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EXHIBIT 10.5
PENNZOIL-QUAKER STATE COMPANY
MEDICAL EXPENSES REIMBURSEMENT PLAN
I. PURPOSES OF PLAN, DEFINITIONS AND DURATION.
1.1 Purposes. This Medical Expenses Reimbursement Plan (the
"Plan") of Pennzoil- Quaker State Company (the "Company") for selected
executives is intended to attract and retain executives of outstanding
competence and ability by providing financial protection against medical
expenses of such executives, their spouses and dependents.
1.2 Definitions.
(a) "Company" means Pennzoil-Quaker State Company or any
successor.
(b) "Subsidiary" means any corporation in which the Company
owns, directly or indirectly, stock possessing 50% or more of the
total combined voting power of all classes of stock or any affiliated
company which is controlled by the Company by reason of a management
contract and stock ownership.
(c) "Board" means the Board of Directors of the Company.
(d) "Closing Date" means the date of Closing as described in
the Agreement and Plan of Merger, dated as of April 14, 1998, among
Pennzoil Company, Pennzoil Products Company, Downstream Merger Company
and Quaker State Corporation ("Merger Agreement").
(e) "Employee" means any person, including an officer of the
Company or any Subsidiary (whether or not he is also a director
thereof), who, at the time such person is designated a Participant
hereunder, is employed by the Company or any Subsidiary on a full-time
basis, who is compensated for such employment by a regular salary and
who, in the opinion of the Committee, is one of the officers or other
key executives of the Company or any Subsidiary in a position to
contribute materially to the continued growth and development and to
the future financial success of the Company.
(f) "Participant" means an Employee who has been designated
by the Committee to participate in the Plan.
(g) "Medical Expenses" means amounts paid for the diagnosis,
cure, mitigation, treatment, or prevention of disease, and for other
"medical care" as such term is defined in Section 213(e)(1) of the
Internal Revenue Code of 1986, as amended.
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(h) "Dependent" means any person who is a "dependent" of a
Participant within the meaning of the term "dependent" as defined in
Section 152 of the Internal Revenue Code 1986, as amended.
(i) "Spouse" means the person to whom a Participant is then
married and not legally separated under a decree of divorce or
separate maintenance.
1.3 Term. The effective date of the Plan is the Closing Date. The Plan
shall continue until terminated by the Board as herein provided.
II. ADMINISTRATION OF THE PLAN - COMMITTEE.
2.1 Appointment of Committee. The Plan shall be administered by the
Compensation Committee or such other committee of the Board as may be
designated by the Board from time to time (the "Committee").
2.2 Committee Powers. The Committee shall be deemed to have and to be
exercising all of the powers of the Board in the performance of any of the
powers and duties delegated to it under the Plan, including, but without
limiting the generality of the foregoing, the selection of Participants. The
Committee may from time to time establish rules for the administration of the
Plan which are not inconsistent with the provisions and purposes of the Plan.
2.3 Committee Action. A majority of the members of the Committee shall
constitutes a quorum for the transaction of business. All action taken by the
Committee at a meeting shall be by the vote of a majority of those present at
such meeting, but any action may be taken by the Committee without a meeting
upon written consent signed by all of the members of the Committee. Members of
the Committee may participate in a meeting by means of conference telephone or
similar communications equipment by means of which all persons participating in
the meeting can hear each other.
2.4 Committee Determinations Conclusive. The determination of the
Committee as to any disputed question of construction or interpretation arising
under the Plan shall be final, binding, and conclusive upon all persons.
III. COVERAGE OF THE PLAN.
3.1 Persons Covered. Each person who is designated as a Participant
and the Spouse and Dependents of each such Participant shall be eligible for
benefits under this Plan from and after the Effective Date or such later date
as may be designated as the commencement date of his coverage under this Plan.
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3.2 Termination of Coverage. Coverage under this Plan of any
Participant, his Spouse and Dependents shall terminate upon the death,
resignation or other termination of such Participant's employment with the
Company.
IV. BENEFITS.
4.1 Reimbursable Medical Expenses. The Company shall reimburse each
Participant for Medical Expenses incurred by such Participant, his Spouse or
any of his Dependents during the time such Participant was covered under this
Plan or under the PennzEnergy Medical Expenses Reimbursement Plan (formerly,
the Pennzoil Company Medical Expenses Reimbursement Plan) to the extent that
such Medical Expenses are or were not otherwise paid or reimbursed by group
hospitalization or other medical benefits insurance or plan or program provided
by the Company or it's former parent, PennzEnergy Company (formerly Pennzoil
Company). Notwithstanding the foregoing, Medical Expenses incurred prior to the
Closing Date will only be reimbursed to the extent required under the Merger
Agreement.
4.2 Payment Procedure. Each Participant entitled to payments for
Reimbursable Medical Expenses under this Plan shall request such payments in
writing in such form as may be prescribed by the Committee and shall support
such request with such invoices and other documents as may be required by the
Committee. Upon receipt of satisfactory proof of payment of Reimbursable
Medical Expenses of a Participant, his Spouse or a Dependent, the Company shall
reimburse such Participant therefor as soon as practicable.
V. RIGHTS OF PARTICIPANTS.
5.1 Limitation of Rights. Nothing in this Plan shall be construed to:
(a) Give any Employee of the Company or a Subsidiary any
right to participate in this Plan; or
(b) Limit in any way the right of the Company or any
Subsidiary to terminate a Participant's employment with the Company or
any Subsidiary at any time; or
(c) Give a Participant any interest in any fund or in any
specific asset or assets of the Company or any Subsidiary; or
(d) Be evidence of any agreement or understanding, express or
implied, that the Company or any Subsidiary will employ a Participant
in any particular position or at any particular rate of remuneration.
5.2 Nonalienation of Benefits. No right or benefit under this Plan
shall be subject to anticipation, alienation, sale, assignment, pledge,
encumbrance or charge of any nature, and any
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attempt to anticipate, alienate, sell, assign, pledge, encumber or charge the
same will be void. No night or benefit hereunder shall in any manner be liable
for or subject to any debts, contracts, liabilities or torts of the person
entitled to such benefits.
VI. MISCELLANEOUS.
6.1 Amendment or Termination of the Plan. The Board may amend or
terminate this Plan at any time. Any such amendment or termination shall not,
however, affect any right to claim reimbursement of Medical Expenses incurred
prior thereto.
6.2 Reliance upon Information. The Board and the Committee shall not
be liable for any decision or action taken in good faith in connection with the
administration of this Plan. Without limiting the generality of the foregoing,
any such decision or action taken by the Board or the Committee in reliance
upon any information supplied to them by an officer of the Company, the
Company's legal counsel or by the Company's independent accountants in
connection with the administration of this Plan shall be deemed to have been
taken in good faith.
6.3 Applicable Laws. This Plan shall be construed, administered and
governed in all respects under the laws of the State of Texas.
PENNZOIL-QUAKER STATE COMPANY
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