<PAGE>
As Filed With the Securities and Exchange Commission on December 29, 1998
Registration No. 333-______
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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)
DELAWARE 76-0200625
(State or other jurisdiction of (I.R.S. Employer Identification Number)
incorporation or organization)
PENNZOIL PLACE, P.O. BOX 2967 77252-2967
HOUSTON, TEXAS (Zip Code)
(address of principal executive offices)
1998 INCENTIVE PLAN OF PENNZOIL-QUAKER STATE COMPANY
(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
TITLE OF SECURITIES TO AMOUNT TO BE OFFERING PRICE PER AGGREGATE OFFERING AMOUNT OF
BE REGISTERED(1) REGISTERED SHARE(2) PRICE(2) REGISTRATION FEE(2)
- -----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock, par 1,000,000 $13 11/16 $13,687,500 $3,805.13
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
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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 - 1998 Incentive Plan of Pennzoil-Quaker State Company (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.
NAME TITLE
------ -------
/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)
II-6
<PAGE>
EXHIBIT 4.3
1998 INCENTIVE PLAN
OF
PENNZOIL-QUAKER STATE COMPANY
1. Plan. This 1998 Incentive Plan of Pennzoil-Quaker State Company
("Plan") was adopted by the Company to reward certain corporate officers and key
employees of the Company.
2. Objectives. This Plan is designed to attract and retain key
employees of the Company and its Subsidiaries, to encourage a sense of
proprietorship and to stimulate the active interest of such persons in the
development and financial success of the Company and its Subsidiaries. These
objectives are to be accomplished by making Awards under this Plan. This Plan
is also designed to provide for substitute awards issued to employees of the
Company in exchange for awards they previously held under a similar plan of the
Company's parent, formerly PennzEnergy Company, a Delaware corporation.
3. Definitions. As used herein, the terms set forth below shall
have the following respective meanings:
"Authorized Officer" means the Chairman of the Board or the Chief
Executive Officer of the Company (or any other senior officer of the Company to
whom either the Chairman or the Chief Executive Officer shall delegate the
authority to execute any Award Agreement).
"Award" means the grant of any Option, SAR, Stock Award, Cash Award or
Performance Award, whether granted singly, in combination or in tandem, to a
Participant pursuant to such applicable terms, conditions and limitations as the
Committee may establish in order to fulfill the objectives of the Plan, and
includes any award made in substitution for awards previously granted to an
employee of the Company by the Company's former parent, PennzEnergy Company,
when such awards are issued in connection with the separation of the Company
from PennzEnergy Company.
"Award Agreement" means a written agreement between the Company and a
Participant setting forth the terms, conditions and limitations applicable to an
Award.
"Board" means the Board of Directors of the Company.
"Cash Award" means an award denominated in cash.
"Code" means the Internal Revenue Code of 1986, as amended from time
to time.
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"Committee" means the Compensation Committee of the Board or such
other committee of the Board as is designated by the Board to administer the
Plan.
"Common Stock" means the Common Stock, par value $0.10 per share, of
the Company.
"Company" means Pennzoil-Quaker State Company, a Delaware corporation.
"Director" means an individual serving as a member of the Board.
"Dividend Equivalents" means, with respect to shares of Restricted
Stock that are to be issued at the end of the Restriction Period (including
conditional stock), an amount equal to all dividends and other distributions (or
the economic equivalent thereof) that are payable to stockholders of record
during the Restriction Period on a like number of shares of Common Stock.
"Employee" means an employee of the Company or any of its
Subsidiaries.
"Fair Market Value" of a share of Common Stock means, as of a
particular date, (i) if shares of Common Stock are listed on a national
securities exchange, the mean between the highest and lowest sales price per
share of Common Stock reported on the consolidated transaction reporting system
for the principal national securities exchange on which shares of Common Stock
are listed on that date, or, if there shall have been no such sale so reported
on that date, on the last preceding date on which such a sale was so reported,
(ii) if shares of Common Stock are not so listed but are quoted on the Nasdaq
National Market, the mean between the highest and lowest sales price per share
of Common Stock reported by the Nasdaq National Market on that date, or, if
there shall have been no such sale so reported on that date, on the last
preceding date on which such a sale was so reported, (iii) if the Common Stock
is not so listed or quoted, the mean between the closing bid and asked price on
that date, or, if there are no quotations available for such date, on the last
preceding date on which such quotations are available, as reported by the Nasdaq
Stock Market, or, if not reported by the Nasdaq Stock Market, by the National
Quotation Bureau Incorporated or (iv) if shares of Common Stock are not publicly
traded, the most recent value determined by an independent appraiser appointed
by the Company for such purpose. The above notwithstanding, respecting an Award
granted under Section 8 of this Plan (x) pursuant to, or in connection with, the
transaction occurring under that certain Agreement and Plan of Merger, dated as
of April 14, 1998, among Pennzoil Company, Pennzoil Products Company, Downstream
Merger Company and Quaker State Corporation ("Merger Agreement"), or (y) as of
the first full trading day of 1999, "Fair Market Value" of a share of Common
Stock shall mean the average of the mean between the highest and lowest sales
prices per share of Common Stock as reported on the New York Stock Exchange for
each of the first three (3) full trading days of 1999.
"Incentive Option" means an Option that is intended to comply with the
requirements set forth in Section 422 of the Code.
2
<PAGE>
"Nonqualified Stock Option" means an Option that is not an Incentive
Option.
"Option" means a right to purchase a specified number of shares of
Common Stock at a specified price.
"Participant" means an individual to whom an Award has been made under
this Plan.
"Performance Award" means an Award made to a Participant pursuant to
this Plan that is subject to the attainment of one or more Performance Goals.
"Performance Goal" means a standard established by the Committee to
determine in whole or in part whether a Performance Award shall be earned.
"Plan" means this 1998 Incentive Plan of Pennzoil-Quaker State
Company, as amended from time to time.
"Restricted Stock" means any Common Stock that is restricted or
subject to forfeiture provisions.
"Restriction Period" means a period of time beginning as of the date
upon which an Award of Restricted Stock is made pursuant to this Plan and ending
as of the date upon which the Common Stock subject to such Award is no longer
restricted or subject to forfeiture provisions.
"SAR" means a right to receive a payment, in cash or Common Stock,
equal to the excess of the Fair Market Value (or other specified valuation) of a
specified number of shares of Common Stock on the date the right is exercised
over a specified strike price, in each case, as determined by the Committee.
"Stock Award" means an award in the form of shares of Common Stock or
units denominated in shares of Common Stock.
"Stock Based Awards Limitations" shall have the meaning set forth in
Section 8(b)(ii).
"Subsidiary" means (i) in the case of a corporation, any corporation
of which the Company directly or indirectly owns shares representing more than
50% of the combined voting power of the shares of all classes or series of
capital stock of such corporation which have the right to vote generally on
matters submitted to a vote of the stockholders of such corporation and (ii) in
the case of a partnership or other business entity not organized as a
corporation, any such business entity of which the Company directly or
indirectly owns more than 50% of the voting, capital or profits interests
(whether in the form of partnership interests, membership interests or
otherwise).
3
<PAGE>
4. Eligibility. Individuals eligible for Awards under this Plan are
(i) those key Employees who hold positions of responsibility and whose
performance, in the judgment of the Committee, can have a significant effect on
the success of the Company and its Subsidiaries, (ii) individuals who are
expected to become such Employees within six months of the date of the Award,
and (iii) with respect to Nonqualified Stock Options and Stock Awards, certain
employees of the PennzEnergy Company, the Company's former parent, required to
receive awards under this Plan in substitution for awards previously held by
such employees under similar plans of PennzEnergy Company in compliance with the
applicable provisions of that certain Agreement and Plan of Merger, dated as of
April 14, 1998, among Pennzoil Company, Pennzoil Products Company, Downstream
Merger Company and Quaker State Corporation and Exhibit A (Distribution
Agreement) Form of Employee Benefits Agreement thereto.
5. Common Stock Available for Awards. Subject to the provisions of
Sections 8(c) and 14 hereof, there shall be available for Awards under this Plan
granted wholly or partly in Common Stock (including rights or options that may
be exercised for or settled in Common Stock) an aggregate of 1,000,000 shares of
Common Stock. All 1,000,000 shares of Common Stock shall be available for
Incentive Options. The number of shares of Common Stock that are the subject of
Awards under this Plan, if forfeited or terminated, unexercised upon expiration,
are settled in cash in lieu of Common Stock or in a manner such that all or some
of the shares covered by an Award are not issued to a Participant, or if
exchanged for Awards that do not involve Common Stock, shall again immediately
become available for Awards hereunder. The Committee may from time to time
adopt and observe such procedures concerning the counting of shares against the
Plan maximum as it may deem appropriate. The Board and the appropriate officers
of the Company shall from time to time take whatever actions are necessary to
file any required documents with governmental authorities, stock exchanges and
transaction reporting systems to ensure that shares of Common Stock are
available for issuance pursuant to Awards.
6. Administration.
(a) This Plan shall be administered by the Committee. The Committee
shall consist of at least two members of the Board.
(b) Subject to the provisions hereof, the Committee shall have full
and exclusive power and authority to administer this Plan and to take all
actions that are specifically contemplated hereby or are necessary or
appropriate in connection with the administration hereof. The Committee
shall also have full and exclusive power to interpret this Plan and to
adopt such rules, regulations and guidelines for carrying out this Plan as
it may deem necessary or proper, all of which powers shall be exercised in
the best interests of the Company and in keeping with the objectives of
this Plan. The Committee may, in its discretion, provide for the extension
of the exercisability of an Award, accelerate the vesting or exercisability
of an Award, eliminate or make less restrictive any restrictions contained
in an Award, waive any restriction or other provision of this Plan or an
Award or otherwise amend or modify an Award in any manner that is either
(i) not adverse to the Participant to
4
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whom such Award was granted or (ii) consented to by such Participant. The
Committee may make an award to an individual who it expects to become an
Employee within the next six months, provided that such award shall be
subject to the individual actually becoming an Employee within such time
period. The Committee may correct any defect or supply any omission or
reconcile any inconsistency in this Plan or in any Award in the manner and
to the extent the Committee deems necessary or desirable to further the
Plan purposes. Any decision of the Committee in the interpretation and
administration of this Plan shall lie within its sole and absolute
discretion and shall be final, conclusive and binding on all parties
concerned.
(c) No member of the Committee or officer of the Company to whom the
Committee has delegated authority in accordance with the provisions of
Section 7 of this Plan shall be liable for anything done or omitted to be
done by him or her, by any member of the Committee or by any officer of the
Company in connection with the performance of any duties under this Plan,
except for his or her own willful misconduct or as expressly provided by
statute.
7. Delegation of Authority. The Committee may delegate to the Chief
Executive Officer and to other senior officers of the Company its duties under
this Plan pursuant to such conditions or limitations as the Committee may
establish.
8. Awards.
(a) The Committee shall determine the type or types of Awards to be
made under this Plan and shall designate from time to time the individuals
who are to be the recipients of Awards. Each Award may be embodied in an
Award Agreement, which shall contain such terms, conditions and limitations
as shall be determined by the Committee in its sole discretion and shall be
signed by the Participant to whom the Award is made and by an Authorized
Officer for and on behalf of the Company. Awards may consist of those
listed in this Section 8(a) and may be granted singly, in combination or in
tandem. Awards may also be made in combination or in tandem with, in
replacement of, or as alternatives to, grants or rights under this Plan or
any other employee plan of the Company or any of its Subsidiaries,
including the plan of any acquired entity. An Award may provide for the
grant or issuance of additional, replacement or alternative Awards upon the
occurrence of specified events, including the exercise of the original
Award granted to a Participant. All or part of an Award may be subject to
conditions established by the Committee, which may include, but are not
limited to, continuous service with the Company and its Subsidiaries,
achievement of specific business objectives, increases in specified
indices, attainment of specified growth rates and other comparable
measurements of performance. Upon the termination of employment by a
Participant who is an Employee, any unexercised, deferred, unvested or
unpaid Awards shall be treated as set forth in the applicable Award
Agreement.
5
<PAGE>
(i) Option. An Award may be in the form of an Option. An Option
awarded pursuant to this Plan may consist of an Incentive Option or a
Nonqualified Stock Option. The price at which shares of Common Stock
may be purchased upon the exercise of an Option shall be not less than
the Fair Market Value of the Common Stock on the date of grant.
Subject to the foregoing provisions, the terms, conditions and
limitations applicable to any Option awarded pursuant to this Plan,
including the term of any Option and the date or dates upon which it
becomes exercisable, shall be determined by the Committee.
(ii) SAR. An Award may be in the form of an SAR. The terms,
conditions and limitations applicable to any SAR awarded pursuant to
this Plan, including the term of any SAR and the date or dates upon
which it becomes exercisable, shall be determined by the Committee.
(iii) Stock Award. An Award may be in the form of a Stock
Award, including the award of Restricted Stock or conditional stock
units. The terms, conditions and limitations applicable to any Stock
Award granted pursuant to this Plan shall be determined by the
Committee.
(iv) Cash Award. An Award may be in the form of a Cash Award.
The terms, conditions and limitations applicable to any Cash Award
granted pursuant to this Plan shall be determined by the Committee.
(v) Performance Award. Without limiting the type or number of
Awards that may be made under the other provisions of this Plan, an
Award may be in the form of a Performance Award. A Performance Award
shall be paid, vested or otherwise deliverable solely on account of
the attainment of one or more pre-established, objective Performance
Goals established by the Committee prior to the earlier to occur of
(x) 90 days after the commencement of such period of service to which
the Performance Goal relates and (y) the lapse of 25% of such period
of service (as scheduled in good faith at the time the goal is
established), and in any event while the outcome is substantially
uncertain. A Performance Goal is objective if a third party having
knowledge of the relevant facts could determine whether the goal is
met. Such a Performance Goal may be based on one or more business
criteria that apply to the individual, one or more business units of
the Company, or the Company as a whole, and may include one or more of
the following: increased revenue; net income; earnings before
interest, taxes, depreciation and amortization; other earnings
measures; economic value added; cash flow measures; stock price;
market share; return on equity or capital; return on revenue measures;
costs; oil and gas volumes; petroleum reserve measures and safety and
environmental performance measures. Unless otherwise stated, such a
Performance Goal need not be based upon an increase or positive result
under a particular business criterion and could include, for example,
maintaining the status quo or limiting economic losses (measured, in
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<PAGE>
each case, by reference to specific business criteria). In
interpreting Plan provisions applicable to Performance Goals and
Performance Awards, it is the intent of the Plan to conform with the
standards of Section 162(m) of the Code and Treasury Regulation
(S) 1.162-27(e)(2)(i), and the Committee in establishing such goals
and interpreting the Plan shall be guided by such provisions. Prior to
the payment of any compensation based on the achievement of
Performance Goals, the Committee must certify in writing that
applicable Performance Goals and any of the material terms thereof
were, in fact, satisfied. Subject to the foregoing provisions, the
terms, conditions and limitations applicable to any Performance Awards
made pursuant to this Plan shall be determined by the Committee.
(b) The following limitations shall apply to any Award made hereunder:
(i) no Participant may be granted, during any one calendar year
period, Awards consisting of Options or SARs that are exercisable for
more than 250,000 shares of Common Stock;
(ii) no Participant may be granted, during any one calendar year
period, Stock Awards covering or relating to more than 10,000 shares
of Common Stock (the limitation set forth in this clause (ii),
together with the limitation set forth in clause (i) above, being
hereinafter collectively referred to as the "Stock Based Awards
Limitations"); and
(iii) no Participant may be granted Awards consisting of cash or
in any other form permitted under this Plan (other than Awards
consisting of Options or SARs or otherwise consisting of shares of
Common Stock or units denominated in such shares) in respect of any
one calendar year period having a value determined on the date of
grant in excess of $2,000,000.
(c) Awards that are issued in substitution for an award previously
held by (1) Company employees by reason of employment by PennzEnergy
Company, the Company's former parent, and (2) certain employees of
PennzEnergy Company, when such Awards are issued in connection with the
separation of the Company from PennzEnergy Company, shall not be subject to
the limitations in Section 8(b), nor shall such Awards count against the
limitations on Common Stock available for Awards set forth in Section 5.
Any such Awards issued in substitution for prior awards held under any
PennzEnergy Company plan, program or practice shall be subject to such
terms and conditions as the Committee may establish, but shall in all
events comply with the applicable provisions of that certain Merger
Agreement and shall in all respects comply with the provisions of Exhibit A
(Distribution Agreement) Form of Employee Benefits Agreement thereto.
7
<PAGE>
9. Payment of Awards.
(a) General. Payment of Awards may be made in the form of cash or
Common Stock, or a combination thereof, and may include such restrictions
as the Committee shall determine, including, in the case of Common Stock,
restrictions on transfer and forfeiture provisions. If payment of an Award
is made in the form of Restricted Stock, the applicable Award Agreement
relating to such shares shall specify whether they are to be issued at the
beginning or end of the Restriction Period. In the event that shares of
Restricted Stock are to be issued at the beginning of the Restriction
Period, the certificates evidencing such shares (to the extent that such
shares are so evidenced) shall contain appropriate legends and restrictions
that describe the terms and conditions of the restrictions applicable
thereto. In the event that shares of Restricted Stock are to be issued at
the end of the Restricted Period, the right to receive such shares shall be
evidenced by book entry registration or in such other manner as the
Committee may determine.
(b) Deferral. With the approval of the Committee, amounts payable in
respect of Awards may be deferred and paid either in the form of
installments or as a lump-sum payment. The Committee may permit selected
Participants to elect to defer payments of some or all types of Awards in
accordance with procedures established by the Committee. Any deferred
payment of an Award, whether elected by the Participant or specified by the
Award Agreement or by the Committee, may be forfeited if and to the extent
that the Award Agreement so provides.
(c) Dividends, Earnings and Interest. Rights to dividends or Dividend
Equivalents may be extended to and made part of any Award consisting of
shares of Common Stock or units denominated in shares of Common Stock,
subject to such terms, conditions and restrictions as the Committee may
establish. The Committee may also establish rules and procedures for the
crediting of interest and other earnings on deferred cash payments and on
Dividend Equivalents for Awards consisting of shares of Common Stock or
units denominated in shares of Common Stock.
(d) Substitution of Awards. At the discretion of the Committee, a
Participant may be offered an election to substitute an Award for another
Award or Awards of the same or different type.
10. Option Exercise. The price at which shares of Common Stock may
be purchased under an Option shall be paid in full at the time of exercise in
cash or, if elected by the optionee, the optionee may purchase such shares by
means of tendering Common Stock or surrendering another Award, including
Restricted Stock, valued at Fair Market Value on the date of exercise, or any
combination thereof. The Committee shall determine acceptable methods for
Participants to tender Common Stock or other Awards; provided that any Common
Stock that is or was the subject of an Award may be so tendered only if it has
been held by the Participant for six months. The Committee may provide for
procedures to permit the exercise or purchase of such
8
<PAGE>
Awards by use of the proceeds to be received from the sale of Common Stock
issuable pursuant to an Award. Unless otherwise provided in the applicable Award
Agreement, in the event shares of Restricted Stock are tendered as consideration
for the exercise of an Option, a number of the shares issued upon the exercise
of the Option, equal to the number of shares of Restricted Stock used as
consideration therefor, shall be subject to the same restrictions as the
Restricted Stock so submitted as well as any additional restrictions that may be
imposed by the Committee. The Committee may adopt additional rules and
procedures regarding the exercise of Options from time to time, provided that
such rules and procedures are not inconsistent with the provisions of this
paragraph.
11. Taxes. The Company shall have the right to deduct applicable
taxes from any Award payment and withhold, at the time of delivery or vesting of
cash or shares of Common Stock under this Plan, an appropriate amount of cash or
number of shares of Common Stock or a combination thereof for payment of taxes
required by law or to take such other action as may be necessary in the opinion
of the Company to satisfy all obligations for withholding of such taxes. The
Committee may also permit withholding to be satisfied by the transfer to the
Company of shares of Common Stock theretofore owned by the holder of the Award
with respect to which withholding is required. If shares of Common Stock are
used to satisfy tax withholding, such shares shall be valued based on the Fair
Market Value when the tax withholding is required to be made. The Committee may
provide for loans, on either a short term or demand basis, from the Company to a
Participant to permit the payment of taxes required by law.
12. Amendment, Modification, Suspension or Termination. The Board
may amend, modify, suspend or terminate this Plan for the purpose of meeting or
addressing any changes in legal requirements or for any other purpose permitted
by law, except that (i) no amendment or alteration that would adversely affect
the rights of any Participant under any Award previously granted to such
Participant shall be made without the consent of such Participant and (ii) no
amendment or alteration shall be effective prior to its approval by the
stockholders of the Company to the extent such approval is required by
applicable legal requirements.
13. Assignability. Unless otherwise determined by the Committee and
provided in the Award Agreement, no Award or any other benefit under this Plan
shall be assignable or otherwise transferable, except by will or the laws of
descent and distribution or pursuant to a qualified domestic relations order as
defined by the Code or Title I of the Employee Retirement Income Security Act,
or the rules thereunder. The Committee may prescribe and include in applicable
Award Agreements other restrictions on transfer. Any attempted assignment of an
Award or any other benefit under this Plan in violation of this Section 13 shall
be null and void.
14. Adjustments.
(a) The existence of outstanding Awards shall not affect in any manner
the right or power of the Company or its stockholders to make or authorize
any or all adjustments, recapitalizations, reorganizations or other changes
in the capital stock of the Company or its business or any merger or
consolidation of the Company, or any issue of bonds, debentures,
9
<PAGE>
preferred or prior preference stock (whether or not such issue is prior to,
on a parity with or junior to the Common Stock) or the dissolution or
liquidation of the Company, or any sale or transfer of all or any part of
its assets or business, or any other corporate act or proceeding of any
kind, whether or not of a character similar to that of the acts or
proceedings enumerated above.
(b) In the event of any subdivision or consolidation of outstanding
shares of Common Stock, declaration of a dividend payable in shares of
Common Stock or other stock split, then (i) the number of shares of Common
Stock reserved under this Plan, (ii) the number of shares of Common Stock
covered by outstanding Awards in the form of Common Stock or units
denominated in Common Stock, (iii) the exercise or other price in respect
of such Awards, (iv) the appropriate Fair Market Value and other price
determinations for such Awards and (v) the Stock Based Awards Limitations
shall each be proportionately adjusted by the Board to reflect such
transaction. In the event of any other recapitalization or capital
reorganization of the Company, any consolidation or merger of the Company
with another corporation or entity, the adoption by the Company of any plan
of exchange affecting the Common Stock or any distribution to holders of
Common Stock of securities or property (other than normal cash dividends or
dividends payable in Common Stock), then (i) the number of shares of Common
Stock covered by outstanding Awards in the form of Common Stock or units
denominated in Common Stock, (ii) the exercise or other price in respect of
such Awards, (iii) the appropriate Fair Market Value and other price
determinations for such Awards and (iv) the Stock Based Awards Limitations
shall each be proportionately adjusted by the Board to reflect such
transaction; provided that such adjustments shall only be such as are
necessary to maintain the proportionate interest of the holders of the
Awards and preserve, without exceeding, the value of such Awards. In the
event of a corporate merger, consolidation, acquisition of property or
stock, separation, reorganization or liquidation, the Board shall be
authorized (i) to issue or assume Awards by means of substitution of new
substitute Awards, as appropriate, for previously issued Awards or to
assume previously issued Awards as part of such adjustment or (ii) to
cancel the Awards that are Options or SARs by giving the holder notice and
opportunity to exercise for 30 days prior to such cancellation. Any
substitute Awards shall not be subject to the limitations on Common Stock
available for Awards under paragraph 5, nor the limitations of Section
8(b).
15. Restrictions. No Common Stock or other form of payment shall be
issued with respect to any Award unless the Company shall be satisfied based on
the advice of its counsel that such issuance will be in compliance with
applicable federal and state securities laws. Certificates evidencing shares of
Common Stock delivered under this Plan (to the extent that such shares are so
evidenced) may be subject to such stop transfer orders and other restrictions as
the Committee may deem advisable under the rules, regulations and other
requirements of the Securities and Exchange Commission, any securities exchange
or transaction reporting system upon which the Common Stock is then listed or to
which it is admitted for quotation and any applicable federal or state
securities law. The Committee may cause a legend or legends to be placed upon
such certificates (if any) to make appropriate reference to such restrictions.
10
<PAGE>
16. Unfunded Plan. Insofar as it provides for Awards of cash, Common
Stock or rights thereto, this Plan shall be unfunded. Although bookkeeping
accounts may be established with respect to Participants who are entitled to
cash, Common Stock or rights thereto under this Plan, any such accounts shall be
used merely as a bookkeeping convenience. The Company shall not be required to
segregate any assets that may at any time be represented by cash, Common Stock
or rights thereto, nor shall this Plan be construed as providing for such
segregation, nor shall the Company, the Board or the Committee be deemed to be a
trustee of any cash, Common Stock or rights thereto to be granted under this
Plan. Any liability or obligation of the Company to any Participant with
respect to an Award of cash, Common Stock or rights thereto under this Plan
shall be based solely upon any contractual obligations that may be created by
this Plan and any Award Agreement, and no such liability or obligation of the
Company shall be deemed to be secured by any pledge or other encumbrance on any
property of the Company. Neither the Company nor the Board nor the Committee
shall be required to give any security or bond for the performance of any
obligation that may be created by this Plan.
17. Governing Law. This Plan and all determinations made and actions
taken pursuant hereto, to the extent not otherwise governed by mandatory
provisions of the Code or the securities laws of the United States, shall be
governed by and construed in accordance with the laws of the State of Delaware.
18. Effectiveness. This Plan shall be effective on December 30,
1998. This Plan and all Awards made hereunder prior to the next meeting of the
Company's stockholders are conditioned upon the approval of this Plan by the
stockholders of the Company at such meeting. If the stockholders of the Company
should fail to so approve this Plan, this Plan shall terminate and cease to be
of any further force or effect and all grants of Awards hereunder shall be null
and void.
11
<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 1,000,000 shares ("Shares") of common stock,
par value $0.10 per share, of the Company issuable under the terms of the
Pennzoil-Quaker State Company 1998 Incentive Plan (the "Plan"), certain legal
matters in connection with the Common Stock.
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. Upon the issuance and sale of Shares by the Company pursuant to the
provisions of the Plan for a consideration at least equal to the par value of
such Shares, such Shares will be validly issued, fully paid and non-assessable
shares of capital stock of the Company.
<PAGE>
Pennzoil-Quaker State Company Page 2 December 28, 1998
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 1998 Incentive 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 Company 1998
Incentive 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 1998 Incentive Plan of
Pennzoil Products Company 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 1998 Incentive Plan of
Pennzoil Products Company 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 1998 Incentive Plan of
Pennzoil Products Company 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 1998 Incentive Plan of
Pennzoil Products Company 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
