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Exhibit 10(e)
SPLIT DOLLAR AGREEMENT
THIS AGREEMENT, made as of __________________, 19___ by and
between QUAKER STATE CORPORATION, a Delaware corporation with offices in Oil
City, Pennsylvania, ("Quaker State") and ___________________________________,
an individual residing in the ____________ of __________________, ("Employee").
WHEREAS, Employee has rendered faithful and competent services
to Quaker State and Quaker State desires to encourage Employee's continued
employment with Quaker State; and
WHEREAS, Employee owns or coincidentally herewith will become
the owner of a policy insuring the life of Employee under insurance issued by
The Equitable Life Assurance Society of the United States ("Insurer"); and
WHEREAS, in respect of Employee's services previously rendered
to Quaker State and to be rendered to Quaker State, Quaker State desires to
assist Employee in purchasing life insurance by advancing to the Employee a
portion of the annual premiums due on said insurance; and
WHEREAS, pursuant to the terms of this Agreement, Employee is
to own the insurance and certain rights with respect to the same are to be
assigned to Quaker State as security in respect of the payment of obligations
accruing due to Quaker State's advances to the Employee of a portion of the
annual premiums due on the insurance.
NOW, THEREFORE, intending to be legally bound hereby, and in
consideration of the mutual covenants and agreements herein contained and other
good and valuable consideration, the parties hereto agree as follows:
1. Employee owns or coincidentally herewith shall become
the owner of insurance on his life, issued by Insurer, in the face amount of
$__________________ (the "Insurance"). The policy number, face amount of
Insurance, and the register date shall be recorded on Schedule A annexed
hereto, and the Insurance shall be subject to the terms and conditions of this
Agreement and the collateral assignment to be made in accordance with paragraph
6 hereof.
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2. Employee shall own the Insurance and may exercise all
rights of ownership with respect to it, except as otherwise provided
hereinafter.
3. (a) All dividends declared by Insurer on the
Insurance shall be applied to purchase paid- up additional whole life insurance
on Employee's life which additional insurance shall also be subject to this
Agreement (the "Paid-up Additions").
(b) Employee will elect and maintain in effect
with respect to the Insurance and Paid-up Additions the dividend option
described in subparagraph (a) of this paragraph 3.
4. (a) Until termination of this Agreement for any
reason, on or before the due date of the annual premium on the Insurance Quaker
State will advance to Employee, solely for the payment of such premium, the
full amount of the annual premium minus the amount of taxable income that would
be imputed to Employee if Quaker State paid the full amount of such annual
premium.
(b) On or before the due date of each annual
premium on the Insurance, Employee shall pay the Insurer the full amount of the
annual premium. Employee shall provide Quaker State, within fifteen days after
the due date of each annual premium, evidence that such annual premium has been
paid.
5. Employee shall be obligated to repay to Quaker State
the amount of premiums advanced to Employee by Quaker State pursuant to
subparagraph (a) of paragraph 4 above. This obligation of Employee to Quaker
State shall be payable solely as provided in paragraphs 7 and 9 hereof.
6. Coincident with this Agreement and in accordance with
the Collateral Assignment Agreement attached hereto, Employee will
collaterally assign to Quaker State (and maintain such collateral assignment in
effect) certain rights in the Insurance (including Paid-up Additions) as
security for the repayment of the amount to which reference is made in
paragraph 5 above. Quaker State shall have no right to assign any right under
this Agreement without Employee's consent, except if such assignment is to
Employee. The collateral assignment pursuant to this paragraph 6 shall not be
terminated, altered or amended by Employee without the express written consent
of Quaker State.
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7. (a) Upon Employee's death, Quaker State shall be
entitled to receive, in a single sum, a portion of the death benefits provided
under the Insurance (including Paid-up Additions). The amount to which Quaker
State will be entitled shall be the amount which Employee is obligated to repay
Quaker State pursuant to paragraph 5 above. The determination of such amount
shall be in the sole discretion of Quaker State. Employee agrees that such
determination is proper as to Employee, his successors, assigns, heirs,
executors, administrators and beneficiaries. The receipt of such amount by
Quaker State shall constitute satisfaction of Employee's obligation under
paragraph 5 above.
(b) Upon Employee's death, the beneficiary or
beneficiaries named by Employee shall be entitled to receive the amount of the
death benefits provided under the Insurance (including Paid-up Additions) in
excess of the amount payable to Quaker State under subparagraph (a) of this
paragraph 7.
(c) The parties hereto agree that the beneficiary
designation provision of the Insurance shall not conflict with the provisions
hereof.
8. This Agreement shall terminate on the occurrence of
any of the following events:
(a) By written notice of the Employee to Quaker
State at any time, provided no premium on the Insurance is overdue;
(b) By mutual written consent of the Employee and
Quaker State;
(c) By surrender or cancellation of the entire
Insurance (including Paid-up Additions);
(d) The end of any policy year, beginning with
the tenth (10th) policy year but in no event later than the fifteenth (15th)
policy year, in which there is sufficient cash value in the Insurance to repay
the premium advances made to Participant by Quaker State without voiding the
Insurance;
(e) The date the Employee quits if such date is (i)
prior to the Employee's eligibility for retirement under the Quaker State
Salaried Pension Plan, or (ii) after the
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Employee's eligibility for retirement under the Quaker State Salaried Pension
Plan and the Employee does not elect to commence receipt of retirement benefits
but becomes employed by a competitor of Quaker State;
(f) The date the Employee is terminated by the
Board of Directors of Quaker State as constituted on the date of this Agreement
("the current Board") or another Board of Directors of Quaker State consisting
of a majority of directors on the current Board and/or persons recommended to
succeed one or more of the Directors on the current Board by a majority of the
Directors on the current Board and/or their successors as provided above;
(g) Payment to Quaker State of the amount
referred to in subparagraph (a) of paragraph 7 upon the death of the Employee;
or
(h) Upon the election of Quaker State, if the
Employee fails to fulfill any obligation hereunder for any reason including the
failure to pay the annual premium on the Insurance when due; provided that any
election to terminate this Agreement under this clause must be made within
ninety (90) days after the later of (i) the failure to fulfill such obligation
occurs, or (ii) Quaker State has knowledge that such failure has occurred.
9. (a) If this Agreement is terminated under
subparagraphs (a) through (f) or (h) of paragraph 8 above, Employee shall have
thirty (30) days in which to make full payment to Quaker State of the amount
the Employee is obligated to repay Quaker State pursuant to paragraph 5 above.
Upon receipt of such repayment in full, Quaker State shall release the
collateral assignment made by Employee to Quaker State pursuant to paragraph 6
above.
(b) If the Employee does not repay the full
amount due to Quaker State within thirty (30) days, as provided in subparagraph
(a) above, then Quaker State may enforce its right to be repaid in accordance
with paragraph 5 above under the collateral assignment only (i) from the cash
surrender value of the Insurance (including Paid-up Additions); provided that
in the event the cash surrender value exceeds the amount due to Quaker State,
such excess shall be paid to Employee; or (ii) from a loan against the
Insurance (including Paid-up Additions).
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10. Insurer shall:
(a) Not be deemed to be a party to this Agreement
for any purpose nor in any way responsible for its validity;
(b) Not be obligated to inquire as to the
distribution of any monies payable or paid by it under the Insurance (including
Paid-up Additions); and
(c) Be fully discharged from any and all
liability under the terms of any policy issued by it, which is subject to the
terms of this Agreement, upon payment or other performance of its obligation in
accordance with the terms thereof, but as restricted by the collateral
assignment referred to in paragraph 6 above.
11. This Agreement contains the entire and only agreement
between the parties with respect to the subject matter of this Agreement, there
being merged into this Agreement all prior and collateral representations,
promises, and conditions in connection with the subject matter of this
Agreement. Any representation, promise or condition not incorporated in this
Agreement shall not be binding on the parties, their heirs, successors or
assigns.
12. No amendment, modification, variation, extension,
supplementation, renewal, termination (other than termination in accordance
with paragraph 8 above), assignment or any future representation, promise, or
agreement in connection with the subject matter of this Agreement shall be
binding unless made in writing and signed by each party, or their respective
heirs, successors or assigns.
13. This Agreement shall be binding upon and inure to the
benefit of Quaker State and its successors and assigns, and the Employee, his
successors, assigns, heirs, executors, administrators and beneficiaries.
14. Employee has voluntarily entered into this Agreement
with the understanding that Quaker State's sole obligation is to assist
Employee with the purchase of the Insurance as provided in paragraph 4(a) above
and to take whatever steps are necessary with regard to obtaining repayment of
the amount Employee is obligated to repay to Quaker State pursuant to paragraph
5 above. Quaker State shall have the sole discretion to determine the steps to
be taken to obtain such repayment and any such determination shall be binding
on Employee and Employee's successors, assigns, heirs, executors,
administrators and beneficiaries.
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15. This Agreement, and the rights of the parties
hereunder, shall be governed by and construed and enforced according to the
laws of the Commonwealth of Pennsylvania.
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement as of the day and year first stated above.
ATTEST: QUAKER STATE CORPORATION
(Quaker State)
By:
----------------------------------- ------------------------------------
Assistant Corporate Secretary Chairman and Chief Executive Officer
(SEAL)
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Witness Employee:
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SCHEDULE A
The following life insurance policy is subject to the attached
Split-Dollar Agreement.
Insurer: The Equitable Life Assurance Society of the
United States
Insured:
Policy Number:
Face Amount: $
Dividend Option: Dividend Additions
Life Insurance Plan: Whole Life-Level Face Amount Plan
Register
(Effective) Date:
Issue Date:
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EXHIBIT 10(e)
COLLATERAL ASSIGNMENT AGREEMENT
THIS AGREEMENT, made as of February _____, 199__, by and between
________________ ("Assignor") and QUAKER STATE CORPORATION ("Assignee").
WITNESSETH:
INTENDING to be legally bound hereby and in consideration of the
mutual covenants and agreements herein contained and other good and valuable
consideration, the parties hereto agree as follows:
1. Assignor hereby assigns, transfers and sets over to Assignee,
its successors and assigns, a right to surrender, a right to borrow against and
a right to the death benefit under Policy No. ________________ issued upon the
life of Assignor by The Equitable Life Assurance Society of the United States
("Insurer"), including paid-up additions and any contracts supplementary
thereto (said policy, paid-up additions and contracts referred to as the
"Policy") to the extent of the Liabilities (as hereinafter defined) subject to
all terms and conditions of the Policy and this Agreement.
2. This assignment is made as collateral security for the
discharge of all liabilities of Assignor to Assignee, either now existing or
hereafter arising under a Split Dollar Agreement dated as of February ____,
199__ between Assignor and Assignee relating to the Policy ("Liabilities").
3. Assignee has the right to collect Policy proceeds from Insurer
as set forth in paragraph 4, the right to surrender the Policy and to collect
the cash value thereof as set forth in paragraph 5, and the right to borrow
against the Policy as set forth in paragraph 6. ASSIGNOR
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RESERVES AND RETAINS ALL OTHER RIGHTS IN THE POLICY, unless otherwise
restricted herein.
4. (a) Upon Assignor's death, Assignee shall be entitled to
collect, in a single sum, Policy proceeds from Insurer to the extent of the
Liabilities. The receipt of such amount by Assignee shall constitute
satisfaction of the Liabilities by Assignor.
(b) Upon Assignor's death, the beneficiary or
beneficiaries named by Assignor shall be entitled to collect the Policy
proceeds from Insurer in excess of the amount payable to Assignee under
subparagraph (a) of this paragraph 4.
5. Assignee may surrender the Policy on termination of the Split
Dollar Agreement referred to in paragraph 2 above and receive from the Insurer
the full amount of the cash value of the Policy. The receipt of such amount by
Assignee shall constitute satisfaction of the Liabilities by Assignor. To the
extent the cash value exceeds the Liabilities, Assignee shall pay such excess
to Assignor.
6. Assignee may borrow against the Policy on termination of the
Split Dollar Agreement referred to in paragraph 2 above to the extent of the
Liabilities prior to such loan. The loan to Assignee shall constitute
satisfaction of the Liabilities by Assignor. Assignor shall be obligated to
pay the interest on any such loan.
7. Assignor shall have no right to borrow against or surrender
the Policy while this Agreement is in effect or to change the paid-up additions
dividend option required to be maintained in effect under the Split Dollar
Agreement.
8. Assignee shall not assign any right under this Agreement
without Assignor's consent, except if such assignment is to Assignor.
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9. Assignee shall have the sole right to determine the amount of
the Liabilities, to determine whether the Split Dollar Agreement has been
terminated and to interpret and administer the provisions hereof. Insurer may
recognize Assignee's claims without verifying Liabilities or investigating
Assignee's application of any amount. Assignee's receipt shall be a full
discharge and release of Insurer. Payment by Insurer of any death benefit
assigned herein shall be as provided in paragraph 4 above.
10. Assignee has no obligation under this Agreement to pay any
Policy premium. Any policy charge shall be Assignor's obligation. Assignor
may not exercise any automatic premium loan options while this Agreement is in
effect.
11. All notices from Insurer regarding Assignor's failure to pay
any annual premium by the due date thereof shall be sent to Assignee at the
following address:
Quaker State Corporation
c/o Treasurer
000 X. Xxxx Xxxxxxxxx Xxxxxxx
Xxxxxx, XX 00000
Assignee shall have the sole discretion to select the option under the Policy
which will apply in case the Policy lapses.
12. Upon satisfaction of the Liabilities by Assignor pursuant to
paragraph 4, 5 or 6 above, Assignee shall release the assignment made hereunder
and this Agreement shall terminate.
13. This Agreement may not be altered, amended or otherwise
modified except in writing signed by Assignor and Assignee.
14. In the event of any conflict between this Agreement and any
other agreement between the parties, this Agreement shall control with respect
to the Policy.
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WITNESS the due execution hereof as of the date first stated above.
____________________________________ ____________________________________
Witness Assignor:
ATTEST QUAKER STATE CORPORATION
(Assignee)
_____________________________________ ____________________________________
Assistant Corporate Secretary Chairman and Chief Executive Officer
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