EXHIBIT 10.5
____________________ ("Executive") and Ultramar Diamond Shamrock Corporation, a
Delaware corporation (the "Company"), hereby enter into this Second Amendment to
the Employment Agreement between Executive and the Company, dated as of
____________________, and effective as of _________________ (the "Agreement").
WHEREAS, the Executive serves as __________________ of the Company; and
WHEREAS, the Executive and the Company entered into the Agreement as of the date
stated above; and
WHEREAS, Section 12.8 of the Agreement provides that it may be amended only by
an instrument in writing approved by the Company and signed by the Executive and
the Company; and
WHEREAS, the Company considers it in the best interests of its stockholders to
▇▇▇▇▇▇ the continued employment of certain key management personnel; and
WHEREAS, the Company wishes to amend the Agreement to add certain provisions
approved by the Compensation Committee of the Board of Directors of the Company
at a meeting held on May 1, 2000.
NOW, THEREFORE, in consideration of the promises and mutual covenants contained
herein and in the Agreement, it is agreed that, effective as of May 1, 2000, the
Agreement shall be amended as follows:
I.
A new final sentence is added to Section 4.2 of the Agreement as follows:
Notwithstanding any other provision of the Agreement, or the terms of
the Ultramar Diamond Shamrock Corporation Retirement Restoration Plan
(the "RRP"), to the contrary, Executive (and Executive's beneficiaries)
shall be entitled to no benefits under, or with respect to, the RRP, in
acknowledgment of the fact that such benefits will be provided under
the supplemental executive retirement plan of the Company in which
Executive participates.
II.
Section 5.2(i) of the Agreement is hereby deleted and substituted with the
following:
(i) If the Company determines in good faith that the Executive
has incurred a Disability (as defined below) during the Term, the
Company may give the Executive written notice of its intention to
terminate its obligations under this Agreement, which notice may, but
need not, include a statement of the Company's intent to terminate the
Executive's employment. In such event, the Company's obligations under
this Agreement, and the Executive's employment (if applicable), will
terminate effective on the 30th day after receipt of such notice by the
Executive (the "Disability Termination Date"), provided that within the
30 days after such receipt, the Executive will not have returned to
full-time performance of his duties. The Executive will continue to
receive his annual base salary until the Disability Termination Date.
The Executive will continue to receive benefits until the Disability
Termination Date, provided that if the Company has not elected to
terminate the Executive's employment under this provision (but rather
to terminate only its obligations under this Agreement), the
Executive's right to continue to receive benefits following the
Disability Termination Date will be governed by the policies and
procedures of the Company generally applicable to disabled employees.
In that event, the Executive will be considered an "employee at will"
following the Disability Termination Date, and either the Executive or
the Company may thereafter terminate the Executive's employment for any
reason or for no reason, and the rights and obligations of the
Executive and the Company upon such termination will be governed by the
policies and procedures of the Company applicable to employees at will,
and by applicable law.
In the event of the Executive's disability, the Company will pay the
Executive, promptly after the Disability Termination Date, (a) the
unpaid annual base salary to which he is entitled, pursuant to Section
4.1, through the Disability Termination Date, (b) for any accrued but
unused vacation days, to the extent and in the amounts, if any,
provided under the Company's usual policies and arrangements, and (c) a
lump sum in cash in an amount equal to 50% of his annual base salary at
the Disability Termination Date. This Section 5.2 will not limit the
entitlement of the Executive, the Executive's estate or beneficiaries
to any disability or other benefits then available to the Executive
under any disability insurance or other benefit plan or policy that is
maintained by the Company for the Executive's benefit; provided that
(i) any amounts paid as base salary shall offset, on a
dollar-for-dollar basis (but not below zero), the Company's obligation
to pay the Executive short-term disability benefits under any
short-term disability plan, program or arrangement of the Company, in
respect of the same period for which such base salary is paid, and (ii)
any benefits paid pursuant to the Company's long-term disability plan
shall reduce, on a dollar-for-dollar basis (but not below zero), the
Company's obligation to pay the Executive base salary in respect of the
same period for which such benefits are paid; provided, however, that
any such offset or reduction shall not affect, or be affected by, the
payment provided to be made in accordance with clauses (a), (b), or (c)
of this Section 5.2(i).
III.
Section 5.5(i)(a) of the Agreement shall be revised to read as follows:
(i) Form and Amount. Upon Executive's involuntary termination,
other than for Cause, the Company shall:
(a) subject to Section 5.5(iii), pay or provide Executive
(1) his annual salary and benefits until the date of termination,
(2) within five business days after any revocation
period in the release described in Section 5.5(iii) has expired, a lump
sum cash payment equal to three multiplied by the sum of (x) and (y),
where (x) is Executive's highest annual base salary in effect during
the three years prior to his date of termination, and (y) is the
highest annual incentive compensation earned by Executive during the
three years prior to his termination; provided, however, that all
amounts received by Executive pursuant to the Ultramar Diamond Shamrock
Corporation Intermediate Incentive and Performance-Based Restricted
Stock Plan shall not be considered "annual incentive compensation" for
purposes of this Section 5.5(i)(a)(2),
(3) three additional years of age and service credit
under all Company-sponsored employee benefit plans, including all
retirement income plans and welfare benefit plans, policies or programs
or arrangements in which Executive participates, including any savings,
pension, supplemental executive retirement or other retirement income
or welfare benefit, short and long-term disability, and any other
deferred compensation, group and/or executive life, health, retiree
health, medical/hospital, or other insurance (whether funded by actual
insurance or self-insured by the Company), expense reimbursement or
other employee benefit plans, policies, programs or arrangements or any
equivalent successor plans, policies, programs or arrangements that may
not now exist or may be adopted hereafter by the Company (but only to
the extent that eligibility, vesting, or the timing or amount of the
benefit are dependent upon age and service); provided, however, that in
the case of a qualified defined benefit pension plan (hereafter, the
"Qualified Plan"), (i) if such aforementioned involuntary termination
occurs prior to, or contemporaneous with, the occurrence of an event
entitling Executive to a lump sum payment under the provisions of
either the Ultramar Corporation Supplemental Executive Retirement Plan
(or any equivalent successor plan, policy, program or arrangement)
(collectively, the "Ultramar SERP") or the Diamond Shamrock, Inc.
Supplemental Executive Retirement Plan (or any equivalent successor
plan, policy, program or arrangement) (collectively, the "DS SERP")
pertaining to "Change in Control" (as defined in either the Ultramar
SERP or the DS SERP, as the case may be), disregarding for this
purpose, any "Change in Control" occurring prior to December 4, 1996
(collectively, a "SERP Lump Sum Payment"), in lieu of granting any such
actual additional years of age and service credit under the Qualified
Plan, an amount equal to the present value of the additional benefit
Executive would have accrued if he had been credited for all purposes
with the three additional years of age and service under the Qualified
Plan as of his date of termination with the Company will be paid in a
lump sum in cash within five business days after any revocation period
in the release described in Section 5.5(iii) has expired and (ii) if
such aforementioned involuntary termination occurs following the
occurrence of an event entitling Executive to a SERP Lump Sum Payment,
in lieu of granting any such additional years of age and service credit
under the Qualified Plan, an amount equal to the excess of (A) the
present value of the additional benefit Executive would have accrued if
he had been credited for all purposes with the three additional years
of age and service under the Qualified Plan as of his date of
termination with the Company over (B) the amount by which the SERP Lump
Sum Payment would, under the terms of the Ultramar SERP or DS SERP (as
the case may be), have been reduced had the aforementioned involuntary
termination instead occurred contemporaneous with the occurrence of the
event entitling Executive to the SERP Lump Sum Payment, will be paid in
a lump sum in cash within five business days after any revocation
period in the release described in Section 5.5(iii) has expired, with
(i) in the event that Executive's aforementioned involuntary
termination occurs on or after a "Change in Control" of the Company, as
defined in Section 6.2 (or prior to, but in anticipation of, such a
"Change in Control"), such present value being determined, in both
cases, using the interest rate and mortality table set forth in Section
4.1(m)(i) and 4.1(n)(i), respectively, of the Ultramar SERP and (ii) in
the event that Employee's aforementioned involuntary termination occurs
prior to such a "Change in Control" of the Company (other than such a
termination in anticipation of such a "Change in Control"), such
present value being determined, in each such case, using in the
interest rate and mortality table set forth in Section 4.1(m)(ii) and
4.1(n)(ii), respectively, of the Ultramar SERP; further, provided,
however, that, in determining the amount of the benefit which Executive
is entitled to receive, determined with respect to the DS SERP, the
three additional years of age and service credit which the Company
would otherwise pay, or provide, Executive under the DS SERP shall not,
pursuant to this clause (3), be taken into account under the DS SERP,
to the extent that Executive was otherwise previously so credited with
three additional years of age and service credit under the terms of the
DS SERP pertaining to "Change in Control;" and further, provided, in
crediting the three additional years of age and service for purposes of
calculating current and unused vacation such additional years shall be
applied in determining the amount of annual vacation to which Executive
is entitled, but shall not be deemed to cause Executive to have earned
three additional years worth of unused vacation,
(4) within five business days after any revocation
period in the release described in Section 5.5(iii) has expired, a lump
sum cash payment equal to three times the maximum amount the Company
could have contributed on behalf of Executive to all of the
Company-sponsored qualified and nonqualified defined contribution
retirement plans in which Executive participated for any of the three
years ending on the date of Executive's termination of employment,
assuming that Executive made the maximum voluntary contributions
thereto,
(5) for a period of three years after the date of
Executive's termination of employment, the continuation of the employee
welfare benefits set forth in Section 4.2 (other than short-term or
long-term disability benefits), except as offset by benefits paid by
other sources as set forth in Section 8.2, or as provided in Section
5.5(ii) (provided, however, that in the event that any such continued
coverage is not permitted under the terms of any applicable welfare
plan or policy, the Company shall provide Executive with the after-tax
economic equivalent of any coverage foregone, such economic equivalent
to be deemed to be no less than the total cost to Executive of
obtaining such coverage on an individual basis and to be paid quarterly
in advance without discount);
IV.
Section 5.5(i) of the Agreement shall be amended by striking the period at the
end of Subsection 5.5(i)(b) and inserting the following in lieu thereof:
; and (c) the Company shall provide Executive with outplacement
services for a period of one year commencing on the date his employment
is terminated in accordance with the Company's executive outplacement
policy in effect at the time his employment is terminated or
immediately prior to a Change in Control (if prior to his termination
of employment), whichever is more generous.
V.
Section 5.5(ii) of the Agreement shall be amended by striking the reference to
"Section 5.5(i)(a)(4)" and inserting "Section 5.5(i)(a)(5)" in lieu thereof and
adding a new sentence to the end thereof which shall read as follows:
Notwithstanding the above, if Executive's continued participation in
any of the benefits referenced in Section 5.5(i)(a)(5) would violate
any applicable law or cause any benefits plan, policy, or arrangement
of the Company to fail to qualify for tax-favored status, the Company
shall not be required to provide such benefits to Executive through the
Company's plans, policies, or arrangements, but instead shall either
(A) arrange to make a substantially similar benefit available to
Executive at no cost to the Executive or (B) pay Executive a sufficient
amount of cash to allow Executive to purchase, on an after-tax basis, a
substantially similar benefit on the open market at no incremental cost
to Executive.
VI.
Section 5.5 of the Agreement shall be amended by adding a new subsection (iv) to
the end thereof which shall read as follows:
(iv) Other Severance Benefits. Notwithstanding any provision
of this Agreement to the contrary, Executive shall be entitled to
receive the greater of (a) the termination payments and benefits
provided under Section 5.5 of this Agreement, or (b) the termination
payments and benefits provided by any other Company-sponsored plan,
program or policy which has as its primary purpose the provision of
severance benefits, but in no event shall Executive be eligible to
receive termination payments and benefits provided under both this
Agreement and any such plan, program or policy.
VII.
Section 8 of the Agreement shall be revised to read as follows:
8. Mitigation and Offset.
---------------------
8.1 Executive's right to receive when due the payments and
other benefits provided for under and in accordance with the terms of
this Agreement is absolute, unconditional and subject to no set-off,
counterclaim or legal equitable defense. Any claim which the Company
may have against Executive, whether for breach of this Agreement or
otherwise, shall be brought in a separate action or proceeding and not
part of any action or proceeding brought by Executive to enforce the
rights against the Company under this Agreement.
8.2 Executive shall not have any duty to mitigate the amounts
payable by the Company under this Agreement upon any termination of
employment by seeking new employment following termination. All amounts
payable pursuant to this Agreement shall be paid without reduction
regardless of any amount of salary, compensation or other amounts which
may be paid or payable to Executive as the result of Executive's
employment by another employer; provided, however, that Executive's
coverage under the Company's welfare benefit plans will be reduced to
the extent that Executive becomes covered under any comparable employee
benefit plan made available by another employer and covering the same
type of benefits. Executive shall report to the Company any such
benefits actually received by him.
VIII.
Section 12.5(i) of the Agreement shall be amended to read as follows:
(i) To The Company. If to the Company, addressed to the
attention of the Chief Executive Officer at ▇.▇. ▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇,
▇▇▇▇▇-▇▇▇▇, with a copy sent to the attention of the General Counsel at such
address.
IX.
Section 12 of the Agreement shall be amended to add a new Subsection 12.11 which
shall read as follows:
12.11 Dialogue. Unless Executive otherwise consents by the
execution of an instrument in writing that specifically refers to
Section 12.11 of this Agreement, no claim or dispute arising out of or
related to this Agreement or any other agreement, policy, plan, program
or arrangement, including without limitation, any qualified or
nonqualified retirement plan, stock option plan or agreement, or any
other equity incentive plan in which Executive participated prior to
his termination, shall be subject to the Company's Dialogue Dispute
Resolution Program.
X.
The model release attached to this Second Amendment as "Exhibit A" shall be
substituted for the exhibit referred to in Section 5.5(iii) of the Agreement.
XI.
Except as otherwise provided herein, the Agreement shall remain in full force
and effect.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the first day
of May, 2000.
_____________________________________
Executive
ULTRAMAR DIAMOND SHAMROCK CORPORATION
By:__________________________________
Title:_______________________________