTMENT PLAN
(Full title of the plan)
------------------------
Linda F. Condit
Corporate Secretary
Pennzoil-Quaker State Company
Pennzoil Place, P.O. Box 2967
Houston, Texas 77252-2967
(Name and address of agent for service)
Telephone number, including area code, of agent for service: (713) 546-4000
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------
PROPOSED MAXIMUM PROPOSED MAXIMUM AMOUNT OF
TITLE OF SECURITIES TO AMOUNT TO BE OFFERING PRICE PER AGGREGATE OFFERING REGISTRATION FEE(2)
BE REGISTERED(1) REGISTERED SHARE (2) PRICE(2)
- --------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock, par 200,000 $13 11/16 $2,737,500 $761.03
value $.10 per share
- --------------------------------------------------------------------------------------------------------------
</TABLE>
(1) In addition, pursuant to Rule 416(c) under the Securities Act of 1933, this
Registration Statement also covers an indeterminate amount of plan
interests to be offered or sold pursuant to the employee benefit plan
described herein.
(2) Estimated pursuant to Rule 457(c) and (h) solely for the purpose of
computing the registration fee and based upon the average of the high and
low sales price of the Common Stock of the Registrant, trading on a when-
issued basis, reported on the New York Stock Exchange on December 22, 1998.
<PAGE>
PART I
INFORMATION REQUIRED IN THE SECTION 10(A) PROSPECTUS
Note: The document(s) containing the employee benefit plan information
required by Item 1 of this Form and the statement of availability of registrant
information, employee benefit plan annual reports and other information required
by Item 2 of this Form will be sent or given to participants as specified by
Rule 428. In accordance with Rule 428 and the requirements of Part I of Form
S-8, such documents are not being filed with the Securities and Exchange
Commission (the "Commission") either as part of this Registration Statement or
as prospectuses or prospectus supplements pursuant to Rule 424. The Registrant
shall maintain a file of such documents in accordance with the provisions of
Rule 428. Upon request, the Registrant shall furnish to the Commission or its
staff a copy or copies of all of the documents included in such file.
<PAGE>
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE.
The following documents, which Pennzoil-Quaker State Company, a Delaware
corporation (the "Company"), has filed with the Commission pursuant to the
Securities Exchange Act of 1934, as amended (the "Exchange Act") (File No.
1-14501), are incorporated in this Registration Statement by reference and shall
be deemed to be a part hereof:
(1) The Company's Form 10 filed with the Commission on September 21, 1998
and Amendment No. 1 to the Form 10 filed with the Commission on
December 1, 1998;
(2) The Company's Quarterly Report on Form 10-Q for the quarter ended
September 30, 1998;
(3) The description of rights to purchase preferred stock contained in the
Company's Registration Statement on Form 8-A filed with the Commission
on December 18, 1998;
(4) The Company's Current Reports on Form 8-K filed with the Commission on
December 18, 1998 and December 29, 1998.
All documents filed by the Company pursuant to Sections 13(a), 13(c), 14
and 15(d) of the Exchange Act subsequent to the date of this Registration
Statement and prior to the termination of the offering made hereby shall be
deemed to be incorporated by reference in this Registration Statement and to be
a part hereof from the date of the filing of such documents. Any statement
contained in this Registration Statement, in a supplement to this Registration
Statement or in a document incorporated or deemed to be incorporated by
reference herein shall be deemed to be modified or superseded for purposes of
this Registration Statement to the extent that a statement contained herein or
in any subsequently filed supplement to this Registration Statement or in any
document that also is or is deemed to be incorporated by reference herein
modifies or supersedes such statement. Any statement so modified or superseded
shall not be deemed, except as so modified or superseded, to constitute a part
of this Registration Statement.
ITEM 4. DESCRIPTION OF SECURITIES.
Not Applicable.
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL.
Not Applicable.
II-1
<PAGE>
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Article 9 of the Amended and Restated By-Laws of the Company provides for
indemnification of any person who is, or is threatened to be made, a witness in
or a party to any proceeding by reason of his Corporate Status, as defined in
the Amended and Restated By-laws, to the extent authorized by applicable law
including, but not limited to, the Delaware General Corporation Law. Directors
of the Company have agreements in place providing for the same indemnification
as the Amended and Restated By-Laws. Pursuant to Section 145 of the Delaware
General Corporation Law a corporation generally has the power to indemnify its
present and former directors, officers, employees and agents against expenses
and liabilities incurred by them in connection with any suit to which they are,
or are threatened to be made, a party by reason of their serving in such
positions so long as they acted in good faith and in a manner they reasonably
believed to be in, or not opposed to, the best interests of the corporation, and
with respect to any criminal action, they had no reasonable cause to believe
their conduct was unlawful. With respect to suits by or in the right of a
corporation, however, indemnification is generally limited to attorney's fees
and other expenses and is not available if such person is adjudged to be liable
to the corporation unless the court determines that indemnification is
appropriate. In addition, a corporation has the power to purchase and maintain
insurance for such persons. The statute also expressly provides that the power
to indemnify authorized thereby is not exclusive of any rights granted under any
bylaw, agreement, vote of stockholders or disinterested directors, or otherwise.
Article IX of the Company's Restated Certificate of Incorporation
eliminates in certain circumstances the monetary liability of directors of the
Company for a breach of their fiduciary duty as directors. These provisions do
not eliminate the liability of a director
(1) for a breach of the director's duty of loyalty to the corporation or
its stockholders;
(2) for acts or omissions not in good faith or which involve intentional
misconduct or knowing violation of law;
(3) under Section 174 of the Delaware General Corporation Law (relating to
the declaration of dividends and purchase or redemption of shares in violation
of the Delaware General Corporation Law); or
(4) for transactions from which the director derived an improper personal
benefit.
The Company has purchased directors and officers liability insurance that
would indemnify the directors and officers of the Company against damages
arising out of certain kinds of claims that might be made against them based on
their negligent acts or omissions while acting in their capacity as such.
II-2
<PAGE>
The above discussion of the Company's Restated Certificate of Incorporation
and Amended and Restated By-Laws and of Section 145 of the Delaware General
Corporation Law is not intended to be exhaustive and is respectively qualified
in its entirety by such Restated Certificate of Incorporation, Amended and
Restated By-Laws and statute.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED.
Not Applicable.
ITEM 8. EXHIBITS.
Exhibit
Number Description
- ------ -----------
+ 4.1 - Restated Certificate of Incorporation of Pennzoil-Quaker State
Company (incorporated herein by reference to Exhibit 4.2 to the
Company's Form 8-K filed with the Commission on December 29, 1998)
+ 4.2 - Amended and Restated By-laws of Pennzoil-Quaker State Company
(incorporated herein by reference to Exhibit 4.3 to the Company's Form
8-K filed with the Commission on December 29, 1998)
4.3 - Pennzoil-Quaker State Company Savings and Investment Plan (filed
herewith)
4.4 - Trust Agreement between Merrill Lynch Trust Company of Texas, as
Trustee, and Pennzoil-Quaker State Company with respect to the
Pennzoil-Quaker State Company Savings and Investment Plan (filed
herewith)
5 - Opinion of Baker & Botts, L.L.P. (filed herewith)
23.1 - Consent of Arthur Andersen LLP, independent public accountants
(filed herewith)
23.2 - Consent of PricewaterhouseCoopers LLP, independent accountants
(filed herewith)
24 - Powers of Attorney (filed herewith)
The Company hereby undertakes to submit the Plan and any amendments thereto
to the Internal Revenue Service in a timely manner and to make all changes
required by the Internal Revenue Service in order to qualify the Plan under
Section 401 of the Internal Revenue Code.
- ---------
+Incorporated herein by reference.
II-3
<PAGE>
ITEM 9. UNDERTAKINGS.
The Company hereby undertakes that, for purposes of determining any
liability under the Securities Act of 1933, as amended (the "Securities Act"),
each filing of the Registrant's annual report pursuant to section 13(a) or
section 15(d) of the Exchange Act (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to section 15(d) of the Exchange
Act) that is incorporated by reference in the Registration Statement shall be
deemed to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof.
(a) The Company hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this registration statement:
(i) To include any prospectus required by section 10(a)(3) of the
Securities Act;
(ii) To reflect in the prospectus any facts or events arising
after the effective date of the Registration Statement (or the
most recent post-effective amendment thereof) which, individually
or in the aggregate, represent a fundamental change in the
information set forth in the Registration Statement;
(iii) To include any material information with respect to the
plan of distribution not previously disclosed in the Registration
Statement or any material change to such information in the
Registration Statement;
PROVIDED, HOWEVER, that paragraphs (i) and (ii) do not apply if the
information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed by the Company pursuant to
section 13 or section 15(d) of the Exchange Act that are incorporated by
reference in the Registration Statement.
(2) That, for the purpose of determining any liability under the
Securities Act, each such post-effective amendment shall be deemed to
be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the
termination of the offering.
II-4
<PAGE>
(b) The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act, each filing of the
Registrant's annual report pursuant to section 13(a) or section 15(d) of
the Exchange Act and each filing of the Plan's annual report pursuant to
section 15(d) of the Exchange Act that are incorporated by reference in
this Registration Statement shall be deemed to be a new registration
statement relating to the securities offered therein, and the offering of
such securities at that time shall be deemed to be the initial bona fide
offering thereof.
(c) Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to directors, officers and controlling persons of the
Registrant pursuant to the foregoing provisions, or otherwise, the
Registrant has been advised that in the opinion of the Commission such
indemnification is against public policy as expressed in the Securities Act
and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
Registrant of expenses incurred or paid by a director, officer or
controlling person of the Registrant in the successful defense of any
action, suit or proceeding) is asserted by such director, officer or
controlling person in connection with the securities being registered, the
Registrant will, unless in the opinion of its counsel the matter has been
settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against
public policy as expressed in the Securities Act and will be governed by
the final adjudication of such issue.
II-5
<PAGE>
SIGNATURES
THE REGISTRANT. Pursuant to the requirements of the Securities Act, the
Company certifies that it has reasonable grounds to believe that it meets all of
the requirements for filing on Form S-8 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Houston, State of Texas, on December 29, 1998.
PENNZOIL-QUAKER STATE COMPANY,
a Delaware corporation
By: /s/ James L. Pate
__________________________________________
James L. Pate, Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities indicated on December 29, 1998.
<TABLE>
<CAPTION>
NAME TITLE
<S> <C>
/s/ David P. Alderson II
- ---------------------------------- Principal Financial Officer
(David P. Alderson II, Vice
President)
/s/ James L. Pate
- ---------------------------------- Principal Executive Officer
(James L. Pate, Chief Executive
Officer)
/s/ James J. Postl
- ---------------------------------- Director
(James J. Postl, President)
/s/ James W. Shaddix
- ---------------------------------- Director
(James W. Shaddix, Vice President)
</TABLE>
II-6
<PAGE>
THE PLAN. Pursuant to the requirements of the Securities Act, the
Administrative Committee which administers the Plan has duly caused this
Registration Statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Houston, State of Texas, on December 29, 1998.
PENNZOIL-QUAKER STATE COMPANY
SAVINGS AND INVESTMENT PLAN
ADMINISTRATIVE COMMITTEE
By: /s/ James W. Shaddix
______________________________________________
James W. Shaddix, Chairman of the Committee
THE COMMITTEE. Pursuant to the requirements of the Securities Act of 1933,
this Registration Statement has been signed by the following persons in the
capacities indicated on December 29, 1998.
MEMBERS OF THE ADMINISTRATIVE COMMITTEE
OF THE SAVINGS AND INVESTMENT PLAN
Signature
---------
David P. Alderson II
Clyde W. Beahm*
Linda F. Condit*
Raymond Fischer*
James J. Postl*
Cherylon B. Reid*
W.M. Robb*
James W. Shaddix*
*By: /s/ David P. Alderson II
____________________________________
(David P. Alderson II, Attorney-in-Fact)
II-7
<PAGE>
Exhibit 4.3
PENNZOIL-QUAKER STATE COMPANY
SAVINGS AND INVESTMENT PLAN
(As Established Effective January 1, 1999)
<PAGE>
PENNZOIL-QUAKER STATE COMPANY
SAVINGS AND INVESTMENT PLAN
(As Established Effective January 1, 1999)
I N D E X
Page
----
RECITALS 1
ARTICLE I DEFINITIONS 3
Account 3
Affiliate 3
After-Tax Contribution Account 3
After-Tax Contributions 3
Beneficiary 3
Board of Directors 3
Change of Control 3
Code 4
Committee 4
Company 4
Company Stock 4
Compensation 4
Contribution 4
Effective Date 4
Eligible Members 4
Employee 5
Employer 5
Employer Contribution Account 5
Entry Date 5
ERISA 5
Forfeiture 5
Income of the Trust Fund 5
Investment Fund 5
Member 5
Plan 5
Plan Quarter 5
Plan Year 6
Pre-Tax Contribution Account 6
Pre-Tax Contributions 6
Prior Plan 6
(i)
<PAGE>
Page
----
Prior Plan Account 6
Prior Plan Member 6
Retirement Date 6
Rollover Account 6
Rollover Amount 6
Service 6
Trust Agreement 7
Trust Fund 7
Trustee 7
Valuation Date 7
ARTICLE II ADMINISTRATION OF THE PLAN 8
2.1 Allocation of Responsibility Among Fiduciaries
for Plan and Trust Administration 8
2.2 Appointment of Committee 8
2.3 Records and Reports 9
2.4 Other Committee Powers and Duties 9
2.5 Rules and Decisions 10
2.6 Committee Procedure 10
2.7 Authorization of Benefit Payments 10
2.8 Payment of Expenses 11
2.9 Application and Forms for Benefits 11
2.10 Committee Liability 11
2.11 Quarterly Statements 11
2.12 Annual Audit 12
2.13 Funding Policy 12
2.14 Allocation and Delegation of Committee Responsibilities 12
ARTICLE III PARTICIPATION AND SERVICE 13
3.1 Eligibility for Participation 13
3.2 Notification of Eligible Employees 13
3.3 Applications by Employees 13
3.4 Service 13
3.5 Break In Service 14
3.6 Participation and Service Upon Re-Employment 15
3.7 Transferred Members 15
3.8 Beneficiary Upon Death 16
3.9 Qualified Election 16
3.10 Special Eligibility and Benefits for Certain Employees 17
ARTICLE IV CONTRIBUTIONS AND FORFEITURES 19
4.1 Pre-Tax Contributions 19
(ii)
<PAGE>
Page
----
4.2 Employer Matching Contributions 20
4.3 After-Tax Contributions 20
4.4 Employer Matching Contributions and Pre-Tax Contributions
to be Tax Deductible 21
4.5 Change of Elections and Suspension of Allotments 21
4.6 Delivery to Trustee 21
4.7 Application of Funds 21
4.8 Disposition of Forfeitures 21
4.9 Rollover Accounts 21
4.10 Prior Plan Accounts 22
ARTICLE V MEMBER ACCOUNTS 23
5.1 Individual Accounts 23
5.2 Account Adjustments 23
5.3 Limitations on Contributions 23
5.4 Valuation of Trust Fund 30
5.5 Recognition of Different Investment Funds 30
ARTICLE VI VOLUNTARY WITHDRAWALS 32
6.1 Withdrawal from After-Tax Contribution and Rollover
Accounts 32
6.2 Withdrawal from Employer Contribution Account 32
6.3 Limitation on Withdrawals 32
6.4 Withdrawal from Pre-Tax Contribution Account 32
6.5 Hardship Withdrawals 32
6.6 Loans to Members 34
ARTICLE VII MEMBERS' BENEFITS 36
7.1 Retirement of Members on or after Retirement Date 36
7.2 Disability of Members 36
7.3 Death of Members 36
7.4 Other Termination of Service 36
7.5 Valuation Dates Determinative of Member's Rights 38
7.6 Terminated After Change of Control 38
ARTICLE VIII PAYMENT OF BENEFITS 39
8.1 Payment of Benefits 39
8.2 Presenting Claims for Benefits 41
8.3 Claims Review Procedure 42
8.4 Disputed Benefits 42
(iii)
<PAGE>
Page
----
ARTICLE IX TRUST AGREEMENT;INVESTMENT FUNDS;
INVESTMENT DIRECTIONS 44
9.1 Trust Agreement 44
9.2 Investment Funds 44
9.3 Investment Directions of Members 44
9.4 Change of Investment Directions 45
9.5 Benefits Paid Solely from Trust Fund 45
9.6 Committee Directions to Trustee 45
9.7 Authority to Designate Investment Manager 45
ARTICLE X ADOPTION OF PLAN BY OTHER ORGANIZATIONS;
SEPARATION OF THE TRUST FUND;
AMENDMENT AND TERMINATION OF THE PLAN;
DISCONTINUANCE OF CONTRIBUTIONS TO THE TRUST FUND 46
10.1 Adoptive Instrument 46
10.2 Separation of the Trust Fund 46
10.3 Voluntary Separation 47
10.4 Amendment of the Plan 47
10.5 Acceptance or Rejection of Amendment by Employers 47
10.6 Termination of the Plan 48
10.7 Liquidation and Distribution of Trust Fund Upon Termination 47
10.8 Effect of Termination or Discontinuance of Contributions 49
10.9 Merger of Plan with Another Plan 49
10.10 Consolidation or Merger with Another Employer 50
ARTICLE XI MISCELLANEOUS PROVISIONS 51
11.1 Terms of Employment 51
11.2 Controlling Law 51
11.3 Invalidity of Particular Provisions 51
11.4 Non-Alienation of Benefits 51
11.5 Payments in Satisfaction of Claims of Members 51
11.6 Payments Due Minors and Incompetents 52
11.7 Impossibility of Diversion of Trust Fund 52
11.8 Evidence Furnished Conclusive 52
11.9 Copy Available to Members 52
11.10 Unclaimed Benefits 52
11.11 Headings for Convenience Only 53
11.12 Successors and Assigns 53
ARTICLE XII TOP-HEAVY PLAN REQUIREMENTS 54
12.1 General Rule 54
12.2 Vesting Provisions 54
12.3 Minimum Contribution Percentage 54
12.4 Limitation on Compensation 55
(iv)
<PAGE>
Page
----
12.5 Limitation on Contributions 55
12.6 Coordination With Other Plans 56
12.7 Distributions to Certain Key Employees 56
12.8 Determination of Top-Heavy Status 56
ARTICLE XIII TESTING OF CONTRIBUTIONS 61
13.1 Definitions 61
13.2 Actual Deferral Percentage 62
13.3 Actual Deferral Percentage Limits 62
13.4 Reduction of Pre-Tax Contribution Rates by
Leveling Method 63
13.5 Increase in Pre-Tax Contribution Rates 63
13.6 Excess Pre-Tax Contributions 64
13.7 Contribution Percentage 65
13.8 Contribution Percentage Limits 65
13.9 Treatment of Excess Aggregate Contributions 66
13.10 Multiple Use of Alternative Limitation 67
(v)
<PAGE>
PENNZOIL-QUAKER STATE COMPANY
SAVINGS AND INVESTMENT PLAN
(As Established Effective January 1, 1999)
RECITALS
Pennzoil Company, a Delaware corporation ("Pennzoil"), established the
Pennzoil Company Savings and Investment Plan (the "Prior Plan"), effective
December 20, 1986, for the benefit of its eligible employees and the eligible
employees of certain other corporations which may adopt the Prior Plan.
As part of the Prior Plan, Pennzoil established a trust, effective
December 20, 1986, to hold and administer funds contributed under the Prior Plan
for the exclusive benefit of participants and beneficiaries thereunder.
Effective as of January 1, 1989, the Board of Directors of Pennzoil authorized
the amendment, restatement and continuation of the Prior Plan to comply with the
provisions of the Tax Reform Act of 1986 and to make certain other changes
therein, including changes relating to investment fund alternatives and employee
loans, effective January 1, 1994.
Effective as of December 30, 1998 (the "Distribution Date") Pennzoil
consolidated its motor oil, refined products and fast lube operations under
Pennzoil Products Company ("PPC"), spun-off PPC, renamed PPC "Pennzoil-Quaker
State Company" (the "Company") and merged the Company's wholly owned subsidiary,
"Merger-Sub" into Quaker State Corporation (the "Merger") with Quaker State
Corporation surviving as a wholly owned subsidiary of the Company. Concurrent
with the Merger, the Board of Directors of Pennzoil also authorized the transfer
of the accounts of those former employees of Pennzoil who as of January 1, 1999
(the "Effective Date") became employees of the Company from the trust for the
Prior Plan to the trust established under the terms of this Plan, which Plan was
approved by the Board of Directors of the Company as of the Effective Date.
As part of the Plan, the Company also established a trust as of the
Effective Date to hold and administer the funds transferred from the Prior Plan
and funds contributed under the Plan for the exclusive benefit of participants
and beneficiaries hereunder. It is intended that said trust shall form a part
of the Plan set forth herein.
There shall be no termination and no gap or lapse in time or effect
between the Prior Plan and this Plan, and the existence of a qualified plan
shall be uninterrupted. The provisions of this Plan shall apply to a Member who
terminates Service on or after January 1, 1999. The rights and benefits, if
any, of a former employee shall be determined in accordance with the provisions
of the Prior Plan in effect on the date his employment terminated.
<PAGE>
The purpose of this Plan is to encourage employees to save, and invest
systematically, a portion of their current compensation in order that they may
have an additional source of income upon their retirement, disability, or for
their family in the event of their death. The benefits provided hereunder will
be in addition to benefits employees are entitled to receive under any other
employee benefit programs of the Company and under the Federal Social Security
Act.
This Plan and its related trust are intended to meet the requirements
of Sections 401(a), 401(k) and 501(a) of the Internal Revenue Code of 1986, and
of the Employee Retirement Income Security Act of 1974, as either may be amended
from time to time.
NOW, THEREFORE, Pennzoil Products Company hereby establishes the
Pennzoil-Quaker State Company Savings and Investment Plan as follows:
-2-
<PAGE>
ARTICLE I
DEFINITIONS
As used in this Plan, the following words and phrases shall have the
following meanings unless the context clearly requires a different meaning:
Account: Collectively, the accounts maintained for each Member
pursuant to Section 5.1.
Affiliate: A corporation or other trade or business which is not an
Employer under this plan but which, together with the Company, is under common
control within the meaning of Code Section 414(b) or (c); any organization
(whether or not incorporated) which together with the Company, is a member of an
affiliated service group within the meaning of Code Section 414(m); and any
other entity required to be aggregated with the Company pursuant to regulations
under Code Section 414(o).
After-Tax Contribution Account: The separate account maintained for a
Member to record his After-Tax Contributions to the Plan and adjustments
relating thereto.
After-Tax Contributions: The amount contributed by a Member pursuant
to Section 4.3 and the amount of Pre-Tax Contributions which have been
recharacterized as After-Tax Contributions pursuant to Section 13.6.
Beneficiary: A Member's surviving spouse, or if no surviving spouse
exists or if a qualified election has been made pursuant to Section 3.9, such
other natural person or persons, or the trustee of an inter vivos trust for the
benefit of natural persons, entitled to benefits hereunder following a Member's
death.
Board of Directors: The board of directors of the Company.
Change of Control: For purposes of this Plan, a Change of Control of
the Company shall conclusively be deemed to have occurred (i) if the Board of
Directors of the Company determines by resolution that a change in control which
has the reasonable likelihood of depriving key employees of benefits they
otherwise would have earned, by depriving key employees of the opportunity to
fulfill applicable service, age or other prerequisites to benefits has occurred,
or (ii) upon the occurrence of an event specified for such purposes as a change
in control by resolution of the Board of Directors adopted not more than 60 days
prior to the occurrence of such event which has the reasonable likelihood of
depriving key employees of benefits they otherwise would have earned, by
depriving key employees of the opportunity to fulfill applicable service, age or
other prerequisites to benefits. The Effective Date of a Change of Control
shall be (x) in the case of such a Change in Control described as specified in
clause (i) of the preceding sentence, the date (not more than 30 days prior to
the date on which the Board of Directors makes the determination) the Board of
Directors determines as the date on which the Change of Control has occurred, or
(y) in the case
-3-
<PAGE>
of such a Change in Control determined as specified in clause (ii) of the
preceding sentence, the date of occurrence of the event specified by the Board
of Directors as constituting such Change in Control.
Code: The Internal Revenue Code of 1986, as now in effect or
hereafter amended, or the corresponding provisions of any future Federal
internal revenue law.
Committee: The Administrative Committee appointed by the Company to
act as administrator of the Plan and to perform the duties described in Article
II.
Company: Pennzoil-Quaker State Company, a Delaware corporation, and
its successors.
Company Stock: The common stock of the Company.
Compensation: The total compensation of an Employee as stated in the
payroll records of the Employer, including salary, wages, commissions and any
amounts paid for time served over the basic work week, or paid as bonuses or as
other special pay (other than foreign service premium, hardship allowance or
non-incentive types of payments for foreign employment) and including any
amounts by which a Member's normal remuneration is reduced pursuant to a
voluntary salary reduction plan qualified under Section 125 of the Code or a
cash or deferred arrangement qualified under Section 401(k) of the Code;
provided, however, that the Compensation of each Member taken into account under
the Plan for any Plan Year shall not exceed $200,000 (or such adjusted amount as
provided under Code Section 401(a)(17)). Effective January 1, 1994, the
Compensation of each Member taken into account under the Plan for any Plan Year
shall not exceed $150,000 (or such adjusted amount as provided under Code
Section 401(a)(17)). If an Employee is employed by more than one Employer, his
Compensation shall be the aggregate compensation received from the Employers.
The Compensation which shall be determinative under Article V shall be that for
the 12-month period ending on the Annual Valuation Date. The Compensation of a
Member as reflected on the books and records of his Employer shall be
conclusive.
Contribution: Any amount contributed to the Trust Fund pursuant to
the provisions of this Plan by an Employer and any After-Tax Contributions made
by the Member pursuant to Section 4.3. Contributions by the Employer shall
sometimes be referred to as "Pre-Tax Contributions" and "Employer Matching
Contributions," as specified under Sections 4.1 and 4.2 hereof.
Effective Date: January 1, 1999.
Eligible Members: For purposes of determining the Members on whose
behalf Employer Matching Contributions shall be made under Section 4.2, Eligible
Members shall include Employees of the Employer who were Members in the Plan
during the applicable calendar month, including those who terminated Service
prior to the end of such month for any reason and those who were transferred to
an Affiliate or to another Employer (either as an Employee or to an employment
-4-
<PAGE>
classification which is not covered by this Plan) prior to the end of the
applicable month. Notwithstanding anything herein to the contrary, any employee
who is compensated by or carried on the payroll of Quaker State Corporation
shall in no event be considered an Eligible Member hereunder.
Employee: Any person who, on or after the Effective Date, is
receiving remuneration for personal services (or would be receiving such
remuneration except for an authorized leave of absence) as an employee of an
Employer. The term "Employee" also includes individuals who are "leased
employees" (as defined in Code Section 414(n) subject to Section 414(n)(5)).
Notwithstanding anything herein to the contrary, any employee who is compensated
by or carried on the payroll of Quaker State Corporation shall in no event be
considered an Employee hereunder.
Employer: Any organization which shall adopt this Plan pursuant to
the provisions of Article X, and the successors, if any, to such organization.
Employer Contribution Account: The account maintained for a Member to
record his share of the Employer Matching Contributions and adjustments relating
thereto.
Entry Date: The beginning of the first payroll period of the Employer
coincident with or next following an Employee's completion of one year of
Continuous Service for an Employer.
ERISA: Public Law No. 93-406, the Employee Retirement Income Security
Act of 1974, as amended from time to time.
Forfeiture: The portion of a Member's Employer Contribution Account
which is forfeited because of termination of Service before full vesting
pursuant to Section 7.4.
Income of the Trust Fund: The net gain or loss of the Trust Fund from
investments, as reflected by interest payments, dividends, realized and
unrealized gains and losses on securities and other investment transactions and
expenses paid from the Trust Fund, excluding, however, any such amounts
attributable to the Pennzoil Company or Battle Mountain Gold Company common
stock held in a Member's Account.
Investment Fund: Any of the investment funds comprising the Trust
Fund, as described in Section 9.2.
Member: An Employee who, pursuant to the provisions of Article III,
has met the eligibility requirements for participation in this Plan and is
participating in the Plan.
Plan: The Pennzoil Company Savings and Investment Plan, set forth
herein, and as hereafter amended from time to time.
Plan Quarter: The three-month period commencing on January 1,
April 1, July 1 and October 1 of each Plan Year.
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Plan Year: The 12-month period commencing on January 1 and ending on
December 31.
Pre-Tax Contribution Account: The account maintained for a Member to
record his Pre-Tax Contributions to the Plan and adjustments relating thereto.
Pre-Tax Contributions: The amount contributed pursuant to the
Member's deferral election by the Employer in accordance with Section 4.1.
Prior Plan: The Pennzoil Company Savings and Investment Plan, as
established effective December 20, 1986, and as thereafter amended, and as in
effect on December 31, 1998.
Prior Plan Account: The account maintained for a Prior Plan Member to
record all full shares of PennzEnergy Company common stock and/or Battle
Mountain Gold Company common stock (and cash in lieu of fractional shares) held
for the benefit of a Prior Plan Member pursuant to the provisions of the Prior
Plan and transferred to this Plan pursuant to Section 4.10, as well as
adjustments relating thereto.
Prior Plan Member: Any person who is (i) in the employment of an
Employer on January 1, 1999 and was, on December 31, 1998 included in and
covered by the Prior Plan; (ii) transferred to the employment of an Employer
within one year following the Effective Date and was, immediately prior to such
transfer included in and covered by the Prior Plan; or (iii) a former employee
of Pennzoil Company or an "Affiliate" of Pennzoil Company (as such term is
defined in the Prior Plan) whose Account was transferred to this Plan on the
Effective Date or within one year following the Effective Date. A Prior Plan
Member shall also be the beneficiary, spouse or estate representative of a Prior
Plan Member who died or who was receiving or entitled to receive benefits under
a Prior Plan.
Retirement Date: The 65th birthday of a Member.
Rollover Account: The account maintained for a Member to record his
Rollover Amount and adjustments relating thereto.
Rollover Amount: One or more distributions to an Employee of all or
any portion of the balance to the credit of an Employee in a qualified trust;
except that such term shall not include (i) any distribution which is one of a
series of substantially equal periodic payments (not less frequently than
annually) made (1) for the life (or life expectancy of the employee or the joint
lives (or joint life expectancies) of the employee and the employee's designated
beneficiary, or (2) for a specified period of ten years or more, and (ii) any
distribution to the extent such distribution is required under Section 401(a)(9)
of the Code. Prior to January 1, 1993, Rollover Amount shall be defined under
the provisions of the Prior Plan.
Service: For purposes of determining an Employee's eligibility to
participate in the Plan under Section 3.1 and for determining a Member's vested
percentage in his Employer
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Contribution Account under Section 7.4, an Employee's or Member's period of
employment with an Employer or Affiliate as determined in accordance with
Section 3.4.
Trust Agreement: The Trust Agreement provided for in Article IX, as
amended from time to time.
Trust Fund: The Investment Funds held by the Trustee under the Trust
Agreement, together with all income, profits or increments thereon.
Trustee: The trustee under the Trust Agreement.
Valuation Date: Any date on which the United States financial markets
are open and any date on which the value of the assets of the Trust Fund is
determined by the Trustee pursuant to Section 5.4. The last business day of
each calendar month shall be the "Monthly Valuation Date," the last day of each
Plan Quarter shall be the "Quarterly Valuation Date," and the last day of
December of each Plan Year shall be the "Annual Valuation Date."
Words used in this Plan and in the Trust Agreement in the singular
shall include the plural and in the plural the singular, and the gender of words
used shall be construed to include whichever may be appropriate under any
particular circumstances of the masculine, feminine or neuter genders.
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ARTICLE II
ADMINISTRATION OF THE PLAN
2.1 Allocation of Responsibility Among Fiduciaries for Plan and Trust
Administration: The Employers, the Investment Committee (said Investment
Committee, as designated pursuant to the terms of the Trust Agreement, being
hereinafter referred to as the "Investment Committee"), the Administrative
Committee and the Trustee (hereinafter collectively referred to as the
"Fiduciaries") shall have only those specific powers, duties, responsibilities
and obligations as are specifically given them under this Plan or the Trust
Agreement. In general, each Employer shall have the sole responsibility for
making the contributions provided for under Sections 4.1 and 4.2. The Board of
Directors shall have the sole authority to appoint and remove the Trustee and
the members of the Administrative and Investment Committees, and to amend or
terminate, in whole or in part, this Plan or the Trust Agreement. The
Investment Committee shall have the sole responsibility to establish and carry
out the funding policy and method of the Plan insofar as such funding policy and
method involves the investment of Plan assets, to appoint and remove any
Investment Manager which may be provided for under the Trust Agreement and to
monitor the performance of the Trustee and any such Investment Manager, which
responsibilities are specifically described in the Trust Agreement. The
Administrative Committee shall have the sole responsibility to administer the
Plan, which responsibilities are more specifically described in this Plan and
the Trust Agreement. The Trustee shall have the sole responsibility for the
administration of the Trust Fund and shall have exclusive authority and
discretion to manage and control the Trust Fund, except to the extent that the
authority to manage, acquire and dispose of assets of the Trust Fund is
delegated to an Investment Manager, all as more specifically provided in the
Trust Agreement. Each Fiduciary warrants that any directions given, information
furnished, or action taken by it shall be in accordance with the provisions of
the Plan or the Trust Agreement, as the case may be, authorizing or providing
for such direction, information or action. Furthermore, each Fiduciary may rely
upon any such direction, information or action of another Fiduciary as being
proper under this Plan or the Trust Agreement, and is not required under this
Plan or the Trust Agreement to inquire into the propriety of any such direction,
information or action. It is intended under this Plan and the Trust Agreement
that each Fiduciary shall be responsible for the proper exercise of its own
powers, duties, responsibilities and obligations under this Plan and the Trust
Agreement and shall not be responsible for any act or failure to act of another
Fiduciary. No Fiduciary guarantees the Trust Fund in any manner against
investment loss or depreciation in asset value.
2.2 Appointment of Committee: The Plan shall be administered by an
Administrative Committee consisting of at least three persons who shall be
appointed by and serve at the pleasure of the Board of Directors, which
Committee shall serve in the capacity of the "plan administrator" within the
meaning of Section 404 of ERISA. The members of the Committee shall not receive
compensation with respect to their services for the Committee. All usual and
reasonable expenses of the Committee may be paid in whole or in part by the
Company, and any expenses not paid by the Company shall be paid by the Trustee
out of the Trust Fund. The Company shall pay the premiums on any bond secured
for the performance of the duties of the Committee members
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described hereunder. The Company shall be entitled to reimbursement by other
Employers for their proportionate shares of any such costs paid in whole or in
part by the Company.
2.3 Records and Reports: The Committee shall exercise such authority and
responsibility as it deems appropriate in order to comply with ERISA and any
governmental regulations issued thereunder relating to records of Members'
Service, Account balances, the percentage of such Account balances which are
non-forfeitable under the Plan, and notifications to Members. The Committee
shall file or cause to be filed with the appropriate office of the Internal
Revenue Service and the Department of Labor all reports, returns, notices and
other information required of plan administrators under ERISA, including, but
not limited to, the summary Plan description, annual reports and amendments
thereof. The Committee shall make available to Members and their Beneficiaries
for examination, during business hours, such records of the Plan as pertain to
the examining person and such documents relating to the Plan as are required by
ERISA.
2.4 Other Committee Powers and Duties: The Committee shall have such
powers as may be necessary to discharge its duties hereunder, including, but not
by way of limitation, the following powers and duties:
(a) To construe and interpret the Plan, decide all questions of
eligibility and determine the amount, manner and time of payment of any
benefits hereunder;
(b) To prescribe procedures to be followed by Members or Beneficiaries
filing applications for benefits;
(c) To receive from the Employers and from Employees such information
as shall be necessary for the proper administration of the Plan;
(d) To prepare and distribute, in such manner as the Committee
determines to be appropriate, information explaining the Plan;
(e) To furnish the Employers, upon request, such annual reports with
respect to the administration of the Plan as are reasonable and
appropriate;
(f) To give written directions to the Trustee, on behalf of Members,
as to the investment and reinvestment of the Trust Fund;
(g) To receive and review reports of the financial condition, and of
the receipts and disbursements, of the Trust Fund from the Trustee and any
Investment Manager, and to transmit such reports, along with its findings
and recommendations surrounding the investment performance of the Trust
Fund, to the Investment Committee;
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(h) To appoint or employ individuals to assist in the administration
of the Plan and any other agents it deems advisable, including legal and
actuarial counsel; and
(i) To interpret and construe all terms, provisions, conditions and
limitations of this Plan and to reconcile any inconsistency or supply any
omitted detail that may appear in this Plan in such manner and to such
extent, consistent with the general terms of this Plan, as the Retirement
Board shall deem necessary and proper to effectuate the Plan for the
greatest benefit of all the parties interested in the Plan.
The Committee shall have no power to add to, subtract from or modify any of the
terms of the Plan, nor to change or add to any benefits provided by the Plan,
nor to waive or fail to apply any requirements of eligibility for a benefit
under the Plan.
2.5 Rules and Decisions: The Committee may adopt such rules for the
administration of the Plan as it deems necessary, desirable or appropriate. All
rules and decisions of the Committee shall be uniformly and consistently applied
to all Employees in similar circumstances. The judgment of the Committee and
each member thereof on any question arising hereunder shall be binding, final
and conclusive on all parties concerned. When making a determination or
calculation, the Committee shall be entitled to rely upon information furnished
by a Member or Beneficiary, the Employer, the legal counsel of the Employer or
the Trustee.
2.6 Committee Procedure: The Committee may act at a meeting or in writing
without a meeting. The Committee shall elect one of its members as chairman,
appoint a secretary, who may or may not be a member of the Committee, and shall
advise the Trustee of such actions in writing. The secretary of the Committee
shall keep a record of all meetings and forward all necessary communications to
the Employer or the Trustee. The Committee may adopt such bylaws and
regulations as it deems desirable for the conduct of its affairs. All decisions
of the Committee shall be made by the vote of the majority including actions
taken in writing without a meeting. A dissenting Committee member who, within a
reasonable time after he has knowledge of any action or failure to act by the
majority, registers his dissent in writing delivered to the other Committee
members, the Employer and the Trustee shall not be responsible for any such
action or failure to act. The Committee shall designate one of its members as
agent of the Plan and of the Committee for service of legal process at the
principal office of the Company.
2.7 Authorization of Benefit Payments: Except with respect to loans, as
described in Section 6.6, the Committee shall issue directions to the Trustee
concerning all benefits which are to be paid from the Trust Fund pursuant to the
provisions of the Plan. Alternatively, the Committee, in its sole discretion
may authorize that in-service withdrawals, as further described in Sections 6.1,
6.2 and 6.3 herein, may be made upon request of the Member through a voice
response system. The Committee shall keep on file, in such manner as it may
deem convenient or proper, all reports from the Trustee.
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2.8 Payment of Expenses: All expenses incident to the administration,
termination or protection of the Plan and Trust Fund, including, but not limited
to, legal, accounting, Investment Manager and Trustee fees, shall be paid by the
Company, which may require reimbursement from the other Employers for their
proportionate shares, or, if not paid by the Company, shall be paid by the
Trustee from the Trust Fund and, until paid, shall constitute a first and prior
claim and lien against the Trust Fund.
2.9 Application and Forms for Benefits: The Committee may require an
Employee or Member to complete and file with the Committee an application for a
benefit and all other forms approved by the Committee, and to furnish all
pertinent information requested by the Committee. The Committee may rely on such
information so furnished it, including the Employee's or Member's current
mailing address.
2.10 Committee Liability: Except to the extent that such liability is
created by ERISA, no member of the Committee shall be liable for any act or
omission of any other member of the Committee, nor for any act or omission on
his own part except for his own gross negligence or willful misconduct, nor for
the exercise of any power or discretion in the performance of any duty assumed
by him hereunder. The Company shall indemnify and hold harmless each member of
the Committee from any and all claims, losses, damages, expenses (including
counsel fees approved by the Committee), and liabilities (including any amounts
paid in settlement with the Committee's approval but excluding any excise tax
assessed against any member or members of the Committee pursuant to the
provisions of Section 4975 of the Code) arising from any act or omission of such
member in connection with duties and responsibilities under the Plan, except
when the same is judicially determined to be due to the gross negligence or
willful misconduct of such member.
2.11 Quarterly Statements: As soon as practicable after each Quarterly
Valuation Date, the Committee shall prepare and deliver to each Member a written
statement showing as of that Quarterly Valuation Date:
(a) The balance in his Account in the Trust Fund as of the preceding
Quarterly Valuation Date;
(b) The amount of Employer Matching Contributions allocated to his
Employer Contribution Account and the amount of his Pre-Tax and After-Tax
Contributions for the Plan Quarter ending on such Quarterly Valuation
Date;
(c) The adjustments to his Account to reflect his share of income and
expenses of the Trust Fund and appreciation or depreciation in Trust Fund
assets during the Plan Quarter ending on such Quarterly Valuation Date;
(d) The new balance in his Account as of that Quarterly Valuation
Date; and
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(e) Such information as the Committee deems appropriate to advise him
of his relative interests in each Investment Fund as of the preceding
Quarterly Valuation Date and the current Quarterly Valuation Date.
2.12 Annual Audit: The Committee shall engage, on behalf of all Members,
an independent Certified Public Accountant who shall conduct an annual
examination of any financial statements of this Plan and Trust Fund and of other
books and records of this Plan and Trust Fund as the Certified Public Accountant
may deem necessary to enable him to form and provide a written opinion as to
whether the financial statements and related schedules required to be filed with
the Department of Labor or furnished to each Member are presented fairly and in
conformity with generally accepted accounting principles applied on a basis
consistent with that of the preceding Plan Year. If, however, the statements
required to be submitted as part of the reports to the Department of Labor are
prepared by a bank or similar institution or insurance carrier regulated and
supervised and subject to periodic examination by a state or federal agency and
if such statements are certified by the preparer as accurate and if such
statements are, in fact, made a part of the annual report to the Department of
Labor and no such audit is required by ERISA, then the audit required by the
foregoing provisions of this Section shall be optional with the Committee.
2.13 Funding Policy: The Investment Committee shall, at a meeting duly
called for such purpose, establish a funding policy and method consistent with
the objectives of the Plan and the requirements of Title I of ERISA. The
Investment Committee shall meet at least annually to review such funding policy
and method. In establishing and reviewing such funding policy and method, the
Investment Committee shall endeavor to determine the Plan's short-term and long-
term objectives and financial needs, taking into account the need for liquidity
to pay benefits and the need for investment growth. All actions of the
Investment Committee taken pursuant to this Section and the reasons therefor
shall be recorded in the minutes of meetings of the Investment Committee and
shall be communicated to the Trustee, any investment manager who may be managing
a portion or all of the Trust Fund in accordance with the provisions of the
Trust Agreement, the Administrative Committee and the Board of Directors.
2.14 Allocation and Delegation of Committee Responsibilities: Upon the
approval of a majority of the members of the Committee, the Committee may (i)
allocate among any of the members of the Committee any of the responsibilities
of the Committee under the Plan and Trust Agreement and/or (ii) designate any
person, firm or corporation that is not a member of the Committee to carry out
any of the responsibilities of the Committee under the Plan and Trust Agreement.
Any such allocation or designation shall be made pursuant to a written
instrument executed by a majority of the members of the Committee.
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ARTICLE III
PARTICIPATION AND SERVICE
3.1 Eligibility for Participation: Each Employee in active Service as of
the Effective Date who was a Prior Plan Member shall be eligible to become a
Member of this Plan as of the Effective Date. Except as herein provided, each
other Employee (i) who is compensated on a salaried basis or (ii) who is not
represented by a collective bargaining agreement but is compensated on an hourly
basis as a packaging plant employee, a truck driver or a technician at the
Woodlands Technology Company shall be eligible to commence participation on the
Effective Date or the first Entry Date thereafter coincident with or next
following his completion of one year of continuous Service. An Employee who
does not participate in the Plan when he first becomes eligible may commence
such participation on any Entry Date thereafter, provided he is otherwise
eligible hereunder.
3.2 Notification of Eligible Employees: The Committee, which shall be the
sole judge of the eligibility of an Employee to participate under the Plan,
shall notify each Employee of his initial eligibility to participate in the
Plan.
3.3 Applications by Employees: Each Employee who shall become eligible to
become a Member under the Plan, and who shall desire so to become a Member,
shall enroll in the Plan by voice response system and shall (i) designate the
amount of his Pre-Tax and/or After-Tax Contributions to the Plan, (ii) agree to
be bound by the terms and conditions of the Plan and (iii) authorize payroll
deductions for his Pre-Tax and/or After-Tax Contributions.
3.4 Service: An Employee's or Member's period of Service shall be
determined in accordance with the following:
(a) Service Prior to the Effective Date: An Employee or Member shall
accrue Service under this Plan for participation and vesting purposes for
periods of employment with Pennzoil Company or an Affiliate of Pennzoil
Company (as such term is defined in the Prior Plan) prior to the Effective
Date which would have constituted "Service" under the Prior Plan.
(b) Service After the Effective Date: From and after the Effective
Date, the term Service shall mean all of an Employee's or Member's years,
months and days of active employment on or after the Effective Date with
an Employer or Affiliate, including periods includable under Section
3.6(b) and periods of absence:
(i) Due to accident or sickness so long as the person is
continued on the employment rolls of the Employer or Affiliate and
remains eligible to return to work upon his recovery;
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(ii) In the service of the Armed Forces of the United States (but
if such absence is not pursuant to orders issued by the Armed Forces
of the United States, only if with the consent of the Employer or
Affiliate); and
(iii) Due to an authorized leave of absence granted by the
Employer or Affiliate for any other purpose approved by the Board of
Directors in accordance with established practices of the Employer or
Affiliate, consistently applied in a non-discriminatory manner in
order that all employees under similar circumstances shall be treated
alike.
An Employee's or Member's Service shall commence (or recommence)
on the date he first performs an "hour of service" within the meaning of
Department of Labor Regulation (S) 2530.200b-2(a)(1) for an Employer or
Affiliate. All periods of Service shall be aggregated so that a one-year
period of Service shall be completed as of the date the Employee or Member
completes 12 months of Service (30 days shall be deemed to be a month in
the case of the aggregation of fractional months), or 365 days of Service.
Hours of Service will be credited for employment with other
members of an affiliated service group (under Code Section 414(m)), a
controlled group of corporations (under Code Section 414(b)), or a group
of trades or businesses under common control (under Code Section 414(c)),
of which the Employer is a member. Hours of Service will also be credited
for any individual considered an Employee for purposes of this Plan under
Code Section 414(n).
(c) Termination of Service: A period of Service of an Employee or
Member shall terminate on the date of the first to occur of (i) his
retirement or death, (ii) his quitting or discharge, (iii) his deemed date
of termination of employment pursuant to his failure to return to work
upon the expiration of such an authorized leave of absence or (iv) one
year from the date the Employee or Member is absent from active employment
for any reason other than retirement, quitting, discharge, authorized
leave of absence or death. For purposes of clause (iii) immediately
above, an Employee's or Member's deemed date of termination shall be the
earlier of (A) the expiration date of such authorized leave of absence and
(B) one year from the date such authorized leave of absence commenced.
3.5 Break In Service: For purposes of the Plan, a "Break In Service"
shall occur upon the expiration of the 12 consecutive month period next
following an Employee's or Member's termination of Service (as determined in
accordance with the provisions of Section 3.4(c) hereof), unless such Employee
or Member sooner recommences Service with an Employer or Affiliate.
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Solely for purposes of determining whether a Break In Service has
occurred for participation and vesting purposes under this Plan, the Service of
an individual who is absent from work for maternity or paternity reasons shall
not terminate until the expiration of 2 years after the date such absence
commenced. For purposes of this paragraph, an absence from work for maternity
or paternity reasons means an absence (a) by reason of the pregnancy of the
individual, (b) by reason of the birth of a child of the individual, (c) by
reason of the placement of a child with the individual in connection with the
adoption of such child by such individual or (d) for purposes of caring for such
child for a period beginning immediately following such birth or placement.
3.6 Participation and Service Upon Re-Employment: Upon the re-employment
of any person on or after the Effective Date who had previously been employed by
an Employer or Affiliate, the following rules shall apply in determining his
eligibility for participation under Section 3.1 and his Service under Section
3.4:
(a) Participation: If the re-employed person was not a Member during
his prior period of Service, he must meet the requirements of Section 3.1
for participation in the Plan as if he were a new Employee. If the re-
employed person was a Member in the Plan during his prior period of
Service, he shall be entitled to recommence participation as of the date
of his re-employment, and may also be entitled to a reinstatement of the
amount previously forfeited from his prior Employer Contribution Account
as provided in Section 7.4.
(b) Service: Any Service attributable to his prior period of Service
shall be reinstated as of the date of his re-employment but only for
purposes of vesting under Section 7.4. In addition, in the event an
Employee or Member recommences Service with an Employer or Affiliate prior
to incurring a Break In Service, the period of his interim absence shall
also constitute Service for purposes of Section 7.4.
3.7 Transferred Members: If a Member is transferred to an Affiliate, or
to an employment classification with an Employer which is not covered by this
Plan, his participation shall be suspended until he is subsequently re-employed
by an Employer in an employment classification covered by the Plan; provided,
however, that during such suspension period (i) such Member shall be credited
with Service in accordance with Section 3.4, (ii) he shall not be entitled or
required to make Contributions under Section 4.1 or 4.3, (iii) his Employer
Contribution Account shall receive no Employer Contribution allocations except
to the extent provided in Sections 4.2 and 5.2 and (iv) his Account shall
continue to share proportionately in Income of the Trust Fund as provided in
Section 5.2. If an Employee is transferred from an employment classification
with an Employer that is not covered by the Plan to an employment classification
that is so covered, or from an Affiliate to an employment classification with an
Employer that is so covered, his period of Service prior to the date of transfer
shall be considered for purposes of determining his eligibility to become a
Member under Section 3.1 and for purposes of vesting under Section 7.4.
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In the event an employee of an Affiliate is transferred to employment
with an Employer in an employment classification covered by this Plan and such
Affiliate provides a thrift, savings or profit-sharing plan of like nature and
intent as this Plan in which the employee was a participant immediately
preceding his transfer, such employee's account balance in a domestic
Affiliate's defined contribution plan qualified under Section 401(a) of the
Code, determined on the valuation date coincident with or next following the
date of the employee's transfer, will, subject to the approval of the Committee,
be transferred to the Trust Fund held under this Plan and allocated among the
Investment Funds in accordance with the provisions of Section 9.3 hereof. In
the event a Member under this Plan is transferred to employment with an
Affiliate and such Affiliate provides a thrift, savings or profit-sharing plan
of like nature and intent as this Plan in which the Member will be eligible to
participate as an employee of such Affiliate, such Member's account balances in
this Plan, determined as of the valuation date coincident with or next following
the date of the Member's transfer, will, subject to the approval of the plan
administrator of the Affiliate's plan, be transferred to such plan and allocated
between the investment funds held thereunder in accordance with the provisions
thereof. For purposes of this paragraph, all references to "Affiliate" shall
include employment classifications with an Employer.
3.8 Beneficiary Upon Death: Upon the death of a Member, his Account shall
be distributed to the Member's surviving spouse, but if there is no surviving
spouse, or if the surviving spouse has already consented by a qualified election
pursuant to Section 3.9, to the Beneficiary or Beneficiaries designated by the
Member in a written designation filed with his Employer, or if no such
designation shall have been so filed, to his estate. No designation of any
Beneficiary other than the Member's surviving spouse shall be effective unless
in writing and received by the Member's Employer, and in no event shall it be
effective as of a date prior to such receipt. The former spouse of a Member
shall be treated as a surviving spouse to the extent provided under a qualified
domestic relations order as described in Section 414(p) of the Code. As soon as
possible after an Employee has become a Member he shall file with the Committee
a written designation, in the form prescribed by the Committee, of the
Beneficiary to receive benefits payable hereunder upon his death. The Member
may at any time change or cancel any such designation on a form prescribed by
the Committee. The last such designation received by the Committee shall be
controlling over any testamentary or other disposition; provided, however, that
no designation or change or cancellation thereof shall be effective prior to the
Member's death, and in no event shall it be effective as of a date prior to such
receipt. If the Committee shall be in doubt as to the right of any Beneficiary
designated by a deceased Member to take the interest of such decedent, the
Committee may direct the Trustee to pay the amount in question to the estate of
such Member, in which event the Trustee, the Employer, the Committee and any
other person in any manner connected with the Plan shall have no further
liability in respect of the amount so paid.
3.9 Qualified Election: The Member's spouse may waive the right to
receive the Member's full vested Account balance. The election to waive the
Member's full vested Account balance must designate a Beneficiary which may not
be changed without spousal consent (or the consent of the spouse must expressly
permit designation by the Member without any requirement of further consent of
the spouse). A consent that permits designations by the Member without all
requirement of further consent by the spouse must acknowledge that the spouse
has the right to limit
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consent to a specific beneficiary and that the spouse voluntarily elects to
relinquish such right. The waiver must be in writing and the Member's spouse
must acknowledge the effect of the waiver. The spouse's consent to a waiver must
be witnessed by a Plan representative or a notary public. The Member may file a
waiver without the spouse's consent if it is established to the satisfaction of
the Committee that such written consent may not be obtained because there is no
spouse or the spouse may not be located. Any consent under this Section 3.9 will
be valid only with respect to the spouse who signs the consent. Additionally, a
revocation of a prior waiver may be made by a Member without the consent of the
spouse at any time before the distribution of the Account. The number of
revocations shall not be limited.
3.10 Special Eligibility and Benefits for Certain Employees:
(a) Penreco Employees: Conoco, Inc., a wholly owned subsidiary of
Dupont ("Conoco"), entered into a joint venture agreement (the
"Agreement") which created a new entity, Penreco, a general partnership,
50% of which is owned by the Company and 50% by Conoco. Under the
Agreement, Conoco and the Company agreed to the adoption of the Plan and
Trust by Penreco for the benefit of eligible salaried employees of
Penreco. Effective October 1, 1997, all Penreco salaried employees
employed by Penreco on October 1, 1997 shall automatically become Members
of this Plan subject to the eligibility requirements under Section 3.1.
Any period of employment with Conoco, an affiliate of Conoco, the Company,
an Employer or an Affiliate prior to October 1, 1997 shall be considered
for purposes of determining a Member's Service and Vesting Service under
this Plan to the extent such employment otherwise qualifies under the
relevant provisions of the Plan."
(b) Former Pennzoil Employees: Pennzoil Company ("Pennzoil"), a
Delaware Corporation, entered into an agreement with Quaker State
Corporation ("Quaker State") under which Pennzoil spun-off Pennzoil
Products Company ("PPC") and related properties and immediately subsequent
to such spin-off PPC was renamed Pennzoil-Quaker State Company, and merged
into Quaker State Corporation ("Quaker State") with Quaker State surviving
as a wholly owned subsidiary. All Employees of the Company who are
employed by the Company on a date prior to the first anniversary of the
Effective Date and who, immediately prior to employment by the Company,
met the definition of an employee under the terms of the Prior Plan, shall
automatically become Members of this Plan subject to the eligibility
requirements under Section 3.1. Any period of employment credited under
the terms of the Prior Plan immediately prior to the Employee's first day
of active employment with the Company shall be considered for purposes of
determining a Member's Service and Vesting Service under this Plan to the
extent such employment otherwise qualifies under the relevant provisions
of the Plan.
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(c) Transferred Quaker State Employees: Individuals employed and
compensated on a salaried basis by Quaker State ("Quaker State Employees")
who transfer to the Company prior to January 1, 1999 and who are,
subsequent to such transfer, compensated on a salaried basis by Richland
Services Company, shall automatically become Members of this Plan subject
to the eligibility requirements under Section 3.1. All periods of
employment immediately prior to the date of the Quaker State Employee's
transfer to the payroll of Richland Services Company recognized as service
under the applicable of the Quaker State, Blue Coral, Axius or Medo 401(k)
plans shall be considered for purposes of determining a Member's Service
and Vesting Service under this Plan to the extent such employment
otherwise qualifies under the relevant provisions of the Plan.
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ARTICLE IV
CONTRIBUTIONS AND FORFEITURES
4.1 Pre-Tax Contributions: Each eligible Employee who elects to make Pre-
Tax Contributions for a Plan Year shall initially elect to defer a portion of
his salary in whole percentages of not less than 1% and not more than 12% of his
Compensation; provided, however, that Pre-Tax Contributions under this Section
4.1 shall not total more than $9,500 per Plan Year (as adjusted upward by the
Secretary of the Treasury to reflect increases in the cost-of-living). Pre-Tax
Contributions under this Section 4.1 and After-Tax Contributions under Section
4.3 shall not total, in the aggregate, more than 12% of the Member's
Compensation.
Each Member's Pre-Tax Contribution shall be contributed to the Trust
Fund by the Employer. Each such election shall be made pursuant to the
provisions of Section 3.3 and shall continue in effect during subsequent Plan
Years unless the Member shall notify the Committee in the manner hereinafter
provided of his election to change or discontinue his Pre-Tax Contribution rate
as provided in Section 4.5. Each Member's Pre-Tax Contribution Account shall be
fully vested and non-forfeitable at all times.
In the event a Member's Pre-Tax Contributions exceed the applicable
limit described in the previous sentence, or in the event the Member submits a
written claim to the Committee, at the time and in the manner prescribed by the
Committee, specifying an amount of Pre-Tax Contributions that will exceed the
applicable limit of Section 402(g) of the Code when added to amounts deferred by
the Member in other plans or arrangements, such excess (the "Excess Deferrals")
shall be treated in one of the following manners:
(a) If the Member has signed an appropriate authorization form, the
Excess Deferrals shall be designated as After-Tax Contributions by the
Member and deposited in the Member's After-Tax Account; or
(b) If the Member has not authorized such action or, has revoked the
authorization, in writing, then such Excess Deferrals, plus any income and
minus any loss attributable thereto for the Plan Year in which the Excess
Deferral occurred shall be returned to the Member by April 15 of the
following year. The amount of any Excess Deferrals to be distributed to a
Member for a taxable year shall be reduced by excess Pre-Tax Contributions
previously recharacterized or distributed pursuant to Article XIII for the
Plan Year beginning in such taxable year. The income or loss attributable
to the Member's Excess Deferral for the Plan Year shall be determined by
multiplying the income or loss attributable to the Member's Pre-Tax
Contribution Account balance for the Plan Year (or relevant portion
thereof) by a fraction, the numerator of which is the Excess Deferral and
the denominator of which is the Member's total Pre-Tax Contribution
Account balance as of the Valuation Date next preceding the date of return
of the Excess Deferral. For these purposes, distribution of an Excess
Deferral on or before the
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15th day of a calendar month shall be treated as having been made on the
last day of the preceding month, and a distribution made thereafter shall
be treated as having been made on the first day of the next month. Excess
Deferrals shall be treated as Annual Additions under Article V of the
Plan.
Each Member's Pre-Tax Contribution shall be contributed to the Trust
Fund by the Employer. A Member shall always be fully vested in and have a non-
forfeitable right to his Pre-Tax Contributions.
4.2 Employer Matching Contributions: For each Plan Year, each Employer
shall make a Matching Contribution to the Trust Fund on behalf of its Eligible
Members in an amount equal to 100% of the first 6% of the total Pre-Tax
Contributions and After-Tax Contributions elected or contributed by its Eligible
Members during such Plan Year and not withdrawn under Article VI during such
Plan Year.
A contribution shall be deemed to be made on account of a Plan Year if
the Board of Directors of the Employer determines the amount of such
Contribution by appropriate action and either (i) the Employer claims such
amount as a deduction on its Federal income tax return for such Plan Year or
(ii) the Employer designates such amount in writing to the Trustee as payment on
account of such Plan Year. All Contributions of the Employer shall be paid to
the Trustee, and payment shall be made not later than the time prescribed by law
for filing the Federal income tax return of the Employer, including any
extension which has been granted for the filing of such tax return. The Trustee
shall hold all such Employer Matching Contributions subject to the provisions of
this Plan and the Trust Agreement, and no part of such Contributions shall be
used for, or diverted to, any other purpose.
In the case of the reinstatement of any amounts forfeited under
Section 7.4 or pursuant to the unclaimed benefit provisions of Section 11.10,
the Employer shall also contribute, within a reasonable time after the repayment
described in Section 7.4 or after a claim is filed under Section 11.10, a
Minimum Contribution in an amount sufficient when added to Forfeitures to
reinstate such amounts. All such Employer Matching Contributions shall be
transmitted to the Trustee as soon as practicable after such Contributions are
made.
4.3 After-Tax Contributions: Each eligible Employee regardless of whether
he has elected to defer any percentage of his salary in the form of a Pre-Tax
Contribution to the Plan may elect to make an After-Tax Contribution of up to
12% of his Compensation; provided, however, that Pre-Tax Contributions under
Section 4.1 and After-Tax Contributions under this Section 4.3 shall not total,
in the aggregate, more than 12% of the Member's Compensation.
Any After-Tax Contribution election shall be made pursuant to the
provisions of Section 3.3 and shall continue in effect during subsequent Plan
Years unless the Member shall notify the Committee in the manner hereinafter
provided of his election to change or discontinue his After-Tax Contribution
rate as provided in Section 4.5. Each Member's After-Tax Contribution Account
shall be fully vested and non-forfeitable at all times.
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4.4 Employer Matching Contributions and Pre-Tax Contributions to be Tax
Deductible: Employer Matching Contributions and Pre-Tax Contributions shall not
be made in excess of the amount deductible under applicable Federal law now or
hereafter in effect limiting the allowable deduction for contributions to
profit-sharing plans. The Employer Matching Contributions and Pre-Tax
Contributions to this Plan when taken together with all other contributions made
by the Employer to other qualified retirement plans shall not exceed the maximum
amount deductible under Section 404 of the Code.
4.5 Change of Elections and Suspension of Allotments: Any Member may
increase or decrease the percentage of his salary designated as Pre-Tax and/or
After-Tax Contributions, but not retroactively and such change shall be
effective as soon as reasonably practicable following receipt of the change of
elections. A Member may make such changes 12 times annually be telephone
through a voice-response system. Further, any Member may, by voice-response,
suspend his Pre-Tax Contributions and/or After-Tax Contributions. In the case
of total suspension of Pre-Tax Contributions and After-Tax Contributions, the
Employer Matching Contribution will automatically cease. Pre-Tax Contributions
and/or After-Tax Contributions which are not made during a period of suspension
shall not be made retroactively. All such changes of elections related to
contributions in the investments of Accounts shall be made by telephone voice-
response system.
4.6 Delivery to Trustee: Each Employer shall, not less frequently than
monthly, pay the Contributions to the Trustee.
4.7 Application of Funds: The Trustee shall hold or apply the
Contributions so received by it subject to the provisions of the Plan; and no
part thereof (except as otherwise provided in the Trust Agreement) shall be used
for any purpose other than the exclusive use of the Members or their
Beneficiaries.
4.8 Disposition of Forfeitures: In any case in which a Member is not
entitled to the full amount in his Employer Contribution Account, the amount to
which he is not entitled shall be forfeited, and shall be allocated in the
following order:
(a) First, such Forfeitures shall be allocated to reinstate any
Employer Matching Contribution Accounts of Members who return to Service
and are entitled to reinstatement of their Employer Contribution Account
in accordance with Section 7.4.
(b) Second, such Forfeitures shall be applied to restore any amounts
forfeited under the unclaimed benefits provisions of Section 11.10.
(c) Third, such Forfeitures shall be applied against the next
succeeding Employer Matching Contribution.
4.9 Rollover Accounts: Any Member may file with the Committee a written
request that the Trustee accept a Rollover Amount from such Member provided,
however, that such Rollover
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Amount shall be transferred only in the form of cash. The Committee shall
develop such procedures and may require such information from the Employee
desiring to make such a transfer as it deems necessary or desirable to determine
that the proposed transfer will meet the requirements of this Section and of the
Code. Upon approval by the Committee, the amount transferred shall be deposited
in the Trust Fund and shall be credited to a separate Rollover Account. Such
account shall at all times be fully vested and non-forfeitable, shall share in
the Income of the Trust Fund in accordance with Section 5.2, but shall not share
in Employer Matching Contribution allocations. Upon termination of employment,
the total amount of the Rollover Account shall be distributed in accordance with
Article VIII. Notwithstanding anything in this Plan to the contrary, no such
transfer of a Rollover Amount shall include a transfer of benefits from a
defined benefit plan or from a defined contribution plan subject to Code
Section 412.
Upon such a transfer by an Employee who is otherwise eligible to
participate in the Plan but who has not yet completed the participation
requirements of Section 3.1, his Rollover Account shall represent his sole
interest in the Plan until he becomes a Member. In all respects, the Rollover
Account shall be treated as a regular account under this Plan and shall be
subject to the investment directions of the Member and the change thereof as
otherwise permitted herein.
4.10 Prior Plan Accounts: The Committee shall instruct the Trustee to
accept a transfer of full shares of PennzEnergy Company common stock, Battle
Mountain Gold Company Common Stock ("BMGC Stock"), and cash in lieu of
fractional shares from the Prior Plan, which assets are attributable to the
Member's interest in such Prior Plan. Any such transferred assets shall be
maintained in the Trust Fund on behalf of the Member as a separate account under
this Plan, which shall be designated as a Prior Plan Account, and shall at all
times remain invested in Pennzoil Company Common Stock and/or BMGC Stock.
Except as provided below, no portion of any such Prior Plan Account (whether the
whole, the lesser amount or none) may be commingled with other assets of the
Trust Fund for investment purposes and any cash dividends or other income paid
with respect to the Account shall be reinvested in Pennzoil-Quaker State Company
Common Stock. Such Prior Plan Account shall at all times be 100% vested in the
Employee or Member, and shall not share in the Income of the Trust Fund in
accordance with Section 5.2 or in Employer Matching Contribution allocations.
Subject to such rules and procedures as may be adopted by the Committee and
communicated to Members, any Member who has a Prior Plan Account may withdraw
all of such account by giving the Committee appropriate timely written notice of
such withdrawal. Upon termination of employment, the total amount of the Prior
Plan Account shall be distributed in kind in accordance with Article VIII. The
Prior Plan Account shall have two subaccounts, the first to be known as the
Prior Plan Employee Account and representing the Prior Plan Member's balance in
his Employee Account held under the Prior Plan and transferred to this Plan, and
the second to be known as the Prior Plan Employer Account and representing the
balance of the Company Account held for such Member under the applicable Prior
Plans and transferred to this Plan. As provided under Sections 9.2, 9.3 and 9.4
of the Plan, a Member who has a Prior Plan Account may elect to invest all or
any part of such Prior Plan Account other than those assets held in the Prior
Plan Employer Account and the Battle Mountain Gold Company Stock Fund in any of
the Investment Funds authorized under Section 9.3.
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ARTICLE V
MEMBER ACCOUNTS
5.1 Individual Accounts: The Committee shall create and maintain adequate
records to disclose the interest in the Trust Fund and in its component
Investment Funds of each Member, former Member and Beneficiary. Such records
shall be in the form of individual accounts and credits and charges shall be
made to such accounts in the manner herein described. A Member may have up to
five separate accounts, an Employer Contribution Account, a Pre-Tax Contribution
Account, an After-Tax Contribution Account, a Prior Plan Account and a Rollover
Account. The Prior Plan Account shall have two subaccounts as provided in
Section 4.10 above. Any Member who transfers from one Employer to another
Employer, or who is simultaneously employed by 2 or more Employers, may have
individual accounts with each such Employer. The maintenance of individual
Accounts is only for accounting purposes, and a segregation of the assets of the
Trust Fund to each Account shall not be required. Distribution and withdrawals
made from an Account shall be charged to the Account as of the date paid.
5.2 Account Adjustments: Except with respect to Employer Matching
Contributions which shall be allocated bi-weekly among Eligible Members, the
accounts of Members, former Members and Beneficiaries shall be adjusted daily.
Forfeitures which have become available for reallocation shall be applied
pursuant to Section 4.8 and Employer Minimum Contributions shall be used solely
to reinstate Accounts in accordance with Section 7.4 and to restore Accounts
pursuant to Section 11.10 whenever the Forfeitures available for such
reinstatement or restoration are insufficient.
5.3 Limitations on Contributions: Notwithstanding any provision of this
Plan to the contrary, the total Annual Additions made to the account of a Member
for any Limitation Year (the Plan Year) shall be subject to the following
limitations:
I. Single Defined Contribution Plan
1. If an Employer does not maintain any other qualified plan,
the amount of Annual Additions which may be allocated under this Plan
on a Member's behalf for a Limitation Year shall not exceed the lesser
of the Maximum Permissible Amount or any other limitation contained in
this Plan.
2. Prior to the determination of the Member's actual
Compensation for a Limitation Year, the Maximum Permissible Amount may
be determined on the basis of the Member's estimated annual
Compensation for such Limitation Year. Such estimated annual
Compensation shall be determined on a reasonable basis and shall be
uniformly determined for all Members similarly situated. Any Employer
contributions (including allocation of forfeitures)
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based on estimated annual Compensation shall be reduced by any Excess
Amounts carried over from prior years.
3. As soon as is administratively feasible after the end of the
Limitation Year, the Maximum Permissible Amount for such Limitation
Year shall be determined on the basis of the Employee's actual
Compensation for such Limitation Year.
4. If there is an Excess Amount with respect to a Member for the
Limitation Year, there shall first be returned to the Member (i) his
After-Tax Contributions attributable to that Limitation Year, and then
(ii) his Pre-Tax Contributions attributable to that Limitation Year,
to the extent such returned Contributions would reduce the Excess
Amount. Then, Excess Amounts will be treated as a forfeiture and
shall be applied as a credit to subsequent Employer contributions or
reallocated to other Employees to the extent such allocations do not
exceed the Maximum Permissible Amount. Any Excess Amounts that cannot
be allocated will be held in a suspense account. All amounts in the
suspense account must be allocated and reallocated to the Employee's
accounts (subject to the limitations of Section 415) in succeeding
Limitation Years before any Employer contribution and non-deductible
employee contribution which would constitute Annual Additions may be
made to the Plan.
If a suspense account is in existence at any time during the
Limitation Year pursuant to this Section, it will not participate in
the allocation of the Trust's investment gains and losses.
II. Two or More Defined Contribution Plans
1. If, in addition to this Plan, the Employer maintains any
other qualified defined contribution plan, the amount of Annual
Additions which may be allocated under this Plan on a Member's behalf
for a Limitation Year shall not exceed the lesser of:
A. the Maximum Permissible Amount, reduced by the sum of
any Annual Additions allocated to the Member's accounts for the
same Limitation Year under this Plan and such other defined
contribution plans; or
B. any other limitation contained in this Plan.
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2. Prior to the determination of the Member's actual
Compensation for the Limitation Year, the amount referred to in
Section 1(A) above, may be determined on the basis of the Member's
estimated annual Compensation for such Limitation Year. Such
estimated annual Compensation shall be determined on a reasonable
basis and shall be uniformly determined for all Members similarly
situated. Any Employer contribution (including allocation of
forfeitures) based on estimated annual Compensation shall be reduced
by any Excess Amounts carried over from prior years.
3. As soon as is administratively feasible after the end of the
Limitation Year, the amounts referred to in Section 1(A) above shall
be determined on the basis of the Member's actual Compensation for
such Limitation Year.
4. If a Member's Annual Additions under this Plan and all such
other defined contribution plans result in an Excess Amount, such
Excess Amount shall be deemed to consist of the amounts last
allocated.
5. If an Excess Amount was allocated to a Member on an
allocation date of this Plan which coincides with an allocation date
of another plan, the Excess Amount attributed to this Plan will be the
product of:
A. the total Excess Amount allocated as of such date
(including any amount which would have been allocated but for the
limitations of Section 415 of the Code); times
B. the ratio of (A) the amount allocated to the Member as
of such date under this Plan, divided by (B) the total amount
allocated as of such date under all qualified defined
contribution plans (determined without regard to the limitations
of Section 415 of the Code).
6. Any Excess Amounts attributed to this Plan shall be disposed
of as provided in Section 5.3(I)(4).
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III. Defined Contribution Plan and Defined Benefit Plan
1. General Rule: If the Employer maintains one or more defined
contribution plans and one or more defined benefit plans, the sum of
the "defined contribution plan fraction" and the "defined benefit plan
fraction," as defined below, cannot exceed 1.0 for any Limitation
Year. For purposes of this Section, employee contributions to a
qualified defined benefit plan are treated as a separate defined
contribution plan. For purposes of this Section, all defined
contribution plans of an Employer are to be treated as one defined
contribution plan and all defined benefit plans of an Employer are to
be treated as one defined benefit plan, whether or not such plans have
been terminated.
If the sum of the defined contribution plan fraction and
defined benefit plan fraction exceeds 1.0, the Annual Benefit of the
defined benefit plans will be reduced so that the sum of the fractions
will not exceed 1.0. In no event will the Annual Benefit be decreased
below the amount of the accrued benefit to date. If additional
reductions are required for the sum of the fractions to equal 1.0, the
reductions will then be made to the Annual Additions of the defined
contribution plans.
2. Defined Contribution Plan Fraction
A. General Rule: The defined contribution plan fraction
for any year is one divided by two, where:
One is the numerator, the sum of the actual Annual
Additions to the Member's account at the close of the
Limitation Year; and
Two is the denominator, the sum of the lesser of the
following amounts determined for such year and for each
prior year of service of the Employee:
a. 1.25 times the dollar limitation in effect for
each such year (without regard to the special dollar
limitations for employee stock ownership plans); or
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b. 1.4 times 25% of the Member's Compensation for
each such year.
B. If the Employee was a participant as of the first day of
the First Limitation Year beginning after December 31, 1986, in
one or more defined contribution plans maintained by the Employer
which were in existence on May 6, 1986, the numerator of this
fraction will be adjusted if the sum of this fraction and the
defined benefit fraction would otherwise exceed 1.0 under the
terms of this Plan. Under the adjustment, an amount equal to the
product of (1) the excess of the sum of the fractions over 1.0
times (2) the denominator of this fraction, will be permanently
subtracted from the numerator of this fraction. The adjustment
is calculated using the fractions as they would be computed as of
the end of the last Limitation Year beginning before January 1,
1987, and disregarding any changes in the terms and conditions of
the plans made after May 5, 1986, but using the Code Section 415
limitation applicable to the first Limitation Year beginning on
or after January 1, 1987.
3. Defined Benefit Plan Fraction
A. General Rule: The defined benefit plan fraction for any
year is one divided by two, where:
One is the projected Annual Benefit of the Member under
the Plan (determined as of the close of the Limitation
Year); and
Two is the lesser of:
a. 1.25 times the dollar limitation (adjusted, if
necessary) for such year; or
b. 1.4 times 100% of the Member's Average
Compensation for the high three years (adjusted, if
necessary).
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B. Notwithstanding the above, if the Employee was a
participant as of the first day of the first Limitation Year
beginning after December 31, 1986, in one or more defined benefit
plans maintained by the Employer which were in existence on May
6, 1986, the denominator of this fraction will not be less than
125% of the sum of the Annual Benefits under such plans which the
Employee had accrued as of the close of the last Limitation Year
beginning before January 1, 1987, disregarding any changes in the
terms and conditions of the plans after May 5, 1986. The
preceding sentence applies only if the defined benefit plans
individually and in the aggregate satisfied the requirements of
Code Section 415 as in effect for all Limitation Years beginning
before January 1, 1987.
IV. Definitions
1. Employer: The Company and any other Employer that adopts this
Plan. In the case of a group of employers which constitutes a controlled
group of corporations (as defined in Section 414(b) of the Code as
modified by Section 415(h)) or which constitutes trades and businesses
(whether or not incorporated) which are under common control (as defined
in Section 414(c) as modified by Section 415(h)) or an affiliated service
group (as defined in Section 414(m)), all such employers shall be
considered a single Employer for purposes of applying the limitations of
these sections.
2. Excess Amount: The excess of the Member's Annual Additions for
the Limitation Year over the Maximum Permissible Amount.
3. Limitation Year: A 12 consecutive month period ending on December
31.
4. Maximum Permissible Amount: For a Limitation Year, the Maximum
Permissible Amount with respect to any Member shall be the lesser of:
A. $30,000 (or, if greater, 1/4 of the defined benefit dollar
limitation set forth in Section 415(b)(1) of the Code as in effect for
the Limitation Year); or
B. 25% of the Member's Compensation for the Limitation Year.
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The Compensation limitation referred to in subparagraph B above
shall not apply to:
(i) Any contribution for medical benefits (within the meaning of
Code Section 419A(f)(2)) after separation from service which is
otherwise treated as an Annual Addition; or
(ii) Any amount otherwise treated as an Annual Addition under
Code Section 415(l)(1).
5. Compensation: For purposes of determining compliance with the
limitations of Code Section 415, Compensation shall mean a Member's earned
income, wages, salaries, fees for professional services and other amounts
received for personal services actually rendered in the course of
employment with an Employer maintaining the Plan, including, but not
limited to, commissions paid salesmen, compensation for services on the
basis of a percentage of profits, commissions on insurance premiums,
tips, and bonuses and excluding the following:
(a) Employer contributions to a plan of a deferred compensation
to the extent contributions are not included in gross income of the
Employee for the taxable year in which contributed, or on behalf of an
employee to a simplified employee pension plan to the extent such
contributions are deductible under Code Section 219(b)(2), and any
distributions from a plan of deferred compensation whether or not
includable in the gross income of the Employee when distributed
(however, any amounts received by an Employee pursuant to an unfunded
non-qualified plan may be considered as compensation in the year such
amounts are included in the gross income of the Employee);
(b) Amounts realized from the exercise of a non-qualified stock
option, or when restricted stock (or property) held by an employee
becomes freely transferable or is no longer subject to a substantial
risk of forfeiture;
(c) amounts realized from the sale, exchange or other disposition
of stock acquired under a qualified stock option; and
(d) Other amounts which receive special tax benefits, or
contributions made by an Employer (whether or not under a salary
reduction agreement) towards the purchase of a Section 403(b) annuity
contract (whether or not the contributions are excludable from the
gross income of the Employee).
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For purposes of applying the limitations in this Section, amounts included
as compensation are those actually paid or made available to a Member
within the Limitation Year. For Limitation Years beginning after December
31, 1988, Compensation shall be limited to $200,000 (unless adjusted in
the same manner as permitted under Code Section 415(d)). For Limitation
Years beginning after December 31, 1993, Compensation shall be limited to
$150,000 (unless adjusted in the same manner as permitted under Code
Section 415(d)). Notwithstanding anything to the contrary in the
definition, Compensation shall include any and all items which may be
includable in Compensation under Section 415(c)(3) of the Code.
6. Average Compensation: The average Compensation during a Member's
high three years of service, which period is the three consecutive
calendar years (or, the actual number of consecutive years of employment
for those Employees who are employed for less than three consecutive years
with the Employer) during which the Employee had the greatest aggregate
Compensation from the Employer.
7. Annual Benefit: A benefit payable annually in the form of a
straight life annuity (with no ancillary benefits) under a plan to which
Employees do not contribute and under which no rollover contributions are
made.
8. Annual Additions: With respect to each Limitation Year, the total
of the Employer Matching Contributions, Pre-Tax Contributions, After-Tax
Contributions, Forfeitures and amounts described in Code Sections 415(l)
and 419A(d)(2) which are allocated to a Member's Account.
5.4 Valuation of Trust Fund: A valuation of the Trust Fund shall be made
as of each Valuation Date and on any other date during the Plan Year that the
Committee deems a valuation to be advisable. Any such interim valuation shall
be exercised on a uniform and non-discriminatory basis. For the purposes of
each valuation, the assets of the Trust Fund shall be valued at the respective
current market values, and the amount of any obligations for which the Trust
Fund may be liable, as shown on the books of the Trustee, shall be deducted from
the total value of the assets. For the purposes of maintenance of books of
account in respect of properties constituting the Trust Fund, and of making any
such valuation, the Trustee shall account for the transactions of the Trust Fund
on a modified cash basis.
5.5 Recognition of Different Investment Funds: As provided in Article IX,
Investment Funds shall be established, and each Member shall direct, within the
limitations set forth in Section 9.3, what portion of the balance in his
Accounts shall be deposited in each Investment Fund. Consequently, when
appropriate, a Member shall have a Pre-Tax Contribution Account, an After-Tax
Contribution Account and a Rollover Account in each such Investment Fund and the
allocations described in Section 5.2 shall be adjusted in such manner as is
appropriate to recognize the existence of the Investment Funds. Because Members
have a choice of Investment Funds, any
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reference in this Plan to a Pre-Tax Contribution Account, an After-Tax
Contribution Account or a Rollover Account shall be deemed to mean and include
all accounts of a like nature which are maintained for the Member under each
Investment Fund.
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ARTICLE VI
VOLUNTARY WITHDRAWALS
6.1 Withdrawal from After-Tax Contribution and Rollover Accounts: Each
Member of the Plan, upon giving not less than 30 days' prior written notice (in
such form and in such manner as prescribed by the Committee) to the Committee,
shall be entitled to withdraw from his After-Tax Contribution Account and
Rollover Account (valued as of the Valuation Date next preceding the Member's
election), any amount up to but not to exceed the balance of such Account as of
such date, plus the net dollar amount of any After-Tax Contributions made during
the month of such withdrawal but not yet credited to the Member's Account. Any
withdrawal from his After-Tax Contribution Account shall cause such Member to
forfeit his right to participate in the Plan for a period of 180 days from the
end of the payroll period following the election to make the withdrawal
following the distribution. For any such period during which a Member is
suspended from making any further withdrawals from the Plan, such Member shall
also forfeit the right to contribute to the Plan, to participate in any Employer
Matching Contributions under the Plan except as otherwise provided above, and to
share in the Income of the Trust Fund.
6.2 Withdrawal from Employer Contribution Account: Each Member who has
been a Member of the Plan for five full Plan Years may withdraw up to 100% of
the amount in his Employer Contribution Account as of the next preceding
Valuation Date, by giving written notice of not less than 30 days (in such form
and in such manner as prescribed by the Committee) to the Committee. Such a
withdrawal shall cause the Member to be suspended from participation in the Plan
for a period of 180 days from the end of the payroll period following the
election to make the withdrawal following the date of the distribution. A
withdrawal by a Member from his Employer Contribution Account will be limited to
one such withdrawal every five full Plan Years.
6.3 Limitation on Withdrawals: Any provision of Section 6.2 hereof to the
contrary notwithstanding, an Employee on suspended status may not make a
withdrawal and an Employee must withdraw the entire amount in his Prior Plan
Account and Rollover Account, if any, prior to exercising his right to withdraw
from his Employer Contribution Account.
6.4 Withdrawal from Pre-Tax Contribution Account: Any Member who has
attained age 59 1/2 may withdraw all or any part of his Pre-Tax Contributions,
plus any earnings thereon, by filing an appropriate request therefor with the
Committee. A withdrawal under this Section 6.4 may be made no more than once in
a calendar year. A withdrawal from the Pre-Tax Contribution Account under this
Section shall not affect the Member's remaining rights hereunder.
6.5 Hardship Withdrawals: A Member may at any time file with the
Committee an appropriate written request for a hardship withdrawal from his Pre-
Tax Contribution Account excluding any Income of the Trust Fund allocated to his
Pre-Tax Contribution Account (under the Plan or the Prior Plan) on or after
January 1, 1989. The approval or disapproval of such request shall be within
the sole discretion of the Committee. A Member must first withdraw any
available amount credited to his Employer Contribution Account, After Tax
Contribution Account, Prior Plan Account
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and Rollover Account, if any, in order to be permitted to make a hardship
withdrawal from his Pre-Tax Contribution Account and must also have taken all
distributions and loans otherwise available under this Plan and all employee
plans maintained by the Member's Employer. The Member must certify that he is
facing a hardship creating an immediate and substantial financial need and that
the resources necessary to satisfy that financial need are not reasonably
available from other sources available to the Member. The amount of the hardship
withdrawal shall be limited to that amount which the Committee determines to be
required to meet the immediate financial need created by the hardship including
anticipated federal and state income taxes and penalties resulting from the
distribution. The hardship withdrawal distribution shall be made in cash as soon
as practicable after the Member submits the hardship request and the dollar
amount withdrawn shall be determined by reference to the Pre-Tax Contribution
Account as of the Valuation Date immediately preceding the date of withdrawal,
plus the net dollar amount of his Pre-Tax Contributions for the Plan Quarter
within which the withdrawal occurs. A Member who receives a hardship withdrawal
shall be prohibited from making pre-tax contributions and employee contributions
to this Plan and any other plan maintained by the Employer (except "welfare
plans" as defined in Section 3(1) of ERISA) for four full calendar quarters
following the date of distribution. In addition, the dollar limitation on the
Pre-Tax Contributions described in Section 4.1 shall be reduced (but not below
zero) in the Plan Year following the hardship withdrawal by the amount of Pre-
Tax Contributions made by the Member of the Plan Year during which the
withdrawal was made. The following standards (or such other standards as may be
acceptable under Treasury Regulations issued pursuant to Section 401(k) of the
Code) shall be applied by the Committee on a uniform and non-discriminatory
basis in determining the existence of such a hardship:
(i) To be considered a hardship for purposes of this Section, the
event giving rise to the need for funds must relate to financial hardship
resulting from:
(1) medical expenses (described in Code Section 213(d) previously
incurred by the Member or the Member's Spouse or dependents (as
defined in Code Section 152) or necessary for those persons to obtain
medical care (as evidenced by a written estimate thereof);
(2) purchase (excluding mortgage payments) of a principal
residence for the Member;
(3) payment for tuition for the next 12 months of post secondary
education for the Member or the Member's spouse, children or
dependents (as defined in Code Section 152); or
(4) the need to prevent the eviction of the Member from his
principal residence or foreclosure on the mortgage of the Member's
principal residence.
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A person shall be considered to be dependent on the Member if the
Member certifies that he reasonably expects to be entitled to claim that
person as a dependent for Federal income tax purposes for a calendar year
coinciding with the Plan Year in which the certification of hardship is
made.
(ii) A financial need shall be considered immediate if it must be
satisfied in substantial part within a period of 12 months from the date
on which the Member certifies his eligibility for a hardship withdrawal.
A financial need shall be considered substantial if it exceeds 10% of the
Member's annual Compensation.
6.6 Loans to Members: A Member who is an Employee and, to the extent not
resulting in discrimination prohibited by Section 401(a)(4) of the Code, any
other Member or any Beneficiary (including an "alternate payee" within the
meaning of Code Section 414(p)(8)) who is a "party in interest" with respect to
the Plan within the meaning of ERISA Section 3(14) and who must be eligible to
obtain a Plan loan in order for the exemption set forth in 29 C.F.R. Section
2550.408b-1 to apply to the Plan, (hereinafter "Borrower"), may make application
to the Committee to borrow from the Accounts maintained by or for the Borrower
in the Trust Fund, and the Committee in its sole discretion may permit such a
loan. Any such loan shall be withdrawn from the Borrower's Accounts in the
following order: first, from the Pre-Tax Contribution Account, second from the
Prior Plan Account, if any, third from the After-Tax Contribution Account,
fourth from the Employer Contribution Account and last from the Rollover
Account, if any. Loans shall be granted in a uniform and nondiscriminatory
manner on terms and conditions determined by the Committee which shall not
result in more favorable treatment of highly compensated employees and shall be
set forth in written procedures promulgated by the Committee in accordance with
applicable governmental regulations. All such loans shall also be subject to
the following terms and conditions:
(a) The amount of the loan shall not exceed the lesser of (i) $50,000,
or (ii) 50% of the present value of the Borrower's vested Account balance
under the Plan. In no event shall a loan of less than $1,000 be made to a
Borrower. A Borrower may not initiate a loan more than once every six
months; may not have more than one loan outstanding at a time under this
Plan and may not refinance an outstanding loan.
(b) The loan shall be for a term not to exceed five years, unless the
loan is used to acquire any dwelling unit which within a reasonable time
is to be used as a principal residence of the Borrower. A loan for the
purchase of a principal residence shall be for a term not to exceed 20
years. The loan shall be evidenced by a note signed by the Borrower. The
loan shall be payable in periodic installments and shall bear interest at
a reasonable rate which shall be determined by the Committee on a uniform
and consistent basis and set forth in the procedures in accordance with
applicable governmental regulations. Payments by a Borrower who is an
Employee receiving compensation from the Employer will be made by means of
payroll deduction from the Borrower's compensation. If the
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Borrower is not receiving compensation from the Employer, the loan
repayment shall be made in accordance with the terms and procedures
established by the Committee. A Borrower may repay an outstanding loan in
a single lump-sum payment before the scheduled due date for repayment of
such loan but may not accelerate the payment of the loan by increasing the
amount of the installments.
(c) In the event an installment payment is not paid on a scheduled due
date, the Committee shall give written notice to the Borrower sent to his
last known address. If such installment payment is not made within 60
days thereafter, the Committee may proceed with foreclosure in order to
collect the full remaining loan balance or shall make such other
arrangements with the Borrower as the Committee deems appropriate.
Foreclosures need not be effected until occurrence of a distributable
event under the terms of the Plan and no rights against the Borrower or
the security shall be deemed waived by the Plan as a result of such delay.
(d) The unpaid balance of the loan, together with interest thereon,
shall become due and payable upon the date of distribution of the Account
or as set forth in the applicable procedures and the Trustee shall first
satisfy the indebtedness from the amount payable to the Borrower or to the
Borrower's Beneficiary before making any payments to the Borrower or to
the Beneficiary.
(e) Any loan to a Borrower under the Plan shall be adequately secured.
Such security shall include a pledge of a portion of the Borrower's right,
title and interest in the Trust Fund which shall not exceed 50% of the
present value of the Borrower's vested Account balance under the Plan as
determined immediately after the loan is extended. Such pledge shall be
evidenced by the execution of a promissory note by the Borrower which
shall grant the security interest and provide that, in the event of any
default by the Borrower on a loan repayment, the Committee shall be
authorized to take any and all appropriate lawful actions necessary to
enforce collection of the unpaid loan. The borrower may not reduce the
Account's value below the value of any outstanding loan balance. Thus, a
loan may limit availability of funds for withdrawal.
(f) A request by a Borrower for a loan shall be made by telephone
through a voice response system specifying the amount of the loan. If a
Borrower's request for a loan is approved, the Trustee shall make the loan
in a lump-sum payment of cash to the Borrower.
(g) A loan to a Borrower shall be considered an investment of the
separate Account(s) of the Borrower from which the loan is made. All loan
repayments shall be credited to an "L Account" and thereafter reinvested
in accordance with such Member's investment election for future
contributions as further provided in Section 9.4.
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ARTICLE VII
MEMBERS' BENEFITS
7.1 Retirement of Members on or after Retirement Date: Any Member who
terminates his Service on or after age 55 shall be vested in and entitled to
receive the entire amount of his Account. The "entire amount" in such Member's
Account at termination of employment shall include any After-Tax Contributions,
Pre-Tax Contributions and Employer Matching Contributions to be made as of the
end of the month in which termination of Service occurs. Payment of benefits
due under this Section shall be made in accordance with Section 8.1.
7.2 Disability of Members: If the Committee shall find and advise the
Trustee that Service of a Member has been terminated because of physical or
mental disability, which in the judgment of the Committee, based upon advice of
competent physicians of their selection, will permanently prevent such Member
from resuming his Service with an Employer, such Member shall become entitled to
receive the entire amount of his Account. The "entire amount" in such Member's
Account shall include any After-Tax Contributions, Pre-Tax Contributions and
Employer Matching Contributions to be made as of the end of the month in which
termination of Service occurs. Payment of benefits due under this Section shall
be made in accordance with Section 8.1.
7.3 Death of Members: In the event of the termination of Service of any
Member by death, and after receipt by the Committee of acceptable proof of
death, his Beneficiary shall be entitled to receive the entire amount in the
Member's Account. The "entire amount" in such Member's Account shall include
any After-Tax Contributions, Pre-Tax Contributions and Employer Matching
Contributions to be made as of the end of the month in which termination of
Service occurs. Payment of benefits due under this Section shall be made in one
lump sum.
7.4 Other Termination of Service:
A. Distributions: In the event of termination of Service of any
Member for any reason other than retirement on or after age 55,
disability or death, a Member shall, subject to the further provisions
of this Plan, be entitled to receive the entire amount credited to his
After-Tax Contribution Account, Pre-Tax Contribution Account, Rollover
Account and Prior Plan Account, plus any of his After-Tax and Pre-Tax
Contributions made for the month of termination of Service, but not
yet allocated. In addition, if the Member has completed at least five
years of Service, he will be eligible to receive 100% of his Employer
Contribution Account; provided, however, that a Prior Plan Member of
the Jiffy Lube International, Inc. 401(k) Plan and Trust Agreement who
has completed three years of Service at the time such Prior Plan
Member becomes a Member will be eligible to receive 100% of his
Employer Contribution Account as of the completion of such three years
of
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Service. Upon termination of Service by a Member who has not completed
the required years of Service described in the preceding sentence, the
following schedule will apply:
Years of Service Vested Percent
---------------- --------------
Less than 2 0%
2 25%
3 50%
4 75%
5 100%
Notwithstanding the above to the contrary, any Employee or Member who
is subject to immediate taxation on his Employer Matching
Contributions pursuant to applicable Canadian income tax laws shall at
all times be 100% vested in his Employer Contribution Account. Payment
of benefits due under this Section shall be made in accordance with
Section 8.1.
If a Member terminates Service and, at the time of termination, the
present value of the Member's vested benefit is zero, the Member will
be deemed to have received a distribution of such vested benefit.
B. Forfeitures: This Section 7.4B does not apply to Members who
are fully vested at the time of termination of Service.
If a Member receives an actual or deemed distribution pursuant to this
Section 7.4 prior to the close of the second Plan Year following the
Plan Year in which the Member's Service terminates, the nonvested
portion of his Employer Contribution Account shall be treated as a
Forfeiture and shall become available for allocation as provided in
Section 4.8. If a Member who has received a distribution as described
in this paragraph thereafter resumes Service under the Plan, he shall
be entitled to have the amount of such Forfeiture reinstated to such
Account by making a lump-sum cash payment to the Plan equal to the
full amount of the prior distribution before the earlier of (a) five
years after the first date on which the Member is subsequently
reemployed by the Employer or (b) the conclusion of five consecutive
one-year Breaks In Service following the date of distribution.
If a Member does not receive a distribution of his vested benefit by
the close of the second Plan Year following the Plan Year in which his
Service terminates, but elects to receive such a distribution before
incurring five consecutive one-year Breaks In Service, the nonvested
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balance in the Member's Employer Contribution Account shall be
credited to a suspense account at the time of distribution of the
vested benefit. If such a Member is thereafter reemployed prior to
incurring five consecutive one-year Breaks In Service, the Member's
vested interest in the suspense account, including any gains or losses
thereon, at any subsequent relevant time shall be an amount "X"
determined by the following formula: X = P(AB + D) - D, where AB is
the suspense account balance at the relevant time, P is the vested
percentage at the relevant time and D is any amount or amounts
previously distributed. If the Member is not reemployed before he has
incurred five consecutive one-year Breaks In Service, his suspense
account shall be treated as a Forfeiture and shall become available
for allocation as described in Section 4.8.
If a Member does not receive a distribution of his vested benefit
before incurring five consecutive one-year Breaks In Service, the
nonvested balance in the Member's Employer Contribution Account shall
then be forfeited and shall become available for allocation as
described in Section 4.8.
7.5 Valuation Dates Determinative of Member's Rights: In the case of any
Member whose Service is terminated for any reason, the amount to which such
Member or his Beneficiary is entitled upon such termination of Service shall be
determined as of the Valuation Date coinciding with or next following his
termination of Service.
7.6 Terminated After Change of Control: Notwithstanding the above
provisions of this Article VII to the contrary, in the event that any Member's
Service terminates for any reason within two years after a Change of Control has
occurred, such Member shall be fully vested and shall be entitled to receive
100% of his Employer Contribution Account upon the date of his termination of
Service.
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ARTICLE VIII
PAYMENT OF BENEFITS
8.1 Payment of Benefits:
(a) Form of Benefits: Upon a Member's entitlement to payment of
benefits under Section 7.1, 7.2 or 7.4, he shall file with the Committee
his written election on such form or forms, and subject to such conditions,
as the Committee shall provide. Payment of a Member's benefits will be
made, at the election of the Member, by payment in one lump sum or the
purchase of an annuity contract.
(i) Lump-Sum Distribution: The normal form of distribution under
the Plan shall be a lump-sum distribution. The amount which a Member,
former Member or Beneficiary is entitled to receive from his After-Tax
and/or Pre-Tax Contribution Accounts at any time and from time to time
may be paid in cash or in common stock of the Company, or in any
combination thereof, provided no discrimination in value results
therefrom. The amount which a Member, former Member or Beneficiary is
entitled to receive from his Employer Contribution Account at any time
and from time to time shall be paid in shares of common stock of the
Company unless such Member has elected to receive the vested balance
in his Employer Contribution Account in cash.
(ii) Annuity Contract: In lieu of receiving a lump-sum
distribution as provided in subparagraph (i) above, a Member may make
a written request to the Committee to apply the total amount to which
he is entitled to the purchase of an annuity contract. Any such
annuity contract shall be distributed at the time provided under
Section 8.1(b). An annuity contract distributed hereunder shall be
purchased from an insurance company or other corporation approved by
the Committee and shall be a single premium, immediate or deferred
annuity contract providing a pension for the Member with payments
guaranteed for a period certain, such period not to exceed the
actuarially estimated life expectancy of the Member. Any request by a
Member to receive a distribution in the form of an annuity contract
must be received by, or mailed to, the Committee at least 30 days
prior to the payment date specified in Section 8.1(b); otherwise,
payment will be made in a lump sum. Any annuity contract distributed
by the Trustee pursuant to the provisions of this Plan shall bear on
the face thereof the designation "Not Transferable," and such annuity
contract shall expressly provide that this contract may not be sold,
assigned, discounted or pledged as collateral for a
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loan as or as security for the performance of an obligation or for any
other purpose or to any person other than this Company.
(b) Timing of Benefits: The day following the date of the Member's
termination of Service is the earliest date that payment of his benefits
may commence and is herein referred to as such Member's "Distribution
Date." Payment of a Member's benefits shall be made or commence as soon as
practicable after his Distribution Date, subject to the Member's election
to defer receipt thereof, but in any event must be made or commence prior
to the expiration of 60 days after the Annual Valuation Date of the Plan
Year within which such Member's Retirement Date occurs.
If the amount to which a terminated Member is entitled is not
more than $5,000, such amount shall be paid to the Member as soon as
practicable after his Distribution Date; if such amount is in excess of
$5,000, the distribution shall be made only if the Member so consents. If
such consent is withheld, distribution of the amount to which the
terminated Member is entitled shall be made to such Member within 60 days
after the end of the Plan Year in which occurs the earlier of the Member's
death or his Retirement Date. If a Member's termination of Service occurs
after his Retirement Date, distribution shall be made within 60 days after
the end of the Plan Year in which termination occurs. If such consent is
withheld and the distribution of a Member's Account is delayed as provided
immediately above, the amount to which such Member is otherwise entitled
shall be segregated by the Trustee and deposited in an interest bearing
account for ultimate distribution pursuant to the above provisions of this
Section 8.1. Distribution of a Member's Account shall be made no later
than April 1 of the calendar year following the calendar year in which the
Member attains age 70 1/2.
(c) Direct Rollovers: Notwithstanding any provision of the Plan to the
contrary that would otherwise limit a Distributee's election under this
Section 8.1(c), a Distributee may elect, at the time and in the manner
prescribed by the Committee, to have any portion of an Eligible Rollover
Distribution greater than $200 paid directly to an Eligible Retirement Plan
specified by the Distributee in a Direct Rollover. For the purposes of
this section the following definitions shall apply:
(i) "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 does not include: any
distribution that is one of a series of substantially equal periodic
payments (not less frequently than annually) made for the life (or
life expectancy) of the Distributee or the joint lives (or joint life
expectancies) of the Distributee and the Distributee's designated
beneficiary, or for a specific period of ten years or more; any
distribution to the extent such distribution is required under
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section 401(a)(9) of the Code; and the portion of any distribution
that is not includible in gross income (determined without regard to
the exclusion for net unrealized appreciation with respect to employer
securities).
(ii) "Eligible Retirement Plan" shall mean an individual
retirement account described in section 408(a) of the Code, an
individual retirement annuity described in section 408(b) of the Code,
an annuity plan described in section 403(a) of the code, or a
qualified trust described in section 401(a) of the Code, that accepts
the Distributee's Eligible Rollover Distribution. However, in the
case of an Eligible Rollover Distribution to the surviving spouse, an
Eligible Retirement Plan is an individual retirement account or
individual retirement annuity.
(iii) "Distributee" shall mean a Member or former Member of the
Plan. In addition, the Member's or Member's surviving spouse and the
Member's or former Member's spouse or former spouse who is the
alternate payee under a qualified domestic relations order, as defined
in section 414(p) of the code, are Distributees with regard to the
interest of the spouse or former spouse.
(iv) "Direct Rollover" shall mean a payment by the Plan to the
Eligible Retirement Plan specified by the Distributee.
8.2 Presenting Claims for Benefits: Any Member or the Beneficiary of any
deceased Member may submit written application to the Committee for the payment
of any benefit asserted to be due him under the Plan. Such application shall
set forth the nature of the claim and such other information as the Committee
may reasonably request. Promptly upon the receipt of any application required
by this Section, the Committee shall determine whether or not the Member or
Beneficiary involved is entitled to a benefit hereunder and, if so, the amount
thereof and shall notify the claimant of its findings.
If a claim is wholly or partially denied, the Committee shall so
notify the claimant within 90 days after receipt of the claim by the Committee,
unless special circumstances require an extension of time for processing the
claim. If such an extension of time for processing is required, written notice
of the extension shall be furnished to the claimant prior to the end of the
initial 90 day period. In no event shall such extension exceed a period of 90
days from the end of such initial period. The extension notice shall indicate
the special circumstances requiring an extension of time and the date by which
the Committee expects to render its final decision. Notice of the Committee's
decision to deny a claim in whole or in part shall be set forth in a manner
calculated to be understood by the claimant and shall contain the following:
(i) the specific reason or reasons for the denial;
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(ii) specific reference to the pertinent Plan provisions on which the
denial is based;
(iii) a description of any additional material or information
necessary for the claimant to perfect the claim and an explanation of why
such material or information is necessary; and
(iv) an explanation of the claims review procedure set forth in
Section 8.3 hereof.
If notice of denial is not furnished, and if the claim is not granted within the
period of time set forth above, the claim shall be deemed denied for purposes of
proceeding to the review stage described in Section 8.3.
8.3 Claims Review Procedure: If an application filed by a Member or
Beneficiary under Section 8.2 above shall result in a denial by the Committee of
the benefit applied for, either in whole or in part, such applicant shall have
the right, to be exercised by written application filed with the Committee
within 60 days after receipt of notice of the denial of his application or, if
no such notice has been given, within 60 days after the application is deemed
denied under Section 8.2, to request the review of his application and of his
entitlement to the benefit applied for. Such request for review may contain
such additional information and comments as the applicant may wish to present.
Within 60 days after receipt of any such request for review, the Committee shall
reconsider the application for the benefit in light of such additional
information and comments as the applicant may have presented, and if the
applicant shall have so requested, shall afford the applicant or his designated
representative a hearing before the Committee. The Committee shall also permit
the applicant or his designated representative to review pertinent documents in
its possession, including copies of the Plan document and information provided
by the Employer relating to the applicant's entitlement to such benefit. The
Committee shall make a final determination with respect to the applicant's
application for review as soon as practicable, and in any event not later than
60 days after receipt of the aforesaid request for review, except that under
special circumstances, such as the necessity for holding a hearing, such 60-day
period may be extended to the extent necessary, but in no event beyond the
expiration of one hundred 120 days after receipt by the Committee of such
request for review. If such an extension of time for review is required because
of special circumstances, written notice of the extension shall be furnished to
the applicant prior to the commencement of the extension. Notice of such final
determination of the Committee shall be furnished to the applicant in writing,
in a manner calculated to be understood by him, and shall set forth the specific
reasons for the decision and specific references to the pertinent provisions of
the Plan upon which the decision is based. If the decision on review is not
furnished within the time period set forth above, the claim shall be deemed
denied on review.
8.4 Disputed Benefits: If any dispute still exists between a Member or a
Beneficiary and the Committee after a review of the claim or in the event any
uncertainty shall develop as to the person to whom payment of any benefit
hereunder shall be made, the Trustee may withhold
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the payment of all or any part of the benefits payable hereunder to the Member
or Beneficiary until such dispute has been resolved by a court of competent
jurisdiction or settled by the parties involved.
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ARTICLE IX
TRUST AGREEMENT;
INVESTMENT FUNDS; INVESTMENT DIRECTIONS
9.1 Trust Agreement: The Company has entered into a Trust Agreement
governing the administration of the Trust established as of January 1, 1999,
under which Merrill Lynch Trust Company of Texas serves as Trustee, and the
provisions of which are herein incorporated by reference as fully as if set out
herein.
9.2 Investment Funds: The Trustee shall divide the Trust Fund into the
Company Stock Fund, the Battle Mountain Gold Company Stock Fund, the Pennzoil
Company Stock Fund and such additional Investment Funds which shall be selected
and reviewed from time to time by the Investment Committee. Notwithstanding the
foregoing, Matching Contributions on behalf of each Member who is employed by
Penreco shall be invested, during the Members Employment by Penreco,
proportionately among those Investment Funds selected by the Member for the
investment of such Member's After-Tax and Pre-Tax Contribution Account.
Contributions shall be paid into the Fund or Funds, pursuant to the
directions of the Members given in accordance with the provisions of Sections
9.3 and 9.4 as certified to the Trustee by the Committee. Except as otherwise
provided herein, interest, dividends and other income and all profits and gains
produced by each such Investment Fund shall be paid into such Investment Fund,
and such interest, dividends and other income or profits and gains, without
distinction between principal and income, may be invested and reinvested but
only in the property hereinabove specified for the particular Investment Fund.
As allowed in the exception provided in Section 407 of ERISA, amounts in excess
of 10% of the assets in the Trust Fund may be invested in Company Stock.
Notwithstanding any provision in this Section to the contrary, the Committee may
direct the Trustee to invest (i) After-Tax, Pre-Tax, or Employer Matching
Contributions in short-term fixed income investments which are acceptable to the
Trustee or in the suspense account to be maintained in each Investment Fund
during the period from the date of any such Contribution until the next
Valuation Date or (ii) all or any portion of the Trust Fund attributable to any
terminated or retired Member or attributable to any Member who is expected to
retire or to terminate his Service within one year, in one or more fixed income
investments which are acceptable to the Trustee. The fixed income investments
authorized by this Section shall include, but not be limited to, certificates of
deposit, savings accounts, or United States Treasury bills or notes.
9.3 Investment Directions of Members: Each Member may invest his After-Tax
and Pre-Tax Contribution Accounts and his Prior Plan Account in increments of 5%
in such Investment Funds as selected by the Investment Committee.
In the event a Member fails to direct the manner of investing his
After-Tax or Pre-Tax Contribution Accounts as provided herein, such Account
shall be invested in such fund as designated by the Investment Committee as the
fixed income fund. All Employer Matching Contributions on
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behalf of each Member shall be invested solely in shares of the common stock of
the Company to be held in the Company Stock Fund.
Each Member who has attained age 55 may direct that all or a part of
his Prior Plan Employer Account consisting of full shares of PennzEnergy Company
common stock and his existing Employer Contribution Account consisting of full
shares of common stock of the Company be liquidated and the proceeds invested
among the various Investment Funds as provided in this Section 9.3.
9.4 Change of Investment Directions: No more than 12 times annually,
each Member may by telephone voice response system, in the manner prescribed by
the Committee and subject to any restrictions or conditions which may be
established by the Committee, direct the investment of his future and/or
transfer of his existing After-Tax and/or Pre-Tax Contributions and the transfer
of assets in his Prior Plan Account, other than those held in the Battle
Mountain Gold Company Stock Fund, among the various Investment Funds in a
minimum increment of 5%.
9.5 Benefits Paid Solely from Trust Fund: All of the benefits to be paid
under Article VIII shall be paid by the Trustee out of the Trust Fund to be
administered under such Trust Agreement. No fiduciary shall be responsible or
liable in any manner for payment of any such benefits, and all Members hereunder
shall look solely to such Trust Fund and to the adequacy thereof /for the
payment of any such benefits of any nature or kind which may at any time be
payable hereunder.
9.6 Committee Directions to Trustee: The Trustee shall make only such
distributions and payments out of the Trust Fund as may be directed by the
Committee. The Trustee shall not be required to determine or make any
investigation to determine the identity or mailing address of any person
entitled to any distributions and payments out of the Trust Fund and shall have
discharged its obligation in that respect when it shall have sent certificates
and checks or other papers by ordinary mail to such persons and addresses as may
be certified to it by the Committee.
9.7 Authority to Designate Investment Manager: The Investment Committee
may appoint an investment manager or managers to manage (including the power to
acquire and dispose of) any assets of the Trust Fund in accordance with the
terms of the Trust Agreement and ERISA.
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ARTICLE X
ADOPTION OF PLAN BY OTHER ORGANIZATIONS;
SEPARATION OF THE TRUST FUND;
AMENDMENT AND TERMINATION OF THE PLAN;
DISCONTINUANCE OF CONTRIBUTIONS TO THE TRUST FUND
10.1 Adoptive Instrument: Any corporation or other organization with
employees, now in existence or hereafter formed or acquired which is not already
an Employer under this Plan and which is otherwise legally eligible, may, with
the approval of the Company by action of the Board of Directors, adopt and
become an Employer under this Plan by executing and delivering to the Company
and the Trustee an adoptive instrument specifying the classification of its
Employees who are to be eligible to participate in the Plan and by agreeing to
be bound as an Employer by all the terms of the Plan with respect to its
eligible Employees. The adoptive instrument may contain such changes and
variations in the terms of the Plan as may be acceptable to the Company. Any
such approved organizations which shall adopt this Plan shall designate the
Company as its agent to act for it in all transactions affecting the
administration of the Plan and shall designate the Committee to act for such
Employer and its Members in the same manner in which the Committee may act for
the Company and its Members hereunder. The adoptive instrument shall specify
the effective date of such adoption of the Plan and shall become, as to such
adopting Employer and its Employees, a part of this Plan. The Company may, in
its absolute discretion, terminate an adopting Employer's participation at any
time when in its judgment such adopting Employer fails or refuses to discharge
its obligations under the Plan.
Notwithstanding the above provisions of this Section or any other
provision of this Plan to the contrary, any employee or Member who becomes an
employee (pursuant to transfer or otherwise) of a subsidiary of a participating
Employer the outstanding common stock of which is at least 80% owned by said
participating Employer (or owned by a new subsidiary owned by a participating
Employer) will be eligible to participate in the Plan provided any such employee
or Member is paid through a payroll office located in the United States and
otherwise meets the eligibility requirements of the Plan. It shall not be
necessary for any such first-tier or second-tier subsidiary of a participating
Employer to formally adopt the Plan, such adoption to be deemed automatic if
this provision becomes operative unless (after due notice) the board of
directors or other appropriate governing authority of such subsidiary shall
direct otherwise within one year of the effective date of such adoption.
10.2 Separation of the Trust Fund: A separation of the Trust Fund as to
the interest therein of the Members of any particular Employer may be made by an
Employer at any time. In such event, the Trustee shall set apart that portion
of the Trust Fund which shall be allocated to such Members pursuant to a
valuation and allocation of the Trust Fund made in accordance with the
procedures set forth in Sections 5.2 and 5.4, but as of the date when such
separation of the Trust Fund shall be effective. Such portion may in the
Trustee's discretion be set apart in cash or in kind out of the properties of
the Trust Fund. That portion of the Trust Fund so set apart shall continue to
be held by the Trustee as though such Employer had entered into the Trust
Agreement as a
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separate trust agreement with the Trustee. Such Employer may in such event
designate a new trustee of its selection to act as trustee under such separate
trust agreement. Such Employer shall thereupon be deemed to have adopted the
Plan as its own separate plan, and shall subsequently have all such powers of
amendment or modification of such plan as are reserved herein to the Company.
10.3 Voluntary Separation: If any Employer shall desire to separate its
interest in the Trust Fund, it may request such a separation in a notice in
writing to the Company and the Trustee. Such separation shall then be made as
of any specified date after service of such notice, and such separation shall be
accomplished in the manner set forth in Section 10.2.
10.4 Amendment of the Plan: The Company shall have the right to amend or
modify this Plan and (with the consent of the Trustee) the Trust Agreement at
any time and from time to time to any extent that it may deem advisable. Any
such amendment or modification shall be set out in an instrument in writing duly
authorized by the Board of Directors and executed by the Company. No such
amendment or modification shall, however, increase the duties or
responsibilities of the Trustee without its consent thereto in writing, or have
the effect of transferring to or vesting in any Employer any interest or
ownership in any properties of the Trust Fund, or of permitting the same to be
used for or diverted to purposes other than for the exclusive benefit of the
Members and their Beneficiaries. No such amendment shall decrease the Account
of any Member or shall decrease any Member's vested interest in his Account.
Notwithstanding anything herein to the contrary, the Plan or the Trust Agreement
may be amended in such manner as may be required at any time to make it conform
to the requirements of the Code or of any United States statutes with respect to
employees' trusts, or of any amendment thereto, or of any regulations or rulings
issued pursuant thereto, and no such amendment shall be considered prejudicial
to any then existing rights of any Member or his Beneficiary under the Plan.
No amendment shall directly or indirectly reduce a Member's
nonforfeitable vested percentage in his benefits under Section 7.4 unless each
Member having not less than three (3) years of Service is permitted to elect to
have his non-forfeitable vested percentage in his benefits under Section 7.4
computed under the provisions of Section 7.4 without regard to the amendment.
Such election shall be available during an election period which shall begin on
the date such amendment is adopted and shall end on the latest of (i) the date
sixty (60) days after such amendment is adopted, (ii) the date sixty (60) days
after such amendment is effected, or (iii) the date sixty (60) days after such
Member is issued written notice of the amendment by the Administrative Committee
or the Employer.
10.5 Acceptance or Rejection of Amendment by Employers: The Company shall
promptly deliver to each other Employer any amendment to this Plan or the Trust
Agreement. Each such Employer will be deemed to have consented to such
amendment unless it notifies the Company and the Trustee in writing within 30
days after receipt of the amendment that it does not consent thereto, and
requests a separation of its interest in the Trust Fund in accordance with the
provisions of Section 10.2, as of the first day of the month following such
written notification to the Company and the Trustee.
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10.6 Termination of the Plan: A termination of the Plan as to any
particular Employer (and only as to any such particular Employer) shall occur
under the following circumstances:
(a) The Plan may be terminated by the delivery to the Trustee of an
instrument in writing approved and authorized by the board of directors of
such Employer. In such event, termination of the Plan shall be effective
as of any subsequent date specified in such instrument.
(b) Except as otherwise provided in Section 10.10, the Plan shall
terminate effective at the expiration of 60 days following the merger into
another corporation or dissolution of any Employer, or following any final
legal adjudication of any Employer as a bankrupt or an insolvent, unless
within such time a successor organization approved by the Company shall
deliver to the Trustee a written instrument certifying that such
organization has (i) become the Employer of more than 50% of those
Employees of such Employer who are then Members under this Plan and (ii)
adopted the Plan as to its Employees. In any such event the interest in
the Plan of any Member whose employment may not be continued by the
successor shall be fully vested as of the date of termination of his
Service, and shall be payable in cash or in kind within 6 months from the
date of termination of his Service.
(c) In the event of termination of the Plan as herein provided, any
amounts attributable to a Member's Pre-Tax Contributions may not be
distributed earlier than upon one of the following events:
(i) The Member's retirement, death, disability or separation from
Service;
(ii) The termination of the Plan without establishment or
maintenance of another defined contribution plan (other than an ESOP
or SEP);
(iii) The Member's attainment of age 59 1/2, or the Member's
hardship;
(iv) The sale or other disposition by an Employer to an unrelated
corporation of substantially all of the assets used in a trade or
business, but only with respect to Employees who continue employment
with the acquiring corporation and the acquiring corporation does not
maintain the Plan after the disposition; and
(v) The sale or other disposition by an Employer of its interest
in a subsidiary to an unrelated entity but only with respect to
Employees who continue employment with the subsidiary and the
acquiring entity does not maintain the Plan after the disposition.
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A distribution may be made pursuant to the provisions of paragraphs
(iv) and (v) of this Section 10.6(c) only if the Employer continues to
maintain the plan after the disposition. A distribution may be made
pursuant to paragraphs (ii), (iv) and (v) of this Section 10.6(c) only if
the distribution is a lump-sum distribution.
10.7 Liquidation and Distribution of Trust Fund Upon Termination: In the
event a complete or partial termination of the Plan in respect of any Employer
shall occur, a separation of the Trust Fund in respect of the affected Members
of such Employer shall be made as of the effective date of such termination of
the Plan in accordance with the procedure set forth in Section 10.2. Following
separation of the Trust Fund in respect of the Members of any Employer as to
whom the Plan has been terminated, the assets and properties of the Trust Fund
so set apart, other than common stock of the Company, shall be reduced to cash
as soon as may be expeditious under the circumstances. Any administrative costs
or expenses incurred incident to the final liquidation of such separate trust
funds shall be paid by the Employer, except that in the case of bankruptcy or
insolvency of such Employer any such costs shall be charged against the Trust
Fund. Following such partial reduction of such Trust Fund to cash, the Accounts
of the Members shall then be valued as provided in Sections 5.2 and 5.4 and
shall be fully vested, whereupon each such Member shall become entitled to
receive the entire amount in his Account in cash and/or common stock of Pennzoil
Company, as directed by the Committee. The terminating Employer shall promptly
advise the appropriate District Director of the Internal Revenue Service of such
complete or partial termination. Any distribution due to the termination of the
Plan will be made in accordance with the requirements of Code Sections
401(a)(11), 411(d)(6) and 417.
10.8 Effect of Termination or Discontinuance of Contributions: If any
Employer shall terminate or partially terminate the Plan as to its Employees,
then all amounts credited to the Accounts of the Members of such Employer with
respect to whom the Plan has terminated shall become fully vested and non-
forfeitable. If any Employer shall completely discontinue its Contributions to
the Trust Fund or suspend its Contributions to the Trust Fund under such
circumstances as to constitute a complete discontinuance of Contributions within
the meaning of Section 1.401-6(c) of the regulations under the Code, then all
amounts credited to the Accounts of the Members of such Employer shall become
fully vested and non-forfeitable, and throughout any such period of
discontinuance of Contributions by an Employer all other provisions of the Plan
shall continue in full force and effect with respect to such Employer other than
the provisions for Contributions by such Employer.
10.9 Merger of Plan with Another Plan: In the event of any merger or
consolidation of the Plan with, or transfer in whole or in part of the assets
and liabilities of the Trust Fund to another trust fund held under, any other
plan of deferred compensation maintained or to be established for the benefit of
all or some of the Members of this Plan, the assets of the Trust Fund applicable
to such Members shall be transferred to the other trust fund only if:
(a) Each Member would (if either this Plan or the other plan then
terminated) receive a benefit immediately after the merger, consolidation
or transfer which is equal to or greater than the benefit he would have
been entitled to receive
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immediately before the merger, consolidation or transfer (if this Plan had
then terminated);
(b) Resolutions of the board of directors of the Employer under this
Plan, or of any new or successor employer of the affected Members, shall
authorize such transfer of assets, and, in the case of the new or successor
employer of the affected Members, its resolutions shall include an
assumption of liabilities with respect to such Members' inclusion in the
new employer's plan; and
(c) Such other plan and trust are qualified under Sections 401(a) and
501(a) of the Code.
10.10 Consolidation or Merger with Another Employer: Notwithstanding
any provision of this Article X to the contrary, upon the consolidation or
merger of two or more Employers under this Plan with each other, the surviving
Employer or organization shall automatically succeed to all the rights and
duties under the Plan and Trust of the Employers involved, and their shares of
the Trust Fund shall, subject to the provisions of Section 10.9, be merged and
thereafter be allocable to the surviving Employer or organization for its
Members and their Beneficiaries.
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ARTICLE XI
MISCELLANEOUS PROVISIONS
11.1 Terms of Employment: The adoption and maintenance of the provisions
of this Plan shall not be deemed to constitute a contract between any Employer
and Employee, or to be a consideration for, or an inducement or condition of,
the employment of any person. Nothing herein contained shall be deemed to give
to any Employee the right to be retained in the employ of an Employer or to
interfere with the right of an Employer to discharge an Employee at any time,
nor shall it be deemed to give to an Employer the right to require any Employee
to remain in its employ, nor shall it interfere with any Employee's right to
terminate his employment at any time.
11.2 Controlling Law: Subject to the provisions of ERISA, this Plan shall
be construed, regulated and administered under the laws of the State of Texas.
11.3 Invalidity of Particular Provisions: In the event any provision of
this Plan shall be held illegal or invalid for any reason, said illegality or
invalidity shall not affect the remaining provisions of this Plan but shall be
fully severable, and this Plan shall be construed and enforced as if said
illegal or invalid provisions had never been inserted herein.
11.4 Non-Alienation of Benefits: No benefit which shall be payable out of
the Trust Fund to any person (including a Member or 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 the extent as may be required by law.
This provision shall not apply to a "qualified domestic relations
order" defined in Code Section 414(p), and those other domestic relations orders
permitted to be so treated by the Committee under the provisions of the
Retirement Equity Act of 1984. The Committee 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
Member shall be treated as the spouse or surviving spouse for all purposes of
the Plan. If, from and after April 1, 1990, the Committee receives a qualified
domestic relations order with respect to a Member, the Committee may authorize
the immediate distribution of the amount assigned to the Member's former spouse
pursuant to such order, to the extent vested and permitted by law, from the
Member's Accounts.
11.5 Payments in Satisfaction of Claims of Members: Any payment or
distribution to any Member or his legal representative or any Beneficiary in
accordance with the provisions of this Plan shall be in full satisfaction of all
claims under the Plan against the Trust Fund, the Trustee and the Employer. The
Trustee may require that any distributee execute and deliver to the Trustee a
receipt
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and a full and complete release as a condition precedent to any payment or
distribution under the Plan.
11.6 Payments Due Minors and Incompetents: If the Committee determines
that any person to whom a payment is due hereunder is a minor or is incompetent
by reason of physical or mental disability, the Committee shall have the power
to cause the payments becoming due such person to be made to another for the
benefit of such minor or incompetent, without the Committee or the Trustee being
responsible to see to the application of such payment. To the extent permitted
by ERISA, payments made pursuant to such power shall operate as a complete
discharge of the Committee, the Trustee and the Employer.
11.7 Impossibility of Diversion of Trust Fund: Notwithstanding any
provision herein to the contrary, no part of the corpus or the income of the
Trust Fund shall ever be used for or diverted to purposes other than for the
exclusive benefit of the Members or their Beneficiaries or for the payment of
expenses of the Plan. No part of the Trust Fund shall ever directly or
indirectly revert to any Employer.
11.8 Evidence Furnished Conclusive: The Employer, the Committee and any
person involved in the administration of the Plan or management of the Trust
Fund shall be entitled to reply upon any certification, statement or
representation made or evidence furnished by a Member or Beneficiary with
respect to facts required to be determined under any of the provisions of the
Plan, and shall not be liable on account of the payment of any monies or the
doing of any act or failure to act in reliance thereon. Any such certification,
statement, representation or evidence, upon being duly made or furnished, shall
be conclusively binding upon such Member or Beneficiary but not upon the
Employer or the Committee or any other person involved in the administration of
the Plan or management of the Trust Fund. Nothing herein contained shall be
construed to prevent any of such parties from contesting any such certification,
statement, representation or evidence or to relieve the Member or Beneficiary
from the duty of submitting satisfactory proof of such fact.
11.9 Copy Available to Members: A copy of the Plan, and of any and all
future amendments thereto, shall be provided to the Committee and shall be
available to Members and, in the event of the death of a Member, to his
Beneficiary, for inspection at the offices of his Employer during the regular
office hours of the Employer.
11.10 Unclaimed Benefits: If at, after or during the time when a
benefit hereunder is payable to any Member, Beneficiary or other distributee,
the Committee, upon request of the Trustee, or at its own instance, shall mail
by registered or certified mail to such Member, Beneficiary or other distributee
at his last known address a written demand for his then address or for
satisfactory evidence of his continued life, or both, and if such Member,
Beneficiary or distributee shall fail to furnish the same to the Committee
within two years from the mailing of such demand, then the Committee may, in its
sole discretion, determine that such Member, Beneficiary or other distributee
has forfeited his right to such benefit and may declare such benefit, or any
unpaid portion thereof, terminated as if the death of the distributee (with no
surviving Beneficiary) had occurred on the date of the last payment made
thereon, or on the date such Member, Beneficiary or distributee first
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became entitled to receive benefit payments, whichever is later; provided,
however, that such forfeited benefit shall be reinstated if a claim for the same
is made by the Member, Beneficiary or other distributee at any time thereafter.
Such reinstatement shall be made out of the Forfeitures for the Plan Year during
which such claim was filed with the Committee (as provided in Section 4.8); and,
if Forfeitures for the Plan Year are insufficient to reinstate such amounts, the
Employer shall make the Minimum Contribution required under Section 4.2 hereof.
11.11 Headings for Convenience Only: The headings and subheadings
herein are inserted for convenience of reference only and are not to be used in
construing this instrument or any provision thereof.
11.12 Successors and Assigns: This agreement shall bind and inure to
the benefit of the successors and assigns of the Employers.
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ARTICLE XII
TOP-HEAVY PLAN REQUIREMENTS
12.1 General Rule: For any Plan Year for which this Plan is a Top-Heavy
Plan, as defined in Section 12.8, despite any other provisions of this Plan to
the contrary, this Plan shall be subject to the provisions of this Article XII.
12.2 Vesting Provisions: Each Member who has completed an Hour of Service
after the Plan becomes top-heavy and while the Plan is top-heavy and who has
completed the Vesting Service specified in the following table shall be vested
in his account under this Plan at least as rapidly as is provided in the
following schedule; except that the vesting provision set forth in Section 7.4
shall be used at any time in which it provides for more rapid vesting:
Vesting Service Vested Percentage
--------------- -----------------
Less than 2 years 0%
2 but less than 3 years 20%
3 but less than 4 years 40%
4 but less than 5 years 60%
5 but less than 6 years 80%
6 years or more 100%
If an account becomes vested by reason of the application of the preceding
schedule, it may not thereafter be forfeited by reason of re-employment after
retirement pursuant to a suspension of benefits provision, by reason of
withdrawal of any mandatory employee contributions to which employer
contributions were keyed, or for any other reason. If the Plan subsequently
ceases to be top-heavy, the preceding schedule shall continue to apply with
respect to any Member who had at least three years of service (as defined in
Treasury Regulation Section 1.411(a)-8T(b)(3)) as of the close of the last year
that the Plan was top-heavy. For all other Members, the vested percentage
provided in the preceding schedule prior to the date the Plan ceases to be top-
heavy shall not be reduced.
12.3 Minimum Contribution Percentage: Each Member who is (i) a Non-Key
Employee, as defined in Section 12.8 and (ii) employed on the last day of the
Plan Year will be entitled to have contributions and forfeitures (if applicable)
allocated to his account of not less than 3% (the "Minimum Contribution
Percentage") of the Member's Compensation. This minimum allocation percentage
shall be provided without taking pre-tax contributions into account. A Non-Key
Employee may not fail to receive a Minimum Contribution Percentage because of a
failure to receive a specified minimum amount of compensation or a failure to
make mandatory employee or elective contributions. This Minimum Contribution
Percentage will be reduced for any Plan Year to the percentage at which
contributions (including forfeitures if applicable) are made or are required to
be made under the Plan for the Plan Year for the Key Employee for whom such
percentage is the highest for such Plan Year. For this purpose, the percentage
with respect to a Key Employee will
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be determined by dividing the contributions (including forfeitures if
applicable) made for such Key Employee by his total compensation (as defined in
Section 415 of the Code) not in excess of $200,000 for the Plan Year. Such
amount will be adjusted in the same manner as the amount set forth in Section
12.4 below.
Contributions considered under the first paragraph of this Section
12.3 will include Employer contributions under this Plan and under all other
defined contribution plans required to be included in an Aggregation Group (as
defined in Section 12.8 below), but will not include Employer contributions
under any plan required to be included in such aggregation group if the plan
enables a defined benefit plan required to be included in such group to meet the
requirements of the Code prohibiting discrimination as to contributions in favor
of employees who are officers, shareholders, or the highly compensated or
prescribing the minimum participation standards. If the highest rate allocated
to a Key Employee for a year in which the Plan is top heavy is less than 3%,
amounts contributed as a result of a salary reduction agreement must be included
in determining contributions made on behalf of Key Employees.
Contributions considered under this Section will not include any
contributions under the Social Security Act or any other federal or state law.
12.4 Limitation on Compensation: The annual compensation of a Member taken
into account under this Article XII and under Article I for purposes of
computing benefits under this Plan shall not exceed $200,000. From and after
January 1, 1994, the annual Compensation of a Member taken into account under
this Article XII shall not exceed $150,000, or such other amount as determined
by the Secretary of the Treasury or his delegate. Such amount shall be adjusted
automatically for each Plan Year to the amount prescribed by the Secretary of
the Treasury or his delegate pursuant to regulations for the calendar year in
which such Plan Year commences.
12.5 Limitation on Contributions: In the event that the Company, other
Employer or an Affiliate (hereinafter in this Article collectively referred to
as a "Considered Company") also maintains a defined benefit plan providing
benefits on behalf of Members in this Plan, one of the two following provisions
will apply:
(a) If for the Plan Year this would not be a Top-Heavy Plan if "90%"
were substituted for "60%" in Section 12.8, then the percentage of 3% used
in Section 12.3 is changed to 4%.
(b) If for the Plan Year this Plan would continue to be a Top-Heavy
Plan if "90%" were substituted for "60%," in Section 12.8, then the
denominator of both the defined contribution plan fraction and the defined
benefit plan fraction shall be calculated as set forth in Section 5.3(III)
for the limitation year ending in such Plan Year by substituting "1.0" for
"1.25" in each place such figure appears. This subsection (b) will not
apply for such Plan Year with respect to any individual for whom there are
no (i) Employer contributions, Forfeitures or voluntary non-deductible
contributions allocated to such individual or (ii) accruals earned under
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the defined benefit plan. Furthermore, the transitional rule set forth in
Section 415(e)(6)(B)(i) of the Code shall be applied by substituting
"$41,500" for "$51,875" where it appears therein.
12.6 Coordination With Other Plans: In the event that another defined
contribution or defined benefit plan maintained by a Considered Company provides
contributions or benefits on behalf of Members in this Plan, such other plan
shall be treated as a part of this Plan pursuant to principles prescribed by
applicable U.S. Treasury Regulations or IRS rulings to determine whether this
Plan satisfies the requirements of Sections 12.3, 12.4 and 12.5 and to avoid
inappropriate omissions or inappropriate duplication. If a Member is covered
both by a top-heavy defined benefit plan and a top-heavy defined contribution
plan, a comparability analysis (as prescribed by Revenue Ruling 81-202 or any
successor ruling) shall be performed in order to establish that the plans are
providing benefits at least equal to the defined benefit minimum. Such
determination shall be made upon the advice of counsel by the Committee which
shall, if necessary, cause benefits or contributions to be made sufficient.
12.7 Distributions to Certain Key Employees: Notwithstanding any other
provision of this Plan to the contrary, the entire interest in this Plan of each
Member who is a 5% owner (as described in Section 416(i)(1)(A) of the Code
determined with respect to the Plan Year ending in the calendar year in which
such individual attains age 70 1/2) shall be distributed to such Member not
later than the first day of April following the calendar year in which such
individual attains age 70 1/2.
12.8 Determination of Top-Heavy Status: The Plan will be a Top-Heavy Plan
for any Plan Year if, as of the Determination Date, the aggregate of the
accounts under the Plan (determined as of the Valuation Date) for Members
(including former Members) who are Key Employees exceeds 60% of the aggregate of
the accounts of all Members, excluding former Key Employees, or if this Plan is
required to be in an Aggregation Group, any such Plan Year in which such Group
is a Top-Heavy Group. In determining Top-Heavy status, if an individual has not
performed one Hour of Service for any Considered Company at any time during the
five year period ending on the Determination Date, any accrued benefit for such
individual and the aggregate accounts of such individual shall not be taken into
account.
For purposes of this Section, the capitalized words have the following
meanings:
(a) Aggregation Group means the group of plans, if any, that includes
both the group of plans required to be aggregated and the group of plans
permitted to be aggregated. The group of plans required to be aggregated
(the "required aggregation group") includes:
(i) Each plan of a Considered Company 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
(ii) Each other plan, including collectively bargained plans, of
a Considered Company which, during this period, enables
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a plan in which a Key Employee is a participant to meet the
requirements of Section 401(a)(4) or 410 of the Code.
The group of plans that are permitted to be aggregated (the
"permissive aggregation group") includes the required aggregation group
plus one or more plans of a Considered Company that is not part of the
required aggregation group and that the Considered Company certifies as a
plan within the permissive aggregation group. Such plan or plans may be
added to the permissive aggregation group only if, after the addition, the
aggregation group as a whole continues to satisfy the requirements of
Sections 401(a)(4) and 410 of the Code.
(b) "Determination Date" means for any Plan Year the last day of the
immediately preceding Plan Year.
(c) "Key Employee" means any Employee or former Employee under this
Plan who, at any time during the Plan Year in question or during any of the
four preceding Plan Years, is or was one of the following:
(i) An officer of a Considered Company having an annual
compensation greater than 50% of the amount in effect under Section
415(b)(1)(A) of the Code for any such Plan Year. Whether an
individual is an officer shall be determined by the Considered Company
on the basis of all the facts and circumstances, such as an
individual's authority, duties, and term of office, not on the mere
fact that the individual has the title of an officer. For any such
Plan Year, officers considered to be Key Employees will be no more
than the fewer of:
(A) 50 employees; or
(B) 10% of the employees or, if greater than 10%, 3
employees.
For this purpose, the highest paid officers shall be selected.
(ii) One of the ten Employees owning (or considered as owning,
within the meaning of the constructive ownership rules of Section
416(i)(1)(B) of the Code) the largest interests in the Considered
Company. An employee who has some ownership interest is considered to
be one of the top ten owners unless at least ten other employees own a
greater interest than that employee. However, an employee will not be
considered a top 10 owner for a Plan Year if the employee earns less
than the maximum dollar limitation on annual additions to a Member's
account in a defined
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contribution plan under the Code, as in effect for the calendar year
in which the Determination Date falls.
(iii) Any person who owns (or is considered as owning, within
the meaning of the constructive ownership rules of Section
416(i)(1)(B) of the Code) more than 5% of the outstanding stock of a
Considered Company or stock possessing more than 5% of the combined
voting power of all stock of the Considered Company.
(iv) Any person who has an annual compensation from the
Considered Company of more than $150,000 and who owns (or is
considered as owning within the meaning of the constructive ownership
rules of Section 416(i)(1)(B) of the Code) more than 1% of the
outstanding stock of the Considered Company or stock possessing more
than 1% of the total combined voting power of all stock of the
Considered Company. For purposes of this subsection, compensation
means all items includable as compensation for purpose of applying the
limitations on annual additions to a Member's account in a defined
contribution plan and the maximum benefit payable under a defined
benefit plan under the Code.
For purposes of this subsection (c), a Beneficiary of a Key Employee shall
be treated as a Key Employee. For purposes of parts (iii) and (iv), each
Considered Company is treated separately in determining ownership
percentages; but all such Considered Companies shall be considered a single
employer in determining the amount of compensation.
(d) "Non-Key Employee" means any employee (and any Beneficiary of an
employee) who is not a Key Employee.
(e) "Top-Heavy Group" means the Aggregation Group, if as of the
applicable Determination Date, the sum of the present value of the
cumulative accrued benefits for Key Employees under all defined benefit
plans included in the Aggregation Group plus the aggregate of the accounts
of Key Employees under all defined contribution plans included in the
Aggregation Group exceeds 60% of the sum of the present value of the
cumulative accrued benefits for all employees, excluding former Key
Employees as provided in paragraph (i) below, under all such defined
benefit plans plus the aggregate accounts for all employees, excluding
former Key Employees as provided in paragraph (i) below, under all such
defined contribution plans. In determining Top-Heavy status, if an
individual has not performed one Hour of Service for any Considered Company
at any time during the five year period ending on the Determination Date,
any accrued benefit for such individual and the aggregate accounts of such
individual shall not be taken into account. If the Aggregation Group that
is a Top-Heavy Group is a required
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aggregation group, each plan in the group will be a Top-Heavy Plan. If the
Aggregation Group that is a Top-Heavy Group is a permissive aggregation
group, only those plans that are part of the required aggregation group
will be treated as Top-Heavy Plans. If the Aggregation Group is not a Top-
Heavy Group, no plan within such group will be a Top-Heavy Plan.
In determining whether this Plan constitutes a Top-Heavy Plan, the
Committee (or its agent) will make the following adjustments:
(f) When more than one plan is aggregated, the Committee shall
determine separately for each plan as of each plan's Determination Date the
present value of the accrued benefits (for this purpose using the actuarial
assumptions set forth in the applicable plan or account balance). The
results shall then be aggregated by adding the results of each plan as of
the Determination Dates for such plans that fall within the same calendar
year.
(g) In determining the present value of the cumulative accrued benefit
(for this purpose using the actuarial assumptions set forth in the
applicable pension plan) or the amount of the account of any employee, such
present value or account will include the amount in dollar value of the
aggregate distributions made to such employee under the applicable plan
during the five year period ending on the Determination Date unless
reflected in the value of the accrued benefit or account balance as of the
most recent Valuation Date. The amounts will include distributions to
employees representing the entire amount credited to their accounts under
the applicable plan.
(h) Further, in making such determination, such present value or such
account shall include any rollover contribution (or similar transfer), as
follows:
(i) If the rollover contribution (or similar transfer) is
initiated by the employee and made to or from a plan maintained by
another Considered Company, the plan providing the distribution shall
include such distribution in the present value of such account; the
plan accepting the distribution shall not include such distribution in
the present value of such account unless the plan accepted it before
December 31, 1983.
(ii) If the rollover contribution (or similar transfer) is not
initiated by the employee or made from a plan maintained by another
Considered Company, the plan accepting the distribution shall include
such distribution in the present value of such account, whether the
plan accepted the distribution before or after December 31, 1983; the
plan making the distribution shall not include the distribution in the
present value of such account.
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(i) In any case where an individual is a Non-Key Employee with respect
to an applicable plan but was a Key Employee with respect to such plan for
any prior Plan Year, any accrued benefit and any account of such employee
shall be altogether disregarded. For this purpose, to the extent that a
Key Employee is deemed to be a Key Employee if he or she met the definition
of Key Employee within any of the four preceding Plan Years, this provision
shall apply following the end of such period of time.
(j) "Valuation Date" means for purposes for determining the present
value of an accrued benefit as of the Determination Date the date
determined as of the most recent valuation date which is within a 12-month
period ending on the Determination Date. For the first plan year of a
plan, the accrued benefit for a current employee shall be determined either
(i) as if the individual terminated service as of the Determination Date or
(ii) as if the individual terminated service as of the valuation date, but
taking into account the estimated accrued benefit as of the Determination
Date. The Valuation Date shall be determined in accordance with the
principles set forth in Q.&A. T-25 of Treasury Regulations (S) 1.416-1.
(k) For purposes of this Article, "Compensation" shall have the
meaning given to it in Section 5.3(IV)(5) of the Plan.
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ARTICLE XIII
TESTING OF CONTRIBUTIONS
13.1 Definitions: For purposes of this Article XIII, the capitalized
words have the following meanings:
(a) "After-Tax Contributions" shall mean the amounts contributed to the
Trust Fund pursuant to Section 4.3.
(b) "Compensation" shall mean the Employee's total Compensation, as
defined in Section 414(s) of the Code, for services rendered to an
Employer during the Plan Year, including the Employee's Pre-Tax
Contributions for the Plan Year and any amounts not currently included in
the Employee's gross income by reason of the application of Section 125
of the Code.
(c) "Employer Matching Contributions" shall mean the amounts
contributed to the Trust Fund by the Employer pursuant to Section 4.2.
(d) "Highly Compensated Employee" shall mean any Employee and any
employee of an Affiliate who, during the current Plan Year performs
services for the Employer or an Affiliate and who:
(i) is a 5% owner; or
(ii) receives Compensation in excess of the Code Section
414(q)(1)(B) amount for the preceding Plan Year.
(e) "Pre-Tax Contributions" shall mean the amounts contributed to the
Trust Fund out of a Member's Compensation pursuant to Section 4.1.
(f) "Qualified Matching Contributions" shall mean Employer Matching
Contributions which are allocated to eligible Members within a Plan Year
in which the Plan failed to satisfy the Actual Deferral Percentage Limits
set forth in Section 13.3, which satisfy the nonforfeitability and
distribution requirements for elective contributions when they are
contributed to the Plan in accordance with Treasury Regulation 1.401(k)-
1(g)(13)(iii), which satisfy the requirements of Treasury Regulation
1.401(k)-1(b)(5) and which may be used in the determination of Actual
Deferral Percentages to help in satisfying the limits of Section 13.3.
Qualified Matching Contributions which are used in applying the Actual
Deferral Percentage test may not be used in applying the Contribution
Percentage test.
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13.2 Actual Deferral Percentage: The Actual Deferral Percentage for a
specified group of Employees for a Plan Year shall be the average of the ratios
(calculated separately for each Employee in such group) of:
(a) The amount of Pre-Tax Contributions actually paid to the Plan on
behalf of each such Employee for such Plan Year which relate to
Compensation that either would have been received by the Employee in such
Plan Year (but for the deferral election) or are attributable to services
performed by the Employee in the Plan Year and would have been received
by the Employee within 2 1/2 months after the close of the Plan Year (but
for the deferral election), over
(b) The Employee's Compensation for such Plan Year.
To the extent permitted by the Code and applicable regulations, the
Employer may elect to take into account, in computing the Actual Deferral
Percentage all or part of the Qualified Matching Contributions made under this
Plan or any other Plan of the Employer.
The individual ratios and Actual Deferral Percentages shall be
calculated to the nearest 1/100 of 1% of an Employee's Compensation. An
eligible Employee for the purpose of computing the Actual Deferral Percentage is
defined in Code Regulation Section 1.401(k)-1(g)(4). The Actual Deferral
Percentage of an eligible Employee who makes no Pre-Tax Contributions and
receives no Supplemental Contributions is zero.
13.3 Actual Deferral Percentage Limits: The Actual Deferral Percentage
for the eligible Highly Compensated Employees for any Plan Year shall not exceed
the greater of (a) or (b), as follows:
(a) The Actual Deferral Percentage of Compensation for the eligible
non-Highly Compensated Employees times 1.25; or
(b) The lesser of (i) the Actual Deferral Percentage of Compensation
for the eligible non-Highly Compensated Employees times 2.0 or (ii) the
Actual Deferral Percentage of Compensation for the eligible non-Highly
Compensated Employees plus two percentage points or such lesser amount as
the Secretary of the Treasury shall prescribe to prevent the multiple use
of this alternative limitation with respect to any Highly Compensated
Employee.
The Actual Deferral Percentage for any Highly Compensated Employee who
is eligible to have deferred contributions allocated to his account under one or
more plans described in Section 401(k) of the Code that are maintained by an
Employer or an Affiliate in addition to this Plan shall be determined as if all
such contributions were made to this Plan. For purposes of determining whether
the Actual Deferral Percentage limits of Section 13.3 are satisfied, all Pre-Tax
Contributions that are made under two or more plans that are aggregated for
purposes of Code
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Section 401(a)(4) or 410(b) (other than Code Section 410(b)(2)(A)(ii)) are to be
treated as made under a single plan and if two or more plans are permissively
aggregated for purposes of Code Section 401(k) the aggregated plans must also
satisfy Code Sections 401(a)(4) and 410(b) as though they were a single plan.
For purposes of determining whether the Actual Deferral Percentage limits of
Section 13.3 are satisfied, all Pre-Tax Contributions that are made under two or
more plans that are aggregated for purpose of Code Section 401(a)(4) or 410(b)
(other than Code Section 410(b)(2)(A)(ii)) are to be treated as made under a
single plan, and if two or more plans are permissively aggregated for purposes
of Code Section 401(k), the aggregated plans must also satisfy Code Sections
401(a)(4) and 410(b) as though they were a single plan.
An eligible Employee for purposes of computing the actual deferral
percentage is defined in Regulation Section 1.401(k)-1(g)(4).
13.4 Reduction of Pre-Tax Contribution Rates by Leveling Method: If on
the basis of the Pre-Tax Contribution rates elected by Members for any Plan
Year, the Committee determines, in its sole discretion, that neither of the
tests contained in (a) or (b) of Section 13.3 will be satisfied, the Committee
may reduce the Pre-Tax Contribution rate of any Member who is among the eligible
Highly Compensated Employees to the extent necessary to reduce the overall
Actual Deferral Percentage for eligible Highly Compensated Employees to a level
which will satisfy either (a) or (b) of Section 13.3. The reductions in Pre-Tax
Contribution rates shall be made in a manner so that the Actual Deferral
Percentage of the affected Members who elected the highest Actual Deferral
Percentage shall be first lowered to the level of the affected Members who
elected the next to the highest Actual Deferral Percentage. If further overall
reductions are required to achieve compliance with (a) or (b) of Section 13.3,
both of the above-described groups of Members will be lowered to the level of
Members with the next highest Actual Deferral Percentage, and so on, until
sufficient total reductions in Pre-Tax Contribution rates have occurred to
achieve compliance with (a) or (b) of Section 13.3. The Committee may, in
accordance with such uniform rules and procedures as it may in its discretion
prescribe, permit a Member whose Pre-Tax Contributions are reduced under this
paragraph, to elect to recharacterize a like amount as After-Tax Contributions.
Notwithstanding the foregoing, however, recharacterized Pre-Tax Contributions
shall, for all other purposes of this Plan except this Article XIII, continue to
be treated as Pre-Tax Contributions and not as After-Tax Contributions. The
Committee may also allow the Member to make an election to reduce his Pre-Tax
Contribution rate for the remainder of any Plan Year in which the Committee
determines, based on the Pre-Tax Contribution rates elected by Members, that
neither of the tests contained in Section 13.3 will be satisfied, and to receive
a distribution as of the end of the Plan Year of any such excess Pre-Tax
Contributions.
13.5 Increase in Pre-Tax Contribution Rates: If a Member's Pre-Tax
Contribution rate is reduced below the level necessary to satisfy either (a) or
(b) of Section 13.3 for the Plan Year, such Member may be eligible to increase
his Pre-Tax Contribution rate for the remainder of the Plan Year to a level not
in excess of that level which will satisfy the greater of (a) or (b) of Section
13.3. Such an increase in the Pre-Tax Contribution rate shall be made by
Members on a uniform and non-discriminatory basis, pursuant to such rules and
procedures as the Committee may prescribe.
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13.6 Excess Pre-Tax Contributions: As soon as possible following the
end of the Plan Year, the Committee shall determine whether either of the tests
contained in Section 13.3 were satisfied as of the end of the Plan Year, and any
excess Pre-Tax Contributions, plus any income and minus any loss attributable
thereto, of those Members who are among the Highly Compensated Employees shall
be recharacterized as After-Tax Contributions and shall be considered as taxable
income to such Members. Any amounts recharacterized as After-Tax Contributions
shall be transferred to the comparable After-Tax Contribution Accounts of such
Members as of the end of such Plan Year; provided, however, that such
recharacterized amounts shall continue to be treated as Pre-Tax Contributions
for all other purposes of the Plan. If the excess Pre-Tax Contributions are not
recharacterized, such excess Pre-Tax Contributions, plus any income and minus
any loss attributable thereto, shall be distributed to the affected Members as
of the end of such Plan Year. As soon as possible following the end of the Plan
Year, the Committee shall determine whether either of the tests contained in
Section 13.3 were satisfied as of the end of the Plan Year, and any excess Pre-
Tax Contributions, plus any income and minus any loss attributable thereto, of
those Members who are among the Highly Compensated Employees shall be
distributed to such Members. Such income shall include the allocable gain or
loss for the Plan Year.
The amount of any excess Pre-Tax Contributions to be recharacterized
or distributed to a Member shall be reduced by Excess Deferrals previously
distributed to him pursuant to Section 4.1 for the taxable year ending in the
same Plan Year. All excess Pre-Tax Contributions shall be returned to the
Members are recharacterized as After-Tax Contributions no later than the last
day of the following Plan Year. The excess Pre-Tax Contributions, if any, of
each Member who is among the Highly Compensated Employees shall be determined by
computing the maximum Actual Deferral Percentage which each such Member may
defer under (a) or (b) of Section 13.3 and then reducing the Actual Deferral
Percentage of some or all of such Members who elected an Actual Deferral
Percentage in excess of such maximum by an amount of sufficient size to reduce
the overall Actual Deferral Percentage for eligible Members who are among the
Highly Compensated Employees to a level which satisfies either (a) or (b) of
Section 13.3. The excess Pre-Tax Contributions, if any, of each Member shall be
determined in such a manner that the Actual Deferral Percentage of such Members
who elected the highest Actual Deferral Percentage shall be first lowered to the
level of such Members who elected the next to the highest Actual Deferral
Percentage. If further overall reductions are required to achieve compliance
with (a) or (b) of Section 13.3, both of the above-described groups of Members
will be lowered to the level of Members with the next highest Actual Deferral
Percentages, and so on, until sufficient total reductions have occurred to
achieve compliance with (a) or (b) of Section 13.3.
The income or loss attributable to the Member's excess Pre-Tax
Contributions for the Plan Year shall be determined by multiplying the income or
loss attributable to the Member's Pre-Tax Contribution Account balance for the
Plan Year by a fraction, the numerator of which is the excess Pre-Tax
Contribution and the denominator of which is the Member's total Pre-Tax
Contribution Account balance. Excess Pre-Tax Contributions shall be treated as
Annual Additions under Section 5.3 of the Plan.
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13.7 Contribution Percentage: The Contribution Percentage for a
specified group of Employees for a Plan Year shall be the average of the ratios
(calculated separately for each Employee in such group) of:
(a) The total of the Employer Matching Contributions and the After-Tax
Contributions (the "Aggregate Contributions") paid under the Plan on
behalf of each Employee for such Plan Year which are made on account of
the Employee's Contributions for the Plan Year, are allocated to the
Employee's Employer Contribution Account during such Plan Year and are
paid to the Trust no later than the end of the next following Plan Year,
to
(b) The Employee's Compensation for such Plan Year.
To the extent permitted by the Code and applicable regulations, the
Employer may elect to take into account, in computing the Contribution
Percentage, pre-tax contributions made under this Plan or any other plan of the
Employer. A Member's Contribution Percentage shall be determined after
determining the Member's Excess Deferrals, if any, pursuant to Section 4.1, and
after determining the Member's excess Pre-Tax Contributions pursuant to Section
13.6.
13.8 Contribution Percentage Limits: The Contribution Percentage for
the eligible Employees for any Plan Year who are Highly Compensated Employees
shall not exceed the greater of (a) or (b), as follows:
(a) The Contribution Percentage for the eligible Employees who are not
Highly Compensated Employees times 1.25; or
(b) The lesser of (i) the Contribution Percentage for the eligible
Employees who are not Highly Compensated Employees times 2.0 or (ii) the
Contribution Percentage for the eligible Employees who are not Highly
Compensated Employees plus two percentage points or such lesser amount as
the Secretary of the Treasury shall prescribe to prevent the multiple use
of this alternative limitation with respect to any Highly Compensated
Employee.
In determining the Contribution Percentage of an Employee who is a 5%
owner or one of the ten most Highly Compensated Employees and who has a Family
Member who is an Employee, any remuneration paid to the Family Member for
services rendered to an Employer or to an Affiliate and any contributions made
on behalf of or by such Family Member shall be attributed to such Highly
Compensated Employee. Family Members, with respect to Highly Compensated
Employees, shall be disregarded as separate Employees in determining the
Contribution Percentage both for Members who are non-Highly Compensated
employees and for Members who are Highly Compensated Employees.
The Contribution Percentage for any Highly Compensated Employee for
any Plan Year who is eligible to have matching employer contributions made on
his behalf or to make after
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tax contributions under one or more plans described in Section 401(a) of the
Code that are maintained by an Employer or an Affiliate in addition to this Plan
shall be determined as if all such contributions were made to this Plan.
In the event that this Plan must be combined with one or more other
plans in order to satisfy the requirements of Code Section 401(b), then the
Contribution Percentage shall be determined as if all such plans were a single
plan. If two or more plans are permissively aggregated for the purposes of Code
Section 410(b) (other than the average benefit percentage test) then the
Contribution Percentage shall be determined as if all such plans were a single
plan.
13.9 Treatment of Excess Aggregate Contributions: If neither of the
tests described in (a) or (b) of Section 13.9 are satisfied, the excess
Aggregate Contributions, plus any income and minus any loss attributable
thereto, shall be forfeited, or if not forfeitable, shall be distributed no
later than the last day of the Plan Year following the Plan Year in which such
excess Aggregate Contributions were made. Such income shall include the
allocable gain or loss for the Plan Year. The income or loss attributable to
the Member's excess Aggregate Contributions for the Plan Year shall be
determined by multiplying the income or loss attributable to the Member's
Employer Contribution Account and After-Tax Contribution Account for the Plan
year by a fraction, the numerator of which is the excess Aggregate Contribution,
and the denominator of which is the Member's total Employer Contribution Account
and After-Tax Contribution Account balance. Excess Aggregate Contributions
shall be treated as Annual Additions under Section 5.3 of the Plan.
The excess Aggregate Contributions, if any, of each Member who is
among the Highly Compensated Employees shall be determined by computing the
maximum Contribution Percentage under (a) or (b) of Section 13.9 and then
reducing the Contribution Percentage of some or all of such Members whose
contribution Percentage exceeds the maximum by an amount of sufficient size to
reduce the overall Contribution Percentage for eligible Members who are among
the Highly Compensated Employees to a level which satisfies either (a) or (b) of
Section 13.9. The excess Aggregate Contributions, if any, of each Member shall
be determined in such a manner that the Contribution Percentage of such members
who have the highest actual contribution ratio under Section 13.8 shall be first
lowered to the level of such Members with the next to the highest actual
contribution ratio under Section 13.8. If further overall reductions are
required to achieve compliance with (a) or (b) of Section 13.9, both of the
above described groups of Members will be lowered to the level of members with
the next highest actual contribution ratio under Section 13.8, and so on, until
sufficient total reductions have occurred to achieve compliance with (a) or (b)
of Section 13.9. For each Member who is a Highly Compensated Employee, the
amount of excess Aggregate Contributions is equal to the total Employer Matching
Contributions and the After-Tax Contributions on behalf of the Member
(determined prior to the application of this paragraph) minus the amount
determined by multiplying the member's actual contribution ratio (determined
after application of this paragraph) by his Compensation used in determining
such ratio. For Plan Years which begin after 1988, the individual ratios and
Contribution Percentages shall be calculated to the nearest 1/100 of 1% of the
Employee's Compensation as such term is used in paragraph (b) of Section 13.9.
Notwithstanding anything in this Plan to the contrary, any Employer Matching
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Contributions attributable to a Member's Pre-Tax or After-Tax Contributions
which are distributed to a Member pursuant to the requirements of the Article
XIII, will be forfeited.
13.10 Multiple Use of Alternative Limitation: The rules set forth in
Code Section 1.401(m)-2(b) for determination of multiple use of the alternative
methods of compliance with respect to Sections 13.3(b) and 13.9(b) are hereby
incorporated into the Plan. If a multiple use of the alternative limitation
occurs with respect to two or more plans or arrangements maintained by an
Employer it shall be treated as an excess Aggregate Contribution and must be
corrected by reducing the actual contribution ratio of Highly Compensated
Employees eligible both to make elective contributions to receive matching
contributions under the 401(k) arrangement or to make contributions under the
401(m) plan. Such reduction shall be by the leveling process set forth in
Section 13.10.
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IN WITNESS WHEREOF, Pennzoil Products Company has caused these
presents to be executed by its duly authorized officers in a number of copies,
all of which shall constitute one and the same instrument, which may be
sufficiently evidenced by any executed copy thereof, this _____ day of
___________, 1998, but effective as of ______________, 1998.
PENNZOIL PRODUCTS COMPANY
By_________________________________
Raymond T. Fischer
Agent and Attorney-in-Fact
ATTEST:
__________________________
Secretary
[SEAL]
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Exhibit 4.4
TRUST AGREEMENT
between
MERRILL LYNCH TRUST COMPANY OF TEXAS, as the Trustee
and
PENNZOIL-QUAKER STATE COMPANY, as the Employer
Trust Agreement entered into as of November 2, 1998 by and between the
above-named employer (the "Employer") and Merrill Lynch Trust Company of Texas,
a Texas corporation (the "Trustee"), with respect to a trust ("Trust") forming
part of the Pennzoil-Quaker State Company Savings & Investment Plan (the
"Plan").
The Employer and the Trustee hereby agree as follows:
ARTICLE I
STATUS OF TRUST AND APPOINTMENT
AND ACCEPTANCE OF TRUSTEE
1.01 STATUS OF TRUST. The Trust is intended to be a qualified trust under
section 401(a) of the Internal Revenue Code of 1986, as amended from time to
time (the "Code"), and exempt from taxation pursuant to section 501(a) of the
Code.
1.02 APPOINTMENT OF TRUSTEE. The Employer represents that all necessary
action has been taken for the appointment of the Trustee as trustee of the Trust
and that the Trust Agreement constitutes a legal, valid and binding obligation
of the Employer.
1.03 ACCEPTANCE OF APPOINTMENT. The Trustee accepts its appointment as
trustee of the Trust.
1.04 TITLE OF TRUST. The Trust shall be known as the Pennzoil-Quaker
State Company Savings & Investment Plan Trust.
1.05 EFFECTIVENESS. This Trust Agreement shall not become effective until
executed and delivered by both the Employer and the Trustee.
ARTICLE II
ADMINISTRATIVE AND INVESTMENT FIDUCIARIES
2.01 NAMED ADMINISTRATIVE AND INVESTMENT FIDUCIARIES. For purposes of this
Trust Agreement, the term "Named Administrative Fiduciary" refers to the person
named or provided for in the Plan as responsible for the administration and
operation of the Plan, and the term "Named Investment Fiduciary" refers to the
person provided for in the Plan as responsible for the investment and management
of Plan assets to the extent provided for in this Trust
<PAGE>
Agreement. The Named Administrative Fiduciary and the Named Investment Fiduciary
may be the same person. If any such person is not named or provided for in the
Plan, or if so named or provided for, is not then serving, the Employer shall be
the Named Administrative Fiduciary or the Named Investment Fiduciary or both, as
the case may be.
2.02 IDENTIFICATION OF NAMED FIDUCIARIES AND DESIGNEES. The Named
Administrative Fiduciary and the Named Investment Fiduciary under the Plan shall
each be identified to the Trustee in writing by the Employer, and specimen
signatures of each, or of each member thereof, as appropriate, shall be provided
to the Trustee by the Employer. The Employer shall promptly give written notice
to the Trustee of a change in the identity either of the Named Administrative
Fiduciary or the Named Investment Fiduciary, or any member thereof, as
appropriate, and until such notice is received by the Trustee, the Trustee shall
be fully protected in assuming that the identity of the Named Administrative
Fiduciary or Named Investment Fiduciary, and the members thereof, as
appropriate, is unchanged. Each person authorized in accordance with the Plan to
give a direction to the Trustee on behalf of the Named Administrative Fiduciary
or the Named Investment Fiduciary shall be identified to the Trustee by written
notice from the Employer or the Named Administrative Fiduciary or the Named
Investment Fiduciary, as the case may be, and such notice shall contain a
specimen of the signature. The Trustee shall be entitled to rely upon each such
written notice as evidence of the identity and authority of the persons
appointed until a written cancellation of the appointment, or the written
appointment of a successor, is received by the Trustee from the Employer, the
Named Administrative Fiduciary or the Named Investment Fiduciary, as the case
may be.
ARTICLE III
RECEIPTS AND TRUST FUND
3.01 RECEIPT BY TRUSTEE. The Trustee shall receive in cash or other assets
acceptable to the Trustee all contributions paid or delivered to it which are
allocable under the Plan and to the Trust and all transfers paid or delivered
under the Plan to the Trust from a predecessor trustee or another trust
(including a trust forming part of another plan qualified under section 401(a)
of the Code), provided that the Trustee shall not be obligated to receive any
such contribution or transfer unless prior thereto or coincident therewith, as
the Trustee may specify, the Trustee has received such reconciliation,
allocation, investment or other information concerning, or such direction,
instruction or representation with respect to, the contribution or transfer or
the source thereof as the Trustee may require. The Trustee shall have no duty or
authority to (a) require any contributions or transfers to be made under the
Plan or to the Trustee, (b) compute any amount to be contributed or transferred
under the Plan to the Trustee, or (c) determine whether amounts received by the
Trustee comply with the Plan.
3.02 TRUST FUND. For purposes of this Trust Agreement, the "Trust Fund"
consists of all money and other property received by the Trustee pursuant to
Section 3.01 hereof, increased by any income or gains on or increment in such
assets and decreased by any investment loss or expense, benefit or disbursement
paid pursuant to this Trust Agreement. The Trustee shall hold the Trust Fund,
without distinction between principal and income, as a nondiscretionary trustee
pursuant to the terms of this Trust Agreement. Assets of the Trust may, in the
Trustee's discretion, be held in an account maintained with an affiliate of the
Trustee.
2
<PAGE>
3.03 ADDITIONAL TRUST FUND. Notwithstanding any other provision of this
Trust Agreement, to the extent that assets of the Plan are held in trust by a
trustee other than the Trustee (such other trustee to be referred to as a
"Second Trustee"), the Employer shall have created two trust funds under the
Plan. The appointment of a Second Trustee shall be deemed a representation by
the Employer that the Plan contains all appropriate provisions relating to the
Second Trustee. The Trustee (i) shall discharge its duties and responsibilities
hereunder solely with respect to those assets delivered into its possession,
(ii) shall have no duties, responsibilities or obligations with respect to
assets held in trust by the Second Trustee unless and until such assets are
delivered to the Trustee and (iii) except as otherwise required under the
Employee Retirement Income Security Act of 1974, as amended from time to time
("ERISA"), shall have no liability or responsibility for the acts or omissions
of the Second Trustee. To the extent that assets of the Plan are held in trust
by multiple trustees other than the Trustee, the foregoing shall apply to each
such other trustee.
ARTICLE IV
PAYMENTS, ADMINISTRATIVE DIRECTIONS
AND EXPENSES
4.01 PAYMENTS BY TRUSTEE. Payments of money or property from the Trust Fund
shall be made by the Trustee upon direction from the Named Administrative
Fiduciary or its designee. Payments by the Trustee shall be transmitted to the
Named Administrative Fiduciary or its designee for delivery to the proper payees
or to payee addresses supplied by the Named Administrative Fiduciary or its
designee, and the Trustee's obligation to make such payments shall be satisfied
upon such transmittal. The Trustee shall have no obligation to determine the
identity of persons entitled to payments under the Plan or their addresses.
4.02 NAMED ADMINISTRATIVE FIDUCIARY'S DIRECTIONS. Directions from or on
behalf of the Named Administrative Fiduciary or its designee shall be
communicated to the Trustee or the Trustee's designee only in a manner and in
accordance with procedures acceptable to the Trustee. The Trustee's designee
shall not, however, be empowered to implement any such directions except in
accordance with procedures acceptable to the Trustee. The Trustee shall have no
liability for following any such directions or failing to act in the absence of
any such directions. The Trustee shall have no liability for the acts or
omissions of any person making or failing to make any direction under the Plan
or this Trust Agreement nor any duty or obligation to review any such direction,
act or omission.
4.03 DISPUTED PAYMENTS. If a dispute arises over the propriety of the
Trustee making any payment from the Trust Fund, the Trustee may withhold the
payment until the dispute has been resolved by a court of competent jurisdiction
or settled by the parties to the dispute. The Trustee may consult legal counsel
and shall be fully protected in acting upon the advice of counsel.
4.04 TRUSTEE'S COMPENSATION AND EXPENSES. The Employer shall (a) pay the
Trustee compensation as agreed upon grom time to time by the Employer and the
Trustee and (b) pay or reimburse the Trustee for all expenses incurred by the
Trustee in connection with or relating to the performance of its duties under
this Trust Agreement or its status as Trustee, including
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reasonable attorneys' fees. If the Employer so elects, such compensation and
expenses may be prorated among the employers who may adopt the Plan and Trust
Agreement or disbursed from the Trust Fund. Until paid by the Employer or
charged against and withdrawn from the Trust Fund, as the case may be, the
Trustee's compensation and expenses shall constitute a lien upon the Trust Fund.
By signing this Trust Agreement, the Employer authorizes the Trustee and/or
its affiliates to receive payments from certain mutual funds (and/or collective
trusts) for which no affiliate of the Trustee acts as investment manager or
adviser (or from the principal distributors and/or advisors of those funds or
trusts), in connection with the performance of reasonable and necessary services
(including recordkeeping, subaccounting, account maintenance, administrative and
other shareholder services). Because different mutual funds (or collective
trusts) may be subject to different fee arrangements, the Employer should
contact the Trustee or its designee to obtain further details on any specific
fee arrangements that may be applicable to investments under the Plan.
4.05 TAXES. The Trustee is authorized, with or without direction from the
Named Administrative Fiduciary or any other person, to withdraw from the Trust
Fund and pay any federal, state or local taxes, charges or assessments of any
kind levied or assessed against the Trust or assets thereof. Until paid, such
taxes shall be a lien against the Trust Fund. The Trustee shall give notice to
the Named Administrative Fiduciary of its receipt of a demand for any such
taxes, charges or assessments. The Trustee shall not be personally liable for
any such taxes, charges or assessments.
4.06 EXPENSES OF ADMINISTRATION. Expenses incurred by the Employer, the
Named Administrative Fiduciary, the Named Investment Fiduciary, any Investment
Manager designated pursuant to Section 5.02 or any other persons designated to
act on behalf of the Employer, the Named Administrative Fiduciary or the Named
Investment Fiduciary, including reimbursement for expenses incurred in the
performance of their respective duties, shall be the obligation of the Employer
or other person specified in the Plan. Such expenses, however, may be paid from
the Trust Fund upon the written direction to the Trustee of the Named
Administrative Fiduciary.
4.07 RESTRICTION ON ALIENATION. Except as provided in Section 4.08 or under
section 401(a)(13) of the Code, the interest of any Plan participant or
beneficiary in the Trust Fund shall not be subject to the claims of such
person's creditors and may not be assigned, sold, transferred, alienated or
encumbered. Any attempt to do so shall be void; and the Trustee shall disregard
any attempt. Trust assets shall not in any manner be liable for or subject to
debts, contracts, liabilities, engagement or torts of any Plan participant or
beneficiary, and benefits shall not be considered an asset of any such a person
in the event of the person's insolvency or bankruptcy.
4.08 PAYMENT ON COURT ORDER. The Trustee is authorized to make any payments
directed by court order in any action in which the Trustee is a party or
pursuant to a "qualified domestic relations order" under section 414(p) of the
Code; provided that the Trustee shall not make such payment if the Trustee is
indemnified and held harmless by the Employer in a manner satisfactory to the
Trustee against all consequences of such failure to pay. The Trustee is not
obligated to defend actions in which the Trustee is named but shall notify the
Employer or Named Administrative Fiduciary of any such action and may tender
defense of the action to
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the Employer, the Named Administrative Fiduciary or the participant or
beneficiary whose interest is affected. The Trustee may in its discretion defend
any action in which the Trustee is named and any expenses, including reasonable
attorneys' fees, incurred by the Trustee in that connection shall be paid or
reimbursed in accordance with Section 4.04 hereof.
ARTICLE V
INVESTMENTS
5.01 INVESTMENT MANAGEMENT. The Named Investment Fiduciary shall manage the
investment of the Trust Fund except insofar as (a) a person (an "Investment
Manager") who meets the requirements of section 3(38) of ERISA has authority to
manage Trust assets as referred to in Section 5.02 hereof or (b) the Plan
provides for participant or beneficiary direction of the investment of assets
allocable under the Plan to the accounts of such participants and beneficiaries.
In the latter situation, a list of the participants and beneficiaries and such
information concerning them as the Trustee may specify shall be provided by the
Employer or the Named Administrative Fiduciary to the Trustee and/or such
person(s) as are necessary for the implementation of the directions in
accordance with the procedure acceptable to the Trustee. Except as required by
ERISA, the Trustee shall invest the Trust Fund as directed by the Named
Investment Fiduciary, an Investment Manager or a Plan participant or
beneficiary, as the case may be, and the Trustee shall have no discretionary
control over, nor any other discretion regarding, the investment or reinvestment
of any asset of the Trust. The Trustee may limit the categories of assets in
which the Trust Fund may be invested.
It is understood that the Trustee may, from time to time, have on hand
funds which are received as contributions or transfers to the Trust which are
awaiting investment or funds from the sale of Trust assets which are awaiting
reinvestment. Absent receipt by the Trustee of a direction from the proper
person for the investment or reinvestment of such funds or otherwise prior to
the application of funds in implementation of such a direction, the Trustee
shall in accordance with the Trustee's normal procedures in this regard cause
such funds to be invested in shares of the money market fund acceptable to the
Trustee as the Employer or Named Investment Fiduciary may in writing to the
Trustee specify for this purpose from time to time. Any such fund may be
sponsored, managed or distributed by an affiliate of the Trustee. The Employer
or the Named Investment Fiduciary, as the case may be, hereby acknowledges that
prior to any such specification it has read or will have read the then current
prospectus for the specified fund.
5.02 INVESTMENT MANAGERS. The Employer or the Named Investment Fiduciary
may appoint one or more Investment Managers, who may be an affiliate of the
Trustee, to direct the Trustee in the investment of all or a specified portion
of the assets of the Trust. Any such Investment Manager shall be directed by the
Employer or the Named Investment Fiduciary, as the case may be, to act in
accordance with the procedures referred to in Section 5.04. The Named Investment
Fiduciary shall notify the Trustee in writing before the effectiveness of the
appointment or removal of any Investment Manager.
If there is more than one Investment Manager whose appointment is effective
under the Plan at any one time, the Trustee shall, upon written instructions
from the Employer or the Named Investment Fiduciary, establish separate funds
for control by each such Investment
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Manager. The funds shall consist of those Trust assets designated by the
Employer or the Named Investment Fiduciary.
5.03 DIRECTION OF VOTING AND OTHER RIGHTS.
(a) With respect to the voting and other rights involving securities other
than Pennzoil-Quaker State Stock, the Trustee shall act as directed by the Named
Investment Fiduciary, except that, when an Investment Manager shall be managing
Trust assets as provided in Section 5.01, the Investment Manager shall exercise
all voting rights thereto. If the Trustee does not receive timely instruction
from the Named Investment Fiduciary, the Trustee shall not vote any shares as to
which no direction has been furnished; provided, however, that in the case of
non-routine items (as defined in Section 5.03(c) and hereinafter referred to as
"Non-Routine Items"), if the Trustee does not receive timely instruction from
the Named Investment Fiduciary, the Trustee may take the actions described in
subsection (b)(2)(ii) below.
(b) With respect to the Pennzoil Company Stock Fund, each participant (or
beneficiary of a deceased participant) is, for purposes of this Section 5.03,
hereby designated as a "named fiduciary" (within the meaning of Section
403(a)(1) of ERISA) with respect to the shares of Pennzoil-Quaker State Stock
allocated to his account, and each participant (or beneficiary of a deceased
participant) shall have the right to direct the Trustee with respect to the vote
of the shares of Pennzoil-Quaker State Stock allocated to his account on each
matter brought before any meeting of the stockholders of the Employee or with
respect to any tender offer or exchange offer (as described below). Before each
such meeting of stockholders, or in the event of a tender offer or exchange
offer, as the case may be, the Employer shall cause to be furnished to each
participant (or beneficiary), as applicable, a copy of the proxy solicitation
material, together with a form requesting confidential directions to the Trustee
on how such hares of Pennzoil-Quaker State Stock allocated to such participant's
(or beneficiary's) account shall be voted on each such matter, or a copy of such
information as will be distributed to stockholders of the Employer in connection
with such tender offer or exchange offer. Upon timely receipt of instructions
from the participants (or beneficiaries), the Trustee shall respond as
instructed with respect to shares of Pennzoil-Quaker State Stock allocated to
such participant's (or beneficiary's) account. The instructions received by the
Trustee from participants (or beneficiaries) shall be held by the Trustee in
confidence and shall not be divulged or released to any person, including the
Named Investment Fiduciary, the Named Administrative Fiduciary, officers or
employees of the Employer or Affiliate (as defined in the Plan). If the Trustee
shall not receive timely instruction from a participant, the Trustee shall act
as follows:
(1) With respect to voting as to any matters other than Non-Routine
items, the Trustee shall vote shares of Pennzoil-Quaker State Stock as
directed by the Named Investment Fiduciary.
(2) With respect to voting as to Non-Routine Items and any tender or
exchange offer, including but not limited to a tender offer or exchange
offer within the meaning of the Securities Exchange Act of 1934, the
Trustee may either (i) refuse to vote, tender, or exchange any shares of
Pennzoil-Quaker State Stock with respect to which a participant has the
right of direction or (ii) at the cost of the Employer, obtain advice from
a bank, insurance company, investment adviser or other investment
professional or retain an Investment Manager with full discretion to make
the decision.
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(c) A voting item is considered a Non-Routine Item when the matter to be
voted upon is a merger, consolidation or any other matter which may affect
substantially the rights or privileges of Pennzoil-Quaker State Stock. Without
limiting the foregoing, a voting item is considered a Non-Routine Item when the
matter to be voted upon:
(1) is not submitted to stockholders by means of a proxy statement
comparable to that specified in Schedule 14A promulgated by the Securities
and Exchange Commission;
(2) is the subject of a counter-solicitation (i.e., a proxy contest):
(3) relates to a merger or consolidation (except a merger with a
wholly-owned subsidiary, provided stockholders dissenting do not have
rights of appraisal);
(4) involves rights of appraisal;
(5) authorizes mortgaging of property;
(6) authorizes or creates indebtedness or increases the authorized
amount of indebtedness;
(7) authorizes or creates a preferred stock or increases the
authorized amount of an existing preferred stock;
(8) alters the terms or conditions of existing stock or indebtedness;
(9) involves waiver or modification of preemptive rights (except when
the proposal is to waive such rights with respect to shares being offered
pursuant to stock options or purchase plans involving the additional
issuance of not more than five percent (5%) of the company's outstanding
common shares);
(10) changes existing quorum requirements with respect to stockholder
meetings;
(11) alters voting provisions or the proportionate voting power of
stock, or the number of its votes per share (except where cumulative voting
provisions govern the number of votes per share for election of directors
and the proposal involves a change in the number of its directors by not
more than ten percent (10%) or not more than one);
(12) authorizes issuances of stock, or options to purchase stock, to
directors, officers, or employees in an amount which exceeds five percent
(5%) of the total amount of the class outstanding;
(13) authorizes (i) a new profit-sharing or special remuneration plan,
or a new retirement plan, the annual cost of which will amount to more than
ten percent (10%) of average annual income before taxes for the preceding
five years, or (ii) the amendment of an existing plan which would bring its
cost above ten percent (10%) of
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such average annual income before taxes, except where the authorization is
for (a) retirement plans based on agreement or negotiations with labor
unions (or which have been or are to be approved by such unions), or (b)
any related retirement plan for benefit of non-union employees having terms
substantially equivalent to the terms of such union-negotiated plan, which
is submitted for action of stockholders concurrently with such union-
negotiated plan;
(14) changes the purposes or powers of a company to an extent which
would permit it to change to a materially different line of business and it
is the company's stated intention to make such a change;
(15) authorizes the acquisition of property, assets or a company,
where the consideration to be given has a fair value approximately 20
percent or ore of the market value of the previously outstanding shares;
(16) authorizes the sale or other disposition of assets or earning
power approximating 20 percent or more of those existing prior to the
transaction;
(17) authorizes a transaction not in the ordinary course of business
in which an officer, director or substantial security holder has a direct
or indirect interest; or
(18) reduces earned surplus by 51 percent or more, or reduces earned
surplus to an amount less than the aggregate of three years' common stock
dividends computed at the current dividend rate.
The Named Investment Fiduciary shall notify the Trustee when a voting item
is considered to be a Non-Routine Item pursuant to this Section 5.03. Except as
required by ERISA, the Trustee shall follow all directions in this Section 5.03
and shall have no other duty to exercise voting or other rights relating to any
security or other assets.
5.04 INVESTMENT DIRECTIONS. Directions for the investment or reinvestment
of Trust assets or directions of a type referred to in Section 5.03 from the
Employer, the Named Investment Fiduciary, an Investment Manager or a Plan
participant or beneficiary, as the case may be, shall, in a manner and in
accordance with procedures acceptable to the Trustee, be communicated to and
implemented by, as the case may be, the Trustee, the Trustee's designee or, with
the Trustee's consent, the broker/dealer designated for the purpose by the
Employer or the Named Investment Fiduciary. Communication of any such direction
to such a designee or broker/dealer shall conclusively be deemed an
authorization to the designee or broker/dealer to implement the direction even
though coming from a person other than the Trustee. The Trustee shall have no
liability for its or any other person's following such directions or failing to
act in the absence of any such directions. The Trustee shall have no liability
for the acts or omissions of any person directing the investment or reinvestment
of Trust Fund assets or making or failing to make any direction referred to in
Section 5.03. Neither shall the Trustee have any duty or obligation to review
any such investment or other direction, act or omission or, except upon receipt
of a proper direction, to invest or otherwise manage any asset of the Trust
which is subject to the control of any such person or to exercise any voting or
other right referred to in Section 5.03.
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5.05 COMMUNICATION OF PROXY AND OTHER MATERIALS. The Employer or Named
Administrative Fiduciary shall establish a procedure acceptable to the Trustee
for the timely dissemination to each person entitled to direct the Trustee or
its designee as to a voting or other decision called for thereby or referred to
therein of all proxy and other materials bearing on the decision. In the case of
Employer Securities, at such time as proxy or other materials bearing thereon
are disseminated generally to owners of Employer Securities in accordance with
applicable law, the Employer shall cause a copy of such proxy or other materials
to be delivered directly to the Trustee and, thereafter, shall promptly deliver
to the Trustee such number of additional copies of the proxy or other materials
as the Trustee may request.
5.06 COMMON AND COLLECTIVE TRUST FUNDS. Any person authorized to direct the
investment of Trust assets may, if the Trustee and the Named Investment
Fiduciary so permit, direct the Trustee to invest such assets in a common or
collective trust maintained by the Trustee or its affiliate for the investment
of assets of qualified trusts under section 401(a) of the Code, individual
retirement accounts under section 408(a) of the Code and plans of governmental
units described in section 818(a)(6) of the Code. The documents governing any
such common or collective trust fund maintained by the Trustee or its affiliate,
and in which Trust assets have been invested, are hereby incorporated into this
Trust Agreement by reference.
ARTICLE VI
RESPONSIBILITIES AND INDEMNITY
6.01 RELATIONSHIP OF FIDUCIARIES. Each fiduciary of the Plan and the Trust
shall be solely responsible for its own acts or omissions. The Trustee shall
have no duty to question any other Plan fiduciary's performance of fiduciary
duties allocated to such other fiduciary pursuant to the Plan. The Trustee shall
not be responsible for the breach of responsibility by any other Plan fiduciary
except as required under ERISA.
6.02 BENEFIT OF PARTICIPANTS. Each fiduciary shall, within the meaning of
the Code and ERISA, discharge its duties with respect to the Trust solely in the
interest of participants in the Plan and their beneficiaries and for the
exclusive purpose of providing benefits to such participants and beneficiaries
and defraying reasonable expenses of administering the Plan.
6.03 STATUS OF TRUSTEE. The Trustee acknowledges its status as a
"fiduciary" of the Plan within the meaning of ERISA.
6.04 LOCATION OF INDICIA OF OWNERSHIP. Except as permitted by ERISA, the
Trustee shall not maintain the indicia of ownership of any assets of the Trust
outside the jurisdiction of the district courts of the United States.
6.05 TRUSTEE'S RELIANCE. The Trustee shall have no duty to inquire whether
directions by the Employer, the Named Administrative Fiduciary, the Named
Investment Fiduciary or any other person conform to the Plan, and the Trustee
shall be fully protected in relying on any such direction communicated in
accordance with procedures acceptable to the Trustee from any person who the
Trustee reasonably believes is a proper person to give the direction. The
Trustee shall have no liability to any participant, any beneficiary or any other
person for
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payments made, any failure to make payments, or any discontinuance of payments,
on direction of the Named Administrative Fiduciary, the Named Investment
Fiduciary or any designee of either of them or for any failure to make payments
in the absence of directions from the Named Administrative Fiduciary or any
person responsible for or purporting to be responsible for directing the
investment of Trust assets. The Trustee shall have no obligation to request
proper directions from any person. The Trustee may request instructions from the
Named Administrative Fiduciary or the Named Investment Fiduciary and shall have
no duty to act or liability for failure to act if such instructions are not
forthcoming. The Trustee shall have no responsibility to determine whether the
Trust Fund is sufficient to meet the liabilities under the Plan, and shall not
be liable for payments or Plan liabilities in excess of the Trust Fund.
6.06 INDEMNIFICATION. The Employer hereby indemnifies the Trustee against,
and shall hold the Trustee harmless from, any and all loss, claims, liability,
and expense, including reasonable attorneys' fees, imposed upon the Trustee or
incurred by the Trustee as a result of any acts taken, or any failure to act, in
accordance with the directions from the Named Administrative Fiduciary, Named
Investment Fiduciary, Investment Manager or any other person specified in
Article IV or V hereof, or any designee of any such person, or by reason of the
Trustee's good faith execution of its duties with respect to the Trust,
including, but not limited to, its holding of assets of the Trust as provided
for in Section 3.02,other than any loss, claim, liability or expense arising out
of the Trustee's negligence or willful misconduct.
6.07 PROTECTION OF DESIGNEES. To the extent that any designee of the
Trustee is performing a function of the Trustee under this Trust Agreement, the
designee shall have the benefit of all of the applicable limitations on the
scope of the Trustee's duties and liabilities, all applicable rights of
indemnification granted hereunder to the Trustee and all other applicable
protections of any nature afforded to the Trustee.
ARTICLE VII
POWERS OF TRUSTEE
7.01 NONDISCRETIONARY INVESTMENT POWERS. At the direction of the person
authorized to direct such action as referred to in Article V hereof, but limited
to those assets or categories of assets acceptable to the Trustee as referred to
in Section 5.01, the Trustee, or the Trustee's designee or a broker/dealer as
referred to in Section 5.04, is authorized and empowered:
(a) To invest and reinvest the Trust Fund, together with the income
therefrom, in common stock, preferred stock, convertible preferred stock, bonds,
debentures, convertible debentures and bonds, mortgages, notes, commercial paper
and other evidences of indebtedness (including those issued by the Trustee),
shares of mutual funds (which funds may be sponsored, managed or offered by an
affiliate of the Trustee), guaranteed investment contracts, bank investment
contracts, other securities, policies of life insurance, annuity contracts,
options, options to buy or sell securities or other assets, and all other
property of any type (personal, real or mixed, and tangible or intangible);
(b) To deposit or invest all or any part of the assets of the Trust in
savings accounts or certificates of deposit or other deposits in a bank or
savings and loan association or other depository institution, including the
Trustee or any of its affiliates; provided that, with
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respect to such deposits with the Trustee or an affiliate, the deposits bear a
reasonable interest rate;
(c) To hold, manage, improve, repair and control all property, real or
personal, forming part of the Trust Fund; to sell, convey, transfer, exchange,
partition, lease for any term, even extending beyond the duration of this Trust,
and otherwise dispose of the same from time to time;
(d) To have, respecting securities, all the rights, powers and privileges
of an owner, including the power to give proxies, pay assessments and other sums
deemed by the Trustee necessary for the protection of the Trust Fund; to vote
any corporate stock either in person or by proxy, with or without power of
substitution, for any purpose; to participate in voting trusts, pooling
agreements, foreclosures, reorganizations, consolidations, mergers and
liquidations, and in connection therewith to deposit securities with or transfer
title to any protective or other committee; to exercise or sell stock
subscriptions or conversion rights; and, regardless of any limitation elsewhere
in this instrument relative to investments by the Trustee, to accept and retain
as an investment any securities or other property received through the exercise
of any of the foregoing powers;
(e) Subject to Section 5.01 hereof, to hold in cash such portion of the
Trust Fund which it is directed to so hold pending investments, or payment of
expenses, or the distribution of benefits;
(f) To take such actions as may be necessary or desirable to protect the
Trust from loss due to the default on mortgages held in the Trust including the
appointment of agents or trustees in such other jurisdictions as may seem
desirable, to transfer property to such agents or trustees, to grant to such
agents such powers as are necessary or desirable to protect the Trust Fund, to
direct such agent or trustee, or to delegate such power to direct, and to remove
such agent or trustee;
(g) To settle, compromise or abandon all claims and demands in favor of or
against the Trust Fund;
(h) To invest in any common or collective trust fund of the type referred
to in Section 5.06 hereof maintained by the Trustee or its affiliate;
(i) To exercise all of the further rights, powers, options and privileges
granted, provided for, or vested in trustees generally under the laws of the
state in which the Trustee is incorporated as set forth above, so that the
powers conferred upon the Trustee herein shall not be in limitation of any
authority conferred by law, but shall be in addition thereto;
(j) To borrow money from any source and to execute promissory notes,
mortgages or other obligations and to pledge or mortgage any trust assets as
security, subject to applicable requirements of the Code and ERISA; and
(k) To maintain accounts at, execute transactions through, and lend on an
adequately secured basis stocks, bonds or other securities to, any brokerage or
other firm, including any firm which is an affiliate of the Trustee.
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7.02 ADDITIONAL POWERS OF TRUSTEE. To the extent necessary or which it
deems appropriate to implement its powers under Section 7.01 or otherwise to
fulfill any of its duties and responsibilities as trustee of the Trust Fund, the
Trustee shall have the following additional powers and authority:
(a) to register securities, or any other property, in its name or in the
name of any nominee, including the name of any affiliate or the nominee name
designated by any affiliate, with or without indication of the capacity in which
property shall be held, or to hold securities in bearer form and to deposit any
securities or other property in a depository or clearing corporation;
(b) to designate and engage the services of, and to delegate powers and
responsibilities to, such agents, representatives, advisers, counsel and
accountants as the Trustee considers necessary or appropriate, any of whom may
be an affiliate of the Trustee or a person who renders services to such an
affiliate, and, as a part of its expenses under this Trust Agreement, to pay
their reasonable expenses and compensation;
(c) to make, execute and deliver, as Trustee, any and all deeds, leases,
mortgages, conveyances, waivers, releases or other instruments in writing
necessary or appropriate for the accomplishment of any of the powers listed in
this Trust Agreement; and
(d) generally to do all other acts which the Trustee deems necessary or
appropriate for the protection of the Trust Fund.
ARTICLE VIII
RECORDS, ACCOUNTINGS AND VALUATIONS
8.01 RECORDS. The Trustee shall maintain or cause to be maintained accurate
records and accounts of all Trust transactions and assets. The records and
accounts shall be available at reasonable times during normal business hours for
inspection or audit by the Named Administrative Fiduciary and the Named
Investment Fiduciary or any person designated for the purpose by either of them.
8.02 ACCOUNTINGS. Within 90 days following the close of each fiscal year of
the Plan or the effective date of the removal or resignation of the Trustee, the
Trustee shall file with the Named Administrative Fiduciary a written accounting
setting forth all transactions since the end of the period covered by the last
previous accounting. The accounting shall include a listing of the assets of the
Trust showing the value of such assets at the close of the period covered by the
accounting. On direction of the Named Administrative Fiduciary, and if
previously agreed to by the Trustee, the Trustee shall submit to the Named
Administrative Fiduciary interim valuations, reports or other information
pertaining to the Trust.
The Named Administrative Fiduciary may approve the accounting by written
approval delivered to the Trustee or by failure to deliver written objections to
the Trustee within 60 days after receipt of the accounting. Any such approval
shall be binding on the Employer, the Named Administrative Fiduciary, the Named
Investment Fiduciary and, to the extent permitted by ERISA, all other persons.
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8.03 VALUATION. The assets of the Trust shall be valued as of each
valuation date under the Plan at fair market value as determined by the Trustee
based upon such sources of information as it may deem reliable, including, but
not limited to, stock market quotations, statistical evaluation services,
newspapers of general circulation, financial publications, advice from
investment counselors or brokerage firms, or any combination of sources. The
reasonable costs incurred in establishing values of the Trust Fund shall be a
charge against the Trust Fund, unless paid by the Employer.
When the Trustee is unable to arrive at a value based upon information from
independent sources, it may rely upon information from the Employer, Named
Administrative Fiduciary, Named Investment Fiduciary, appraisers, or other
sources, and shall not incur any liability for inaccurate valuation based in
good faith upon such information.
8.04 LOANS. In the event that participant loans are available under the
Plan, the Trustee shall reflect one aggregate balance for participant loans
under the Plan and shall reflect changes thereto only as directed by the
Employer or Named Administrative Fiduciary. The Trustee has no responsibility
with respect to maintenance of promissory notes or monitoring of loan
amortization schedules.
ARTICLE IX
RESIGNATION AND REMOVAL OF TRUSTEE
9.01 RESIGNATION. The Trustee may resign at any time upon at least 30
days' written notice to the Employer.
9.02 REMOVAL. The Employer may remove the Trustee upon at least 30 days'
written notice to the Trustee.
9.03 APPOINTMENT OF A SUCCESSOR. Upon resignation or removal of the
Trustee, the Employer shall appoint a successor trustee. Upon failure of the
Employer to appoint, or the failure of the effectiveness of the appointment by
the Employer of, a successor trustee by the effective date of the resignation or
removal, the Trustee may apply to any court of competent jurisdiction for the
appointment of a successor.
Promptly after receipt by the Trustee of notice of the effectiveness of the
appointment of the successor trustee, the Trustee shall deliver to the successor
trustee such records as may be reasonably requested to enable the successor
trustee to properly administer the Trust Fund and all property of the Trust
after deducting therefrom such amounts as the Trustee deems necessary to provide
for expenses, taxes, compensation or other amounts due to or by the Trustee
pursuant to Sections 4.04 or 5.03 hereof not paid by the Employer prior to the
delivery.
9.04 SETTLEMENT OF ACCOUNT. Upon resignation or removal of the Trustee, the
Trustee shall have the right to a settlement of its account, which settlement
shall be made, at the Trustee's option, either by an agreement of settlement
between the Trustee and the Employer or by a judicial settlement in an action
instituted by the Trustee.
13
<PAGE>
9.05 EXPENSES AND COMPENSATION. The Trustee shall not be obligated to
transfer Trust assets until the Trustee is provided assurance by the Employer
satisfactory to the Trustee that all fees and expenses reasonably anticipated
will be paid.
9.06 TERMINATION OF RESPONSIBILITY AND LIABILITY. Upon settlement of the
account and transfer of the Trust Fund to the successor trustee, all rights and
privileges under this Trust Agreement shall vest in the successor trustee and
all responsibility and liability of the Trustee with respect to the Trust and
assets thereof shall, except as otherwise required by ERISA, terminate subject
only to the requirement that the Trustee execute all necessary documents to
transfer the Trust assets to the successor trustee.
ARTICLE X
AMENDMENT AND TERMINATION
10.01 AMENDMENT. The Employer reserves the right to amend this Trust
Agreement, provided that no amendment of this Trust Agreement or the Plan shall
be effective which would (a) cause any assets of the Trust Fund to be used for,
or diverted to, purposes other than the exclusive benefit of Plan participants
or their beneficiaries other than an amendment permissible under the Code and
ERISA, or (b) affect the rights, duties, responsibilities, obligations or
liabilities of the Trustee without the Trustee's written consent. The Employer
shall amend this Trust Agreement as requested by the Trustee to reflect changes
in law which counsel for the Trustee advises the Trustee require such changes.
Amendments to the Trust Agreement or a certified copy of the amendments shall be
delivered to the Trustee promptly after adoption, and if practicable under the
circumstances, any proposed amendment under consideration by the Employer shall
be communicated to the Trustee to permit the Trustee to review and comment
thereon in due course before the Employer acts on the proposed amendment.
10.02 TERMINATION. The Trust may be terminated by the Employer upon at
least 60 days' written notice to the Trustee. Upon such termination, and subject
to Section 11.01 hereof, the Trust Fund shall be distributed as directed by the
Named Administrative Fiduciary.
ARTICLE XI
MISCELLANEOUS
11.01 EXCLUSIVE BENEFIT RULE. Except as provided in Section 11.02, or as
otherwise permitted or required by ERISA or the Code, no asset of the Trust
shall be used for, or diverted to, purposes other than the exclusive benefit of
Plan participants or their beneficiaries or for the reasonable expenses of
administering the Plan and Trust until all liabilities for benefits due Plan
participants or their beneficiaries have been satisfied.
11.02 REFUNDS TO EMPLOYER. The Trustee shall, upon the written direction of
the Named Administrative Fiduciary which shall include a certification that such
action is proper under the Plan, ERISA and the Code specifying any relevant
sections thereof, return to the Employer any amount referred to in section
403(c)(2) of ERISA.
14
<PAGE>
11.03 AUTHORIZED ACTION. Any action to be taken under this Trust Agreement
by an Employer or other person which is: (a) a corporation shall be taken by the
board of directors of the corporation or any person or persons duly empowered by
the board of directors to take the action involved, (b) a partnership shall be
taken by an authorized general partner of the partnership, and (c) a sole
proprietorship by the sole proprietor.
11.04 TEXT OF PLAN. The Employer represents that, prior to the execution of
this Trust Agreement by both parties, it delivered to the Trustee the text of
the Plan as in effect as of the date of this Trust Agreement. The Employer shall
deliver to the Trustee promptly after adoption thereof a certified copy of any
amendment of the Plan.
11.05 CONFLICT WITH PLAN. The rights, duties, responsibilities, obligations
and liabilities of the Trustee are as set forth in this Trust Agreement, and no
provision of the Plan or any other document shall be deemed to affect such
rights, duties, responsibilities, obligations and liabilities. If there is a
conflict between provisions of the Plan and this Trust Agreement with respect to
any subject involving the Trustee, including but not limited to the
responsibility, authority or powers of the Trustee, the provisions of this Trust
Agreement shall be controlling.
11.06 FAILURE TO MAINTAIN QUALIFICATION. If the Trust fails to qualify as a
qualified trust under section 401(a) of the Code, or loses its status as such a
qualified trust, the Employer shall immediately so notify the Trustee, and the
Trustee shall, without further notice or direction, remove the Trust assets from
any common or collective trust fund maintained by the Trustee or its affiliate
for investments by qualified trusts.
11.07 GOVERNING LAW AND CONSTRUCTION. This Trust Agreement and the Trust
shall be construed, administered and governed under ERISA and other pertinent
federal law, and to the extent that federal law is inapplicable, under the laws
of the state of Texas. If any provision of this Trust Agreement is susceptible
to more than one interpretation, the interpretation to be given is that which is
consistent with the Trust being a qualified trust under section 401(a) of the
Code. If any provision of this Trust Agreement is held by a court of competent
jurisdiction to be invalid or unenforceable, the remaining provisions shall
continue to be fully effective to the extent possible under the circumstances.
11.08 SUCCESSORS AND ASSIGNS. This Trust Agreement shall inure to the
benefit of and be binding upon the parties hereto and their respective
successors and assigns.
11.09 GENDER. As used in this Trust Agreement, the masculine gender shall
include the feminine and the neuter genders and the singular shall include the
plural and the plural the singular, as the context requires.
11.10 HEADINGS. Headings and subheadings in this Trust Agreement are for
convenience of reference only and are not to be considered in the construction
of the provisions of the Trust Agreement.
11.11 COUNTERPARTS. This Trust Agreement may be executed in several
counterparts, each of which shall be deemed an original, and these counterparts
shall constitute one and the same instrument which may be sufficiently evidenced
by any one counterpart.
15
<PAGE>
IN WITNESS WHEREOF, the Employer and the Trustee have executed this Trust
Agreement each by action of a duly authorized person.
MERRILL LYNCH TRUST
COMPANY OF TEXAS PENNZOIL-QUAKER STATE COMPANY
By: ____________________________ By: _____________________________
Name: __________________________ Name: ___________________________
Title: _________________________ Title: __________________________
16
<PAGE>
EXHIBIT 5
BAKER & BOTTS, L.L.P.
One Shell Plaza
910 Louisiana
Houston, Texas 77002-4995
December 28, 1998
Pennzoil-Quaker State Company
Pennzoil Place
P.O. Box 2967
Houston, Texas 77252-2967
Gentlemen:
As set forth in the Registration Statement on Form S-8 to be filed by
Pennzoil-Quaker State Company (the "Company") under the Securities Act of 1933,
as amended (the "Act"), relating to 200,000 shares ("Shares") of common stock,
par value $0.10 per share, of the Company issuable under the terms of the
Pennzoil-Quaker State Company Savings and Investment Plan (the "Plan"), certain
legal matters in connection with the Common Stock and the participation in the
Plan are being passed upon for the Company by us.
In our capacity as counsel to the Company in the connection referred to
above, we have familiarized ourselves with the Company's Restated Certificate of
Incorporation and Amended and Restated By-laws and have examined the originals,
or copies certified or otherwise identified, of corporate records of the
Company, including minute books of the Company as furnished to us by the
Company, certificates of public officials and of representatives of the
Company, statutes and other instruments and documents, as a basis for the
opinions hereinafter expressed. In giving such opinions we have relied upon
certificates of officers of the Company with respect to the accuracy of the
material factual matters contained in such certificates.
Based on our examination as aforesaid, we are of the opinion that:
1. The Company is a corporation duly organized and validly existing in
good standing under the laws of the State of Delaware.
2. Participation in the Plan is valid under the laws of the State of
Delaware.
3. Upon the due authorization, issuance and sale of Shares by the Company
to the Plan trustee from time to time pursuant to the provisions of the Plan for
a
<PAGE>
Pennzoil-Quaker State Company Page 2 December 28, 1998
consideration at least equal to the par value of such Shares, such Shares will
be validly issued, fully paid and nonassessable.
We hereby consent to the filing of this opinion of counsel as Exhibit 5 to
the Registration Statement. In giving this consent, we do not hereby admit that
we are in the category of persons whose consent is required under Section 7 of
the Act.
Very truly yours,
/s/ BAKER & BOTTS, L.L.P.
BAKER & BOTTS, L.L.P.
<PAGE>
EXHIBIT 23.1
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation
by reference in this registration statement on Form S-8 relating to the
Pennzoil-Quaker State Company Savings and Investment Plan of our report dated
June 2, 1998 included in Pennzoil-Quaker State Company's Form 10/A dated
December 1, 1998 and to all references to our Firm included in this registration
statement.
ARTHUR ANDERSEN LLP
Houston, Texas
December 28, 1998
<PAGE>
EXHIBIT 23.2
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in the Registration
Statement on Form S-8 relating to the Pennzoil Quaker State Savings and
Investment Plan of our report dated March 11, 1998, except as to the second
paragraph to Note 11 which is as of July 10, 1998, relating to the financial
statements of Excel Paralubes, which appears in the Information Statement
constituting part of the Registration Statement on Form 10 filed by Pennzoil-
Quaker State Company on September 21, 1998.
PricewaterhouseCoopers LLP
Houston, Texas
December 28, 1998
<PAGE>
EXHIBIT 24
PENNZOIL PRODUCTS COMPANY
POWER OF ATTORNEY
WHEREAS, PENNZOIL PRODUCTS COMPANY, a Delaware corporation (the "Company"),
intends to file with the Securities and Exchange Commission (the "Commission")
under the Securities Act of 1933, as amended, a Registration Statement on Form
S-8 (the "Registration Statement") relating to the Pennzoil Products Company
Savings and Investment Plan and the Common Stock of the Company issuable
thereunder, together with any and all exhibits and other documents having
relation thereto;
NOW, THEREFORE, the undersigned, in his capacity as a director or officer,
or both, as the case may be, of the Company, does hereby appoint DAVID P.
ALDERSON II, JAMES L. PATE and JAMES W. SHADDIX, and each of them severally, his
true and lawful attorneys or attorney with power to act with or without the
others and with full power of substitution and resubstitution, to execute in his
name, place and stead, in his capacity as a director or officer or both, as the
case may be, of the Company, the Registration Statement and all instruments
necessary or incidental in connection therewith, as may be necessary or
appropriate, together with any and all exhibits and other documents relating
thereto as said attorneys or any of them shall deem necessary or incidental in
connection therewith, and to file the same or cause the same to be filed with
the Commission. Each of said attorneys shall have full power and authority to do
and perform in the name and on behalf of the undersigned, in any and all
capacities, every act whatsoever necessary or desirable to be done to the
premises, as fully and to all intents and purposes as the undersigned might or
could do in person, the undersigned hereby ratifying and approving the acts of
said attorneys and each of them.
IN WITNESS WHEREOF, the undersigned has executed this instrument on this
29th day of December, 1998.
/s/ David P. Alderson II
-------------------------------
David P. Alderson II
<PAGE>
EXHIBIT 24
PENNZOIL PRODUCTS COMPANY
POWER OF ATTORNEY
WHEREAS, PENNZOIL PRODUCTS COMPANY, a Delaware corporation (the "Company"),
intends to file with the Securities and Exchange Commission (the "Commission")
under the Securities Act of 1933, as amended, a Registration Statement on Form
S-8 (the "Registration Statement") relating to the Pennzoil Products Company
Savings and Investment Plan and the Common Stock of the Company issuable
thereunder, together with any and all exhibits and other documents having
relation thereto;
NOW, THEREFORE, the undersigned, in his capacity as a director or officer,
or both, as the case may be, of the Company, does hereby appoint DAVID P.
ALDERSON II, JAMES L. PATE and JAMES W. SHADDIX, and each of them severally, his
true and lawful attorneys or attorney with power to act with or without the
others and with full power of substitution and resubstitution, to execute in his
name, place and stead, in his capacity as a director or officer or both, as the
case may be, of the Company, the Registration Statement and all instruments
necessary or incidental in connection therewith, as may be necessary or
appropriate, together with any and all exhibits and other documents relating
thereto as said attorneys or any of them shall deem necessary or incidental in
connection therewith, and to file the same or cause the same to be filed with
the Commission. Each of said attorneys shall have full power and authority to do
and perform in the name and on behalf of the undersigned, in any and all
capacities, every act whatsoever necessary or desirable to be done to the
premises, as fully and to all intents and purposes as the undersigned might or
could do in person, the undersigned hereby ratifying and approving the acts of
said attorneys and each of them.
IN WITNESS WHEREOF, the undersigned has executed this instrument on this
29th day of December, 1998.
/s/ James L. Pate
-------------------------------
James L. Pate
<PAGE>
EXHIBIT 24
PENNZOIL PRODUCTS COMPANY
POWER OF ATTORNEY
WHEREAS, PENNZOIL PRODUCTS COMPANY, a Delaware corporation (the "Company"),
intends to file with the Securities and Exchange Commission (the "Commission")
under the Securities Act of 1933, as amended, a Registration Statement on Form
S-8 (the "Registration Statement") relating to the Pennzoil Products Company
Savings and Investment Plan and the Common Stock of the Company issuable
thereunder, together with any and all exhibits and other documents having
relation thereto;
NOW, THEREFORE, the undersigned, in his capacity as a director or officer,
or both, as the case may be, of the Company, does hereby appoint DAVID P.
ALDERSON II, JAMES L. PATE and JAMES W. SHADDIX, and each of them severally, his
true and lawful attorneys or attorney with power to act with or without the
others and with full power of substitution and resubstitution, to execute in his
name, place and stead, in his capacity as a director or officer or both, as the
case may be, of the Company, the Registration Statement and all instruments
necessary or incidental in connection therewith, as may be necessary or
appropriate, together with any and all exhibits and other documents relating
thereto as said attorneys or any of them shall deem necessary or incidental in
connection therewith, and to file the same or cause the same to be filed with
the Commission. Each of said attorneys shall have full power and authority to do
and perform in the name and on behalf of the undersigned, in any and all
capacities, every act whatsoever necessary or desirable to be done to the
premises, as fully and to all intents and purposes as the undersigned might or
could do in person, the undersigned hereby ratifying and approving the acts of
said attorneys and each of them.
IN WITNESS WHEREOF, the undersigned has executed this instrument on this
29th day of December, 1998.
/s/ James J. Postl
-------------------------------
James J. Postl
<PAGE>
EXHIBIT 24
PENNZOIL PRODUCTS COMPANY
POWER OF ATTORNEY
WHEREAS, PENNZOIL PRODUCTS COMPANY, a Delaware corporation (the "Company"),
intends to file with the Securities and Exchange Commission (the "Commission")
under the Securities Act of 1933, as amended, a Registration Statement on Form
S-8 (the "Registration Statement") relating to the Pennzoil Products Company
Savings and Investment Plan and the Common Stock of the Company issuable
thereunder, together with any and all exhibits and other documents having
relation thereto;
NOW, THEREFORE, the undersigned, in his capacity as a director or officer,
or both, as the case may be, of the Company, does hereby appoint DAVID P.
ALDERSON II, JAMES L. PATE and JAMES W. SHADDIX, and each of them severally, his
true and lawful attorneys or attorney with power to act with or without the
others and with full power of substitution and resubstitution, to execute in his
name, place and stead, in his capacity as a director or officer or both, as the
case may be, of the Company, the Registration Statement and all instruments
necessary or incidental in connection therewith, as may be necessary or
appropriate, together with any and all exhibits and other documents relating
thereto as said attorneys or any of them shall deem necessary or incidental in
connection therewith, and to file the same or cause the same to be filed with
the Commission. Each of said attorneys shall have full power and authority to do
and perform in the name and on behalf of the undersigned, in any and all
capacities, every act whatsoever necessary or desirable to be done to the
premises, as fully and to all intents and purposes as the undersigned might or
could do in person, the undersigned hereby ratifying and approving the acts of
said attorneys and each of them.
IN WITNESS WHEREOF, the undersigned has executed this instrument on this
29th day of December, 1998.
/s/ James W. Shaddix
-------------------------------
James W. Shaddix
<PAGE>
EXHIBIT 24
PENNZOIL PRODUCTS COMPANY
POWER OF ATTORNEY
WHEREAS, PENNZOIL PRODUCTS COMPANY, a Delaware corporation (the "Company"),
intends to file with the Securities and Exchange Commission (the "Commission")
under the Securities Act of 1933, as amended, a Registration Statement on Form
S-8 (the "Registration Statement") relating to the Pennzoil Products Company
Savings and Investment Plan and the Common Stock of the Company issuable
thereunder, together with any and all exhibits and other documents having
relation thereto;
NOW, THEREFORE, the undersigned, in his or her capacity as a member of the
Administrative Committee of the Savings and Investment Plan (the "Committee"),
does hereby appoint DAVID P. ALDERSON II, JAMES L. PATE and JAMES W. SHADDIX,
and each of them severally, his or her true and lawful attorneys or attorney
with power to act with or without the others and with full power of substitution
and resubstitution, to execute in his or her name, place and stead, in his or
her capacity as a member of the Committee, the Registration Statement and all
instruments necessary or incidental in connection therewith, as may be necessary
or appropriate, together with any and all exhibits and other documents relating
thereto as said attorneys or any of them shall deem necessary or incidental in
connection therewith, and to file the same or cause the same to be filed with
the Commission. Each of said attorneys shall have full power and authority to do
and perform in the name and on behalf of the undersigned, in any and all
capacities, every act whatsoever necessary or desirable to be done to the
premises, as fully and to all intents and purposes as the undersigned might or
could do in person, the undersigned hereby ratifying and approving the acts of
said attorneys and each of them.
IN WITNESS WHEREOF, the undersigned has executed this instrument on this
29th day of December, 1998.
/s/ David P. Alderson II
-------------------------------
David P. Alderson II
<PAGE>
EXHIBIT 24
PENNZOIL PRODUCTS COMPANY
POWER OF ATTORNEY
WHEREAS, PENNZOIL PRODUCTS COMPANY, a Delaware corporation (the "Company"),
intends to file with the Securities and Exchange Commission (the "Commission")
under the Securities Act of 1933, as amended, a Registration Statement on Form
S-8 (the "Registration Statement") relating to the Pennzoil Products Company
Savings and Investment Plan and the Common Stock of the Company issuable
thereunder, together with any and all exhibits and other documents having
relation thereto;
NOW, THEREFORE, the undersigned, in his or her capacity as a member of the
Administrative Committee of the Savings and Investment Plan (the "Committee"),
does hereby appoint DAVID P. ALDERSON II, JAMES L. PATE and JAMES W. SHADDIX,
and each of them severally, his or her true and lawful attorneys or attorney
with power to act with or without the others and with full power of substitution
and resubstitution, to execute in his or her name, place and stead, in his or
her capacity as a member of the Committee, the Registration Statement and all
instruments necessary or incidental in connection therewith, as may be necessary
or appropriate, together with any and all exhibits and other documents relating
thereto as said attorneys or any of them shall deem necessary or incidental in
connection therewith, and to file the same or cause the same to be filed with
the Commission. Each of said attorneys shall have full power and authority to do
and perform in the name and on behalf of the undersigned, in any and all
capacities, every act whatsoever necessary or desirable to be done to the
premises, as fully and to all intents and purposes as the undersigned might or
could do in person, the undersigned hereby ratifying and approving the acts of
said attorneys and each of them.
IN WITNESS WHEREOF, the undersigned has executed this instrument on this
29th day of December, 1998.
/s/ Clyde W. Beahm
-------------------------------
Clyde W. Beahm
<PAGE>
EXHIBIT 24
PENNZOIL PRODUCTS COMPANY
POWER OF ATTORNEY
WHEREAS, PENNZOIL PRODUCTS COMPANY, a Delaware corporation (the "Company"),
intends to file with the Securities and Exchange Commission (the "Commission")
under the Securities Act of 1933, as amended, a Registration Statement on Form
S-8 (the "Registration Statement") relating to the Pennzoil Products Company
Savings and Investment Plan and the Common Stock of the Company issuable
thereunder, together with any and all exhibits and other documents having
relation thereto;
NOW, THEREFORE, the undersigned, in his or her capacity as a member of the
Administrative Committee of the Savings and Investment Plan (the "Committee"),
does hereby appoint DAVID P. ALDERSON II, JAMES L. PATE and JAMES W. SHADDIX,
and each of them severally, his or her true and lawful attorneys or attorney
with power to act with or without the others and with full power of substitution
and resubstitution, to execute in his or her name, place and stead, in his or
her capacity as a member of the Committee, the Registration Statement and all
instruments necessary or incidental in connection therewith, as may be necessary
or appropriate, together with any and all exhibits and other documents relating
thereto as said attorneys or any of them shall deem necessary or incidental in
connection therewith, and to file the same or cause the same to be filed with
the Commission. Each of said attorneys shall have full power and authority to do
and perform in the name and on behalf of the undersigned, in any and all
capacities, every act whatsoever necessary or desirable to be done to the
premises, as fully and to all intents and purposes as the undersigned might or
could do in person, the undersigned hereby ratifying and approving the acts of
said attorneys and each of them.
IN WITNESS WHEREOF, the undersigned has executed this instrument on this
29th day of December, 1998.
/s/ Linda F. Condit
-------------------------------
Linda F. Condit
<PAGE>
EXHIBIT 24
PENNZOIL PRODUCTS COMPANY
POWER OF ATTORNEY
WHEREAS, PENNZOIL PRODUCTS COMPANY, a Delaware corporation (the "Company"),
intends to file with the Securities and Exchange Commission (the "Commission")
under the Securities Act of 1933, as amended, a Registration Statement on Form
S-8 (the "Registration Statement") relating to the Pennzoil Products Company
Savings and Investment Plan and the Common Stock of the Company issuable
thereunder, together with any and all exhibits and other documents having
relation thereto;
NOW, THEREFORE, the undersigned, in his or her capacity as a member of the
Administrative Committee of the Savings and Investment Plan (the "Committee"),
does hereby appoint DAVID P. ALDERSON II, JAMES L. PATE and JAMES W. SHADDIX,
and each of them severally, his or her true and lawful attorneys or attorney
with power to act with or without the others and with full power of substitution
and resubstitution, to execute in his or her name, place and stead, in his or
her capacity as a member of the Committee, the Registration Statement and all
instruments necessary or incidental in connection therewith, as may be necessary
or appropriate, together with any and all exhibits and other documents relating
thereto as said attorneys or any of them shall deem necessary or incidental in
connection therewith, and to file the same or cause the same to be filed with
the Commission. Each of said attorneys shall have full power and authority to do
and perform in the name and on behalf of the undersigned, in any and all
capacities, every act whatsoever necessary or desirable to be done to the
premises, as fully and to all intents and purposes as the undersigned might or
could do in person, the undersigned hereby ratifying and approving the acts of
said attorneys and each of them.
IN WITNESS WHEREOF, the undersigned has executed this instrument on this
29th day of December, 1998.
/s/ Raymond T. Fischer
-------------------------------
Raymond T. Fischer
<PAGE>
EXHIBIT 24
PENNZOIL PRODUCTS COMPANY
POWER OF ATTORNEY
WHEREAS, PENNZOIL PRODUCTS COMPANY, a Delaware corporation (the "Company"),
intends to file with the Securities and Exchange Commission (the "Commission")
under the Securities Act of 1933, as amended, a Registration Statement on Form
S-8 (the "Registration Statement") relating to the Pennzoil Products Company
Savings and Investment Plan and the Common Stock of the Company issuable
thereunder, together with any and all exhibits and other documents having
relation thereto;
NOW, THEREFORE, the undersigned, in his or her capacity as a member of the
Administrative Committee of the Savings and Investment Plan (the "Committee"),
does hereby appoint DAVID P. ALDERSON II, JAMES L. PATE and JAMES W. SHADDIX,
and each of them severally, his or her true and lawful attorneys or attorney
with power to act with or without the others and with full power of substitution
and resubstitution, to execute in his or her name, place and stead, in his or
her capacity as a member of the Committee, the Registration Statement and all
instruments necessary or incidental in connection therewith, as may be necessary
or appropriate, together with any and all exhibits and other documents relating
thereto as said attorneys or any of them shall deem necessary or incidental in
connection therewith, and to file the same or cause the same to be filed with
the Commission. Each of said attorneys shall have full power and authority to do
and perform in the name and on behalf of the undersigned, in any and all
capacities, every act whatsoever necessary or desirable to be done to the
premises, as fully and to all intents and purposes as the undersigned might or
could do in person, the undersigned hereby ratifying and approving the acts of
said attorneys and each of them.
IN WITNESS WHEREOF, the undersigned has executed this instrument on this
29th day of December, 1998.
/s/ James J. Postl
-------------------------------
James J. Postl
<PAGE>
EXHIBIT 24
PENNZOIL PRODUCTS COMPANY
POWER OF ATTORNEY
WHEREAS, PENNZOIL PRODUCTS COMPANY, a Delaware corporation (the "Company"),
intends to file with the Securities and Exchange Commission (the "Commission")
under the Securities Act of 1933, as amended, a Registration Statement on Form
S-8 (the "Registration Statement") relating to the Pennzoil Products Company
Savings and Investment Plan and the Common Stock of the Company issuable
thereunder, together with any and all exhibits and other documents having
relation thereto;
NOW, THEREFORE, the undersigned, in his or her capacity as a member of the
Administrative Committee of the Savings and Investment Plan (the "Committee"),
does hereby appoint DAVID P. ALDERSON II, JAMES L. PATE and JAMES W. SHADDIX,
and each of them severally, his or her true and lawful attorneys or attorney
with power to act with or without the others and with full power of substitution
and resubstitution, to execute in his or her name, place and stead, in his or
her capacity as a member of the Committee, the Registration Statement and all
instruments necessary or incidental in connection therewith, as may be necessary
or appropriate, together with any and all exhibits and other documents relating
thereto as said attorneys or any of them shall deem necessary or incidental in
connection therewith, and to file the same or cause the same to be filed with
the Commission. Each of said attorneys shall have full power and authority to do
and perform in the name and on behalf of the undersigned, in any and all
capacities, every act whatsoever necessary or desirable to be done to the
premises, as fully and to all intents and purposes as the undersigned might or
could do in person, the undersigned hereby ratifying and approving the acts of
said attorneys and each of them.
IN WITNESS WHEREOF, the undersigned has executed this instrument on this
29th day of December, 1998.
/s/ Cherylon B. Reid
-------------------------------
Cherylon B. Reid
<PAGE>
EXHIBIT 24
PENNZOIL PRODUCTS COMPANY
POWER OF ATTORNEY
WHEREAS, PENNZOIL PRODUCTS COMPANY, a Delaware corporation (the "Company"),
intends to file with the Securities and Exchange Commission (the "Commission")
under the Securities Act of 1933, as amended, a Registration Statement on Form
S-8 (the "Registration Statement") relating to the Pennzoil Products Company
Savings and Investment Plan and the Common Stock of the Company issuable
thereunder, together with any and all exhibits and other documents having
relation thereto;
NOW, THEREFORE, the undersigned, in his or her capacity as a member of the
Administrative Committee of the Savings and Investment Plan (the "Committee"),
does hereby appoint DAVID P. ALDERSON II, JAMES L. PATE and JAMES W. SHADDIX,
and each of them severally, his or her true and lawful attorneys or attorney
with power to act with or without the others and with full power of substitution
and resubstitution, to execute in his or her name, place and stead, in his or
her capacity as a member of the Committee, the Registration Statement and all
instruments necessary or incidental in connection therewith, as may be necessary
or appropriate, together with any and all exhibits and other documents relating
thereto as said attorneys or any of them shall deem necessary or incidental in
connection therewith, and to file the same or cause the same to be filed with
the Commission. Each of said attorneys shall have full power and authority to do
and perform in the name and on behalf of the undersigned, in any and all
capacities, every act whatsoever necessary or desirable to be done to the
premises, as fully and to all intents and purposes as the undersigned might or
could do in person, the undersigned hereby ratifying and approving the acts of
said attorneys and each of them.
IN WITNESS WHEREOF, the undersigned has executed this instrument on this
29th day of December, 1998.
/s/ W. M. Robb
-------------------------------
W. M. Robb
<PAGE>
EXHIBIT 24
PENNZOIL PRODUCTS COMPANY
POWER OF ATTORNEY
WHEREAS, PENNZOIL PRODUCTS COMPANY, a Delaware corporation (the "Company"),
intends to file with the Securities and Exchange Commission (the "Commission")
under the Securities Act of 1933, as amended, a Registration Statement on Form
S-8 (the "Registration Statement") relating to the Pennzoil Products Company
Savings and Investment Plan and the Common Stock of the Company issuable
thereunder, together with any and all exhibits and other documents having
relation thereto;
NOW, THEREFORE, the undersigned, in his or her capacity as a member of the
Administrative Committee of the Savings and Investment Plan (the "Committee"),
does hereby appoint DAVID P. ALDERSON II, JAMES L. PATE and JAMES W. SHADDIX,
and each of them severally, his or her true and lawful attorneys or attorney
with power to act with or without the others and with full power of substitution
and resubstitution, to execute in his or her name, place and stead, in his or
her capacity as a member of the Committee, the Registration Statement and all
instruments necessary or incidental in connection therewith, as may be necessary
or appropriate, together with any and all exhibits and other documents relating
thereto as said attorneys or any of them shall deem necessary or incidental in
connection therewith, and to file the same or cause the same to be filed with
the Commission. Each of said attorneys shall have full power and authority to do
and perform in the name and on behalf of the undersigned, in any and all
capacities, every act whatsoever necessary or desirable to be done to the
premises, as fully and to all intents and purposes as the undersigned might or
could do in person, the undersigned hereby ratifying and approving the acts of
said attorneys and each of them.
IN WITNESS WHEREOF, the undersigned has executed this instrument on this
29th day of December, 1998.
/s/ James W. Shaddix
-------------------------------
James W. Shaddix
