<PAGE>   1


                                                                  EXHIBIT 10(b)

                            QUAKER STATE CORPORATION
                            1996 DIRECTORS' FEE PLAN
                     (AS AMENDED EFFECTIVE MARCH 27, 1997)

                                       1

                         PURPOSE; RESERVATION OF SHARES

       The purposes of the 1996 Directors' Fee Plan (the "Plan") are to provide
Directors of Quaker State Corporation (the "Corporation") with payment
alternatives for fees payable for future services as a member of the Board of
Directors of the Corporation (hereinafter referred to as the "Board") or as a
member of any committee thereof ("Director Fees") and to increase the
identification of interests between such Directors and the stockholders of the
Corporation by providing Directors the opportunity to elect to receive payment
of Director Fees in shares of Capital Stock, par value $1.00 per share, of the
Corporation ("Capital Stock"). For each calendar year, the aggregate number of
shares of Capital Stock which may be issued under Current Stock Elections or
credited to Deferred Stock Compensation Accounts for subsequent issuance under
the Plan is limited to 50,000 shares, subject to adjustment and substitution as
set forth in Section 5(b).

                                       2

                                  ELIGIBILITY

       Any Director of the Corporation who is separately compensated for
services on the Board or on any committee of the Board shall be eligible to
participate in the Plan.

                                       3

                                   ELECTIONS

       (a) DIRECTOR FEE PAYMENT  ALTERNATIVES.  For each  calendar year  
beginning January 1, 1997, a Director may elect any one of the following
alternatives for the payment of Director Fees:

               (1) to receive current payment in cash, on the date on which the
       Director Fees are payable, of all Director Fees for the calendar year;

               (2) to receive current payment in shares of Capital Stock, on
       the date on which the Director Fees are payable, of all Director Fees
       for the calendar year (a "Current Stock Election");

               (3) to defer payment of all or a portion of the Director Fees
       for the calendar year for subsequent payment in cash (a "Cash Deferral
       Election"); or

               (4) to defer payment of all the Director Fees for the calendar
       year for subsequent payment in shares of Capital Stock (a "Stock
       Deferral Election").

       (b) FILING AND EFFECTIVENESS OF ELECTIONS. The election by a Director to
receive 


                                      
<PAGE>   2

payment of Director Fees other than in cash on the date on which the Director
Fees are otherwise payable is made by filing with the Secretary of the
Corporation a Notice of Election in the form prescribed by the Corporation (an
"Election"). In order to be effective for any calendar year, an Election must
be received by the Secretary of the Corporation on or before December 31 of the
preceding calendar year, except that if a Director files a Notice of Election
on or before 30 days subsequent to the Director's initial election to the
office of Director, the Election shall be effective on the date of filing with
respect to Director Fees payable for any portion of the calendar year which
remains at the date of such filing. An Election may not be modified or
terminated after the beginning of a calendar year for which it is effective.
Unless modified or terminated by filing a new Notice of Election on or before
December 31 immediately preceding the calendar year for which such modification
or termination is effective, an Election shall be effective for and apply to
Director Fees payable for each subsequent calendar year. Director Fees earned
at any time for which an Election is not effective shall be paid in cash on the
date when the Director Fees are otherwise payable. Any Election shall terminate
on the date a Director ceases to be a member of the Board.

       (c) CURRENT STOCK ELECTIONS. During the period a Current Stock Election
is effective, all Director Fees payable shall be paid by the issuance to the
Director of a number of whole shares of Capital Stock equal to (x) 105% of the
cash amount of the Director Fees payable divided by (y) the Fair Market Value
of one share of the Capital Stock, as defined in Section 11 hereof, on the date
on which such Director Fees are payable. Any amount of Director Fees which is
not paid in Capital Stock on the date otherwise payable because less than the
Fair Market Value of a whole share shall be accumulated in cash without
interest and added to the amount used in computing the number of shares of
Capital Stock issuable on the next succeeding date on which Director Fees are
payable under the Current Stock Election. Any such accumulated fractional
amount remaining as of the effective date of any termination of a Current Stock
Election or of the termination of the Plan shall be paid to the Director in
cash on the next succeeding date on which Director Fees would have been payable
to the Director under the Current Stock Election. The Corporation shall issue
share certificates to the Director for the shares of Capital Stock acquired or,
if requested in writing by the Director and permitted under such plan, the
shares acquired shall be added to the Director's account under the
Corporation's Automatic Dividend Reinvestment Plan. As of the date on which the
Director Fees are payable in shares of Capital Stock, the Director shall be a
stockholder of the Corporation with respect to such shares.

         (d) Cash Deferral Elections. Director Fees deferred pursuant to a Cash
Deferral Election shall be deferred and paid as provided in Sections 4 and 6.
If only a portion of the Director Fees otherwise payable for a calendar year
are deferred pursuant to a Cash Deferral Election, the Director Fees deferred
shall be prorated from each payment of Director Fees earned during such year
after the Cash Deferral Election becomes effective and credited to the
Director's Deferred Cash Compensation Account.

       (d) STOCK DEFERRAL ELECTIONS. Director Fees deferred pursuant to a Stock
Deferral Election shall be deferred and paid as provided in Sections 5 and 6. A
Stock Deferral Election shall apply to all Director Fees otherwise payable with
respect to a calendar year, or portion thereof, for which such Stock Deferral
Election is effective.


                                       2
<PAGE>   3

                                       4

                       DEFERRED CASH COMPENSATION ACCOUNT

       (a) GENERAL. The amount of any Director Fees deferred in accordance with
a Cash Deferral Election shall be credited on the date on which such Director
Fees are otherwise payable to a deferred cash compensation account maintained
by the Corporation in the name of the Director (a "Deferred Cash Compensation
Account"). A separate Deferred Cash Compensation Account shall be maintained
for each calendar year for which a Director has elected a different number of
payment installments or as otherwise determined by the Board. The amount in the
Director's Deferred Cash Compensation Account shall be adjusted on a quarterly
basis as of the last day of each calendar quarter to reflect earnings, if any,
for the quarter. Earnings will be calculated on a Director's Deferred Cash
Compensation Account using the balance in the account on the last day of the
quarter and one quarter of the annual prime rate of interest, as reported in
the Wall Street Journal for the last business day of the quarter, plus one
percent. In addition to or in lieu of the investment option described above,
other investment options may be established from time to time, as determined by
the Board, and the Board may provide any other form of investment option it
determines to be advisable, provided, however, that such option shall be made
available and communicated to all Directors on a uniform basis.

       (b) Intentionally Omitted.

                  (c) MANNER OF PAYMENT. The balance of a Director's Deferred
                Cash Compensation Account will be paid to the Director or, in
                the event of the Director's death, to the Director's designated
                beneficiary, in accordance with the Cash Deferral Election. A
                Director may elect at the time of filing of the Notice of
                Election for a Cash Deferral Election to receive payment of the
                Director Fees in annual installments rather than a lump sum,
                provided that the payment period for installment payments shall
                not exceed ten years following the Payment Commencement Date,
                as described in Section 6 hereof. The amount of any installment
                shall be determined by multiplying (i) the balance in the
                Director's Deferred Cash Compensation Account on the date of
                such installment by (ii) a fraction, the numerator of which is
                one and the denominator of which is the number of remaining
                unpaid installments. The balance of the Deferred Cash
                Compensation Account shall be appropriately reduced on the date
                of payment to the Director or the Director's designated
                beneficiary to reflect the installment payments made hereunder.
                Amounts held pending distribution pursuant to this Section 4(c)
                shall continue to be credited with earnings, if any, on a
                quarterly basis as described in Section 4(a).



                                       3
<PAGE>   4


                                       5

                      DEFERRED STOCK COMPENSATION ACCOUNT

       (a) GENERAL. The amount of any Director Fees deferred in accordance with
a Stock Deferral Election shall be credited to a deferred stock compensation
account maintained by the Corporation in the name of the Director (a "Deferred
Stock Compensation Account"). A separate Deferred Stock Compensation Account
shall be maintained for each calendar year for which a Director has elected a
different number of payment installments or as otherwise determined by the
Board. On each date on which Director Fees are otherwise payable and a Stock
Deferral Election is effective for a Director, the Director's Deferred Stock
Compensation Account for that calendar year shall be credited with a number of
shares of Capital Stock (including fractional shares) equal to (x) 105% of the
cash amount of the Director Fees payable divided by (y) the Fair Market Value
of one share of the Capital Stock, as defined in Section 11 hereof, on the date
on which such Director Fees are payable. If a dividend or distribution is paid
on the Capital Stock in cash or property other than Capital Stock, on the date
of payment of the dividend or distribution to holders of the Capital Stock each
Deferred Stock Compensation Account shall be credited with a number of shares
of Capital Stock (including fractional shares) equal to the number of shares of
Capital Stock credited to such Account on the date fixed for determining the
stockholders entitled to receive such dividend or distribution times the amount
of the dividend or distribution paid per share of Capital Stock divided by the
Fair Market Value of one share of the Capital Stock, as defined in Section 11
hereof, on the date on which the dividend or distribution is paid. If the
dividend or distribution is paid in property, the amount of the dividend or
distribution shall equal the fair market value of the property on the date on
which the dividend or distribution is paid. The Deferred Stock Compensation
Account of a Director shall be charged on the date of distribution with any
distribution of shares of Capital Stock made to the Director from such Account
pursuant to Section 5(c) hereof.

       (b) ADJUSTMENT AND SUBSTITUTION. The number of shares of Capital Stock
credited to each Deferred Stock Compensation Account, and the number of shares
of Capital Stock available for issuance or crediting under the Plan in each
calendar year in accordance with Section 1 hereof, shall be proportionately
adjusted to reflect any dividend or other distribution on the outstanding
Capital Stock payable in shares of Capital Stock or any split or consolidation
of the outstanding shares of Capital Stock. If the outstanding Capital Stock
shall, in whole or in part, be changed into or exchangeable for a different
class or classes of securities of the Corporation or securities of another
corporation or cash or property other than Capital Stock, whether through
reorganization, reclassification, recapitalization, merger, consolidation or
otherwise, the Board shall adopt such amendments to the Plan as it deems
necessary to carry out the purposes of the Plan, including the continuing
deferral of any amount of any Deferred Stock Compensation Account.

       (c) MANNER OF PAYMENT. The balance of a Director's Deferred Stock
Compensation Account will be paid in shares of Capital Stock to the Director
or, in the event of the Director's death, to the Director's designated
beneficiary, in accordance with the Stock Deferral Election. A Director may
elect at the time of filing of the Notice of Election for a Stock Deferral
Election to receive payment of the shares of Capital Stock credited to the
Director's Deferred Stock Compensation Account in annual installments rather
than a lump sum, provided that the payment period for installment payments
shall not exceed ten years following the Payment Commencement Date as described
in Section 6 hereof. The number of shares of Capital Stock distributed in each
installment shall be determined by multiplying (i) the number of shares of
Capital 




                                       4
<PAGE>   5

Stock in the Deferred Stock Compensation Account on the date of payment
of such installment, by (ii) a fraction, the numerator of which is one and the
denominator of which is the number of remaining unpaid installments, and by
rounding such result down to the nearest whole number of shares. The balance of
the number of shares of Capital Stock in the Deferred Stock Compensation
Account shall be appropriately reduced in accordance with Section 5(a) hereof
to reflect the installment payments made hereunder. Shares of Capital Stock
remaining in a Deferred Stock Compensation Account pending distribution
pursuant to this Section 5(c) shall continue to be credited with respect to
dividends or distributions paid on the Capital Stock pursuant to Section 5(a)
hereof and shall be subject to adjustment pursuant to Section 5(b) hereof. If a
lump sum payment or the final installment payment hereunder would result in the
issuance of a fractional share of Capital Stock, such fractional share shall
not be issued and cash in lieu of such fractional share shall be paid to the
Director based on the Fair Market Value of a share of Capital Stock, as defined
in Section 11 hereof, on the date immediately preceding the date of such
payment. The Corporation shall issue share certificates to the Director, or the
Director's designated beneficiary, for the shares of Capital Stock distributed
hereunder, or if requested in writing by the Director and permitted under such
plan, the shares to be distributed shall be added to the Director's account
under the Corporation's Automatic Dividend Reinvestment Plan. As of the date on
which the Director is entitled to receive payment of shares of Capital Stock, a
Director shall be a stockholder of the Corporation with respect to such shares.

                                       6

                           PAYMENT COMMENCEMENT DATE

         Payment of amounts in a Deferred Cash Compensation Account or a
Deferred Stock Compensation Account shall commence on May 30 (or if May 30 is
not a business day, on the first preceding business day) of the calendar year
following the date on which the Director ceases to be a member of the Board for
any reason, including death or disability.

                                       7

                            BENEFICIARY DESIGNATION

       A Director may designate, in the Beneficiary Designation form prescribed
by the Corporation, any person to whom payments of cash or shares of Capital
Stock are to be made if the Director dies before receiving payment of all
amounts due hereunder. A beneficiary designation will be effective only after
the signed beneficiary designation form is filed with the Secretary of the
Corporation while the Director is alive and will cancel all beneficiary
designations signed and filed earlier. If the Director fails to designate a
beneficiary, or if all designated beneficiaries of the Director die before the
Director or before complete payment of all amounts due hereunder, any remaining
unpaid amounts shall be paid in one lump sum to the estate of the last to die
of the Director or the Director's designated beneficiaries, if any.

                                       8

                          NON-ALIENABILITY OF BENEFITS

       Neither the Director nor any beneficiary designated by the Director
shall have the right to, directly or indirectly, alienate, assign, transfer,
pledge, anticipate or encumber (except by reason of death) any amount that is
or may be payable hereunder, nor shall 


                                      5
<PAGE>   6

any such amount be subject to anticipation, alienation, sale, transfer,
assignment, pledge, encumbrance, attachment, or garnishment by creditors of the
Director or the Director's designated beneficiary or to the debts, contracts,
liabilities, engagements, or torts of any Director or designated beneficiary,
or transfer by operation of law in the event of bankruptcy or insolvency of the
Director or any beneficiary, or any legal process.

                                       9

                          NATURE OF DEFERRED ACCOUNTS

       Any Deferred Cash Compensation Account or Deferred Stock Compensation
Account and any cash fractional amount accumulated under Section 3(c) shall be
established and maintained only on the books and records of the Corporation,
and no assets or funds of the Corporation or the Plan or shares of Capital
Stock of the Corporation shall be removed from the claims of the Corporation's
general or judgment creditors or otherwise made available until such amounts
are actually payable to Directors or their designated beneficiaries as provided
herein. The Plan constitutes a mere promise by the Corporation to make payments
in the future. The Directors and their designated beneficiaries shall have the
status of, and their rights to receive a payment of cash or shares of Capital
Stock under the Plan shall be no greater than the rights of, general unsecured
creditors of the Corporation. No person shall be entitled to any voting rights
with respect to shares credited to a Deferred Stock Compensation Account and
not yet payable to a Director or the Director's designated beneficiary. The
Corporation shall not be obligated under any circumstance to fund its financial
obligations under the Plan, and the Plan is intended to constitute an unfunded
plan for tax purposes. However, the Corporation may, in its discretion, set
aside funds in a trust or other vehicle, subject to the claims of its
creditors, in order to assist it in meeting its obligations under the Plan, if
such arrangement will not cause the Plan to be considered a funded deferred
compensation plan under the Internal Revenue Code of 1986, as amended.

                                       10

                  ADMINISTRATION OF PLAN; HARDSHIP WITHDRAWAL

       Full power and authority to construe, interpret, and administer the Plan
shall be vested in the Board. Decisions of the Board shall be final,
conclusive, and binding upon all parties. Notwithstanding the terms of a Cash
Deferral Election or a Stock Deferral Election made by a Director hereunder,
the Board may, in its sole discretion, permit the withdrawal of amounts
credited to a Deferred Cash Compensation Account or shares credited to a
Deferred Stock Compensation Account with respect to Director Fees previously
payable, upon the request of a Director or the Director's representative, or
following the death of a Director upon the request of a Director's beneficiary
or such beneficiary's representative, if such Board determines that the
Director or the Director's beneficiary, as the case may be, is confronted with
an unforeseeable emergency. For this purpose, an unforeseeable emergency is an
unanticipated emergency caused by an event that is beyond the control of the
Director or the Director's beneficiary and that would result in severe
financial hardship to the Director or the Director's beneficiary if an early
hardship withdrawal were not permitted. The Director or the Director's
beneficiary shall provide to such Board such evidence as the Board, in its
discretion, may require to demonstrate that such emergency exists and financial
hardship would occur if the withdrawal were not permitted. The withdrawal shall
be limited to the amount or to the number of shares, as the case may be,
necessary to meet the emergency. For purposes of the Plan, a hardship shall be
considered to constitute an immediate and 



                                      6
<PAGE>   7

unforeseen financial hardship if the Director has an unexpected need for cash
to pay for expenses incurred by him or a member of his immediate family (spouse
and/or natural or adopted children) such as those arising from illness,
casualty loss, or death. Cash needs arising from foreseeable events, such as
the purchase or building of a house or education expenses, will not be
considered to be the result of an unforeseeable financial emergency. Payment
shall be made as soon as practicable after the Board approves the payment and
determines the amount of the payment or number of shares which shall be
withdrawn, in a single lump sum from the portion of the Deferred Cash
Compensation Account or Deferred Stock Compensation Account, as applicable,
with the longest number of installment payments first. No Director shall
participate in any decision of the Board regarding such Director's request for
a withdrawal under this Section 10.

                                       11

                               FAIR MARKET VALUE

       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 Board or its delegate, in its discretion, may
determine to rely upon): (a) if the Capital Stock is listed on the New York
Stock Exchange, the highest and lowest sales prices per share of the Capital
Stock as quoted in the NYSE-Composite Transactions listing for such date, (b)
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 Securities Exchange Act of 1934 on which the Capital Stock is listed,
or (c) 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 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
11. If the fair market value of the Capital Stock cannot be determined on the
basis previously set forth in this Section 11 on the date as of which fair
market value is to be determined, the Board or its delegate 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.




                                       7
<PAGE>   8

                                       12

                      SECURITIES LAWS; ISSUANCE OF SHARES

       The obligation of the Corporation to issue or credit shares of 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 shares may then be listed and
(iii) all other applicable laws, regulations, rules and orders which may then
be in effect. If, on the date on which any shares of Capital Stock would be
issued pursuant to a Current Stock Election or credited to a Deferred Stock
Compensation Account, sufficient shares of Capital Stock are not available
under the Plan or the Corporation is not obligated to issue shares pursuant to
this Section 12, then no shares of Capital Stock shall be issued or credited
but rather, in the case of a Current Stock Election, cash shall be paid in
payment of the Director Fees payable, and in the case of a Deferred Stock
Compensation Account, Director Fees and dividends which would otherwise have
been credited in shares of Capital Stock shall be credited in cash to a
Deferred Cash Compensation Account in the name of the Director. The Board shall
adopt appropriate rules and regulations to carry out the intent of the
immediately preceding sentence if the need for such rules and regulations
arises.

                                       13

                                 GOVERNING LAW

       The provisions of this Plan shall be interpreted and construed in
accordance with the laws of the State of Delaware.

                                       14

                   EFFECTIVE DATE; AMENDMENT AND TERMINATION

         The Plan was adopted by the Board on March 21, 1996 and became
effective upon approval by the stockholders of the Corporation at its 1996
Annual Meeting held on May 16, 1996. On October 24, 1996, the Board amended the
Plan effective as of January 1, 1997. On March 27, 1997 the Board amended the
Plan effective as of March 31, 1997. The Board may further amend or terminate
the Plan at any time, provided that no such amendment or termination shall
adversely affect rights with respect to amounts or shares then credited to any
Deferred Cash Compensation Account or Deferred Stock Compensation Account.


                                      8