<PAGE> 1
As filed with the Securities and Exchange Commission on August 7, 1997
Registration No. 333-_________
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
---------------
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
---------------
QUAKER STATE CORPORATION
(Exact name of registrant as specified in its charter)
DELAWARE 25-0742820
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
225 EAST JOHN CARPENTER FREEWAY
IRVING, TEXAS 75062
(Address of Principal Executive Offices) (Zip Code)
1994 STOCK INCENTIVE PLAN
(Full title of the plan)
---------------
PAUL E. KONNEY, ESQUIRE
SENIOR VICE PRESIDENT, GENERAL COUNSEL AND SECRETARY
QUAKER STATE CORPORATION
225 EAST JOHN CARPENTER FREEWAY
IRVING, TEXAS 75062
(972) 868-0400
(Name, address and telephone number of agent for service)
---------------
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
================================================================================================================
Title of Proposed Proposed
securities Amount maximum maximum Amount of
to be to be offering price aggregate registration
registered registered per share offering price fee
- ----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Capital Stock, par value
$1.00 per share 3,500,000 shs. $15.75(1) $55,125,000 $16,704.55
Rights to purchase Capital
Stock (2) (2) (2) (2)
================================================================================================================
</TABLE>
(1) Estimated solely for the purpose of calculating the registration fee
calculated in accordance with Rules 457(h) and 457(c) on the basis of the
average of the high and low sale prices for the Capital Stock as reported in the
New York Stock Exchange Composite Transactions Listing for August 5, 1997, as
quoted in the Wall Street Journal.
(2) Such number of Rights as are associated with the shares of capital stock
registered hereby from time to time pursuant to the terms of the Registrant's
Stockholder Rights Plan. Initially the Rights are attached to and trade with the
shares of capital stock. Pursuant to Rule 457, no additional registration fee
is required for the Rights.
================================================================================
<PAGE> 2
PART II.
INFORMATION REQUIRED IN
REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed by the registrant with the Securities and
Exchange Commission (File No. 1-2677) are incorporated by reference in this
registration statement:
(a) The registrant's Annual Report on Form 10-K for the year ended
December 31, 1996, filed pursuant to Section 13(a) of the Securities
Exchange Act of 1934 (the "1934 Act");
(b) All other reports filed by the registrant pursuant to Section
13(a) of the 1934 Act since the end of the fiscal year covered by the
annual report on Form 10-K referred to in (a) above;
(c) Company's Current Reports on Form 8-K, filed July 13, 1996 and
Form 8-K/A-1 filed on September 11, 1996 relating to the acquisition of
Blue Coral, Inc.; in conjunction with the audited financial statements of
Blue Coral, Inc., see footnote 2 of the consolidated financial statements
of the Company incorporated by reference in its Annual Report on Form 10-K
for the fiscal year ended December 31, 1996, describing the sale of
Nicsand, Inc. to its minority stockholder;
(d) Company's Current Reports on Form 8-K, filed October 10, 1996 and
Form 8-K/A-1 filed December 17, 1996, relating to the acquisition of Medo
Industries, Inc. and its affiliated companies; and
(e) The description of the registrant's Capital Stock contained in
the registrant's Current Report on Form 8-K filed November 12, 1996,
including any amendment or report filed for the purpose of updating such
description.
All documents filed by the registrant pursuant to Sections 13(a), 13(c), 14
or 15(d) of the 1934 Act subsequent to the filing of the annual report on Form
10-K referred to in (a) above and prior to the filing of a post-effective
amendment which indicates that all securities offered hereby have been sold or
which deregisters all securities then remaining unsold shall be deemed to be
incorporated by reference in this registration statement and to be a part
hereof from the date of filing of such documents, except that the information
included in any document in response to paragraphs (i), (k) or (l) of Item 402
of Regulation S-K is not incorporated by reference in this registration
statement.
Any statement contained in a document incorporated or deemed to be
incorporated by reference in this registration statement shall be deemed to be
modified or superseded for purposes of this registration statement to the
extent that a statement contained in this registration statement or in any
subsequently filed document which also is or is deemed to be incorporated by
reference in this registration statement modifies or supersedes such statement.
Any statement so modified or superseded shall not be
II-1
<PAGE> 3
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.
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Section 145 of the Delaware General Corporation Law provides that a
corporation shall have power to indemnify any person who was or is a party, or
is threatened to be made a party to any threatened, pending or completed
action, suit or proceeding, whether civil, criminal, administrative or
investigative (other than an action by or in the right of the corporation) by
reason of the fact that such person is or was a director, officer, employee or
agent of the corporation, or is or was serving at the request of the
corporation as a director, officer, employee or agent of another corporation,
partnership, joint venture, trust or other enterprise, against expenses
(including attorneys' fees), judgments, fines and amounts paid in settlement
actually and reasonably incurred by such person in connection with such action,
suit or proceeding if such person acted in good faith and in a manner such
person reasonably believed to be in or not opposed to the best interests of the
corporation, and, with respect to any criminal action or proceeding, had no
reasonable cause to believe such person's conduct was unlawful. The
termination of any action, suit or proceeding by judgment, order, settlement,
conviction, or upon a plea of nolo contendere or its equivalent shall not, of
itself, create a presumption that the person did not act in good faith and in a
manner which such person reasonably believed to be in or not opposed to the
best interests of the corporation, and, with respect to any criminal action or
proceeding, had reasonable cause to believe that his or her conduct was
unlawful.
Section 145 of the Delaware General Corporation Law also provides that a
corporation shall have power to indemnify any person who was or is a party, or
is threatened to be made a party, to any threatened, pending or completed
action or suit by or in the right of the corporation to procure a judgment in
its favor by reason of the fact that such person is or was a director, officer,
employee or agent of the corporation, or is or was serving at the request of
the corporation as a director, officer, employee or agent of another
corporation, partnership, joint venture, trust or other enterprise against
expenses (including attorneys' fees) actually and reasonably incurred by such
person in connection with the defense or settlement of such action or suit if
such person acted in good faith and in a manner such person reasonably believed
to be in or not opposed to the best interests of the corporation and except
that no indemnification shall be made in respect of any claim, issue or matter
as to which such person shall have been adjudged to be liable to the
corporation unless and only to the extent that the Court of Chancery or the
court in which such action or suit was brought shall determine upon application
that, despite the adjudication of liability but in view of all the
circumstances of the case, such person is fairly and reasonably entitled to
indemnity for such expenses which the Court of Chancery or such other court
shall deem proper.
II-2
<PAGE> 4
Under Section 145, any such indemnification (unless ordered by a court)
shall be made by the corporation only as authorized in the specific case upon a
determination that indemnification of the director, officer, employee or agent
is proper in the circumstances because such person has met the applicable
standard of conduct. Such determination shall be made (1) by a majority vote
of the directors who are not parties to such action, suit or proceeding, even
though less than a quorum, or (2) if there are no such directors, or if such
directors so direct, by independent legal counsel in a written opinion or (3)
by the stockholders.
Notwithstanding the above, Section 145 provides that to the extent that a
director, officer, employee or agent of a corporation has been successful on
the merits or otherwise in defense of any action, suit or proceeding referred
to above, or in defense of any claim, issue or matter therein, such person
shall be indemnified against expenses (including attorneys' fees) actually and
reasonably incurred by such person in connection therewith.
Section 145 further provides that expenses (including attorneys' fees)
incurred by an officer or director in defending any civil, criminal,
administrative or investigative action, suit or proceeding may be paid by the
corporation in advance of the final disposition of such action, suit or
proceeding upon receipt of an undertaking by or on behalf of such director or
officer to repay such amount if it shall ultimately be determined that such
person is not entitled to be indemnified. Such expenses (including attorneys'
fees) incurred by other employees and agents may be so paid upon such terms and
conditions, if any, as the board of directors deems appropriate.
Finally, Section 145 provides that the indemnification and advancement of
expenses provided by or granted pursuant to Section 145 shall not be deemed
exclusive of any other rights to which those seeking indemnification or
advancement of expenses may be entitled under any bylaw, agreement, vote of
stockholders or disinterested directors or otherwise, both as to action in such
person's official capacity and as to action in another capacity while holding
such office, and shall, unless otherwise provided when authorized or ratified,
continue as to a person who has ceased to be a director, officer, employee or
agent and inure to the benefit of the heirs, executors and administrators of
such a person.
Article Sixteenth of the registrant's Certificate of Incorporation (the
"Indemnification Article") provides that Directors and officers of the
registrant shall be indemnified except as prohibited by law against reasonable
expenses and any liability paid or incurred by such person in connection with
any actual or threatened claim, action, suit or proceeding, whether civil,
criminal, administrative, investigative or other, whether brought by or in the
right of the registrant or otherwise, in which such person may be involved by
reason of such person being or having been a Director or officer of the
registrant or by reason of the fact that such person is or was serving at the
request of the registrant as a director, officer, employee, fiduciary or other
representative of another corporation or other entity.
The registrant has also entered into Indemnification and Insurance
Agreements with certain of its Directors and from time to time may enter into
such agreements with other Directors or with certain officers, employees or
other persons designated by the registrant's Board of Directors. The
individual party to the agreement is indemnified for all expenses and liability
(including amounts paid in settlement) in any proceeding
II-3
<PAGE> 5
against such party unless it shall be determined under a procedure established
in the agreement that such party knew that his or her conduct was clearly
opposed to the best interests of the registrant.
Section 145 of the Delaware General Corporation Law provides that a
corporation shall have power to purchase and maintain insurance on behalf of
any person who is or was a director, officer, employee or agent of the
corporation, or is or was serving at the request of the corporation as a
director, officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise against any liability asserted against such
person and incurred by such person in any such capacity, or arising out of such
person's status as such, whether or not the corporation would have the power to
indemnify such person against such liability under the provisions of Section
145.
The Indemnification Article provides that the registrant may purchase and
maintain insurance to protect itself and any Director, officer or other person
entitled to indemnification under the Indemnification Article against any
expenses or liability incurred by such person in connection with any claim,
action, suit or proceeding in which such person may be involved by reason of
the service of such person to the registrant or to another organization at the
request of the registrant whether or not the registrant would have the power to
indemnify such person against such liability by law or under the provisions of
the Indemnification Article.
The registrant maintains director and officer liability insurance covering
its Directors and officers with respect to liabilities, including liabilities
under the Securities Act of 1933, which they may incur in connection with their
serving as such. Under this insurance, the insurer will pay amounts which the
registrant's Directors and officers become legally obligated to pay and for
which they are legally entitled to indemnification from the registrant, and the
Directors and officers have coverage against certain liabilities for which they
may not be entitled to indemnification from the registrant, in each case
subject to certain limitations and exclusions. Each Indemnification and
Insurance Agreement provides that if the registrant does not maintain in effect
the director and officer liability insurance in effect at the time the
Indemnification and Insurance Agreement was entered into, the registrant will
make payment to the Director to the fullest extent of the coverage that would
otherwise have been provided by the insurance for the benefit of the Director
had the insurance been maintained.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED.
Not applicable.
II-4
<PAGE> 6
ITEM 8. EXHIBITS.
The following exhibits are filed as part of this registration statement:
<TABLE>
<CAPTION>
EXHIBIT
NO. DOCUMENT
- --------- ------------------------------------------------------------
<S> <C>
4.1 Composite Certificate of Incorporation of the registrant
containing amendments through May 16, 1997, filed herewith.
4.2 Bylaws of the registrant, as amended and restated on March
27, 1997, filed as Exhibit 3 to the registrant's Quarterly
Report on Form 10-Q for the quarter ended March 31,
1997 and incorporated herein by reference.
4.3 Rights Agreement, dated as of September 28, 1995, between
the registrant and Mellon Securities Trust Company, as
Rights Agent, filed as Exhibit 1 to the registrant's Current
Report on Form 8-K dated October 20, 1995 and
incorporated herein by reference.
4.4 Quaker State Corporation 1994 Stock Incentive Plan, as
amended and restated through May 16, 1997, filed
herewith.
5.1 Opinion of Vinson & Elkins L.L.P. as to the legality of the
shares of Capital Stock being registered, filed herewith.
23.1 Consent of Vinson & Elkins L.L.P., included in Exhibit 5.1
filed herewith.
23.2 Consent of Coopers & Lybrand L.L.P., filed herewith.
23.3 Consent of Arthur Andersen LLP, filed herewith.
23.4 Consent of Ernst & Young LLP, filed herewith.
24.1 Power of Attorney (set forth on page II-8 of the
registration statement).
</TABLE>
II-5
<PAGE> 7
ITEM 9. UNDERTAKINGS.
(a) Rule 415 offering.
The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this registration statement:
(i) To include any prospectus required by section 10(a)(3)
of the Securities Act of 1933 (the "1933 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 (1)(i) and (1)(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 with or
furnished to the Securities and Exchange Commission by the registrant
pursuant to section 13 or section 15(d) of the Securities Exchange Act
of 1934 (the "1934 Act") that are incorporated by reference in the
registration statement;
(2) That, for the purpose of determining any liability under the
1933 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; and
(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.
(b) Filings incorporating subsequent Exchange Act documents by reference.
The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the 1933 Act, each filing of the registrant's
annual report pursuant to section 13(a) or section 15(d) of the 1934 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.
II-6
<PAGE> 8
(h) Commission opinion regarding indemnification.
Insofar as indemnification for liabilities arising under the 1933 Act may
be permitted to directors, officers and controlling persons of the registrant
pursuant to the provisions described under Item 6 above, or otherwise, the
registrant has been advised that, in the opinion of the Securities and Exchange
Commission, such indemnification is against public policy as expressed in the
1933 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 1933
Act and will be governed by the final adjudication of such issue.
II-7
<PAGE> 9
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
certifies that it has reasonable grounds to believe that it meets all 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 Irving, State of Texas, on August 7, 1997.
QUAKER STATE CORPORATION
By: /s/ Herbert M. Baum
-----------------------------
(Herbert M. Baum)
Chairman of the Board and
Chief Executive Officer
POWER OF ATTORNEY
We, the undersigned officers and directors of Quaker State Corporation,
hereby severally constitute Conrad A. Conrad and Paul E. Konney, and each of
them singly, our true and lawful attorneys-in-fact and agents, with full power
of substitution and resubstitution, for the undersigned and in the
undersigned's name, place and stead, in any and all capacities, to sign any and
all amendments (including post effective amendments) to this Registration
Statement, and to file same, with all exhibits thereto, and other documents in
connection therewith, with the Securities and Exchange Commission, granting
unto said attorneys-in-fact and agents, and each of them, full power and
authority to do and perform each and every act and thing requisite and
necessary to be done, as fully to all intents and purposes as the undersigned
might or could do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents or either of them, or their or his substitutes,
may lawfully do or cause to be done by virtue thereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement and Power of Attorney have been signed by the following
persons in the capacities and on the date indicated.
<TABLE>
<CAPTION>
Name Title Date
---- ----- ----
<S> <C> <C>
/s/ Herbert M. Baum Chairman of the Board, Chief 8/7/97
- -------------------------------- Executive Officer and Director
(Herbert M. Baum) (Principal Executive Officer)
/s/ Conrad A. Conrad Vice Chairman, Chief Financial 8/7/97
- -------------------------------- Officer and Director (Principal
(Conrad A. Conrad) Financial Officer)
/s/ Keith S. Krzeminski Vice President and Controller 8/7/97
- -------------------------------- (Principal Accounting Officer)
(Keith S. Krzeminski)
</TABLE>
II-8
<PAGE> 10
<TABLE>
<CAPTION>
Name Title Date
---- ----- ----
<S> <C> <C>
/s/ John D. Barr Director 8/7/97
- --------------------------------
(John D. Barr)
/s/ Leonard M. Carroll Director 8/7/97
- --------------------------------
(Leonard M. Carroll)
/s/ J. Taylor Crandall Director 8/7/97
- --------------------------------
(J. Taylor Crandall)
/s/ Laurel Cutler Director 8/7/97
- --------------------------------
(Laurel Cutler)
/s/ C. Frederick Fetterolf Director 8/7/97
- --------------------------------
(C. Frederick Fetterolf)
/s/ Thomas A. Gardner Director 8/7/97
- --------------------------------
(Thomas A. Gardner)
/s/ F. William Grube Director 8/7/97
- --------------------------------
(F. William Grube)
/s/ Forrest R. Haselton Director 8/7/97
- --------------------------------
(Forrest R. Haselton)
/s/ L. David Myatt Director 8/7/97
- --------------------------------
(L. David Myatt)
/s/ Raymond A. Ross, Jr. Director 8/7/97
- --------------------------------
(Raymond A. Ross, Jr.)
/s/ Lorne R. Waxlax Director 8/7/97
- --------------------------------
(Lorne R. Waxlax)
</TABLE>
<PAGE> 11
QUAKER STATE CORPORATION
1994 STOCK INCENTIVE PLAN
---------------------
REGISTRATION STATEMENT
ON FORM S-8
---------------------
EXHIBIT INDEX
(PURSUANT TO ITEM 601 OF REGULATION S-K)
<TABLE>
<CAPTION>
EXHIBIT
NO. DOCUMENT
------- ----------------------------------------------------------------------------------------------------------------
<S> <C>
4.1 Composite Certificate of Incorporation of the registrant containing amendments through May 16, 1997, filed
herewith.
4.2 Bylaws of the registrant, as amended and restated on March 27, 1997, filed as Exhibit 3 to the registrant's
Quarterly Report on Form 10-Q for the quarter ended March 31, 1997 and incorporated herein by reference.
4.3 Rights Agreement, dated as of September 28, 1995, between the registrant and Mellon Securities Trust
Company, as Rights Agent, filed as Exhibit 1 to the registrant's Current Report on Form 8-K dated October
20, 1995 and incorporated herein by reference.
4.4 Quaker State Corporation 1994 Stock Incentive Plan, as amended and restated through May 16, 1997, filed
herewith.
5.1 Opinion of Vinson & Elkins L.L.P. as to the legality of the shares of Capital Stock being registered, filed
herewith.
23.1 Consent of Vinson & Elkins L.L.P., included in Exhibit 5.1 filed herewith.
23.2 Consent of Coopers & Lybrand L.L.P., filed herewith.
23.3 Consent of Arthur Andersen LLP, filed herewith.
23.4 Consent of Ernst & Young LLP, filed herewith.
24.1 Power of Attorney (set forth on page II-8 of the registration statement).
</TABLE>
<PAGE> 1
Exhibit 4.1
CERTIFICATE
OF
INCORPORATION
OF
QUAKER STATE CORPORATION
RESTATED MAY 16, 1997
<PAGE> 2
CERTIFICATE
OF
INCORPORATION
OF
QUAKER STATE CORPORATION
**********
FIRST. The name of the corporation is Quaker State Corporation.
SECOND. Its registered office in the State of Delaware is located at 1209
Orange Street, in the City of Wilmington, County of New Castle. The name and
address of its registered agent is The Corporation Trust Company, 1209 Orange
Street, Wilmington, Delaware.
THIRD. The nature of the business, or objects or purposes to be
transacted, promoted or carried on are:
To purchase, lease or otherwise acquire lands, or oil, gas and mineral
rights in land, for the purpose of producing and to produce therefrom oil, gas,
or other volatile or mineral substances; to develop said lands by drilling oil
and gas wells thereon and by the installation of plants, machinery and
appliances for said purposes and to deal in, transport, store, supply, market
and sell oil, gas or volatile or mineral substances for either light, heat or
both or other purposes and for any or all of said purposes to own, maintain and
operate pipes, pipe lines, tanks, and such other devices, property and
appliances as may be necessary and incidental thereto.
To produce or otherwise acquire, transport, store and refine petroleum and
manufacture, compound and deal in the refined and semi-refined products of
petroleum, and own and operate all property, plants and refineries necessary
and incidental thereto.
To acquire by exchange or otherwise and subscribe for, purchase, hold, own,
assign, pledge and otherwise dispose of shares of capital stock, bonds,
mortgages, debentures, notes and other securities, obligations, contracts and
evidences of indebtedness of corporations of this State, including this
corporation,
<PAGE> 3
or of any other State, Country, Nation or Government and to issue, execute and
deliver in exchange therefor its stocks, bonds or other obligations and to
exercise in respect of any such shares of stock, bonds and other securities so
held, owned or possessed, any and all rights, powers and privileges of
ownership.
To manufacture, purchase or otherwise acquire, own, mortgage, pledge, sell,
assign and transfer, or otherwise dispose of, to invest, trade, deal in and
deal with goods, wares and merchandise and real and personal property of every
class and description.
To acquire, and pay for in cash, stock or bonds of this corporation or
otherwise, the good will, rights, assets and property, and to undertake or
assume the whole or any part of the obligations or liabilities of any person,
firm, association or corporation.
To acquire, hold, use, sell, assign, lease, grant licenses in respect of,
mortgage, or otherwise dispose of letters patent of the United States or any
foreign country, patent rights, licenses and privileges, inventions,
improvements and processes, copyrights, trademarks and trade names, relating to
or useful in connection with any business of this corporation.
To guarantee, purchase, hold, sell, assign, transfer, mortgage, pledge or
otherwise dispose of shares of the capital stock of, or any bonds, securities
or evidences of indebtedness created by any other corporation or corporations
organized under the laws of the this State or any other State, Country, Nation
or Government, and while the owner thereof to exercise all the rights, powers
and privileges of ownership.
To enter into, make and perform contracts of every kind and description
with any person, firm, association, corporation, municipality, county, state,
body politic or government or colony or dependency thereof.
To borrow or raise moneys for any of the purposes of the corporation and,
from time to time, without limit as to amount, to draw, make, accept, endorse,
execute and issue promissory notes, drafts, bills of exchange, warrants, bonds,
debentures and other negotiable or non-negotiable instruments and evidences of
indebtedness, and to secure the payment of any thereof and of the interest
thereon by mortgage upon or
<PAGE> 4
pledge, conveyance or assignment in trust of the whole or any part of the
property of the corporation, whether at the time owned or thereafter acquired
and to sell, pledge or otherwise dispose of such bonds or other obligations of
the corporation for its corporate purposes.
To purchase, hold, sell and transfer the shares of its own capital stock;
provided it shall not use its funds or property for the purchase of its own
shares of capital stock when such use would cause any impairment of its capital
except as otherwise permitted by law, and provided further that shares of its
own capital stock belonging to it shall not be voted upon directly or
indirectly.
To have one or more offices, to carry on all or any of its operations and
business and without restriction or limit as to amount to purchase or otherwise
acquire, hold, own, mortgage, sell, convey, or otherwise dispose of real and
personal property of every class and description in any of the States,
Districts, Territories or Colonies of the United States, and in any and all
foreign countries, subject to the laws of such State, District, Territory,
Colony or Country.
In general, to carry on any other business in connection with the
foregoing, and to have and exercise all the powers conferred by the laws of
Delaware upon corporations formed under the act hereinafter referred to, and to
do any or all of the things hereinbefore set forth to the same extent as
natural persons might or could do.
The objects and purposes specified in the foregoing clauses shall, except
where otherwise expressed, be in nowise limited or restricted by reference to,
or inference from, the terms of any other clause in this certificate of
incorporation, but the objects and purposes specified in each of the foregoing
clauses of this article shall be regarded as independent objects and purposes.
FOURTH: The total number of shares of stock which the Corporation shall
have authority to issue is Two Hundred and Fifty Million (250,000,000) shares
of the par value of one dollar ($1.00) each.
FIFTH: Except as authorized by the Board of Directors in its discretion,
no stockholder of any class shall have any preemptive or preferential right to
purchase or subscribe for either (i) any shares of
<PAGE> 5
the Corporation which the Corporation may issue or sell, whether out of the
number of shares authorized by this Certificate of Incorporation or any
amendment hereto or whether out of shares of the Corporation acquired by the
Corporation after the issue thereof, or (ii) any obligation or security of the
Corporation which the Corporation may issue or sell, that shall be convertible
into, or exchangeable for, any shares of the Corporation of any class, or (iii)
any warrant or option of the Corporation which the Corporation may issue or
sell, that confers upon the holder or owner thereof the right to subscribe for
or purchase from the Corporation any shares of the Corporation of any class.
SIXTH. The amount of capital with which the corporation will commence
business is One Hundred Thousand Dollars ($100,000).
SEVENTH. The names and places of residence of the incorporators are as
follows:
<TABLE>
<CAPTION>
NAMES RESIDENCES
----- ----------
<S> <C>
C.S. Peabbles Wilmington, Delaware
H. H. Snow Wilmington, Delaware
L. H. Herman Wilmington, Delaware
</TABLE>
EIGHTH. The corporation is to have perpetual existence.
NINTH. The private property of the stockholders shall not be subject to
the payment of corporate debts to any extent whatsoever.
TENTH. In furtherance, and not in limitation of the powers conferred by
statute, the board of directors is expressly authorized:
To make and alter the by-laws of the corporation.
To authorize and cause to be executed mortgages and liens upon the real and
personal property of the corporation.
To set apart out of any of the funds of the corporation available for
dividends a reserve or reserves for any proper purpose or to abolish any such
reserve in the manner in which it was created.
<PAGE> 6
By resolution or resolutions, passed by a majority of the whole Board to
designate one or more committees, each committee to consist of two or more of
the directors of the corporation, which, to the extent provided in said
resolution or resolutions or in the by-laws of the corporation, shall have and
may exercise the powers of the board of directors in the management of the
business and affairs of the corporation, and may have power to authorize the
seal of the corporation to be affixed to all papers which may require it. Such
committee or committees shall have such name or names as may be stated in the
by-laws of the corporation or as may be determined from time to time by
resolution adopted by the board of directors.
When and as authorized by the affirmative vote of the holders of a majority
of the stock issued and outstanding having voting power given at a
stockholders' meeting duly called for that purpose, or when authorized by the
written consent of the holders of a majority of the voting stock issued and
outstanding, the board of directors shall have power and authority to sell,
lease or exchange all of the property and assets of the corporation, including
its good will and its corporate franchises, upon such terms and conditions and
for such consideration, which may be in whole or in part shares of stock in,
and/or other securities of, any other corporation or corporations, as its board
of directors shall deem expedient and for the best interests of the
corporation.
The corporation may in its by-laws confer powers upon its board of
directors in addition to the foregoing, and in addition to the powers and
authorities expressly conferred upon it by statute.
ELEVENTH. Whenever a compromise or arrangement is proposed between this
corporation and its creditors or any class of them and/or between this
corporation and its stockholders or any class of them, any court of equitable
jurisdiction within the State of Delaware may, on the application in a summary
way of this corporation or of any creditor or stockholder thereof, or on the
application of any receiver or receivers appointed for this corporation under
the provisions of Section 3883 of the Revised Code of 1915 of said State, or on
the application of trustees in dissolution or of any receiver or receivers
appointed for this corporation under the provisions of Section 43 of the
General Corporation Law of the State of Delaware, order a meeting of the
creditors or class of creditors, and/or of the stockholders or class of
stockholders of
<PAGE> 7
this corporation, as the case may be, to be summoned in such manner as the
said Court directs. If a majority in number representing three-fourths in
value of the creditors or class of creditors, and/or of the stockholder or
class of stockholders of this corporation, as the case may be, agree to any
compromise or arrangement and to any reorganization of this corporation as
consequence of such compromise or arrangement, the said compromise or
arrangement and said reorganization shall, if sanctioned by the Court to which
the said application has been made, be binding on all the creditors or class of
creditors, and/or on all the stockholders or class of stockholders, of this
corporation, as the case may be, and also on this corporation.
TWELFTH. Both stockholders and directors shall have power, if the by-laws
so provide, to hold their meetings, and to have one or more offices within or
without the State of Delaware, and to keep the books of this corporation
(subject to the provisions of the statutes), outside of the State of Delaware
at such places as may be from time to time designated by the board of
directors.
THIRTEENTH. The corporation reserves the right to amend, alter, change or
repeal any provision contained in this certificate of incorporation, in the
manner now or hereafter prescribed by statute, and all rights conferred upon
stockholders herein are granted subject to this reservation.
FOURTEENTH. 1. The affirmative vote or consent of the holders of
ninety-five percent (95%) of all shares of stock of the Corporation entitled to
vote in elections of directors, considered for the purposes of this Article
FOURTEEN as one class, shall be required for the adoption or authorization of a
business combination (as hereinafter defined) with any other entity (as
hereinafter defined) if, as of the record date for the determination of
stockholders entitled to notice thereof and to vote thereon or consent thereto,
such other entity is the beneficial owner, directly or indirectly, of more than
thirty percent (30%) of the outstanding shares of stock of the Corporation
entitled to vote in elections of directors considered for the purposes of this
Article FOURTEEN as one class; provided that such ninety-five per cent (95%)
voting requirement shall not be applicable if:
(a) The cash, or fair market value of other consideration, to be received
per share by capital stockholders of the Corporation in such business
combination bears the same or a greater percentage relationship to the market
price of the Corporation's Capital Stock immediately prior to the announcement
of such business combination as the highest per share price (including
brokerage commissions and/or soliciting dealers fees) which such other entity
has theretofore paid for any of the shares of the Corporation's Capital
<PAGE> 8
Stock already owned by it bears to the market price of the Capital Stock of the
Corporation immediately prior to the commencement of acquisition of the
Corporation's Capital Stock by such other entity;
(b) The cash, or fair market value of other consideration, to be received
per share by capital stockholders of the Corporation in such business
combination (i) is not less than the highest per share price (including
brokerage commissions and/or soliciting dealers' fees) paid by such other
entity in acquiring any of its holdings of the Corporation's Capital Stock, and
(ii) is not less than the earnings per share of Capital Stock of the
Corporation for the four full consecutive fiscal quarters immediately preceding
the record date for solicitation of votes on such business combination,
multiplied by the then price/earnings multiple (if any) of such other entity as
customarily computed and reported in the financial community;
(c) After such other entity has acquired a thirty per cent (30%) interest
and prior to the consummation of such business combination: (i) such other
entity shall have taken steps to ensure that the Corporation's Board of
Directors included at all times representation by continuing director(s) (as
hereinafter defined) proportionate to the stockholdings of the Corporation's
public capital stockholders not affiliated with such other entity (with a
continuing director to occupy any resulting fractional board position); (ii)
there shall have been no reduction in the rate of dividends payable on the
Corporation's Capital Stock except as necessary to insure that a quarterly
dividend payment does not exceed 12.5% of the net income of the Corporation for
the four full consecutive fiscal quarters immediately preceding the declaration
date of such dividend, or except as may have been approved by a unanimous vote
of the directors; (iii) such other entity shall not have acquired any newly
issued shares of stock, directly or indirectly, from the Corporation (except
upon conversion of convertible securities acquired by it prior to obtaining a
thirty per cent (30%) interest or as a result of a pro rata stock dividend or
stock split); and (iv) such other entity shall not have acquired any additional
shares of the Corporation's outstanding Capital Stock or securities convertible
into Capital Stock except as a part of the transaction which results in such
other entity acquiring its thirty percent (30%) interest;
(d) Such other entity shall not have (i) received the benefit, directly or
indirectly (except proportionately as a stockholder) of any loans, advances,
guarantees, pledges or other financial assistance or tax credits provided by
the Corporation, or (ii) made any major change in the Corporation's business or
equity capital structure without the unanimous approval of the directors, in
either case prior to the consummation of such business combination; and
(e) A proxy statement responsive to the requirements of the Securities
Exchange Act of 1934 shall be mailed to public stockholders of the Corporation
for the purpose of soliciting stockholder approval of such business combination
and shall contain at the front thereof, in a prominent place, any
recommendations as to the advisability (or inadvisability) of the business
combination which the continuing directors, or any of them, may choose to state
and, if deemed advisable by a majority of the continuing directors, an opinion
of a reputable investment banking firm as to the fairness (or not) of the terms
of such business combination, from the point of view of the remaining public
stockholders of the Corporation (such investment banking firm to be selected by
a majority of the continuing directors and to be paid a reasonable fee for
their services by the Corporation upon receipt of such opinion).
The provisions of this Article FOURTEENTH shall also apply to a business
combination with any other entity which at any time has been the beneficial
owner, directly or indirectly, of more than thirty percent (30%) of the
outstanding shares of stock of the Corporation entitled to vote in elections of
directors considered for the purposes of this Article FOURTEENTH as one class,
notwithstanding the fact that such other entity has reduced its shareholdings
below thirty percent (30%) if, as of the record date for the determination of
stockholders entitled to notice of and to vote on or consent to the business
combination, such other entity is an "affiliate" of the Corporation (as
hereinafter defined).
<PAGE> 9
2. As used in this Article FOURTEENTH, (a) the term "other entity" shall
include any corporation, person or other entity and any other entity with which
it or its "affiliate" or "associate" (as defined below) has any agreement,
arrangement or understanding, directly or indirectly, for the purpose of
acquiring, holding, voting or disposing of stock of the Corporation, or which
is its "affiliate" or "associate" as those terms are defined in Rule 12b-2 of
the General Rules and Regulation sunder the Securities Exchange Act of 1934 as
in effect on July 1, 1979, together with the successors and assigns of such
persons in any transaction or series of transactions not involving a public
offering of the Corporation's stock within the meaning of the Securities Act of
1933; (b) another entity shall be deemed to be the beneficial owner of any
shares of stock of the Corporation which the other entity (as defined above)
has the right to acquire pursuant to any agreement, or upon exercise of
conversion rights, warrants or options, or otherwise; (c) the outstanding
shares of any class of stock of the Corporation shall include shares deemed
owned through application of clause (b) above but shall not include any other
shares which may be issuable pursuant to any agreement, or upon exercise of
conversion rights, warrants or options, or otherwise; (d) the term "business
combination" shall include any merger or consolidation of the Corporation with
or into any other corporation, or the sale or lease of all or any substantial
part of the assets of the Corporation to, or any sale or lease to the
Corporation or any subsidiary thereof in exchange for securities of the
Corporation of any assets (except assets having an aggregate fair market value
of less than $5,000,000) of any other entity; (e) the term "continuing
director" shall mean a person who was a member of the Board of Directors of the
Corporation elected by the public stockholders prior to the time that such
other entity acquired in excess of ten percent (10%) of the stock of the
Corporation entitled to vote in the election of directors, or a person
recommended to succeed a continuing director by a majority of continuing
directors; and (f) for the purposes of subparagraphs 1(a) and (b) of this
Article FOURTEENTH the term "other consideration to be received" shall mean
Capital Stock of the Corporation retained by its existing public stockholders
in the event of a business combination with such other entity in which the
Corporation is the surviving corporation.
3. A majority of the continuing directors shall have the power and duty to
determine for the purposes of this Article FOURTEENTH on the basis of
information known to them whether (a) such other entity beneficially owns more
than thirty percent (30%) of the outstanding shares of stock of the Corporation
entitled to vote in election of directors, (b) an other entity is an
"affiliate" or "associate" (as defined above) of another, (c) an other entity
has an agreement, arrangement or understanding with another, or (d) the assets
<PAGE> 10
being acquired by the Corporation, or any subsidiary thereof, have an aggregate
fair market value of less than $5,000,000.
4. No amendment to the Certificate of Incorporation of the Corporation
shall amend, alter, change or repeal any of the provisions of this Article
FOURTEENTH, unless the amendment effecting such amendment, alteration, change
or repeal shall receive the affirmative vote or consent of the holders of
ninety-five percent (95%) of all shares of stock of the Corporation entitled to
vote in election of directors, considered for the purposes of this Article
FOURTEENTH as one class; provided that this paragraph 4 shall not apply to, and
such ninety-five percent (95%) vote or consent shall not be required for, any
amendment, alteration, change or repeal unanimously recommended to the
stockholders by the Board of Directors of the Corporation if all of such
directors are persons who would be eligible to serve as "continuing directors"
within the meaning of paragraph 2 of this Article FOURTEENTH.
5. Northing contained in this Article FOURTEENTH shall be construed to
relieve any other entity from any fiduciary obligation imposed by law.
FIFTEENTH. 1. To the fullest extent that the law of the State of
Delaware, as the same exists or may hereafter be amended, permits elimination
of the personal liability of directors, no director of this Corporation shall
be personally liable to this Corporation or its stockholders for monetary
damages for breach of fiduciary duty as a director.
2. The provisions of this Article FIFTEENTH shall be deemed to be a
contract with each director of this Corporation who serves as such at any time
while this Article FIFTEENTH is in effect, and each such director shall be
deemed to be serving as such in reliance on the provisions of this Article
FIFTEENTH. Any amendment or repeal of this Article FIFTEENTH or adoption of
any By-Law of this Corporation or other provision of the Certificate of
Incorporation of this Corporation which has the effect of increasing director
liability shall operate prospectively only and shall not affect any action
taken, or any failure to act, by a director of this Corporation prior to the
effectiveness of such amendment, repeal, By-Law or other provisions.
<PAGE> 11
SIXTEENTH. 1. Right to Indemnification. Except as prohibited by law,
every director and officer of the Corporation shall be entitled as of right to
be indemnified by the Corporation against reasonable expenses and any liability
paid or incurred by such person in connection with any actual or threatened
claim, action, suit or proceeding, civil, criminal, administrative,
investigative or other, whether brought by or in the right of the Corporation
or otherwise, in which he or she may be involved, as a party or otherwise, by
reason of such person being or having been a director or officer of the
Corporation or by reason of the fact that such person is or was serving at the
request of the Corporation as a director, officer, employee, fiduciary or other
representative of another corporation, partnership, joint venture, trust,
employee benefit plan or other entity (such claim, action, suit or proceeding
hereinafter being referred to as an "Action"); provided, however, that no such
right to indemnification shall exist with respect to an Action brought by an
indemnitee (as defined below) against the Corporation (an "Indemnitee Action")
except as provided in the last sentence of this Paragraph 1. Persons who are
not directors or officers of the Corporation may be similarly indemnified in
respect of service to the Corporation or to another such entity at the request
of the Corporation to the extent the Board of Directors of the Corporation at
any time denominates any of such persons as entitled to the benefits of this
Article SIXTEENTH. As used in this Article SIXTEENTH, "indemnitee" shall
include each director and officer of the Corporation and each other person
denominated by the Board of Directors of the Corporation as entitled to the
benefits of this Paragraph 1; "expenses" shall include fees and expenses of
counsel selected by an indemnitee and "liability" shall include amounts of
judgments, excise taxes, fines, penalties and amounts paid in settlement. An
indemnitee shall be entitled to be indemnified pursuant to this Paragraph 1
against expenses incurred in connection with an Indemnitee Action only if (i)
the Indemnitee Action is instituted under Paragraph 3 of this Article SIXTEENTH
and the indemnitee is successful in whole or in part in such Indemnitee Action,
(ii) the indemnitee is successful in whole or in part in another Indemnitee
Action for which expenses are claimed or (iii) the indemnification for expenses
is included in a settlement of, or is awarded by a court in, such other
Indemnitee Action.
2. Right to Advancement of Expenses. Every indemnitee shall be entitled
as of right to have the expenses of the indemnitee in defending any Action or
in bringing and pursuing any Indemnitee Action under Paragraph 3 of this
Article SIXTEENTH paid in advance by the Corporation prior to final disposition
of the Action or Indemnitee Action provided that the Corporation receives a
written undertaking
<PAGE> 12
by or on behalf of the indemnitee to repay the amount advanced if it should
ultimately be determined that the indemnitee is not entitled to be indemnified
for the expenses.
3. Right of Indemnitee to Bring Action. If a written claim for
indemnification under Paragraph 1 of this Article SIXTEENTH or for advancement
of expenses under Paragraph 2 of this Article SIXTEENTH is not paid in full by
the Corporation within 30 days after the claim has been received by the
Corporation, the Indemnitee may at any time thereafter bring an Indemnitee
Action to recover the unpaid amount of the claim and, if successful in whole or
in part, the indemnitee shall also be entitled to be paid the expense of
bringing and pursuing such Indemnitee Action. The only defense to an
Indemnitee Action to recover on a claim for indemnification under Paragraph 1
of this Article SIXTEENTH shall be that the conduct of the indemnitee was such
that under Delaware law the Corporation is prohibited from indemnifying the
indemnitee for the amount claimed, but the burden of proving such defense shall
be on the Corporation. Neither the failure of the Corporation (including its
Board of Directors, independent legal counsel and stockholders) to have made a
determination prior to the commencement of such Indemnitee Action that
indemnification of the indemnitee is proper in the circumstances, nor an actual
determination by the Corporation (including its Board of Directors, independent
legal counsel or stockholders) that the conduct of the indemnitee was such that
indemnification is prohibited by Delaware law, shall be a defense to such
Indemnitee Action or create a presumption that the conduct of the indemnitee
was such that indemnification is prohibited by Delaware law. The only defense
to an Indemnitee Action to recover on a claim for advancement of expenses under
Paragraph 2 of this Article SIXTEENTH shall be failure by the indemnitee to
provide the undertaking required by Paragraph 2 of this Article SIXTEENTH.
4. Funding and Insurance. The Corporation may create a trust fund, grant
a security interest, cause a letter of credit to be issued or use other means
(whether or not similar to the foregoing) to ensure the payment of all sums
required to be paid by the Corporation to effect indemnification as provided in
this Article SIXTEENTH. The Corporation may purchase and maintain insurance to
protect itself and any indemnitee against any expenses or liability incurred by
the indemnitee in connection with any Action, whether or not the Corporation
would have the power to indemnify the indemnitee against the expenses or
liability by law or under the provisions of this Article SIXTEENTH.
<PAGE> 13
5. Non-Exclusivity; Nature and Extent of Rights. The rights to
indemnification and advancement of expenses provided for in this Article
SIXTEENTH shall (i) not be deemed exclusive of any other rights, whether now
existing or hereafter created, to which any indemnitee may be entitled under
any agreement, provision in the Certificate of Incorporation or By-laws of the
Corporation, vote of stockholders or disinterested directors or otherwise, (ii)
be deemed to create contractual rights in favor of each indemnitee who serves
the Corporation at any time while this Section 5 is in effect (and each such
indemnitee shall be deemed to be so serving in reliance on the provisions of
this Section 5), (iii) continue as to each indemnitee who has ceased to have
the status pursuant to which the indemnitee was entitled or was denominated as
entitled to indemnification under this Article SIXTEENTH and shall inure to the
benefit of the heirs and legal representatives of each indemnitee and (iv) be
applicable to Actions commenced after the effectiveness of this Article
SIXTEENTH, whether arising from acts or omissions occurring before or after the
effectiveness of this Article SIXTEENTH. Any amendment or repeal of this
Article SIXTEENTH or adoption of any By-Law of this Corporation or other
provision of the Certificate of Incorporation of this Corporation which has the
effect of limiting in any way the rights to indemnification or advancement of
expenses provided for in this Article SIXTEENTH shall operate prospectively
only and shall not affect any action taken, or any failure to act, by an
indemnitee prior to the effectiveness of any such amendment, repeal, By-law or
other provision.
6. Partial Indemnity. If an indemnitee is entitled under any provision of
this Article SIXTEENTH to indemnification by the Corporation for some or a
portion of the expenses or a liability paid or incurred by the indemnitee in
the preparation, investigation, defense, appeal or settlement of any Action or
Indemnitee Action but not, however, for the total amount thereof, the
Corporation shall indemnify the indemnitee for the portion of such expenses or
liability to which the indemnitee is entitled.
WE, THE UNDERSIGNED, being each of the incorporators hereinbefore named for
the purpose of forming a corporation to do business both within and without the
State of Delaware, and in pursuance of the General Corporation Law of the State
of Delaware, being Chapter 65 of the Revised Code of Delaware, and the acts
amendatory thereof and supplemental thereto, do make this certificate, hereby
declaring and certifying that the facts herein stated are true, and accordingly
have hereunto set our hands and seals this 23rd day of June, A.D. 1931.
<PAGE> 14
In presence of
Harold E. Grantland C.S. Peabbles (Seal)
H.H. Snow (Seal)
L.H. Herman (Seal)
STATE OF DELAWARE )
) SS
COUNTY OF NEW CASTLE )
BE IT REMEMBERED, that on this 23rd day of June, A.D. 1931, personally came
before me, Harold E. Grantland, a Notary Public for the State of Delaware, C.S.
Peabbles, H.H. Snow, L.H. Herman, all of the parties to the foregoing
certificate of incorporation, known to me personally to be such, and severally
acknowledged the said certificate to be the act and deed of the signers
respectively and that the facts therein stated are truly set forth.
GIVEN under my hand and seal of office the day and year aforesaid.
Harold E. Grantland
Notary Public
Appointed January 12, 1931
State of Delaware
Term Two Years
<PAGE> 1
Exhibit 4.4
QUAKER STATE CORPORATION
1994 STOCK INCENTIVE PLAN
As Approved by Stockholders on May 12, 1994
Amended and Restated Through May 16, 1997
<PAGE> 2
QUAKER STATE CORPORATION
1994 STOCK INCENTIVE PLAN
The purposes of the 1994 Stock Incentive Plan (the "Plan") are to encourage
eligible employees of Quaker State Corporation (the "Corporation") and its
Subsidiaries to increase their efforts to make the Corporation and each
Subsidiary more successful, to provide an additional inducement for such
employees to remain with the Corporation or a Subsidiary, to reward such
employees by providing an opportunity to acquire shares of the Capital Stock,
par value $1.00 per share, of the Corporation (the "Capital Stock") on
favorable terms and to provide a means through which the Corporation may
attract able persons to enter the employ of the Corporation or one of its
Subsidiaries. For the purposes of the Plan, the term "Subsidiary" means any
corporation in an unbroken chain of corporations beginning with the
Corporation, if each of the corporations other than the last corporation in the
unbroken chain owns stock possessing at least fifty percent (50%) or more of
the total combined voting power of all classes of stock in one of the other
corporations in the chain.
SECTION 1
ADMINISTRATION
The Plan shall be administered by a Committee (the "Committee") appointed
by the Board of Directors of the Corporation (the "Board") and consisting of
not less than two members of the Board, each of whom at the time of appointment
to the Committee and at all times during service as a member of the Committee
shall be (i) a "non-employee director" as defined under Rule 16b-3(b)(3) under
the Securities Exchange Act of 1934, as amended (the "1934 Act"), or any
successor Rule and (ii) an "outside director" under Section 162(m)(4)(C) of the
Internal Revenue Code of 1986 (the "Code"), or any successor provision.
The Committee shall interpret the Plan and prescribe such rules,
regulations and procedures in connection with the operations of the Plan as it
shall deem to be necessary and advisable for the administration of the Plan
consistent with the purposes of the Plan. All questions of interpretation and
application of the Plan, or as to grants or awards under the Plan, shall be
subject to the determination of the Committee, which shall be final and
binding.
The Committee shall keep records of action taken. A majority of the
Committee shall constitute a quorum at any meeting, and the acts of a majority
of the members present at any meeting at which a quorum is present, or acts
approved in writing by all the members of the Committee, shall be the acts of
the Committee.
SECTION 2
ELIGIBILITY
Those key employees of the Corporation or any Subsidiary (including, but
not limited to, covered employees as defined in Section 162(m)(3) of the Code,
or any successor provision) who share responsibility for the management, growth
or protection of
<PAGE> 3
the business of the Corporation or any Subsidiary shall be eligible to be
granted stock options (with or without alternative stock appreciation rights
and/or cash payment rights) and to receive awards of restricted, performance
and other shares as described herein.
Subject to the provisions of the Plan, the Committee shall have full and
final authority, in its discretion, to grant stock options (with or without
alternative stock appreciation rights and/or cash payment rights) and to award
restricted, performance and other shares as described herein and to determine
the employees to whom any such grant or award shall be made and the number of
shares to be covered thereby. In determining the eligibility of any employee,
as well as in determining the number of shares covered by each grant or award
and whether alternative stock appreciation rights and/or cash payment rights
shall be granted in conjunction with a stock option, the Committee shall
consider the position and the responsibilities of the employee being
considered, the nature and value to the Corporation or a Subsidiary of his or
her services, his or her present and/or potential contribution to the success
of the Corporation or a Subsidiary and such other factors as the Committee may
deem relevant.
SECTION 3
SHARES AVAILABLE UNDER THE PLAN
The aggregate number of shares of the Capital Stock that may be issued and
as to which grants or awards may be made under the Plan is 4,862,978 shares,
subject to adjustment and substitution as set forth in Section 7. If any stock
option granted under the Plan is cancelled by mutual consent or terminates or
expires for any reason without having been exercised in full, the number of
shares subject thereto shall again be available for purposes of the Plan,
except that to the extent that alternative stock appreciation rights granted in
conjunction with a stock option under the Plan are exercised and the related
stock option surrendered the number of shares available for purposes of the
Plan shall be reduced by the number of shares of Capital Stock issued upon
exercise of such alternative stock appreciation rights. If shares of Capital
Stock are forfeited to the Corporation pursuant to the restrictions applicable
to restricted shares awarded under the Plan, the shares so forfeited shall not
again be available for purposes of the Plan unless during the period such
shares were outstanding the grantee received no dividends or other benefits of
ownership from such shares. For the purpose of applying this standard, no
benefit is deemed to be derived by a grantee from voting rights or where
dividends accumulate but due to forfeiture are never realized. To the extent
any performance shares are not earned, the number of shares shall again be
available for purposes of the Plan.
The shares which may be issued under the Plan may be either authorized but
unissued shares or treasury shares or partly each.
<PAGE> 4
SECTION 4
GRANT OF STOCK OPTIONS, ALTERNATIVE
STOCK APPRECIATION RIGHTS AND CASH
PAYMENT RIGHTS AND AWARD OF RESTRICTED,
PERFORMANCE AND OTHER SHARES
The Committee shall have authority, in its discretion, (i) to grant
"incentive stock options" pursuant to Section 422 of the Code, to grant
"nonstatutory stock options" (i.e., stock options which do not qualify under
Sections 422 or 423 of the Code) or to grant both types of stock options (but
not in tandem), (ii) to award restricted shares, (iii) to award performance
shares and (iv) to make other share awards, all as provided herein. The
Committee also shall have the authority, in its discretion, to grant
alternative stock appreciation rights in conjunction with incentive stock
options or nonstatutory stock options with the effect provided in Section 5(D)
and to grant cash payment rights in conjunction with nonstatutory stock options
with the effect provided in Section 5(E). Alternative stock appreciation
rights granted in conjunction with an incentive stock option may only be
granted at the time the incentive stock option is granted. Cash payment rights
may not be granted in conjunction with incentive stock options. Alternative
stock appreciation rights and/or cash payment rights granted in conjunction
with a nonstatutory stock option may be granted either at the time the stock
option is granted or at any time thereafter during the term of the stock
option.
During the duration of the Plan, the maximum award under the Plan to any
one employee during any calendar year will be 350,000 shares and/or $400,000 as
cash payment rights, subject to adjustment and substitution as set forth in
Section 7. For the purposes of this limitation, any adjustment or substitution
made pursuant to Section 7 with respect to the maximum number of shares set
forth in the preceding sentence shall also be made with respect to any shares
subject to stock options or share awards previously granted under the Plan to
such employee during the same calendar year.
Notwithstanding any other provision contained in the Plan or in any
agreement referred to in Section 5(I), but subject to the possible exercise of
the Committee's discretion contemplated in the last sentence of this paragraph,
the aggregate fair market value, determined as provided in Section 5(J) on the
date of grant, of the shares with respect to which incentive stock options are
exercisable for the first time by an employee during any calendar year under
all plans of the corporation employing such employee, any parent or subsidiary
corporation of such corporation and any predecessor corporation of any such
corporation shall not exceed $100,000. If the date on which one or more of
such incentive stock options could first be exercised would be accelerated
pursuant to any provision of the Plan or any stock option agreement, and the
acceleration of such exercise date would result in a violation of the
limitation set forth in the preceding sentence, then, notwithstanding any such
provision, but subject to the provisions of the next succeeding sentence, the
exercise dates of such incentive stock options shall be accelerated only to the
date or dates, if any, that do not result in a violation of such limitation
and, in such event, the exercise dates of the incentive stock options with the
lowest option prices shall be accelerated to the earliest such dates. The
Committee may, in its discretion, authorize the acceleration of the exercise
date of one or more incentive stock options even if such acceleration would
violate the $100,000 limitation set forth in the first sentence of this
paragraph and even if such incentive stock options are thereby converted in
whole or in part to nonstatutory stock options.
The Committee may accept the cancellation of outstanding stock options or
the contribution or surrender of restricted shares in return for the grant of
new stock options for the same or a different number of shares at the same
option exercise price or for restricted shares with different restrictions.
<PAGE> 5
SECTION 5
STOCK OPTIONS, ALTERNATIVE STOCK APPRECIATION
RIGHTS AND CASH PAYMENT RIGHTS
Stock options, alternative stock appreciation rights and cash payment
rights granted under the Plan shall be subject to the following terms and
conditions:
(A) The purchase price at which each stock option may be exercised
(the "option price") shall be such price as the Committee, in its
discretion, shall determine but shall not be less than one hundred percent
(100%) of the fair market value per share of the Capital Stock covered by
the stock option on the date of grant, except that in the case of an
incentive stock option granted to an employee who, immediately prior to
such grant, owns stock possessing more than ten percent (10%) of the total
combined voting power of all classes of stock of the Corporation or any
Subsidiary (a "Ten Percent Employee"), the option price shall not be less
than one hundred ten percent (110%) of such fair market value on the date
of grant. For purposes of this Section 5(A), the fair market value of the
Capital Stock shall be determined as provided in Section 5(J). For
purposes of this Section 5(A), an individual (i) shall be considered as
owning not only shares of stock owned individually but also all shares of
stock that are at the time owned, directly or indirectly, by or for the
spouse, ancestors, lineal descendants and brothers and sisters (whether by
the whole or half blood) of such individual and (ii) shall be considered as
owning proportionately any shares owned, directly or indirectly, by or for
any corporation, partnership, estate or trust in which such individual is a
stockholder, partner or beneficiary.
(B) The option price for each stock option shall be payable in cash in
United States dollars (including check, bank draft or money order);
provided, however, that in lieu of cash the person exercising the stock
option may (if authorized by the Committee at the time of grant in the case
of an incentive stock option, or at any time in the case of a nonstatutory
stock option) pay the option price in whole or in part by delivering to the
Corporation shares of the Capital Stock having a fair market value on the
date of exercise of the stock option, determined as provided in Section
5(J), equal to the option price for the shares being purchased, except that
(i) any portion of the option price representing a fraction of a share
shall in any event be paid in cash and (ii) no shares of the Capital Stock
which have been held for less than six months may be delivered in payment
of the option price of a stock option. Delivery of shares, if authorized,
may also be accomplished through the effective transfer to the Corporation
of shares held by a broker or other agent. The Corporation will also
cooperate with any person exercising a stock option who participates in a
cashless exercise program of a broker or other agent under which all or
part of the shares received upon exercise of the stock option are sold
through the broker or other agent or under which the broker or other agent
makes a loan to such person. Notwithstanding the foregoing, unless the
Committee, in its discretion, shall otherwise determine at the time of
grant in the case of an incentive stock option, or at any time in the case
of a nonstatutory stock option, the exercise of the stock option shall not
be deemed to occur and no shares of Capital Stock will be issued by the
Corporation upon exercise of the stock option until the Corporation has
received payment of the option price in full. The date of exercise of a
stock option shall be determined under procedures established by the
Committee, and as of the date of exercise the person exercising the stock
option shall be considered
<PAGE> 6
for all purposes to be the owner of the shares with respect to which the
stock option has been exercised. Payment of the option price with shares
shall not increase the number of shares of the Capital Stock which may be
issued under the Plan as provided in Section 3.
(C) Each stock option shall be exercisable at such time or times as
the Committee, in its discretion, shall determine, except that no stock
option shall be exercisable after the expiration of ten years (five years
in the case of an incentive stock option granted to a Ten Percent Employee)
from the date of grant. A stock option to the extent exercisable at any
time may be exercised in whole or in part.
(D) Alternative stock appreciation rights granted in conjunction with
a stock option shall entitle the person exercising the alternative stock
appreciation rights to surrender the related stock option, or any portion
thereof, and to receive from the Corporation in exchange therefor that
number of shares of the Capital Stock having an aggregate fair market value
on the date of exercise of the alternative stock appreciation rights equal
to the excess of the fair market value of one share of the Capital Stock on
such date of exercise over the option price per share times the number of
shares covered by the related stock option, or portion thereof, which is
surrendered. Alternative stock appreciation rights shall be exercisable to
the extent that the related stock option is exercisable and only by the
same person who is entitled to exercise the related stock option; provided,
however, that alternative stock appreciation rights granted in conjunction
with an incentive stock option shall not be exercisable unless the then
fair market value of the Capital Stock exceeds the option price of the
shares subject to the incentive stock option. Cash shall be paid in lieu
of any fractional shares. The date of exercise of alternative stock
appreciation rights shall be determined under procedures established by the
Committee, and as of the date of exercise the person exercising the
alternative stock appreciation rights shall be considered for all purposes
to be the owner of the shares to be received. To the extent that a stock
option as to which alternative stock appreciation rights have been granted
is exercised, cancelled, terminates or expires, the alternative stock
appreciation rights shall be cancelled. For the purposes of this Section
5(D), the fair market value of the Capital Stock shall be determined as
provided in Section 5(J).
(E) Cash payment rights granted in conjunction with a nonstatutory
stock option shall entitle the person who is entitled to exercise the stock
option, upon exercise of the stock option or any portion thereof, to
receive cash from the Corporation (in addition to the shares to be received
upon exercise of the stock option) equal to such percentage as the
Committee, in its discretion, shall determine not greater than one hundred
percent (100%) of the excess of the fair market value of a share of the
Capital Stock on the date of exercise of the stock option over the option
price per share of the stock option times the number of shares covered by
the stock option, or portion thereof, which is exercised. Payment of the
cash provided for in this Section 5(E) shall be made by the Corporation as
soon as practicable after the time the amount payable is determined. For
purposes of this Section 5(E), the fair market value of the Capital Stock
shall be determined as provided in Section 5(J).
(F) Unless the Committee, in its discretion, shall otherwise
determine, (i) no stock option shall be transferable by the grantee
otherwise than by Will, or if the
<PAGE> 7
grantee dies intestate, by the laws of descent and distribution of the
state of domicile of the grantee at the time of death and (ii) all stock
options shall be exercisable during the lifetime of the grantee only by the
grantee.
(G) Subject to the provisions of Section 4 in the case of incentive
stock options, unless the Committee, in its discretion, shall otherwise
determine:
(i) If the employment of a grantee is voluntarily
terminated with the consent of the Corporation or a Subsidiary, the
grantee becomes entitled to a severance benefit under the
Corporation's Severance Pay Plan for Salaried and Hourly Non-Union
Employees (the "Severance Plan") or a grantee retires under any
retirement plan of the Corporation or a Subsidiary, any outstanding
stock option held by such grantee shall be exercisable by the grantee
(but only to the extent exercisable by the grantee immediately prior
to the termination of employment) at any time prior to the expiration
date of such stock option or within three years after the date of
termination of employment of the grantee, whichever is the shorter
period, and to the extent not exercisable shall terminate;
(ii) Following the death of a grantee during employment,
any outstanding stock option held by the grantee at the time of death
shall be exercisable in full (whether or not so exercisable by the
grantee immediately prior to the death of the grantee) by the person
entitled to do so under the Will of the grantee, or, if the grantee
shall fail to make testamentary disposition of the stock option or
shall die intestate, by the legal representative of the grantee at any
time prior to the expiration date of such stock option or within three
years after the date of death of the grantee, whichever is the shorter
period;
(iii) Following the death of a grantee after termination of
employment during a period when a stock option is exercisable, the
stock option shall be exercisable by such person entitled to do so
under the Will of the grantee or by such legal representative during
the shorter of the following two periods: (i) until the expiration
date of the stock option or (ii) within three years after the
termination of employment of the grantee or one year after the date of
death of the grantee (whichever is longer).
(iv) Unless Section 8(C) applies following termination of
employment, if the employment of a grantee terminates for any reason
other than voluntary termination with the consent of the Corporation
or a Subsidiary, severance under the Severance Plan, retirement under
any retirement plan of the Corporation or a Subsidiary or death, all
outstanding stock options held by the grantee at the time of such
termination of employment shall automatically terminate.
Whether termination of employment is a voluntary termination with the
consent of the Corporation or a Subsidiary shall be determined, in its
discretion, by the Committee and any such determination by the Committee
shall be final and binding.
(H) If a grantee of a stock option (i) engages in the operation or
management of a business (whether as owner, partner, officer, director,
employee or otherwise and whether during or after termination of
employment) which is in competition with the Corporation or any of its
Subsidiaries (provided, however, that
<PAGE> 8
this clause shall not apply if Section 8(C) applies following termination
of employment), (ii) induces or attempts to induce any customer, supplier,
licensee or other individual, corporation or other business organization
having a business relationship with the Corporation or any of its
Subsidiaries to cease doing business with the Corporation or any of its
Subsidiaries or in any way interferes with the relationship between any
such customer, supplier, licensee or other person and the Corporation or
any of its Subsidiaries or (iii) solicits any employee of the Corporation
or any of its Subsidiaries to leave the employment thereof or in any way
interferes with the relationship of such employee with the Corporation or
any of its Subsidiaries, the Committee, in its discretion, may immediately
terminate all outstanding stock options held by the grantee. Whether a
grantee has engaged in any of the activities referred to the preceding
sentence which would cause the outstanding stock options to be terminated
shall be determined, in its discretion, by the Committee, and any such
determination by the Committee shall be final and binding.
(I) All stock options, alternative stock appreciation rights and cash
payment rights shall be confirmed by an agreement which shall be executed
on behalf of the Corporation by the Chief Executive Officer (if other than
the President), the President or any Vice President and by the grantee.
The agreement confirming a stock option shall specify whether the stock
option is an incentive stock option or a nonstatutory stock option. The
provisions of such agreements need not be identical.
(J) Fair market value of the Capital Stock shall be the mean between
the following prices, as applicable, for the date as of which fair market
value is to be determined as quoted in The Wall Street Journal (or in such
other reliable publication as the Committee, in its discretion, may
determine to rely upon): (i) if the Capital Stock is listed on the New York
Stock Exchange ("NYSE"), the highest and lowest sales prices per share of
the Capital Stock as quoted in the NYSE-Composite Transactions listing for
such date, (ii) if the Capital Stock is not listed on such exchange, the
highest and lowest sales prices per share of Capital Stock for such date on
(or on any composite index including) the principal United States
securities exchange registered under the 1934 Act on which the Capital
Stock is listed or (iii) if the Capital Stock is not listed on any such
exchange, the highest and lowest sales prices per share of the Capital
Stock for such date on the National Association of Securities Dealers
Automated Quotations System or any successor system then in use ("NASDAQ").
If there are no such sale price quotations for the date as of which fair
market value is to be determined but there are such sale price quotations
within a reasonable period both before and after such date, then fair
market value shall be determined by taking a weighted average of the means
between the highest and lowest sales prices per share of the Capital Stock
as so quoted on the nearest date before and the nearest date after the date
as of which fair market value is to be determined. The average should be
weighted inversely by the respective numbers of trading days between the
selling dates and the date as of which fair market value is to be
determined. If there are no such sale price quotations on or within a
reasonable period both before and after the date as of which fair market
value is to be determined, then fair market value of the Capital Stock
shall be the mean between the bona fide bid and asked prices per share of
Capital Stock as so quoted for such date on NASDAQ, or if none, the
weighted average of the means between such bona fide bid and asked prices
on the nearest
<PAGE> 9
trading date before and the nearest trading date after the date as of which
fair market value is to be determined, if both such dates are within a
reasonable period. The average is to be determined in the manner described
above in this Section 5 (J). If the fair market value of the Capital Stock
cannot be determined on any basis previously set forth in this Section 5(J)
for the date as of which fair market value is to be determined, the
Committee shall in good faith determine the fair market value of the
Capital Stock on such date. Fair market value shall be determined without
regard to any restriction other than a restriction which, by its terms,
will never lapse.
(K) The obligation of the Corporation to issue shares of the Capital
Stock under the Plan shall be subject to (i) the effectiveness of a
registration statement under the Securities Act of 1933, as amended, with
respect to such shares, if deemed necessary or appropriate by counsel for
the Corporation, (ii) the condition that the shares shall have been listed
(or authorized for listing upon official notice of issuance) upon each
stock exchange, if any, on which the Capital Stock may then be listed and
(iii) all other applicable laws, regulations, rules and orders which may
then be in effect.
Subject to the foregoing provisions of this Section 5 and the other
provisions of the Plan, stock options, alternative stock appreciation rights
and cash payment rights granted under the Plan shall be subject to such
restrictions and other terms and conditions, if any, as shall be determined, in
its discretion, by the Committee and set forth in the agreement referred to in
Section 5(l).
SECTION 6
RESTRICTED SHARES, PERFORMANCE SHARES AND
OTHER SHARE AWARDS
(A) RESTRICTED SHARES
Awards of restricted shares shall be confirmed by an agreement which shall
set forth the number of shares of the Capital Stock awarded, the restrictions
imposed thereon (including, without limitation, restrictions on the right of
the grantee to sell, assign, transfer or encumber such shares (except as
provided below) while such shares are subject to other restrictions imposed
under this Section 6(A)), the duration of such restrictions, events (which may,
in the discretion of the Committee, include termination of employment and/or
performance-based events) the occurrence of which would cause a forfeiture of
the restricted shares and such other terms and conditions as shall be
determined, in its discretion, by the Committee. The agreement shall be
executed on behalf of the Corporation by the Chief Executive Officer (if other
than the President), the President or any Vice President and by the grantee.
The provisions of such agreements need not be identical. Awards of restricted
shares shall be effective on the date determined, in its discretion, by the
Committee.
Following the award of restricted shares and prior to the lapse or
termination of the applicable restrictions, share certificates for the
restricted shares shall be issued in the name of the grantee and deposited with
the Corporation in escrow together with related stock powers signed by the
grantee. Except as provided in Section 7, the Committee, in its discretion,
may determine that dividends and other distributions on the shares held in
<PAGE> 10
escrow shall not be paid to the grantee until the lapse or termination of the
applicable restrictions. Unless otherwise provided, in its discretion, by the
Committee, any such dividends or other distributions shall not bear interest.
Upon the lapse or termination of the applicable restrictions (and not before
such time), the grantee shall receive the share certificates for the restricted
shares (subject to the provisions of Section 10) and unpaid dividends, if any.
From the date the award of restricted shares is effective, the grantee shall be
a stockholder with respect to all the shares represented by the share
certificates and shall have all the rights of a stockholder with respect to all
the restricted shares, including the right to vote such shares and to receive
all dividends and other distributions paid with respect to such shares, subject
only to the preceding provisions of this paragraph and the other restrictions
imposed by the Committee.
If a grantee of restricted shares (i) engages in the operation or
management of a business (whether as owner, partner, officer, director,
employee or otherwise and whether during or after termination of employment)
which is in competition with the Corporation or any of its Subsidiaries
(provided, however, that this clause shall not apply if Section 8(D) applies),
(ii) induces or attempts to induce any customer, supplier, licensee or other
individual, corporation or other business organization having a business
relationship with the Corporation or any of its Subsidiaries to cease doing
business with the Corporation or any of its Subsidiaries or in any way
interferes with the relationship between any such customer, supplier, licensee
or other person and the Corporation or any of its Subsidiaries or (iii)
solicits any employee of the Corporation or any of its Subsidiaries to leave
the employment thereof or in any way interferes with the relationship of such
employee with the Corporation or any of its Subsidiaries, the Committee may
immediately declare forfeited all restricted shares held by the grantee as to
which the restrictions have not yet lapsed. Whether a grantee has engaged in
any of the activities referred to in the preceding sentence which would cause
the restricted shares to be forfeited shall be determined, in its discretion,
by the Committee, and any such determination by the Committee shall be final
and binding.
Neither this Section 6(A) nor any other provision of the Plan shall
preclude a grantee from transferring or assigning restricted shares to (i) the
trustee of a trust that is revocable by such grantee alone, both at the time of
the transfer or assignment and at all times thereafter prior to such grantee's
death or (ii) the trustee of any other trust to the extent approved in advance
by the Committee in writing. A transfer or assignment of restricted shares
from such trustee to any person other than such grantee shall be permitted only
to the extent approved in advance by the Committee in writing, and restricted
shares held by such trustee shall be subject to all of the conditions and
restrictions set forth in the Plan and in the applicable agreement as if such
trustee were a party to such agreement.
Restricted Performance Shares. Specifically, the Committee, in its
discretion, may award restricted performance shares with three-year performance
cycles which will vest if three-year average return on average equity ("Average
ROE") and three-year cumulative earnings per share ("Cumulative EPS") goals
established by the Committee are achieved. The Average ROE percentage and the
Cumulative EPS figure will be calculated from the consolidated financial
statements of the Corporation and its Subsidiaries, excluding (i) the effect of
changes in Federal income tax rates, (ii) the effect of unusual and
extraordinary items as defined by Generally Accepted Accounting Principles
("GAAP") and (iii) the cumulative effect of changes in accounting principles in
accordance with GAAP. The Cumulative EPS figure will also be calculated using
primary net income per share,
<PAGE> 11
excluding the effect of share distributions for which under GAAP net income per
share is adjusted.
The restricted performance shares for a particular three-year performance
cycle and the performance goals to apply to these shares must be established in
the year prior to the first year of the three-year period, except that the key
employees designated to receive restricted performance shares for the
three-year period 1994-1996 and the performance goals to apply to these shares
were determined by the Committee on or prior to March 23, 1994. Restricted
performance shares as to which the restrictions do not lapse will be forfeited.
Awards of restricted performance shares need not be made every year.
Dividends and other distributions (except dividends or other distributions
payable in shares of the Corporation's Capital Stock) on the restricted
performance shares held in escrow shall be paid by the Corporation to the
grantees of the restricted performance shares at the time such dividends or
other distributions would be payable to stockholders, unless the Committee, in
its discretion, determines otherwise. It is intended that any compensation
received by grantees of restricted performance shares will qualify as
performance-based compensation under Section 162(m) of the Code and this
portion of Section 6(A) shall be interpreted consistently with that intention.
<PAGE> 12
(B) PERFORMANCE SHARES
An award of performance shares shall entitle the grantee to receive up to
the number of shares of Capital Stock covered by the award at the end of or at
a specified time or times during a specified award period contingent upon the
extent to which one or more predetermined performance targets have been met
during the award period. All the terms and conditions of an award of
performance shares shall be determined, in its discretion, by the Committee and
shall be confirmed by an agreement which shall be executed on behalf of the
Corporation by the Chief Executive Officer (if other than the President), the
President or any Vice President and by the grantee.
The performance target or targets may be expressed in terms of earnings per
share, return on stockholder equity, operating profit, return on capital
employed or such other measures of accomplishment by the Corporation or a
Subsidiary, or any branch, department or other portion thereof, or the grantee
individually, as may be established, in its discretion, by the Committee. The
performance target or targets may vary for different award periods and need not
be the same for each grantee receiving an award for an award period.
At any time prior to the end of an award period, the Committee may adjust
downward (but not upward) the performance target or targets as a result of
major events unforeseen at the time of the award, such as changes in the
economy, in the industry or laws affecting the operations of the Corporation or
a Subsidiary, or any branch, department or other portion thereof, or any other
event the Committee determines would have a significant impact upon the
probability of attaining the previously established performance target or
targets.
Payment of earned performance shares shall be made to grantees as soon as
practicable after the shares have been earned. The Committee, in its
discretion, may determine that grantees shall also be entitled to any dividends
or other distributions that would have been paid on earned performance shares
had the shares been outstanding during the period from the award to the payment
of the performance shares. Unless otherwise provided, in its discretion, by
the Committee, any such dividends or other distributions shall not bear
interest.
Unless otherwise provided in the agreement confirming the award of the
performance shares, if prior to the close of an award period, the employment of
a grantee of performance shares is voluntarily terminated with the consent of
the Corporation or a Subsidiary, the grantee becomes entitled to a severance
benefit under the Severance Plan, the grantee retires under any retirement plan
of the Corporation or a Subsidiary or the grantee dies during employment, the
Committee in its discretion, may determine to pay to the grantee all or part of
the performance shares based upon the extent to which the Committee determines
the performance target or targets have been achieved as of the date of
termination of employment, retirement or death, the period of time remaining
until the end of the award period and/or such other factors as the Committee
may deem relevant. If the Committee, in its discretion, determines that all or
any part of the performance shares shall be paid, payment shall be made to the
grantee or the estate of the grantee as promptly as practicable following such
determination.
Except as otherwise provided in Section 8(E), if the employment of a
grantee of an award of performance shares terminates prior to the time the
performance shares have
<PAGE> 13
been earned for any reason other than voluntary termination with the consent of
the Corporation or a Subsidiary, severance under the Severance Plan, retirement
under any retirement plan of the Corporation or a Subsidiary or death, the
unearned performance shares shall be deemed not to have been earned and such
shares shall not be paid to the grantee.
Whether termination of employment is a voluntary termination with the
consent of the Corporation or a Subsidiary shall be determined, in its
discretion, by the Committee and any such determination by the Committee shall
be final and binding.
If a grantee of performance shares (i) engages in the operation or
management of a business (whether as owner, partner, officer, director,
employee or otherwise and whether during or after termination of employment)
which is in competition with the Corporation or any of its Subsidiaries
(provided, however, that this clause shall not apply if Section 8(E) applies),
(ii) induces or attempts to induce any customer, supplier, licensee or other
individual, corporation or other business organization having a business
relationship with the Corporation or any of its Subsidiaries to cease doing
business with the Corporation or any of its Subsidiaries or in any way
interferes with the relationship between any such customer, supplier, licensee
or other person and the Corporation or any of its Subsidiaries or (iii)
solicits any employee of the Corporation or any of its Subsidiaries to leave
the employment thereof or in any way interferes with the relationship of such
employee with the Corporation or any of its Subsidiaries, the Committee may
immediately cancel the award. Whether a grantee has engaged in any of the
activities referred to the preceding sentence which would cause the award of
performance shares to be cancelled shall be determined, in its discretion, by
the Committee, and any such determination by the Committee shall be final and
binding.
(C) OTHER SHARE AWARDS
The Committee, in its discretion, may from time to time make other awards
of shares of Capital Stock under the Plan as an inducement to the grantee to
enter the employment of the Corporation or a Subsidiary, in recognition of the
contribution of the grantee to the performance of the Corporation or a
Subsidiary, or any branch, department or other portion thereof, in recognition
of the grantee's individual performance or on the basis of such other factors
as the Committee may deem relevant. Capital Stock issued as a bonus pursuant
to this Section 6(C) shall be issued for such consideration as the Committee
shall determine in its sole discretion.
SECTION 7
ADJUSTMENT AND SUBSTITUTION OF SHARES
If a dividend or other distribution shall be declared upon the Capital
Stock payable in shares of the Capital Stock, the number of shares of the
Capital Stock subject to any outstanding stock options or performance share
awards, the number of shares of the Capital Stock which may be issued under the
Plan but are not subject to outstanding stock options or performance share
awards and the maximum number of shares as to which stock options may be
granted and as to which shares may be awarded under the Plan to any employee
during any calendar year under Section 4 on the date fixed for determining the
stockholders entitled to receive such stock dividend or distribution shall be
adjusted by
<PAGE> 14
adding thereto the number of shares of the Capital Stock which would have been
distributable thereon if such shares had been outstanding on such date. Shares
of Capital Stock so distributed with respect to any restricted shares held in
escrow shall also be held by the Corporation in escrow and shall be subject to
the same restrictions as are applicable to the restricted shares on which they
were distributed.
If the outstanding shares of the Capital Stock shall be changed into or
exchangeable for a different number or kind of shares of stock or other
securities of the Corporation or another corporation, whether through
reorganization, reclassification, recapitalization, stock split-up, combination
of shares, merger or consolidation, then there shall be substituted for each
share of the Capital Stock subject to any then outstanding stock option or
performance share award, and for each share of the Capital Stock which may be
issued under the Plan but which is not then subject to any outstanding stock
option or performance share award, the number and kind of shares of stock or
other securities into which each outstanding share of the Capital Stock shall
be so changed or for which each such share shall be exchangeable. Unless
otherwise determined by the Committee, in its discretion, any such stock or
securities, as well as any cash or other property, into or for which any
restricted shares held in escrow shall be changed or exchangeable in any such
transaction shall also be held by the Corporation in escrow and shall be
subject to the same restrictions as are applicable to the restricted shares in
respect of which such stock, securities, cash or other property was issued or
distributed.
In case of any adjustment or substitution as provided for in the first two
paragraphs of this Section 7, the aggregate option price for all shares subject
to each then outstanding stock option prior to such adjustment or substitution
shall be the aggregate option price for all shares of stock or other securities
(including any fraction) to which such shares shall have been adjusted or which
shall have been substituted for such shares. Any new option price per share
shall be carried to at least three decimal places with the last decimal place
rounded upwards to the nearest whole number.
If the outstanding shares of the Capital Stock shall be changed in value by
reason of any spin-off, split-off or split-up, or dividend in partial
liquidation, dividend in property other than cash or extraordinary distribution
to holders of the Capital Stock, (i) the Committee shall make any adjustments
to any then outstanding stock option which it determines are equitably required
to prevent dilution or enlargement of the rights of grantees which would
otherwise result from any such transaction, and (ii) unless otherwise
determined by the Committee, in its discretion, any stock, securities, cash or
other property distributed with respect to any restricted shares held in escrow
or for which any restricted shares held in escrow shall be exchanged in any
such transaction shall also be held by the Corporation in escrow and shall be
subject to the same restrictions as are applicable to the restricted shares in
respect of which such stock, securities, cash or other property was distributed
or exchanged.
In case of any adjustment or substitution as provided for in the first two
paragraphs of this Section 7, the exercise price for all shares subject to each
then outstanding stock option prior to such adjustment or substitution shall be
the exercise price for all shares of stock or other securities (including any
fraction) after the adjustment or substitution.
If the outstanding shares of the Capital Stock shall be changed in value by
reason of any spin-off, split-off or split-up, or dividend in partial
liquidation, dividend in property other than cash or extraordinary distribution
to holders of the Capital Stock, (i) the
<PAGE> 15
Committee shall make any adjustments to any then outstanding stock option which
it determines are equitably required to prevent dilution or enlargement of the
rights of grantees which would otherwise result from any such transaction,
except that no such adjustment will be made to the exercise price of any stock
option and (ii) unless otherwise determined by the Committee, in its
discretion, any stock, securities, cash or other property distributed with
respect to any restricted shares held in escrow or for which any restricted
shares held in escrow shall be exchanged in any such transaction shall also be
held by the Corporation in escrow and shall be subject to the same restrictions
as are applicable to the restricted shares in respect of which such stock,
securities, cash or other property was distributed or exchanged.
Except as provided in this Section 7, a grantee shall have no rights by
reason of any issue by the Corporation of stock of any class or securities
convertible into stock of any class, any subdivision or consolidation of shares
of stock of any class, the payment of any stock dividend or any other increase
or decrease in the number of shares of stock of any class.
SECTION 8
ADDITIONAL RIGHTS IN CERTAIN EVENTS
(A) DEFINITIONS.
For purposes of this Section 8, the following terms shall have the
following meanings:
(1) The term "Person" shall be used as that term is used in Sections
13(d) and 14(d) of the 1934 Act as in effect on the effective date of the
Plan.
(2) "Beneficial Ownership" shall be determined as provided in Rule
13d-3 under the 1934 Act as in effect on the effective date of the Plan.
(3) A specified percentage of "Voting Power" of a company shall mean
such number of the Voting Shares as shall enable the holders thereof to
cast such percentage of all the votes which could be cast in an annual
election of directors (without consideration of the rights of any class of
stock other than the common stock of the company to elect directors by a
separate class vote); and "Voting Shares" shall mean all securities of a
company entitling the holders thereof to vote in an annual election of
directors (without consideration of the rights of any class of stock other
than the common stock of the company to elect directors by a separate class
vote).
(4) "Tender Offer" shall mean a tender offer or exchange offer to
acquire securities of the Corporation (other than such an offer made by the
Corporation or any Subsidiary), whether or not such offer is approved or
opposed by the Board.
(5) "Continuing Directors" shall mean a director of the Corporation
who either (a) was a director of the Corporation on the effective date of
the Plan or (b) is an individual whose election, or nomination for
election, as a director of the Corporation was approved by a vote of at
least two-thirds of the directors then still
<PAGE> 16
in office who were Continuing Directors (other than an individual whose
initial assumption of office is in connection with an actual or threatened
election contest relating to the election of directors of the Corporation
which would be subject to Rule 14a-11 under the 1934 Act, or any successor
Rule).
(6) "Section 8 Event" shall mean the date upon which any of the
following events occurs:
(a) The Corporation acquires actual knowledge that any Person
other than the Corporation, a Subsidiary or any employee benefit
plan(s) sponsored by the Corporation or a Subsidiary has acquired the
Beneficial Ownership, directly or indirectly, of securities of the
Corporation entitling such Person to 30% or more of the Voting Power
of the Corporation;
(b) A Tender Offer is made to acquire securities of the
Corporation entitling the holders thereof to 30% or more of the Voting
Power of the Corporation; or
(c) A solicitation subject to Rule 14a-11 under the 1934 Act (or
any successor Rule) relating to the election or removal of 50% or more
of the members of the Board or any class of the Board shall be made by
any person other than the Corporation or less than 51% of the members
of the Board shall be Continuing Directors; or
(d) The stockholders of the Corporation shall approve a merger,
consolidation, share exchange, division or sale or other disposition
of assets of the Corporation as a result of which the stockholders of
the Corporation immediately prior to such transaction shall not hold,
directly or indirectly, immediately following such transaction a
majority of the Voting Power of (i) in the case of a merger or
consolidation, the surviving or resulting corporation, (ii) in the
case of a share exchange, the acquiring corporation or (iii) in the
case of a division or a sale or other disposition of assets, each
surviving, resulting or acquiring corporation which, immediately
following the transaction, holds more than 10% of the consolidated
assets of the Corporation immediately prior to the transaction;
provided, however, that (i) if securities beneficially owned by a grantee
are included in determining the Beneficial Ownership of a Person referred
to in paragraph 6(a), (ii) a grantee is required to be named pursuant to
Item 2 of the Schedule 14D-1 (or any similar successor filing requirement)
required to be filed by the bidder making a Tender Offer referred to in
paragraph 6(b) or (iii) if a grantee is a 144 participant" as defined
in Instruction 3 to Item 4 of Schedule 14A under the 1934 Act (or any
successor Rule) in a solicitation (other than a solicitation by the
Corporation) referred to in paragraph 6(c), then no Section 8 Event with
respect to such grantee shall be deemed to have occurred by reason of such
event.
(B) ACCELERATION OF THE EXERCISE DATE OF STOCK OPTIONS.
Subject to the provisions of Section 4 in the case of incentive stock
options, unless the agreement referred to in Section 5(I) shall otherwise
provide, notwithstanding any other provision contained in the Plan, in case any
"Section 8 Event" occurs all outstanding
<PAGE> 17
stock options (other than those held by a person referred to in the proviso to
Section 8(A)(6)) shall become immediately and fully exercisable whether or not
otherwise exercisable by their terms.
(C) EXTENSION OF THE EXPIRATION DATE OF STOCK OPTIONS.
Subject to the provisions of Section 4 in the case of incentive stock
options, unless the agreement referred to in Section 5(I) shall otherwise
provide, notwithstanding any other provision contained in the Plan, all
outstanding stock options held by a grantee (other than a grantee referred to
in the proviso to Section 8(A)(6)) whose employment with the Corporation or a
Subsidiary terminates within one year of any Section 8 Event for any reason
other than voluntary termination with the consent of the Corporation or a
Subsidiary, severance under the Severance Plan, retirement under any retirement
plan of the Corporation or a Subsidiary or death which are exercisable shall
continue to be exercisable for a period of three years from the date of such
termination of employment, but in no event after the expiration date of the
stock option.
(D) LAPSE OF RESTRICTIONS ON RESTRICTED SHARE AWARDS.
Unless the agreement referred to in Section 6(A) shall otherwise provide,
notwithstanding any other provision contained in the Plan, if any "Section 8
Event" occurs prior to the scheduled lapse of all restrictions applicable to
restricted share awards under the Plan (other than those held by a person
referred to in the proviso to Section 8(A)(6)), all such restrictions shall
lapse upon the occurrence of any such "Section 8 Event" regardless of the
scheduled lapse of such restrictions.
(E) PAYMENT OF PERFORMANCE SHARES.
Unless the agreement referred to in Section 6(B) shall otherwise provide,
notwithstanding any other provision contained in the Plan, if any "Section 8
Event" occurs prior to the end of an award period with respect to an award of
performance shares to a grantee, the performance shares (unless the grantee is
a person referred to in the proviso to Section 8(A)(6)) shall be deemed to have
been fully earned as of the date of the Section 8 Event, regardless of the
attainment or nonattainment of any performance target and shall be paid to the
grantee as promptly as practicable after the Section 8 Event.
SECTION 9
EFFECT OF THE PLAN ON THE RIGHTS OF EMPLOYEES AND EMPLOYER
Neither the adoption of the Plan nor any action of the Board or the
Committee pursuant to the Plan shall be deemed to give any employee any right
to be granted a stock option (with or without alternative stock appreciation
rights and/or cash payment rights) or an award under the Plan. Nothing in the
Plan, in any stock option, alternative stock appreciation rights or cash
payment rights granted under the Plan or in any award under the Plan or in any
agreement providing for any of the foregoing shall confer any right on any
employee to continue in the employ of the Corporation or any Subsidiary or
interfere in any way with the rights of the Corporation or any Subsidiary to
terminate the employment of any employee at any time.
<PAGE> 18
SECTION 10
WITHHOLDING
Income or employment taxes may be required to be withheld by the
Corporation or a Subsidiary in connection with the exercise of a stock option
or alternative stock appreciation rights, upon a "disqualifying disposition" of
the shares acquired upon exercise of an incentive stock option, at the time
restricted shares are granted or vest or performance shares are earned or upon
the receipt by the grantee of cash in payment of cash payment rights or
dividends on restricted stock which has not vested. Except as provided below,
the grantee shall pay the Corporation in cash the amount required to be
withheld.
A grantee may elect to have any withholding obligation at the time of the
exercise of a nonstatutory stock option or alternative stock appreciation
rights or at the time restricted shares vest or performance shares are earned
satisfied by the Corporation withholding from the shares of Capital Stock the
grantee would otherwise receive full shares of Capital Stock having a fair
market value, determined as provided in Section 5(J), on the date that the
amount of tax to be withheld is determined (the "Tax Date") equal to, or as
nearly equal as possible to but less than, the amount required to be withheld.
The Corporation will request that the grantee pay any additional amount
required to be withheld directly to the Corporation in cash. Any income or
employment taxes required to be withheld by the Corporation or any of its
Subsidiaries upon the receipt by the grantee of cash in payment of cash payment
rights or dividends will be satisfied by the Corporation by withholding the
taxes required to be withheld from the cash the grantee would otherwise
receive.
A grantee may also elect to have any withholding obligation in connection
with the exercise of a nonstatutory stock option or alternative stock
appreciation rights, upon a "disqualifying disposition" of the shares acquired
upon the exercise of an incentive stock option or at the time restricted shares
are granted or vest or performance shares are earned satisfied in whole or in
part by the grantee tendering to the Corporation a number of previously owned
shares of Capital Stock having a fair market value, determined as provided in
Section 5(J), on the Tax Date equal to or less than the amount required to be
withheld.
If a grantee does not pay any income or employment taxes required to be
withheld by the Corporation or any of its Subsidiaries within ten days after a
request for the payment of such taxes, the Corporation or such Subsidiary may
withhold such taxes from any other compensation to which the grantee is
entitled from the Corporation or any of its Subsidiaries.
SECTION 11
AMENDMENT
The right to alter and amend the Plan at any time and from time to time and
the right to revoke or terminate the Plan are hereby specifically reserved to
the Board; provided that no such alteration or amendment of the Plan shall,
without stockholder approval, (i) increase the number of shares which may be
issued under the Plan as set forth in Section
<PAGE> 19
3, (ii) increase the maximum number of shares as to which stock options may be
granted and as to which shares may be awarded under the Plan to any one
employee during any one calendar year as set forth in Section 4, (iii)
materially increase the benefits accruing under the Plan to persons subject to
the provisions of Section 16(b) of the 1934 Act, (iv) materially modify the
requirements as to eligibility for participation in the Plan by persons subject
to the provisions of Section 16(b) of the 1934 Act, (v) make any changes in
the class of employees eligible to receive incentive stock options under the
Plan or (vi) extend the duration of the Plan. No alteration, amendment,
revocation or termination of the Plan shall, without the written consent of the
holder of an outstanding grant or award under the Plan, adversely affect the
rights of such holder with respect to such outstanding grant or award.
SECTION 12
EFFECTIVE DATE AND DURATION OF PLAN
The effective date and date of adoption of the Plan shall be December 16,
1993, the date of adoption of the Plan by the Board, provided that such
adoption of the Plan by the Board is approved by the affirmative votes of the
holders of a majority of the Capital Stock present in person or by proxy and
entitled to vote at a meeting of stockholders duly called and held on or prior
to December 15, 1994. No stock option or alternative stock appreciation rights
granted under the Plan may be exercised and no restricted shares may be awarded
until after such approval. No stock option, alternative stock appreciation
rights or cash payment rights may be granted and no awards may be made under
the Plan subsequent to December 15, 2003.
The Plan was amended, by the Corporation's stockholders on May 16, 1996, to
increase the shares available for grant under the Plan. The Plan was amended
by the Board on October 24, 1996 to comply with certain changes made to the
1994 Act. The Plan was amended, by the Corporation's stockholders on May 16,
1997, to eliminate the authorization to reprice stock options, to authorize the
issuance under the Plan of 3,500,000 additional shares of the Company's capital
stock and to set maximum limitations on awards to comply with the Code.
IN WITNESS WHEREOF, the Corporation has evidenced the adoption of this
Restated Plan by the signature of its duly authorized officer effective May 16,
1997.
QUAKER STATE CORPORATION
Attest:
By: /s/ Paul E. Konney
/s/ C Sherwood ---------------------------------------
- ---------------------- Paul E. Konney
Assistant Secretary Senior Vice President, General
Counsel and Secretary
(SEAL)
<PAGE> 1
Exhibit 5.1
[Vinson & Elkins L.L.P. Letterhead]
August 7, 1997
Quaker State Corporation
225 East John Carpenter Freeway
Irving, Texas 75062
Re: Registration Statement on Form S-8 for the 1994 Stock Incentive Plan
Gentlemen:
We have acted as counsel to Quaker State Corporation, a Delaware
corporation (the "Corporation"), in connection with the above-captioned
registration statement (the "Registration Statement") relating to the 3,500,000
shares of Capital Stock, par value $1.00 per share, of the Corporation (the
"Capital Stock") which may be issued under its 1994 Stock Incentive Plan (the
"Plan"). Either authorized but unissued or treasury shares of Capital Stock
may be used under the Plan. In rendering our opinion below, we have assumed
that only authorized but unissued shares will be issued under the Plan.
In connection with this opinion, we have examined, among other things:
1. resolutions adopted by the Corporation's Board of Directors on January
29, 1997, amending the Plan to increase the number of shares of Capital Stock
that may be issued thereunder from 1,362,978 to 4,862,978 shares;
2. the Certificate of Incorporation of the Corporation as in effect at
all times since the last amendment to the Certificate of Incorporation
effective June 13, 1997;
3. the Bylaws of the Corporation, as amended and restated on March 27,
1997;
4. the Plan, as amended and restated on May 16, 1997;
5. a copy of the Report of Inspectors of Election, indicating that the
amendment to the Plan referred to in clause (1) above was approved by the
Corporation's stockholders at the Corporation's Annual Meeting of Stockholders
held on May 16, 1997.
As to matters of fact relevant to the opinions expressed herein, and as to
factual matters arising in connection with our examination of corporate
documents, records and other documents and writings, we have relied upon
certificates and other communications of corporate officers of the Corporation,
without further investigation as to the facts set forth therein.
Based on the foregoing and upon an examination of such other documents,
corporate proceedings, statutes, decisions, certificates of public officials,
and questions of law as we considered necessary in order to enable us to
furnish this opinion, we advise you that in our opinion, the 3,500,000 shares
of Capital Stock, the offering and sale of which, pursuant to the Plan, is
being registered on the Registration Statement, have been duly authorized, and
upon
<PAGE> 2
issuance in accordance with the provisions of the Plan, will be validly issued,
fully paid and nonassessable.
The opinion expressed above is subject to the following assumptions,
exceptions and qualifications:
a. We have assumed that (i) all information in all documents reviewed by
us is true and correct, (ii) all signatures on all documents reviewed by us are
genuine, (iii) all documents submitted to us as originals are true and
complete, (iv) all documents submitted to us as copies are true and complete
copies of the originals thereof, (v) each person signing any document reviewed
by us in any representative capacity had proper authority to do so, and (vi)
each natural person signing any document reviewed by us had the legal capacity
to do so.
b. We are admitted to practice law in the State of Texas. The foregoing
opinion is limited to the General Corporation Law of the State of Delaware and
the federal laws of the United States of America.
c. We have assumed that the exercise price for each of the shares of
Capital Stock issued under the Plan will not be less than the par value of such
share of Capital Stock at the time of issuance.
d. We have assumed there are no agreements that affect the ability of the
Corporation to issue the shares of Capital Stock.
We express no opinion as to any matter other than as expressly set forth
above, and no opinion on any other matter may be inferred or implied herefrom.
We hereby consent to the filing of this opinion as an Exhibit to the
Registration Statement and to the use of our name under the caption "Legal
Opinion" in the Section 10(a) prospectus used in connection with the Plan and
the Registration Statement. In giving this consent, however, we do not hereby
admit that we are within the category of persons whose consent is required
under Section 7 of the Securities Act of 1933 and the rules and regulations of
the Securities and Exchange Commission promulgated thereunder.
Yours truly,
Vinson & Elkins L.L.P.
<PAGE> 1
Exhibit 23.2
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in the registration statement of
Quaker State Corporation on Form S-8 for the registration of 3,500,000 shares
of Capital Stock which may be issued under its 1994 Stock Incentive Plan, and
in the Section 10(a) prospectus used in connection therewith, of our reports
dated January 28, 1997, on our audits of the consolidated financial statements
and the financial statement schedule of Quaker State Corporation and
subsidiaries as of December 31, 1996 and 1995, and for the three years ended
December 31, 1996, which reports are included in the Annual Report on Form
10-K. We also consent to the reference of our firm under the caption
"Experts."
Coopers & Lybrand L.L.P.
Dallas, Texas
August 7, 1997
<PAGE> 1
EXHIBIT 23.3
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation
by reference in this Registration Statement of Quaker State Corporation on Form
S-8 of our report dated August 21, 1996, on the combined financial statements
of Blue Coral, Inc. and subsidiaries as of October 31, 1995 and 1994, and for
each of the three years in the period ended October 31, 1995, included in
Quaker State Corporation's Current Report on Form 8-K/A-1 filed September 11,
1996 and to all references to our Firm included in this Registration Statement.
ARTHUR ANDERSEN LLP
/s/ Arthur Andersen LLP
Toledo, Ohio
August 7, 1997
<PAGE> 1
EXHIBIT 23.4
CONSENT OF INDEPENDENT AUDITORS
We consent to the reference to our firm under the caption "Experts" in the
Registration Statement (Form S-8, 333-#) of Quaker State Corporation
pertaining to the Quaker State Corporation 1994 Stock Incentive Plan and to the
incorporation by reference therein of our reports dated March 22, 1996 and
March 24, 1995, with respect to the Combined Financial Statements of Medo
Industries, Inc., Medo Manufacturing Corp. and Medo Industries Canada, Ltd. for
each of the three years in the period ended December 31, 1995, included in the
Current Report (Form 8-K, File No. 1-2677) of Quaker State Corporation dated
October 11, 1996, filed with the Securities and Exchange Commission.
ERNST & YOUNG LLP
/s/ Ernst & Young LLP
White Plains, New York
August 7, 1997
