SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
___________________
Form 10-K/A
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the Fiscal Year Ended Commission File Number
December 31, 1995 1-9409
___________________
DIAMOND SHAMROCK, INC.
(Exact Name of Registrant as Specified in its Charter)
Delaware 74-2456753
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification No.)
9830 Colonnade Boulevard
San Antonio, Texas 78230
(Address of Principal (Zip Code)
Executive Offices)
Registrant's Telephone Number, Including Area Code: (210) 641-6800
Securities registered pursuant to Section 12(b) of the Act:
Title of Each Class Name of Each Exchange on Which
Registered
Common Stock, $.01 Par Value New York Stock Exchange
Securities registered pursuant to Section 12(g) of the Act: None
Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the Securities
Exchange Act of 1934 during the preceding 12 months (or for such shorter
period that the registrant was required to file such reports), and (2) has
been subject to such filing requirements for the past 90 days.
YES X NO_____
Indicate by check mark if disclosure of delinquent filers pursuant to
Item 405 of Regulation S-K is not contained herein, and will not be
contained, to the best of registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form
10-K/A or any amendment to this Form 10-K/A. [X]
The aggregate market value of the voting stock held by non-affiliates
of the registrant as of March 14, 1996 was approximately $908,280,319
Shares of Common Stock outstanding at March 14, 1996 -- 29,181,697
DOCUMENTS INCORPORATED BY REFERENCE
Portions of the registrant's Annual Report to shareholders for the
fiscal year ended December 31, 1995, filed as Exhibits 13.1 and 13.2
hereto, are incorporated by reference into Parts I and II hereof. Portions
of the registrant's definitive Proxy Statement for the 1996 Annual Meeting
of Stockholders, to be filed with the Commission pursuant to Regulation 14A
no later than 120 days after the end of the fiscal year covered by this
report, are incorporated by reference into Part III hereof.
PART I
Item 1. Business.
Diamond Shamrock, Inc. (the "Company") is the leading
independent refiner and marketer of petroleum products in the
southwestern United States and the largest retail marketer of
gasoline in the state of Texas. The Company operates two
crude oil refineries located in Texas and is engaged in the
wholesale and retail marketing of refined petroleum products
in a nine state area. The Company sells gasoline and
merchandise through Company-operated retail outlets
concentrated in Texas, Colorado, New Mexico, Louisiana, and
Arizona, and distributes gasoline through independently owned
Diamond Shamrock branded outlets in Texas and nearby states.
The Company also stores and markets natural gas liquids,
manufactures and markets anhydrous ammonia and polymer-grade
propylene, and operates certain other related businesses.
The Company was incorporated in Delaware in February,
1987, and became a publicly owned corporation effective April
30, 1987.
A description of the general development and conduct of
the business of the Company is set forth below. Consolidated
financial information for the Company for the year ended
December 31, 1995 and for certain prior years, including
Management's Discussion and Analysis of Financial Condition
and Results of Operations, Consolidated Financial Statements,
and Selected Financial Data, is included in this report as
Exhibits 13.1 and 13.2, and all such information is
incorporated into this report by reference. Information
concerning outside sales and operating revenues and operating
profit for the Company and each of its business segments for
the three years ended December 31, 1995, together with
information concerning the identifiable assets of the various
business segments as of December 31, 1993, 1994, and 1995, is
set forth in Note 5 contained in Exhibit 13.2, which is
incorporated herein by reference.
Refining
The Company owns and operates two modern refineries
strategically located near its key markets. The McKee
Refinery, located near Amarillo, Texas, and the Three Rivers
Refinery, located near San Antonio, Texas, have an aggregate
refining capacity of approximately 215,000 barrels of crude
oil per day (140,000 barrels at the McKee Refinery and 75,000
barrels at the Three Rivers Refinery). The Company operated
its refineries at levels which averaged in excess of 95% of
capacity in 1995. Approximately 91% of the refinery outputs
are high-value products, including gasoline, diesel, jet
fuels, and liquefied petroleum gases. The refineries also
produce sulfur, sulfuric acid, ammonium thiosulfate, refinery
grade propylene, fuel oil, asphalt, and carbon black oil.
The completion of certain debottlenecking projects at the
McKee Refinery during 1993, 1994, and 1995 increased its crude
oil throughput capacity to approximately 140,000 barrels per
day. Other projects at the refinery in recent years permit it
to meet various federally mandated fuel specifications.
Preparations were completed at the McKee Refinery during 1994
for the production of reformulated gasoline ("RFG") for the
Dallas/Fort Worth market, and production of RFG commenced in
November 1994. RFG production was made more cost-effective in
mid-1995 when a new tertiary amylmethyl ether ("TAME") unit
was completed at the refinery. In addition to RFG
production, the McKee Refinery supplies oxygenated fuel during
the winter months to the El Paso, Denver, and Albuquerque
markets. Most of the oxygenated fuel manufactured at McKee,
other than RFG, contains oxygenates obtained from other
manufacturers. The McKee plant also manufactures low-sulfur
diesel meeting governmental specifications for on-road use,
with the aid of a desulfurization unit which was completed in
1993.
In 1995, the Company commenced work at the Three Rivers
Refinery on several expansion projects which will, when
completed, allow the refinery to be more flexible in selecting
its crude oil feedstock, upgrade its product slate, and expand
its throughput capacity to approximately 85,000 barrels of
crude oil per day. The projects include a demetalized oil
hydrotreater, a hydrogen plant, a sulphur recovery plant, and
expansion of the crude unit. The hydrogen plant was completed
in October 1995. The sulphur recovery plant and expansion of
the crude unit were completed in February 1996. The final
phase of the expansion, completion of the demetalized oil
hydrotreater, is scheduled for the third quarter of 1996.
The Three Rivers Refinery began processing natural gas
liquids (NGL) from local gas processing plants in early 1995.
A 50 mile pipeline and modifications to existing equipment
were completed in March 1996 to enable the Three Rivers plant
to produce and transport a purity ethane product to a
commercial ethylene plant for processing.
The Company has also commenced engineering work on a
benzene/toluene/xylene ("BTX") extraction and fractionation
unit at the Three Rivers Refinery, which will allow the
company to recover these valuable petrochemical feedstocks
from the refinery s gasoline pool. Completion of the BTX unit
is scheduled for the first half of 1997.
The Three Rivers Refinery continued throughout 1995 to
enjoy the benefits of a substantial plant expansion which was
completed in 1993. That expansion included construction of
a hydrocracker and modification of a continuous regeneration
reformer and crude distillation unit. Completion of these
projects enabled the refinery to increase gasoline production
capacity by approximately 50% and production capacity for
other distillates, including diesel, by approximately 25%. It
also enabled the refinery to meet federal diesel
desulphurization requirements.
The Company owns a natural gas processing facility
located at the McKee Refinery. Upon termination of a gas
processing agreement as of January 1993, the operation of the
facility was phased out. This facility has a throughput
capacity of more than 172 million cubic feet of natural gas
per day. The Company has no present plans to resume operation
of the gas processing plant.
Supply and Distribution
The flexibility to supply the Company's refineries from
a variety of sources is an essential part of being
competitive. The Company's network of crude oil pipelines
gives the Company the ability to acquire crude oil from
producing leases, major domestic oil trading centers, and Gulf
Coast ports, and to transport crude oil to the Company's
refineries at a competitive cost.
The McKee Refinery has access to crude oil from the Texas
Panhandle, Oklahoma, southwestern Kansas, and eastern Colorado
through approximately 1,200 miles of crude oil pipeline owned
or leased (in whole or in part) by the Company. This refinery
is also connected by common carrier pipelines to the major
crude oil centers of Cushing, Oklahoma and Midland, Texas.
The McKee Refinery also has access at Wichita Falls,
Texas through a 70,000 barrel per day pipeline to major
pipelines which transport crude oil from the Texas Gulf Coast
and major West Texas oil fields into the Mid-Continent region.
The Three Rivers Refinery has access to crude oil from
foreign sources delivered to the Texas Gulf Coast at Corpus
Christi, Texas, as well as crude oil from domestic sources. To
enhance its access to foreign crude oil, in 1995 the Company
completed a new crude oil terminal located at the Port of
Corpus Christi, which has a total storage capacity of 1.2
million barrels. The addition of a fourth 400,000 barrel tank
to the terminal in the first half of 1996 will permit the
Company to be more flexible in taking delivery of and in
blending crude oil feedstock for the Three Rivers Refinery,
thereby enabling it to take better advantage of the increased
refining complexity provided by the improvements that have
been recently completed or which are currently underway at the
Three Rivers Refinery. The addition of the new tank should
also reduce the Company's demurrage expense (the charge
assessed by a ship for the time it is delayed in port to
unload cargo) by allowing the Company to accept delivery of
larger crude oil cargos at the terminal, thereby decreasing
the number of such deliveries, and reduce transportation
expense by eliminating the need to terminal a portion of the
Company's crude oil receipts through facilities located near
Corpus Christi which are owned by other parties. The Corpus
Christi crude oil terminal is connected to the Three Rivers
Refinery by a 70 mile pipeline which has the capacity to
deliver 120,000 barrels of crude oil per day to the refinery.
The Three Rivers Refinery also has access to West Texas
Intermediate crude oil through common carrier pipelines and to
crude oil production in South Texas.
The Company acquires a major portion of its crude oil
requirements through the purchase of futures contracts on the
New York Mercantile Exchange. The Company also uses the
futures market to manage the price risk inherent in purchasing
the crude oil in advance of the delivery date, and in
maintaining the inventories contained within its refinery and
pipeline systems.
While the Company has no crude oil reserves and its
operations could be adversely affected by fluctuations in the
availability of crude oil and other supplies, the Company
believes that current domestic and foreign sources of crude
oil will be sufficient to meet the Company's requirements for
the foreseeable future.
The Company's refined products are distributed primarily
through the Company's approximately 2,959 miles of refined
products pipelines and its 16 terminals. The Company's
refined products terminal near Dallas, the Southlake Terminal,
also receives products from the Explorer Pipeline, a major
common carrier of refined products from the Houston area.
Over the last several years the Company has added
significantly to its product distribution system. This has
been accomplished in part by the construction of new product
pipelines to connect the Company's refineries to expanding
markets and in part by adding to or purchasing additional
capacity in existing product pipelines.
In November 1995, the Company commenced operation of a
newly constructed 409-mile, 10-inch pipeline from the McKee
Refinery to El Paso, Texas, along with a new terminal in El
Paso from which the Company will distribute product delivered
via the pipeline. The new pipeline has an initial capacity to
deliver 27,000 barrels per day of refined products, including
gasoline, diesel, jet fuels, and propane, and the new terminal
provides total associated storage capacity for approximately
500,000 barrels of product. It gives the Company the
capability of delivering refined products from the McKee
Refinery directly to the El Paso market, in which the Company
has established a significant market presence, and also to
deliver refined products to markets in Arizona through a
common carrier pipeline originating in El Paso.
Available capacity in the Amarillo-Tucumcari-Albuquerque
products pipeline, which carries products from the McKee
refinery, has been expanded both by purchase of one-half of
the interest of a pipeline partner, and by construction
projects that expanded the capacity of that line by an
additional 2,000 barrels per day, giving the line a total
product delivery capacity from the McKee Refinery of 12,600
barrels per day. In 1994, the Company completed construction
of a products pipeline from the McKee Refinery to the Colorado
Springs, Colorado area. The project included a 10-inch
pipeline to Colorado Springs, Colorado with an initial
capacity of 32,000 barrels per day, covering approximately
258 miles, which connects to a new terminal facility with a
total product storage capacity of 320,000 barrels. Subject to
obtaining regulatory approvals, the Company plans to construct
an extension of that pipeline to Denver.
In 1994, the Company connected its product pipeline
running from the McKee Refinery to the Southlake Terminal to
those of another gasoline refiner and marketer at Wichita
Falls, Texas and at Southlake, Texas. The connections enable
the Company to deliver an additional 2,500 barrels of gasoline
per day from the McKee Refinery to Wichita Falls as part of a
product exchange arrangement, and to deliver an additional
9,000 to 18,000 barrels of gasoline per day from the McKee
Refinery to the Southlake Terminal for sale at a specified
margin above the spot market price.
The Company expanded the Three Rivers Refinery product
distribution system in 1992 by constructing a refined products
terminal near Laredo, Texas. The project required
construction of a 100-mile refined products pipeline
connecting the terminal to the Three Rivers Refinery. The
terminal enables the Company to deliver approximately 15,000
barrels per day of refined products to southwest Texas and
adjacent market areas in Mexico.
The Company has historically entered into product
exchange and purchase agreements with unaffiliated companies.
Exchange agreements provide for the delivery to unaffiliated
companies of refined products at the Company's terminals in
exchange for delivery of a similar amount of refined products
to the Company by such unaffiliated companies at agreed
locations. Purchase agreements involve the purchase by the
Company of refined products from unaffiliated companies with
delivery occurring at agreed locations. Such arrangements
enable the Company to broaden its geographical distribution
capabilities and supply markets not connected to its refined
products pipeline system. Most of the Company's exchanges and
purchase arrangements are long-standing arrangements, but
generally can be terminated on 30 to 90 days notice. Products
are currently received on exchange or by purchase through 39
terminals and distribution points throughout the Company's
principal marketing areas.
Marketing
In December 1995, the Company successfully concluded a
public tender offer for the outstanding common stock and
warrants to purchase common stock of National Convenience
Stores Incorporated ("NCS"), and NCS subsequently became a
wholly owned subsidiary of the Company through merger. At the
end of 1995, NCS operated 661 specialty convenience stores,
over 90% of which sold gasoline, in four cities in the state
of Texas under the name Stop N Go. The Company is currently
engaged in the integration of the NCS stores with the rest of
the Company's retail operations. The Company currently plans
to sell Diamond Shamrock branded gasoline through the Stop N
Go outlets, but to otherwise retain and use the Stop N Go
brand in connection with those outlets.
The Company has a strong brand identification in much of
its nine-state marketing area. The volume of gasoline the
Company sells through its network of 1,506 Company-operated
retail outlets is equal to approximately 68% of the gasoline
the Company produces at its refineries. The volume of
gasoline the Company sells to independent branded and
unbranded jobbers, commercial, and end user accounts, and
other marketers exceeds the remainder of the Company's
gasoline production. To the extent the Company's requirements
exceed the production at its refineries, the balance is made
up through purchases of gasoline.
Total motor fuel outlets at the dates indicated below
were as follows:
December 31,
1995 1994 1993
Company Owned and Operated 715 496 504
Company Leased and Operated 791 314 272
TOTAL COMPANY OPERATED 1,506 810 776
Jobber Operated 1,203 1,206 1,194
TOTAL MOTOR FUEL OUTLETS 2,709 2,016 1,970
As of December 31, 1995, Company-operated retail outlets
were located in Texas (1,291), Colorado (128), New Mexico
(49), Louisiana (37), and Arizona (1). Most of the
Company's stores are modern, attractive, high-volume gasoline
outlets. In addition, these outlets sell a wide variety of
products such as groceries, health and beauty aids, fast
foods, and beverages.
The Company plans to open 16 new retail outlets during
1996, most of which will be located in Arizona.
The Company opened 30 new retail outlets in 1995. In
1995, the Company also purchased, in addition to 661 NCS
retail outlets, 21 retail outlets in New Mexico.
In 1994, the Company opened 17 new outlets, and purchased
an additional 26. In 1993, the Company opened nine new
outlets, and purchased an additional 19.
The Company has an ongoing program to modernize and
upgrade the retail outlets it operates. These efforts are
designed to improve appearances and create a uniform look
easily recognizable by customers. Exterior improvements
generally include the installation of new price signs,
lighting, and canopies over the gasoline pumping areas. The
program also includes the installation of computer-controlled
pumping equipment and the renovation of interiors.
The Company is continuing its program of closing and
selling retail outlets which have marginal profitability or
which are situated outside its principal marketing areas.
During 1995, the Company closed five such outlets. In
addition, the Company sold all 11 of the outlets it operated
in Amarillo, Texas to a retailer who agreed to become one of
Diamond Shamrock's branded jobbers, and who agreed to retain
the Diamond Shamrock brand on the outlets purchased as well as
place it on another 36 of the jobber's outlets selling
gasoline under other brands in that market.
As of December 31, 1995, 136 independent jobbers supplied
1,203 "Diamond Shamrock" branded retail outlets located in
eight states. The Company enjoys long-term relationships with
many of its jobbers. Representatives from 20 jobbers make up
a Jobber Council that meets on a regular basis with the
Company's management to communicate concerns, and to learn
about opportunities and developments in the Company's
marketing program.
During the past three years, the Company has made a
number of significant improvements to its jobber assistance
programs in an on-going effort to improve the quality of the
"Diamond Shamrock" brand image. Such programs provide
assistance or incentives to jobbers to upgrade existing
outlets or construct new outlets and to make environmental
improvements.
In July 1993, the Company formed a joint venture for the
purpose of franchising the Company's "Corner Store" branded
convenience stores in Mexico. The stores are operated in
conjunction with Mexican national oil company gasoline outlets
under the name "Corner Store", and are patterned after the
Company's retail outlets in the United States. Three new
stores were opened under the franchise arrangement during
1995, and two unprofitable locations were closed during the
year. A total of ten locations were operating under the
franchise arrangement at the end of 1995. The Company
anticipates that an additional three to five locations will be
opened under the arrangement during 1996.
The Company's competitive position is supported by its
own proprietary credit card program, which had approximately
600,000 active accounts at the end of 1995. The Company
currently utilizes electronic point-of-sales credit card
processing ("P.O.S.") at all of its Company and jobber
operated stores. P.O.S. reduces transaction time at the sales
counter and lowers the Company's credit card program costs by
reducing float, reducing charges paid by the Company to accept
other company's credit cards for purchases, eliminating
postage and insurance costs, and reducing bad debts. In
February 1994, the Company began installing pump island-mounted credit
card readers at high volume company operated retail locations, as part
of its "Pay the Pump" program. These units enable the customer to pay
for a gasoline purchase without leaving the gasoline pump. At the end
of 1995, the Company had installed the units at over 160 of its
stores.
In June 1994, the Company completed installation of a
computer based, intelligent retail information system ("IRIS")
at Company-operated stores. IRIS incorporates an enhanced
P.O.S. system and will automate inventory control, pricing,
and sales tracking. IRIS interfaces with the Company's new
pump island-mounted credit card readers and the new continuous
underground storage tank monitoring system now being installed
by the Company. The Company is currently working to integrate
the newly acquired NCS stores into its electronic data
processing system, and expects that project to be complete by
the end of 1996.
The "Corner Store" concept for the retail outlets that
began in 1987 is intended to provide the customer with a
message of convenience and friendly customer service. The
Company also uses "Corner Store" to identify its newly
expanded merchandise line. Customers now find a greater
variety of merchandise and consistency of appearance from
outlet to outlet.
The Company actively uses radio, television, newspaper,
and billboard advertising to promote the Company and its
products. These promotional efforts are facilitated by the
concentration of a substantial portion of the Company's
outlets in the Texas metropolitan areas of Austin, Corpus
Christi, Dallas, El Paso, Fort Worth, Houston, and San
Antonio, and in Denver and Colorado Springs, Colorado. The
Company considers the "Diamond Shamrock" and the "Stop N Go"
brand names and logos to be of significant importance to its
business.
In addition to gasoline, the Company also markets an
average of 52,484 barrels per day of diesel fuel to branded
and non-branded customers, railroads, and large fleet
accounts. Asphalt produced at the McKee Refinery is sold
primarily to the roofing industry and for road construction.
The Company also sells an average of 18,705 barrels per day of
high quality jet fuel to commercial airlines and the United
States military.
Allied Businesses
In addition to its core refining and marketing
businesses, the Company is engaged in several related
businesses. The more significant of these businesses and new
ventures are described below.
The Company owns and operates large underground natural
gas liquids and petrochemical storage and distribution
facilities located on the Mont Belvieu salt dome, northeast of
Houston. The facility has total permitted storage capacity of
approximately 77 million barrels, and consists of 30 wells.
The facilities are used for storing and distributing ethane,
ethane/propane mix, ethylene, propane, natural gasoline,
butane, and isobutane, as well as refinery, chemical, and
polymer-grade propylene. The Mont Belvieu facilities receive
products from the McKee Refinery through the Skelly-Belvieu
pipeline (which the Company operates and in which it owns a
50% interest), as well as from local fractionators and through
major pipelines coming from the Mid-Continent region, West
Texas, and New Mexico. In 1995, an average of approximately
618,000 barrels per day of natural gas liquids and
petrochemicals moved through the facilities and were
distributed via an extensive network of pipeline connections
to various refineries and petrochemical complexes on the Texas
and Louisiana Gulf Coasts, earning various storage and
distribution fees for the Company.
The Company operates a propane/propylene splitter plant
located at the Company's Mont Belvieu hydrocarbon storage
facility. A subsidiary of American PetroFina, Inc. ("Fina")
has a one-third interest in the plant. The Company and Fina
each pay their proportionate share of the costs and receive in
kind their proportionate share of the products produced at the
plant.
The splitter is capable of producing 720 million pounds of
polymer-grade propylene per year. Polymer-grade propylene is
a feedstock used in the manufacture of plastics. The plant
utilizes refinery-grade propylene produced by both the
Company's refineries and other refiners for feedstock. The
Company's storage facilities at Mont Belvieu are used to store
both feedstock for the plant and polymer-grade propylene after
it is produced. The product is distributed by pipeline to
purchasers in the Houston ship channel area and to export
facilities. In 1995, the Company's share of production from
the splitter totaled over 500 million pounds of polymer-grade
propylene, and the Company was successful in marketing product
in excess of that amount. The Company and Fina have commenced
work on a project, scheduled to be completed in the third
quarter of 1996, which will add a second splitter and double
the productive capacity of the plant. The two companies will
maintain their existing ownership arrangement for the expanded
facilities, under which Diamond Shamrock is entitled to two
thirds of production.
A petrochemical export terminal located on the Houston
Ship Channel in which the Company has a joint venture interest
was completed and commenced operation in August 1992. The
terminal is connected by pipeline to the Company's
propane/propylene splitter plant and petrochemical storage
facilities at Mont Belvieu. The terminal provides the Company
with access to international petrochemical markets.
The Company has operated an ammonia production facility
located at the McKee Refinery since 1991. During 1995, the
plant produced approximately 431 tons per day of anhydrous
ammonia which is marketed by the Company as a fertilizer.
In September 1991, the Company and Sol Petroleo, S.A.
("Sol"), an Argentine company headquartered in Buenos Aires,
jointly acquired the oil and gas exploration and production
interests of Occidental Petroleum in the Republic of Bolivia.
In 1994, the Company purchased all of Sol's interest in the
Bolivian operations. The Bolivian operations are now owned
jointly by a wholly-owned subsidiary of the Company and
Phoebus Energy, Ltd., a Bermuda corporation in which the
Company owns a 50% interest. The operation includes a 100%
interest in the Chaco Block in southeastern Bolivia, which
has net daily sales of approximately 12 million cubic feet of
gas, a 100% interest in the Nupuco Block, which is also in
southern Bolivia, and a 50% interest in the Madre de Dios
Block in northern Bolivia. This operation is managed by a
staff located in Santa Cruz de la Sierra, Bolivia.
In August 1995, the Company announced that the joint
venture of which it is part owner had made a significant
natural gas discovery in the Nupuco Block. It is estimated
that the first completed well will be capable of producing up
to 20 million cubic feet per day of natural gas and 400
barrels per day of light condensate from five commercial
zones. The Company is entitled to 75% of the net revenue of
the joint venture, which it jointly operates with another
partner.
The Company is the indirect owner of approximately 34% of
the outstanding shares of Sol, whose shares are publicly
traded on the Argentine stock exchange. Sol currently markets
gasoline under the Sol brand through 48 retail gasoline
outlets and convenience stores in Argentina, eight of which
are operated by the company and 40 of which are operated by
jobbers.
The Company operates a wholly owned subsidiary, North
American InTeleCom, Inc. ("NAI"), which is engaged in the
telecommunications industry. NAI operates telephone systems
for use by inmates in correctional facilities, provides pay
telephone services, manages the pay telephone accounts of
several regional retailers, and provides prepaid calling card
services. At the end of 1995, NAI operated inmate telephone
systems in 60 correctional facilities serving some 40,000
inmates and owned or managed approximately 8,350 pay
telephones.
Competitive Considerations
The Company's two refineries and refined products
pipelines and terminals network are strategically located to
service its markets in the states in which the Diamond
Shamrock brand is strongly represented. The Company
consistently sells more refined products than its refineries
produce, purchasing its additional requirements in the spot
market. This strategy has enabled the Company to operate its
refineries at high rates while allowing for incremental
refinery capacity expansions to be quickly utilized upon
completion.
Quality products and a strong brand identification have
positioned the Company as the largest marketer of motor fuels
in the state of Texas, with a market share of approximately
15%. The Company also has a branded gasoline market share of
approximately 11% in the state of Colorado, approximately 13%
in the state of New Mexico, and a significant branded gasoline
market presence in Louisiana.
The retail markets have historically been highly
competitive. Competitors include a number of well capitalized
and fully-integrated major oil companies and both large and
small independent operators. Industry studies indicate that
over the last several years, the retail markets have been
characterized by several significant trends including (i)
increased store rationalization by retailers to fewer
geographic regions and (ii) increased consumer emphasis on
convenience.
During the past several years, the retail marketing
industry has experienced increasing concentration of market
outlets selling under the same brand in selected and fewer
geographic regions as major oil companies have divested non-
strategic locations and have focused efforts on targeted
areas, many of which are near strategic supply sources.
Additionally, smaller operators have closed marginal and
unprofitable locations as a result of increasing environmental
regulations requiring replacement of underground storage
tanks. Industry studies indicate that consumer buying
behavior continues to reflect the effect of increasing demands
on consumer time. Convenience and the time required to make
a purchase are increasingly important considerations in buying
decisions. The Company believes these two trends may result
in opportunities to increase market share in the Company's
core markets.
The Company's earnings and cash flow from operations are
primarily dependent upon processing crude oil and selling
quantities of refined products at refining and retail
marketing margins sufficient to cover fixed and variable
expenses. Crude oil and refined products are commodities.
Crude oil costs and refined product prices depend on numerous
factors beyond the Company's control, including the supply of
and demand for crude oil, gasoline and other refined products
which in turn depend on, among other factors, changes in
domestic and foreign economies, political affairs and
production levels, the availability of imports, the marketing
of competitive fuels, and the extent of government regulation.
The prices received by the Company for its refined products
are affected by regional factors, such as product pipeline
capacity, local market conditions, and the level of operations
of competing refineries. A large, rapid increase in crude oil
prices would adversely affect the Company's operating margins
if the increased cost of raw materials could not be passed on
to the Company's customers. In recent years, crude oil costs
and prices of refined products have fluctuated substantially.
The industry also tends to be seasonal in that refining
margins often increase in the second quarter and decrease at
the end of the third quarter of the year, reflecting increased
demand for gasoline and other refined products during the
summer driving season.
Regulatory Matters
Federal, state, and local laws and regulations
establishing various health and environmental quality
standards affect nearly all of the operations of the Company.
Included among such statutes are the Clean Air Act of 1955, as
amended ("CAA"), including substantial amendments adopted in
1990 (the "1990 Clean Air Act Amendments"), the Clean Water
Act of 1977, as amended ("CWA"), the Resource Conservation and
Recovery Act of 1976, as amended ("RCRA"), and the
Comprehensive Environmental Response, Compensation and
Liability Act of 1980, as amended ("CERCLA"). Also
significantly affecting the Company are the rules and
regulations issued pursuant to the Occupational Safety and
Health Act of 1970 ("OSHA").
The CAA requires the Company to meet certain air emission
standards and certain specifications for the products the
Company produces. The CWA requires the Company to obtain and
comply with the terms of water discharge permits. The RCRA
empowers the United States Environmental Protection Agency
("EPA") to regulate the treatment and disposal of industrial
and hazardous wastes and to regulate the use and operation of
underground storage tanks. CERCLA requires notification to
the National Response Center of releases of hazardous
materials and provides a program to remediate hazardous
releases at uncontrolled or abandoned hazardous waste sites.
The Superfund Amendments and Reauthorization Act of 1986
("SARA") is an extension of the CERCLA cleanup program. Title
III of SARA, the Emergency Planning and Community Right to
Know Act of 1986, relates to planning for hazardous material
emergencies and provides for a community's right to know about
the hazards of chemicals used or manufactured at industrial
facilities. OSHA requires the Company to furnish to each of
its employees a place of employment and working conditions
which are free from recognized hazards that are causing or are
likely to cause death or serious physical harm. OSHA rules
and regulations provide for a worker's right to know about the
hazards of chemicals used or produced at the Company's
facilities; for the management of hazards associated with the
processes using highly hazardous chemicals; and for the safe
clean-up of hazardous waste and response to uncontrolled
releases of hazardous substances.
Regulations issued by the EPA in 1988 with respect to
underground storage tanks require the Company, over a period
up to ten years, to install, where not already in place, spill
prevention manholes, tank overfill protection devices, leak
detection devices, and corrosion protection on all underground
tanks and piping at retail gasoline outlets. The regulations
also require periodic tightness testing of underground tanks
and piping. Commencing in 1998, operators will be required
under these regulations to install continuous monitoring
systems for underground tanks.
The Company seeks reimbursement from state underground
storage tank insurance funds, when available, for expenses
incurred in replacing older underground storage tanks and in
cleaning up related hydrocarbon contamination. In 1995, the
Company received over $2.6 million from such state insurance
funds in Texas and Louisiana for claims filed in previous
years. Continued receipt of such reimbursements remains
problematic, insofar as aggregate claims made on such
insurance funds in the states in which the Company operates
continue to exceed amounts available in those insurance funds
to pay such claims, and receipt of such reimbursements
therefore continues to lag behind the time of application by
substantial periods.
State and local regulations in parts of Texas, New
Mexico, Colorado, and Arizona require that only motor fuels
containing specified levels of oxygen may be marketed in
winter months. Such fuels are intended to reduce the amount
of carbon monoxide in automobile emissions. Beginning in
November 1992, the 1990 Clean Air Act Amendments required that
only oxygenated gasoline having a minimum oxygen content of
2.7% be marketed in these areas during the winter months. The
level of oxygen in motor fuels is normally raised by the
addition of methyl tertiary butyl ether ("MTBE"), ethanol, or
tertiary amyl methyl ether ("TAME"). The Company produces
TAME and MTBE at its McKee Refinery in sufficient amounts to
meet its requirements for production of reformulated gasoline
("RFG"), all of which is sold into the Dallas, Texas market.
The rest of the Company's oxygenate requirements are currently
being met by the purchase of oxygenates from other
manufacturers. If other areas currently not identified as
severe carbon monoxide or ozone nonattainment areas elect to
require the use of oxygenated gasoline or RFG, the Company may
be required to purchase additional blending components. To
the extent that the Company is unable to pass along such costs
by raising motor fuel prices, the Company's profitability will
be adversely affected.
The EPA has issued a series of regulations since 1989
under authority of the CAA requiring a reduction for the
summer months in the volatility of gasoline as measured by its
Reid Vapor Pressure ("RVP"), which measures the amount of
light hydrocarbons contained in gasoline, such as normal
butane, an octane booster. Such regulations require
reductions in RVP for gasolines produced at the McKee Refinery
for distribution in the Denver, Dallas-Fort Worth, and El
Paso markets.
The 1990 Clean Air Act Amendments impact the Company in
the following areas: (i) starting in 1995, RFG was mandated
for use in the nine worst ozone polluting cities, including
Houston, Texas; Dallas, Texas has opted into the program;
(ii) "Stage II" hose and nozzle controls on gas pumps to
capture fuel vapors in nonattainment areas, including
Beaumont, Dallas, El Paso, Fort Worth, and Houston, Texas; and
(iii) more stringent refinery and petrochemical permitting
requirements.
In addition, EPA regulations required that after October
1, 1993 the sulfur contained in on-highway diesel fuel
produced in the United States be reduced. Construction of a
desulfurization unit at the McKee Refinery and a hydrocracker
unit at the Three Rivers Refinery enabled the Company to
produce diesel fuel in compliance with such regulations.
It is expected that rules and regulations implementing
the 1990 Clean Air Act Amendments and other federal, state,
and local laws relating to health and environmental quality
will continue to affect the operations of the Company. The
Company cannot predict what health or environmental
legislation or regulations will be enacted in the future or
how existing or future laws or regulations will be
administered or enforced with respect to products or
activities of the Company. However, compliance with more
stringent laws or regulations, as well as more expansive
interpretation of existing laws and their more vigorous
enforcement by the regulatory agencies could have an adverse
effect on the operations of the Company and could require
substantial additional expenditures by the Company, such as
for the installation and operation of pollution control
systems and equipment. Much of the capital spent by the
Company for environmental compliance is integrally related to
projects that increase refinery capacity or improve product
mix, and the Company does not specifically identify capital
expenditures related to such projects on the basis of
environmental as opposed to economic purpose. However, with
respect to capital expenditures budgeted primarily to produce
federally-mandated fuels to comply with regulations related to
air and water toxic emission levels, for remediation and
compliance costs related to underground storage tanks, and to
meet Stage II Vapor Recovery requirements, it is estimated
that approximately $11.4 million was spent in 1995, $11.6
million was spent in 1994, and $21.4 million was spent in
1993. For 1996 the Company has budgeted approximately $14.1
million in environmental capital expenditures, primarily for
the retail segment and the refining and wholesale segment.
The Company has in effect policies, practices, and
procedures in the areas of pollution control, product safety,
occupational health, the production, handling, storage, use,
and transportation of refined petroleum products, and the
storage, use, and disposal of hazardous materials to prevent
an unreasonable risk of material environmental or other
damage, and the material financial liability which could
result from such events. However, some risk of environmental
or other damage is inherent in the businesses of the Company,
as it is with other companies engaged in similar businesses.
Employees
The Company employs approximately 11,800 people, about
1,100 of which are part-time employees. Approximately 330
hourly paid workers at the McKee Refinery are affiliated with
the Oil, Chemical, and Atomic Workers International Union,
AFL-CIO, with which the Company has a contract extending to
April 1996. The Company considers its relationship with its
employees to be good and has not experienced any organized
work stoppage in over 30 years.
Certain Transactions
In connection with the divestiture of its ownership of
the Company in 1987 (the "Spin-Off"), Maxus Energy Corporation
("Maxus") and the Company entered into an agreement which,
among other things, provides that as between the Company and
Maxus, the Company will be responsible for liabilities and
other obligations relating principally to the Company's
business and Maxus will be responsible for all other
liabilities relating principally to Maxus' continuing and
former businesses, subject to certain cost-sharing
arrangements described below.
The agreement provides for the sharing by Maxus and the
Company of certain liabilities relating to businesses
discontinued or disposed of by Maxus prior to April 30, 1987.
In substance, the cost of such liabilities will be borne one-third
by the Company and two-thirds by Maxus until the
Company's aggregate reimbursement share equals $85.0 million,
and thereafter solely by Maxus. The Company has reflected the
entire undiscounted amount of its liability under the
Distribution Agreement in its financial statements (See Note
3 to the Consolidated Financial Statements contained in
Exhibit 13.1 to this report). Although some expenditures are
still subject to audit, the Company has reimbursed Maxus for
a total of $74.9 million as of December 31, 1995, including
$11.4 million paid during 1995.
Pursuant to the agreement, the Company will also
reimburse Maxus for one-third of all payments made by Maxus
after April 30, 1987 for providing certain medical and life
insurance benefits with respect to persons who retired on or
before the effective date of the Spin-Off. The actuarial cost
of these expected payments under the Distribution Agreement
has been recognized by the Company.
Item 2. Properties.
The principal plants and properties used by the Company
in its Refining and Wholesale segment are the McKee Refinery,
the Three Rivers Refinery, the Company's crude oil and refined
products pipelines, and its crude oil and products terminals.
For a description of the foregoing, see "Refining", and
"Supply and Distribution" in Item 1 above. The refineries
are owned by the Company in fee, as were the Company's 1,268
miles of crude oil pipelines and 2,959 miles of refined
products pipelines at the end of 1995. Forty-one miles of the
Company's crude oil pipelines and 1,246 miles of its refined
products pipelines were owned jointly with one or more other
companies. The Company's interests in such pipelines were
between 33% and 54%. The Company's 16 products terminals were
owned in fee at the end of 1995. Fifteen of the terminals
were 100% owned by the Company and one terminal was owned 60%
by the Company. The Company leases the property on which its
Corpus Christi crude oil terminal is situated, under a lease
which has a 20 year primary term followed by six consecutive
five year renewal options.
The principal properties used in the Company's Retail
segment at the end of 1995 were 1,506 Company-operated retail
outlets, 715 of which are owned in fee and 791 of which are
leased. Of the leased outlets, 202 were leased to the Company
pursuant to a lease facility entered into in 1992. This lease
facility was expanded by $25 million in April 1993, and by an
additional $25 million in April 1994. The facility has an
initial five year term which expires in 1999. After the
initial five year term the Company may purchase the properties
or renew the lease with the lessor's consent for an additional
five year term or arrange for a sale of the outlets. For a
description of the Company-operated retail outlets, see
"Marketing" in Item 1 above.
The principal plants and properties used in the Company's
Allied Businesses segment are the hydrocarbon storage facility
at Mont Belvieu, which the Company owns, and the jointly-owned
propane/propylene splitter at Mont Belvieu. See "Allied
Businesses" in Item 1 above.
Item 3. Legal Proceedings.
Routine Matters.
The Company is a party to a number of lawsuits which are
ordinary routine litigation incidental to the Company's
businesses, the outcomes of which are not expected to have a
material adverse effect on the Company's operations or
financial position. In addition, the Company is engaged in a
number of hydrocarbon remediation projects, mostly relating to
retail gasoline outlets. While such cleanup projects are
typically conducted under the supervision of a governmental
authority, they do not involve proceedings seeking material
monetary damages from the Company and are not expected to be
material to the Company's operations or financial position.
Three Rivers Refinery.
In October and November, 1994, the Texas Natural Resource
Conservation Commission ("TNRCC") conducted an inspection of
the Company's Three Rivers Refinery. As a result of that
inspection, the Company received a Notice of Violation from
the TNRCC dated December 16, 1994. In 1995, the Company and
the TNRCC negotiated an agreement pertaining to the notice of
violation containing certain enforcement orders as well as a
fine of $74,160 with $22,248 deferred. The Company expects
the agreed order to be effective by the end of the first
quarter of 1996.
Item 4. Submission of Matters to a Vote of Security Holders.
Inapplicable.
PART II
Item 5. Market for Registrant's Common Equity and Related
Stockholder Matters.
The principal United States market on which the Common
Stock of the Company is traded is the New York Stock Exchange.
The high and low sales prices for the Common Stock of the
Company for each full quarterly period during 1994 and 1995 as
reported on the New York Stock Exchange Composite Tape,
together with the amount of cash dividends paid per share of
the Common Stock by calendar quarter, are contained in Exhibit
13.2 to this report, which information is incorporated herein
by reference.
The approximate number of record holders of the Common
Stock at March 14, 1996 was 12,899.
Item 6. Selected Financial Data.
The information required by this item appears in Exhibit
13.2 to this report, which information is incorporated herein
by reference.
Item 7. Management's Discussion and Analysis of Financial
Condition and Results of Operation
The information required by this item appears in Exhibit
13.1 to this report, which information is incorporated herein
by reference.
Item 8. Financial Statements and Supplementary Data.
The information required by this item appears in Exhibit
13.2 to this report, which information is incorporated herein
by reference.
Item 9. Changes in and Disagreements with Accountants on
Accounting and Financial Disclosure.
Inapplicable.
PART III
Item 10. Directors and Executive Officers of the Registrant.
The information required by this item with respect to the
identity and business experience of the directors of the
Company appears under the heading "Election of Directors" in
the Company's definitive Proxy Statement for the 1996 Annual
Meeting of Stockholders to be filed with the Securities and
Exchange Commission (the "Commission") pursuant to Regulation
14A (the "Proxy Statement"), which information is incorporated
herein by reference.
The following information concerning the executive
officers of the Company is as of March 1, 1996.
Roger R. Hemminghaus, 59, is Chairman of the Board, President,
and Chief Executive Officer of the Company, and has served as
the Chief Executive Officer of the Company since April 1987.
Robert C. Becker, 54, has served as Vice President and
Treasurer of the Company since April 1987.
W. Paul Eisman, 40, is Vice President and Group Executive-
Manufacturing of the Company. During the five years prior to
his promotion to that position in 1995, he served in various
positions with the Company, including Director-Crude Oil
Supply, Assistant to the Chairman, and Plant Manager of the
McKee Refinery.
Timothy J. Fretthold, 46, is Senior Vice President/Group
Executive and General Counsel of the Company. He served as a
Group Vice President, and General Counsel of the Company from
April 1987 to June 1989, and as Senior Vice President/Group
Executive and General Counsel since that date.
Gary E. Johnson, 60, has served as Vice President and
Controller of the Company since April 1987.
William R. Klesse, 49, is Executive Vice President of the
Company. He served as Group Vice President - Development and
New Ventures of the Company from May 1988 to June 1989 and as
Senior Vice President/Group Executive from that date until
February 1995 when he became Executive Vice President. Mr.
Klesse served as Group Vice President - Planning and Public
Affairs of the Company from April 1987 through May 1988.
J. Robert Mehall, 53, is Executive Vice President of the
Company. He served as Group Vice President - Supply of the
Company from April 1987 to June 1989 and as Senior Vice
President/Group Executive from that date until February 1995
when he became Executive Vice President.
A. W. O'Donnell, 63, is President/Marketing and Senior Vice
President. He served as Group Vice President - Marketing of
the Company from April 1987 to June 1989 and as Senior Vice
President/Group Executive from that date until February 1995
when he became President/Marketing.
Officers are elected annually by the Board of Directors
and may be removed at any time by the Board. There are no
family relationships among the executive officers listed or
the directors of the Company, and there are no arrangements or
understandings pursuant to which any of the officers or
directors were elected as such.
Information concerning compliance by the directors and
executive officers of the Company with Section 16(a) of the
Securities Exchange Act of 1934 appears under the heading
"Compliance with Section 16(a) of the Securities Exchange Act
of 1934" in the Company's definitive Proxy Statement for the
1996 Annual Meeting of Stockholders to be filed with the
Commission pursuant to Regulation 14A, which information is
incorporated herein by reference.
Item 11. Executive Compensation.
The information required by this item appears under the
heading "Compensation of Executive Officers" in the Proxy
Statement, which information is incorporated herein by
reference.
Item 12. Security Ownership of Certain Beneficial Owners and
Management.
The information required by this item appears under the
heading "Beneficial Ownership of Securities" in the Proxy
Statement, which information is incorporated herein by
reference.
Item 13. Certain Relationships and Related Transactions.
The information required by this item with respect to
directors appears under the heading "The Board of Directors
and Its Committees - Certain Business Relationships" in the
Proxy Statement, which information is incorporated herein by
reference.
The information required by this item with respect to
executive officers appears under the heading "Employee Stock
Purchase Loan Program" in the Proxy Statement, which
information is incorporated herein by reference.
PART IV
Item 14. Exhibits, Financial Statement Schedules and Reports on Form 8-K.
(a) Documents filed as part of this report:
(1) Financial Statements
The following financial statements are attached
hereto as Exhibit 13.2, and are incorporated herein
by reference:
Consolidated Statement of Operations for the
three years ended December 31, 1995
Consolidated Balance Sheet - December 31, 1995
and 1994
Consolidated Statement of Cash Flows for the
three years ended December 31, 1995
Notes to Consolidated Financial Statements
Supplementary Financial Information
The Report of Independent Accountants relating to
such financial statements is attached hereto as
Exhibit 13.3, and is incorporated herein by
reference.
Condensed parent company financial information has
been omitted, since the amount of restricted net
assets of consolidated subsidiaries does not exceed
25% of total consolidated net assets. Also,
footnote disclosure regarding restrictions on the
ability of both consolidated and unconsolidated
subsidiaries to transfer funds to the parent company
has been omitted since the amount of such
restrictions does not exceed 25% of total
consolidated net assets.
(2) Financial Statement Schedules.
The following report of independent accountants
and financial statement schedules are also a
part of this report:
Report of Independent Accountants on
Financial Statement Schedules
Schedule V - Consolidated Properties and
Equipment
Schedule VI - Consolidated Accumulated
Depreciation
All other schedules have been omitted because they
are not applicable or the required information is
shown in the Financial Statements or the Notes to
Consolidated Financial Statements.
(3) Exhibits.
Exhibit Filing
No. Reference Description of Document
3.1 * Certificate of Incorporation of the
Company (Exhibit 3.1 to the Company's Form
10 Registration Statement No. 1-9409 (the
"Form 10")).
3.2 * Form of Certificates of Designations of
Series A Junior Participating Preferred
Stock (Exhibit 3 to the Company's Form 8-A
Registration Statement dated March 6,
1990, filed under Commission File No. 1-9409
(the "Form 8-A for Preferred Stock Purchase Rights")).
3.3 * Form of Certificate of Designations
establishing 5% Cumulative Convertible
Preferred Stock (filed as Exhibit 4.7 to
the Company's Form S-3 Registration
Statement dated August 6, 1993, under
Commission File No. 33-67166, and
incorporated herein by reference).
3.4 * By-Laws of the Company (Exhibit 3.2 to the
Form 10).
4.1 * Certificate of Incorporation of the
Company (Exhibit 3.1 to the Form 10).
4.2 * By-Laws of the Company (Exhibit 3.2 to the
Form 10).
4.3 * Form of Common Stock Certificate (Exhibit
4.3 to the Form 10).
4.4 * Form of Indenture between the Company and
The First National Bank of Chicago
(Exhibit 4.1 to the Company's Form S-1
Registration Statement No. 33-32024 (the
"Form S-1 for Medium-Term Notes")).
4.5 * Form of Right Certificate (Exhibit 1 to
the Form 8-A for Preferred Stock Purchase
Rights).
4.6 * Rights Agreement between the Company and
Ameritrust Company National Association
(Exhibit 2 to the Form 8-A for Preferred
Stock Purchase Rights).
4.7 * Form of 9-3/8% Note Due March 1, 2001
(Exhibit 4.1 to Form 8-K dated February
20, 1991, filed with the Commission on
February 22, 1991).
4.8 * Forms of Medium-Term Notes, Series A
(Exhibit 4.2 to the Company's Form S-3
Registration Statement No. 33-588744).
4.9 * Form of 8% Debenture due April 1, 2023
(Exhibit 4.1 to Form 8-K dated March 22,
1993, filed with the Commission on March
25, 1993).
4.10 * 401(k) Retirement Savings Plan creating
certain "participation interests" (Exhibit
4.1 to Form S-8 Registration Statement
dated October 6, 1993, filed under
Commission File No. 33-50573).
4.11 * Form of Certificate of Designations
establishing 5% Cumulative Convertible
Preferred Stock (filed as Exhibit 4.7 to
the Company's Form S-3 Registration
Statement dated August 6, 1993, under
Commission File No. 33-67166, and
incorporated herein by reference).
4.12 * Form of 5% Cumulative Convertible
Preferred Stock Certificate (Exhibit 4.12
to the Company's Form 10-K for the fiscal
year ended December 31, 1993 (the "1993
10-K").
4.13 * Form of Medium Term Notes, Series B
(Exhibit 99.1 to the Company's Report on
Form 10-Q for the quarter ended June 30,
1995).
10.1 * Distribution Agreement between the Company
and Maxus (Exhibit 10.1 to the Form 10).
10.2 * Tax-Sharing Agreement between the Company
and Maxus (Exhibit 10.2 to the Form 10).
10.3 * Credit Agreement I, dated as of April 14,
1987, as amended and restated through
April 15, 1993, between the Company and
certain banks (Exhibit 10.1 to the
Company's report on Form 10-Q for the
quarter ended June 30, 1993.)
10.4 * Credit Agreement II, dated as of April 14,
1987, as amended and restated through
April 15, 1993, between the Company and
certain banks (Exhibit 10.2 to the
Company's report on Form 10-Q for the
quarter ended June 30, 1993).
10.5 * Senior Subordinated Note Purchase
Agreement, dated as of April 17, 1987,
between the Company and certain purchasers
(the "Senior Subordinated Note Agreement")
(Exhibit 10.22 to the Form 10).
10.6 * Amendment No. 1 to the Senior Subordinated
Note Agreement, dated as of March 31, 1988
(Exhibit 19.5 to the Company's report on
Form 10-Q for the quarter ended March 31,
1988).
10.7 * Amendment No. 2 to the Senior Subordinated
Note Agreement, dated as of July 12, 1989,
between the Company and certain
purchasers. (Exhibit 19.2 to the
Company's report on Form 10-Q for the
quarter ended June 30, 1989 (the "June 30,
1989 10-Q")).
10.8 * Amendment No. 3 to the Senior Subordinated
Note Agreement, dated as of December 6,
1993, between the Company and certain
purchasers (Exhibit 10.8 to the 1993 10-K).
10.9 # 9% Senior Note Purchase Agreement, dated
as of June 4, 1987, between the Company
and Prudential Insurance Company of
America (the "9% Senior Note Agreement").
10.10 # Amendment No. 1 to the 9% Senior Note
Agreement, dated as of July 12, 1989.
10.11 # Amendment No. 2 to the 9% Senior Note
Agreement, dated as of December 6, 1993.
10.12 # 8.35% Senior Note Purchase Agreement,
dated as of December 1, 1988, between the
Company and Prudential Insurance Company
of America (the "8.35% Senior Note
Agreement").
10.13 # Amendment No. 1 to the 8.35% Senior Note
Agreement, dated as of July 12, 1989.
10.14 # Amendment No. 2 to the 8.35% Senior Note
Agreement, dated as of December 6, 1993.
10.15 # 8.77% Senior Note Agreement, dated as of
April 20, 1989, between the Company and
Prudential Insurance Company of America
(the "8.77% Senior Note Agreement").
10.16 # Amendment No. 1 to the 8.77% Senior Note
Agreement, dated as of July 12, 1989.
10.17 # Amendment No. 2 to the 8.77% Senior Note
Agreement, dated as of December 6, 1993.
10.18 * X Form of Indemnification Agreement between
the Company and its directors and
executive officers (Exhibit 19.6 to the
Company's report on Form 10-Q for the
quarter ended June 30, 1987 (the "June 30,
1987 10-Q")).
10.19 * X Amended form of Employment Agreement
between the Company and certain of its
executive officers (Exhibit 19.2 to the
Company's report on Form 10-Q for the
quarter ended March 31, 1989).
10.20 * X Deferred Compensation Plan for executives
and directors of the Company, amended and
restated as of January 1, 1989 (Exhibit
10.13 to the Company's report on Form 10-K
for the year ended December 31, 1988 (the "1988
Form 10-K")).
10.21 * X Supplemental Executive Retirement Plan of
the Company (the "SERP") (Exhibit 10.16 to
the Form 10).
10.22 * X First Amendment to the SERP (Exhibit 10.17
to the Form S-1 for Preferred Stock).
10.23 * X Second Amendment to the SERP (Exhibit
10.21 to the 1989 Form 10-K).
10.24 * X Performance Incentive Plan of the Company
(Exhibit 10.19 to the Form 10).
10.25 * X Excess Benefits Plan of the Company
(Exhibit 19.5 to the June 30, 1987 Form
10-Q).
10.26 * X 1987 Long-Term Incentive Plan of the
Company (Annex A-1 to the Company's Form
S-8 Registration Statement No. 33-15268).
10.27 * X Amended Form of Non-Incentive Stock Option
Agreement with Stock Appreciation Rights
between the Company and certain officers
(Exhibit 19.5 to the June 30, 1989 Form
10-Q).
10.28 * X Amended Form of Restricted Stock Agreement
between the Company and certain officers
(Exhibit 19.6 to the June 30, 1989 Form
10-Q).
10.29 * X Form of Disability Benefit Agreement
between the Company and certain of its
executive officers (Exhibit 10.21 to the
Form S-1 for Preferred Stock).
10.30 * X Form of Split Dollar Insurance Agreement
between the Company and certain of its
executive officers (Exhibit 10.20 to the
1988 Form 10-K).
10.31 * X Form of Supplemental Death Benefit
Agreement between the Company and certain
of its executive officers (Exhibit 19.9 to
the June 30, 1987 Form 10-Q).
10.32 * X Form of Employee Stock Purchase Loan
Agreement between the Company and certain
of its executive officers and employees
(Exhibit 10.19 to the Company's Annual
Report on Form 10-K for the year ended
December 31, 1987).
10.33 * X Amendment dated March 5, 1990 to the
Employee Stock Purchase Loan Agreement
(Exhibit 10.31 to the 1989 Form 10-K).
10.34 * X Retirement Plan for Non-Employee Directors
of the Company dated as of May 2, 1989
(Exhibit 19.7 to the June 30, 1989 Form
10-Q).
10.35 * X Diamond Shamrock, Inc. Long-Term Incentive
Plan (Exhibit 4.1 to the Company's Form S-8
Registration Statement No. 33-34306 filed on
April 13, 1990).
10.36 * X Form of Executive Officer's Restricted
Stock Agreement between the Company and
certain officers pursuant to the Diamond
Shamrock, Inc. Long-Term Incentive Plan.
(Exhibit 19.3 to the Company's report on
Form 10-Q for the quarter ended June 30,
1990 (the "June 30, 1990 Form 10-Q")).
10.37 * X Form of Non-Incentive Stock Option
Agreement with Stock Appreciation Rights
between the Company and certain officers
pursuant to the Diamond Shamrock, Inc.
Long-Term Incentive Plan. (Exhibit 19.4
to the June 30, 1990 Form 10-Q).
10.38 * X Form of Executive Officer's Performance
Restricted Stock Agreement between the
Company and certain officers pursuant to
the Diamond Shamrock, Inc. Long-Term
Incentive Plan. (Exhibit 19.5 to the June
30, 1990 Form 10-Q).
10.39 * X Form of Non-Incentive Stock Option
Agreement between the Company and certain
officers pursuant to the Diamond Shamrock,
Inc. Long-Term Incentive Plan (Exhibit
19.2 to the Company's report on Form 10-Q
for the quarter ended September 30, 1991
(the "September 30, 1991 Form 10-Q").
10.40 * X Form of Non-Incentive Stock Option
Agreement With Reload between the Company
and certain officers pursuant to the
Diamond Shamrock, Inc. Long-Term Incentive
Plan (Exhibit 19.3 to the Company's report
on Form 10-Q for the quarter ended
September 30, 1991 (the "September 30,
1991 Form 10-Q").
10.41 * X Form of Amendment to the Non-Incentive
Stock Option Agreement with Stock
Appreciation Rights and the Non-Incentive
Stock Option Agreement with Reload, each
between the Company and certain officers
pursuant to the Diamond Shamrock, Inc.
Long-Term Incentive Plans (Exhibit 19.1
to the Company's report on Form 10-Q for
the quarter ended March 31, 1992 (the
"March 31, 1992 Form 10-Q").
10.42 * X Form of Amendment to the Non-Incentive
Stock Option Agreement between the Company
and certain officers pursuant to the
Diamond Shamrock, Inc. Long-Term Incentive
Plan (Exhibit 19.2 to the March 31, 1992
Form 10-Q).
10.43 * X Diamond Shamrock, Inc. Long-Term Incentive
Plan, amended and restated as of May 5,
1992 (Exhibit 19.1 to the Company's
report on Form 10-Q for the quarter ended
June 30, 1992 (the "June 30, 1992 Form 10-Q").
10.44 * X Form of Employee Stock Purchase Loan
Agreement between the Company and certain
of its executive officers and employees,
amended and restated as of May 26, 1992
(Exhibit 19.2 to the June 30, 1992 Form
10-Q).
10.45 * Ground Lease Agreement between Brazos
River Leasing, L.P. and DSRMC, dated as of
April 23, 1993 (Exhibit 19.3 to the June
30, 1992 Form 10-Q).
10.46 * First Amendment to Ground Lease Agreement
between Brazos River Leasing, L.P. and
Diamond Shamrock Refining and Marketing
Company, dated as of August 1, 1992
(Exhibit 10.2 to the Company's report on
Form 10-Q for the quarter ended, September
30, 1993)
10.47 * Facilities Lease Agreement between Brazos
River Leasing L.P. and DSRMC, dated as of
April 23, 1992 (Exhibit 19.4 to the June
30, 1992 Form 10-Q).
10.48 * First Amendment to Facilities Lease
Agreement between Brazos River Leasing,
L.P. and Diamond Shamrock Refining and
Marketing Company, dated as of August 1,
1992. (Exhibit 10.3 to the Company's
report on Form 10-Q for the quarter ended
September 30, 1993 (the "September 30,
1993 10-Q").
10.49 * Schedule Relating to Certain Lease
Agreements (Exhibit 10.4 to the September
30, 1993 10-Q).
10.50 * X Form of Excess Benefits Plan between the
Company and certain officers, amended and
restated as of December 1, 1992 (Exhibit
10.49 to the Company's report on Form 10-K
for the year ended December 31, 1992 (the
"1992 10-K")).
10.51 * X Form of Disability Benefit Agreement
between the Company and certain officers,
amended and restated as of January 1, 1993
(Exhibit 10.50 to the 1992 10-K).
10.52 * X Form of Deferred Compensation Plan between
the Company and certain directors,
officers and other employees of the
Company, amended and restated as of
January 1, 1993 (Exhibit 10.51 to the 1992
10-K).
10.53 * Second Amendment to Agreement for Ground
Lease between Brazos River Leasing L.P.
and Diamond Shamrock Refining and
Marketing Company, dated as of April 23,
1994 (Exhibit 10.1 to the Company's report
on Form 10-Q for the quarter ended June
30, 1994 (the "June 30, 1994 10-Q")).
10.54 * Second Amendment to Ground Lease Agreement
between Brazos River Leasing L.P. and
Diamond Shamrock Refining and Marketing
Company, dated as of April 23, 1994.
(Exhibit 10.2 to the June 30, 1994 10-Q)
10.55 * Second Amendment to Agreement for
Facilities Lease between Brazos River
Leasing L.P. and Diamond Shamrock Refining
and Marketing Company, dated as of April
23, 1994. (Exhibit 10.3 to the June 30,
1994 10-Q).
10.56 * Second Amendment to Facilities Lease
Agreement between Brazos River Leasing
L.P. and Diamond Shamrock Refining and
Marketing Company, dated as of April 23,
1994 (Exhibit 10.4 to the June 30, 1994
10-Q).
10.57 * First Amendment to Agreement for Ground
Lease between Brazos River Leasing L.P.
and Diamond Shamrock Refining and
Marketing Company, dated as of June 1,
1994 (Exhibit 10.1 to the Company's report
on Form 10-Q for the quarter ended
September 30, 1994 (the "September 30,
1994 10-Q")).
10.58 * First Amendment to Ground Lease Agreement
between Brazos River Leasing L.P. and
Diamond Shamrock Refining and Marketing
Company, dated as of June 1, 1994.
(Exhibit 10.2 to the September 30, 1994
10-Q).
10.59 * First Amendment to Agreement for
Facilities Lease between Brazos River
Leasing L.P. and Diamond Shamrock Refining
and Marketing Company, dated as of June 1,
1994 (Exhibit 10.3 to the September 30,
1994 10-Q).
10.60 * First Amendment to Facilities Lease
Agreement between Brazos River Leasing
L.P. and Diamond Shamrock Refining and
Marketing Company, dated as of June 1,
1994 (Exhibit 10.4 to the September 30,
1994 10-Q").
10.61 * Third Amendment to Agreement for Ground
Lease between Brazos River Leasing L.P.
and Diamond Shamrock Refining and
Marketing Company, dated as of September
16, 1994 (Exhibit 10.5 to the September
30, 1994 10-Q).
10.62 * Third Amendment to Ground Lease Agreement
between Brazos River Leasing L.P. and
Diamond Shamrock Refining and Marketing
Company, dated as of September 16, 1994.
(Exhibit 10.6 to the September 30, 1994
10-Q).
10.63 * Third Amendment to Agreement for
Facilities Lease between Brazos River
Leasing L.P. and Diamond Shamrock Refining
and Marketing Company, dated as of
September 16, 1994. (Exhibit 10.7 to the
September 30, 1994 10-Q).
10.64 * Third Amendment to Facilities Lease
Agreement between Brazos River Leasing
L.P. and Diamond Shamrock Refining and
Marketing Company, dated as of September
16, 1994. (Exhibit 10.8 to the
September 30, 1994 10-Q).
10.65 . First Amendment dated as of March 31, 1995
to Credit Agreement I dated as of April
14, 1987, as amended and restated through
April 15, 1993.
10.66 . Second Amendment dated as of December 5,
1995 to Credit Agreement I dated as of
April 14, 1987, as amended and restated
through April 15, 1993, as further amended
by the First Amendment thereto dated as of
March 31, 1995.
10.67 . First Amendment dated as of March 31, 1995
to Credit Agreement II dated as of April
14, 1987, as amended and restated through
April 15, 1993.
10.68 . Second Amendment dated as of December 5,
1995 to Credit Agreement II dated as of
April 14, 1987, as amended and restated
through April 15, 1993, as further amended
by the First Amendment thereto dated as of
March 31, 1995.
10.69 * Agreement and Plan of Merger, dated
November 8, 1995 by and among Diamond
Shamrock, Inc., Shamrock Acquisition
Corp., and National Convenience Stores
Incorporated. (Exhibit (c)(1) to the
Company's Schedule 14D-1 Tender Offer
Statement, filed with the Securities and
Exchange Commission on November 14, 1995).
10.70 * Credit Agreement dated December 11, 1995
among the Company, Bank of America
National Trust and Savings Association, as
Agent, Chemical Bank, Royal Bank of
Canada, and Societe Generale, as Co-Agents,
and the banks named therein (Exhibit 4.1 to
the Company's report on Form 8-K dated December
14, 1995).
10.71 *X Diamond Shamrock, Inc. Long-Term Incentive
Plan, amended and restated as of May 2,
1995 (Exhibit 4.1 to the Company's Form S-8
Registration Statement No. 33-59025).
10.72 *X Diamond Shamrock, Inc. Nonqualified 401(k)
Plan (Exhibit 4.1 to the Company's Form S-8
Registration Statement No. 33-64645).
13.1 . Management's Discussion and Analysis of
Financial Condition and Results of
Operation from the Company's Annual Report
to Shareholders for the year ended
December 31, 1995.
13.2 . Consolidated Financial Statements and
Selected Financial Data from the Company's
Annual Report to Shareholders for the year
ended December 31, 1995.
13.3 . Report of Independent Accountants from the
Company's Annual Report to Shareholders
for the year ended December 31, 1995.
21.1 . Significant Subsidiaries of the Company.
23.1 . Consent of Price Waterhouse LLP.
24.1 . Power of Attorney of the Company
24.2 . Powers of Attorney of directors and
officers of the Company.
27.1 . Financial Data Schedule
____________________________
* Each document marked with an asterisk is incorporated herein by
reference to the designated document previously filed with the
Securities Exchange Commission.
# The Company hereby agrees pursuant to Item 601(b)(4)(III)(A) of
Regulation S-K to furnish a copy of this agreement to the
Securities and Exchange Commisson upon request.
. Indicates a document filed with this report.
X Indicates the document which constitutes an executive contract or
compensation plan or arrangement.
(b) Reports on Form 8-K.
The following reports on Form 8-K were filed by the
Company during the fourth quarter of 1995:
Current Report on Form 8-K dated December 14, 1995,
filed on December 28, 1995, and amended by Form 8-K/
A filed February 14, 1996.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of
the Securities Exchange Act of 1934, the registrant has duly
caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
DIAMOND SHAMROCK, INC.
By: /s/ TODD WALKER
Todd Walker
Attorney-in-Fact
October 1, 1996
Pursuant to the requirements of the Securities Exchange
Act of 1934, this report has been signed by the following
persons on behalf of the registrant, and in the capacities,
and on the dates indicated.
Signature Title
/s/ R. R. HEMMINGHAUS*
R. R. Hemminghaus Chairman of the Board and
President
(Principal Executive Officer)
/s/ ROBERT C. BECKER*
Robert C. Becker Vice President and Treasurer
(Principal Financial Officer)
/s/ GARY E. JOHNSON*
Gary E. Johnson Vice President and Controller
Principal Accounting Officer)
/s/ B. CHARLES AMES*
B. Charles Ames Director
/s/ E. GLENN BIGGS*
E. Glenn Biggs Director
/s/ WILLIAM E. BRADFORD* Director
William E. Bradford
/s/ LAURO F. CAVAZOS*
Lauro F. Cavazos Director
/s/ W. H. CLARK*
W. H. Clark Director
/s/ WILLIAM L. FISHER*
William L. Fisher Director
/s/ BOB MARBUT*
Bob Marbut Director
/s/ KATHERINE D. ORTEGA*
Katherine D. Ortega Director
* The undersigned, by signing his name hereto, does hereby
sign this report on Form 10-K/A pursuant to the Powers of
Attorney executed on behalf of the above-named officers
and directors of the registrant, and contemporaneously
filed herewith with the Securities and Exchange
Commission
/s/ TODD WALKER
Todd Walker
Attorney-in-Fact
October 1, 1996
REPORT OF INDEPENDENT ACCOUNTANTS ON
FINANCIAL STATEMENT SCHEDULES
To the Board of Directors of
Diamond Shamrock, Inc.
Our audits of the consolidated financial statements referred
to in our report dated February 23, 1996, which includes an
explanatory paragraph with respect to the Company's change in
its method of accounting for its long-term shared cost
liability, which is included as Exhibit 13.3 to this Annual
Report on Form 10-K/A also included an audit of the Financial
Statement Schedules listed in Item 14(a)(2) hereof. In our
opinion, these Financial Statement Schedules present fairly,
in all material respects, the information set forth therein
when read in conjunction with the related consolidated
financial statements.
/s/ PRICE WATERHOUSE LLP
PRICE WATERHOUSE LLP
San Antonio, Texas
February 23, 1996
SCHEDULE V
DIAMOND SHAMROCK, INC.
CONSOLIDATED PROPERTIES AND EQUIPMENT
Three Years Ended December 31, 1995
(dollars in millions)
Refining & Retail Allied
Wholesale Marketing Businesses Other
Total
Balance January 1, 1993 $ 838.9 $ 306.7 $ 212.6 $ 33.6 $ 1,391.8
Additions, at cost 100.1 26.5 4.4 0.8 131.8
Disposals and transfers 10.1 (6.7) (34.5)(1) (0.5) (31.6)
Balance December 31, 1993 949.1 326.5 182.5 33.9 1,492.0
Additions, at cost 89.3 49.3 22.3 1.2 162.1
Disposals and transfers (14.0) (6.3) 2.0 (0.4) (18.7)
Balance December 31, 1994 1,024.4 369.5 206.8 34.7 1,635.4
Additions, at cost 193.0 202.3 21.2 1.5 418.0
Disposals and transfers 21.1 (9.3) (24.6) 0.7 (12.1)
Balance December 31, 1995 $1,238.5 $ 562.5 $ 203.4 $ 36.9 $ 2,041.3
(1) During 1993, the Company exchanged an undivided interest in certain
properties and equipment for an equity ownership interest in a limited
liability company. This transaction increased investments by $19.2
million, decreased properties and equipment by $22.0 million and
decreased accumulated depreciation by $2.8 million in the Allied
Businesses segment.
SCHEDULE VI
DIAMOND SHAMROCK, INC.
CONSOLIDATED ACCUMULATED DEPRECIATION
Three Years Ended December 31, 1995
(dollars in millions)
Refining & Retail Allied
Wholesale Marketing Businesses Other Total
Balance January 1, 1993 $ 331.1 $ 85.3 $ 66.3 $ 11.5 $494.2
Additions charged against
income 35.1 14.6 11.7 2.9 64.3
Disposals and transfers 0.7 (3.3) (3.5)* (1.5) (7.6)
Balance December 31, 1993 366.9 96.6 74.5 12.9 550.9
Additions charged against
income 38.3 16.3 13.1 3.2 70.9
Disposals and transfers (8.4) (4.2) 0.3 (0.2) (12.5)
Balance December 31, 1994 396.8 108.7 87.9 15.9 609.3
Additions charged against
income 43.5 20.5 11.4 2.3 77.7
Disposals and transfers 19.8 (3.7) (18.9) 0.0 (2.8)
Balance December 31, 1995 $ 460.1 $ 125.5 $ 80.4 $ 18.2 $684.2
* See footnote (1) to the preceding Schedule V "Consolidated Properties and
Equipment."
The provisions for depreciation were computed principally in
accordance with the following methods and range of rates:
Method Rate
Buildings and land improvements Straight line 3% to 5%
Machinery and equipment Straight line 5% to 20%
Furniture and fixtures Straight line 10% to 20%
Automotive equipment Straight line 14% to 33%
Leasehold improvements Straight line Lease terms
INDEX TO EXHIBITS
Exhibit
Number Exhibit
3.1 * Certificate of Incorporation of the Company (Exhibit
3.1 to the Company's Form 10 Registration Statement No.
1-9409 (the "Form 10")).
3.2 * Form of Certificates of Designations of Series A Junior
Participating Preferred Stock (Exhibit 3 to the
Company's Form 8-A Registration Statement dated
March 6, 1990, filed under Commission File No. 1-9409
(the "Form 8-A for Preferred Stock Purchase Rights")).
3.3 * Form of Certificate of Designations establishing 5%
Cumulative Convertible Preferred Stock (filed as
Exhibit 4.7 to the Company's Form S-3 Registration
Statement dated August 6, 1993, under Commission
File No. 33-67166, and incorporated herein by
reference).
3.4 * By-Laws of the Company (Exhibit 3.2 to the Form 10).
4.1 * Certificate of Incorporation of the Company (Exhibit
3.1 to the Form 10).
4.2 * By-Laws of the Company (Exhibit 3.2 to the Form 10).
4.3 * Form of Common Stock Certificate (Exhibit 4.3 to the
Form 10).
4.4 * Form of Indenture between the Company and The First
National Bank of Chicago (Exhibit 4.1 to the Company's
Form S-1 Registration Statement No. 33-32024 (the
"Form S-1 for Medium-Term Notes")).
4.5 * Form of Right Certificate (Exhibit 1 to the Form 8-A
for Preferred Stock Purchase Rights).
4.6 * Rights Agreement between the Company and Ameritrust
Company National Association (Exhibit 2 to the Form
8-A for Preferred Stock Purchase Rights).
4.7 * Form of 9-3/8% Note Due March 1, 2001 (Exhibit 4.1 to
Form 8-K dated February 20, 1991, filed with the
Commission on February 22, 1991).
4.8 * Forms of Medium-Term Notes, Series A (Exhibit 4.2 to
the Company's Form S-3 Registration Statement No.
33-58744).
4.9 * Form of 8% Debenture due April 1, 2023 (Exhibit 4.1 to
Form 8-K dated March 22, 1993, filed with the
Commission on March 25, 1993).
4.10 * 401(k) Retirement Savings Plan creating certain
"participation interests" (Exhibit 4.1 to Form S-8
Registration Statement dated October 6, 1993, filed
under Commission File No. 33-50573).
4.11 * Form of Certificate of Designations establishing 5%
Cumulative Convertible Preferred Stock (filed as
Exhibit 4.7 to the Company's Form S-3 Registration
Statement dated August 6, 1993, under Commission File
No. 33-67166, and under Commission File No.
33-67166, and under Commission File No. 33-67166,
and incorporated herein by reference).
4.12 * Form of 5% Cumulative Convertible Preferred Stock
Certificate (Exhibit 4.12 to the Company's Form 10-K
for the fiscal year ended December 31, 1993
(the "1993 10-K").
4.13 * Form of Medium Term Notes, Series B (Exhibit 99.1 to
the Company's Report on Form 10-Q for the quarter
ended June 30, 1995).
10.1 * Distribution Agreement between the Company and Maxus
(Exhibit 10.1 to the Form 10).
10.2 * Tax-Sharing Agreement between the Company and Maxus
(Exhibit 10.2 to the Form 10).
10.3 * Credit Agreement I, dated as of April 14, 1987, as
amended and restated through April 15, 1993, between
the Company and certain banks (Exhibit 10.1 to the
Company's report on Form 10-Q for the quarter ended
June 30, 1993.)
10.4 * Credit Agreement II, dated as of April 14, 1987, as
amended and restated through April 15, 1993, between
the Company and certain banks (Exhibit 10.2 to the
Company's report on Form 10-Q for the quarter ended
June 30, 1993).
10.5 * Senior Subordinated Note Purchase Agreement, dated as
of April 17, 1987, between the Company and certain
purchasers (the "Senior Subordinated Note Agreement")
(Exhibit 10.22 to the Form 10).
10.6 * Amendment No. 1 to the Senior Subordinated Note
Agreement, dated as of March 31, 1988 (Exhibit 19.5
to the Company's report on Form 10-Q for the quarter
ended March 31, 1988).
10.7 * Amendment No. 2 to the Senior Subordinated Note
Agreement, dated as of July 12, 1989, between the
Company and certain purchasers. (Exhibit 19.2 to
the Company's report on Form 10-Q for the quarter
ended June 30, 1989 (the "June 30, 1989 10-Q")).
10.8 * Amendment No. 3 to the Senior Subordinated Note
Agreement, dated as of December 6, 1993, between
the Company and certain purchasers (Exhibit 10.8
to the 1993 10-K).
10.9 # 9% Senior Note Purchase Agreement, dated
as of June 4, 1987, between the Company
and Prudential Insurance Company of
America (the "9% Senior Note Agreement").
10.10 # Amendment No. 1 to the 9% Senior Note
Agreement, dated as of July 12, 1989.
10.11 # Amendment No. 2 to the 9% Senior Note
Agreement, dated as of December 6, 1993.
10.12 # 8.35% Senior Note Purchase Agreement,
dated as of December 1, 1988, between the
Company and Prudential Insurance Company
of America (the "8.35% Senior Note
Agreement").
10.13 # Amendment No. 1 to the 8.35% Senior Note
Agreement, dated as of July 12, 1989.
10.14 # Amendment No. 2 to the 8.35% Senior Note
Agreement, dated as of December 6, 1993.
10.15 # 8.77% Senior Note Agreement, dated as of
April 20, 1989, between the Company and
Prudential Insurance Company of America
(the "8.77% Senior Note Agreement").
10.16 # Amendment No. 1 to the 8.77% Senior Note
Agreement, dated as of July 12, 1989.
10.17 # Amendment No. 2 to the 8.77% Senior Note
Agreement, dated as of December 6, 1993.
10.18 * X Form of Indemnification Agreement between
the Company and its directors and
executive officers (Exhibit 19.6 to the
Company's report on Form 10-Q for the
quarter ended June 30, 1987 (the "June 30,
1987 10-Q")).
10.19 * X Amended form of Employment Agreement between
the Company and certain of its executive officers
(Exhibit 19.2 to the Company's report on
Form 10-Q for the quarter ended March 31, 1989).
10.20 * X Deferred Compensation Plan for executives and
directors of the Company, amended and restated as
of January 1, 1989 (Exhibit 10.13 to the Company's
report on Form 10-K for the year ended December 31,
1988 (the "1988 Form 10-K")).
10.21 * X Supplemental Executive Retirement Plan of the Company
(the "SERP") (Exhibit 10.16 to the Form 10).
10.22 * X First Amendment to the SERP (Exhibit 10.17 to the Form
S-1 for Preferred Stock).
10.23 * X Second Amendment to the SERP (Exhibit 10.21 to the
1989 Form 10-K).
10.24 * X Performance Incentive Plan of the Company (Exhibit
10.19 to the Form 10).
10.25 * X Excess Benefits Plan of the Company (Exhibit 19.5 to
the June 30, 1987 Form 10-Q).
10.26 * X 1987 Long-Term Incentive Plan of the Company (Annex
A-1 to the Company's Form S-8 Registration Statement
No.33-15268).
10.27 * X Amended Form of Non-Incentive Stock Option Agreement
with Stock Appreciation Rights between the Company and
certain officers (Exhibit 19.5 to the June 30, 1989
Form 10-Q).
10.28 * X Amended Form of Restricted Stock Agreement between the
Company and certain officers (Exhibit 19.6 to the
June 30, 1989 Form 10-Q).
10.29 * X Form of Disability Benefit Agreement between the
Company and certain of its executive officers (Exhibit
10.21 to the Form S-1 for Preferred Stock).
10.30 * X Form of Split Dollar Insurance Agreement between the
Company and certain of its executive officers (Exhibit
10.20 to the 1988 Form 10-K).
10.31 * X Form of Supplemental Death Benefit Agreement between
the Company and certain of its executive officers
(Exhibit 19.9 to the June 30, 1987 Form 10-Q).
10.32 * X Form of Employee Stock Purchase Loan Agreement between
the Company and certain of its executive officers and
employees (Exhibit 10.19 to the Company's Annual
Report on Form 10-K for the year ended December 31,
1987).
10.33 * X Amendment dated March 5, 1990 to the Employee Stock
Purchase Loan Agreement (Exhibit 10.31 to the 1989
Form 10-K).
10.34 * X Retirement Plan for Non-Employee Directors of the
Company dated as of May 2, 1989 (Exhibit 19.7 to the
June 30, 1989 Form 10-Q).
10.35 * X Diamond Shamrock, Inc. Long-Term Incentive Plan
(Exhibit 4.1 to the Company's Form S-8 Registration
Statement No. 33-34306 filed on April 13, 1990).
10.36 * X Form of Executive Officer's Restricted Stock Agreement
between the Company and certain officers pursuant to
the Diamond Shamrock, Inc. Long-Term Incentive Plan.
(Exhibit 19.3 to the Company's report on Form 10-Q for
the quarter ended June 30, 1990 (the "June 30, 1990
Form 10-Q")).
10.37 * X Form of Non-Incentive Stock Option Agreement with
Stock Appreciation Rights between the Company and
certain officers pursuant to the Diamond Shamrock,
Inc. Long-Term Incentive Plan. (Exhibit 19.4 to the
June 30, 1990 Form 10-Q).
10.38 * X Form of Executive Officer's Performance Restricted
Stock Agreement between the Company and certain
officers pursuant to the Diamond Shamrock, Inc.
Long-Term Incentive Plan. (Exhibit 19.5 to the
June 30, 1990 Form 10-Q).
10.39 * X Form of Non-Incentive Stock Option Agreement between
the Company and certain officers pursuant to the
Diamond Shamrock, Inc. Long-Term Incentive Plan
(Exhibit 19.2 to the Company's report on Form 10-Q for
the quarter ended September 30, 1991 (the "September
30, 1991 Form 10-Q").
10.40 * X Form of Non-Incentive Stock Option Agreement With
Reload between the Company and certain officers
pursuant to the Diamond Shamrock, Inc. Long-Term
Incentive Plan (Exhibit 19.3 to the Company's report
on Form 10-Q for the quarter ended September 30, 1991
(the "September 30, 1991 Form 10-Q").
10.41 * X Form of Amendment to the Non-Incentive Stock Option
Agreement with Stock Appreciation Rights and the Non-
Incentive Stock Option Agreement with Reload, each
between the Company and certain officers pursuant to
the Diamond Shamrock, Inc. Long-Term Incentive Plans
(Exhibit 19.1 to the Company's report on Form 10-Q for
the quarter ended March 31, 1992 (the "March 31, 1992
Form 10-Q").
10.42 * X Form of Amendment to the Non-Incentive Stock Option
Agreement between the Company and certain officers
pursuant to the Diamond Shamrock, Inc. Long-Term
Incentive Plan (Exhibit 19.2 to the March 31, 1992
Form 10-Q).
10.43 * X Diamond Shamrock, Inc. Long-Term Incentive Plan,
amended and restated as of May 5, 1992 (Exhibit 19.1
to the Company's report on Form 10-Q for the quarter
ended June 30, 1992 (the "June 30, 1992 Form 10-Q").
10.44 * X Form of Employee Stock Purchase Loan Agreement between
the Company and certain of its executive officers and
employees, amended and restated as of May 26, 1992
(Exhibit 19.2 to the June 30, 1992 Form 10-Q).
10.45 * Ground Lease Agreement between Brazos River Leasing,
L.P. and DSRMC, dated as of April 23, 1993 (Exhibit
19.3 to the June 30, 1992 Form 10-Q).
10.46 * First Amendment to Ground Lease Agreement between
Brazos River Leasing, L.P. and Diamond Shamrock
Refining and Marketing Company, dated as of August 1,
1992 (Exhibit 10.2 to the Company's report on Form
10-Q for the quarter ended, September 30, 1993)
10.47 * Facilities Lease Agreement between Brazos River Leasing
L.P. and DSRMC, dated as of April 23, 1992 (Exhibit
19.4 to the June 30, 1992 Form 10-Q).
10.48 * First Amendment to Facilities Lease Agreement between
Brazos River Leasing, L.P. and Diamond Shamrock
Refining and Marketing Company, dated as of August 1,
1992. (Exhibit 10.3 to the Company's report on Form
10-Q for the quarter ended September 30, 1993 (the
"September 30, 1993 10-Q").
10.49 * Schedule Relating to Certain Lease Agreements
(Exhibit 10.4 to the September 30, 1993 10-Q).
10.50 * X Form of Excess Benefits Plan between the Company and
certain officers, amended and restated as of December
1, 1992 (Exhibit 10.49 to the Company's report on Form
10-K for the year ended December 31, 1992 (the "1992
10-K")).
10.51 * X Form of Disability Benefit Agreement between the
Company and certain officers, amended and restated
as of January 1, 1993 (Exhibit 10.50 to the 1992 10-K).
10.52 * X Form of Deferred Compensation Plan between the Company
and certain directors, officers and other employees of
the Company, amended and restated as of January 1, 1993
(Exhibit 10.51 to the 1992 10-K).
10.53 * Second Amendment to Agreement for Ground Lease between
Brazos River Leasing L.P. and Diamond Shamrock Refining
and Marketing Company, dated as of April 23, 1994
(Exhibit 10.1 to the Company's report on Form 10-Q for
the quarter ended June 30, 1994 (the "June 30, 1994
10-Q")).
10.54 * Second Amendment to Ground Lease Agreement between
Brazos River Leasing L.P. and Diamond Shamrock Refining
and Marketing Company, dated as of April 23, 1994.
(Exhibit 10.2 to the June 30, 1994 10-Q)
10.55 * Second Amendment to Agreement for Facilities Lease
between Brazos River Leasing L.P. and Diamond Shamrock
Refining and Marketing Company, dated as of April 23,
1994. (Exhibit 10.3 to the June 30, 1994 10-Q).
10.56 * Second Amendment to Facilities Lease Agreement between
Brazos River Leasing L.P. and Diamond Shamrock Refining
and Marketing Company, dated as of April 23, 1994
(Exhibit 10.4 to the June 30, 1994 10-Q).
10.57 * First Amendment to Agreement for Ground Lease between
Brazos River Leasing L.P. and Diamond Shamrock Refining
and Marketing Company, dated as of June 1, 1994
(Exhibit 10.1 to the Company's report on Form 10-Q for
the quarter ended September 30, 1994 (the "September
30, 1994 10-Q")).
10.58 * First Amendment to Ground Lease Agreement between
Brazos River Leasing L.P. and Diamond Shamrock Refining
and Marketing Company, dated as of June 1, 1994.
(Exhibit 10.2 to the September 30, 1994 10-Q).
10.59 * First Amendment to Agreement for Facilities Lease
between Brazos River Leasing L.P. and Diamond Shamrock
Refining and Marketing Company, dated as of June 1,
1994. (Exhibit 10.3 to the September 30, 1994 10-Q).
10.60 * First Amendment to Facilities Lease Agreement between
Brazos River Leasing L.P. and Diamond Shamrock Refining
and Marketing Company, dated as of June 1, 1994
(Exhibit 10.4 to the September 30, 1994 10-Q").
10.61 * Third Amendment to Agreement for Ground Lease between
Brazos River Leasing L.P. and Diamond Shamrock Refining
and Marketing Company, dated as of September 16, 1994
(Exhibit 10.5 to the September 30, 1994 10-Q).
10.62 * Third Amendment to Ground Lease Agreement between
Brazos River Leasing L.P. and Diamond Shamrock
Refining and Marketing Company, dated as of September
16, 1994. (Exhibit 10.6 to the September 30, 1994
10-Q).
10.63 * Third Amendment to Agreement for Facilities Lease
between Brazos River Leasing L.P. and Diamond Shamrock
Refining and Marketing Company, dated as of September
16, 1994. (Exhibit 10.7 to the September 30, 1994
10-Q).
10.64 * Third Amendment to Facilities Lease Agreement between
Brazos River Leasing L.P. and Diamond Shamrock Refining
and Marketing Company, dated as of September 16, 1994.
(Exhibit 10.8 to the September 30, 1994 10-Q).
10.65 . First Amendment dated as of March 31, 1995 to Credit
Agreement I dated as of April 14, 1987, as amended and
restated through April 15, 1993.
10.66 . Second Amendment dated as of December 5, 1995 to Credit
Agreement I dated as of April 14, 1987, as amended and
restated through April 15, 1993, as further amended by
the First Amendment thereto dated as of March 31, 1995.
10.67 . First Amendment dated as of March 31, 1995 to Credit
Agreement II dated as of April 14, 1987, as amended and
restated through April 15, 1993.
10.68 . Second Amendment dated as of December 5, 1995 to Credit
Agreement II dated as of April 14, 1987, as amended and
restated through April 15, 1993, as further amended by
the First Amendment thereto dated as of March 31, 1995.
10.69 * Agreement and Plan of Merger, dated November 8, 1995 by
and among Diamond Shamrock, Inc., Shamrock Acquisition
Corp., and National Convenience Stores Incorporated.
(Exhibit 10.1 to the Company's report on Form 10-Q for
the quarter ended September 30, 1995)
10.70 * Credit Agreement dated December 11, 1995 among the
Company, Bank of America National Trust and Savings
Association, as Agent, Chemical Bank, Royal Bank of
Canada, and Societe Generale, as Co-Agents, and the
banks named therein (Exhibit 4.1 to the Company's
report on Form 8-K dated December 14, 1995).
10.71 *X Diamond Shamrock, Inc. Long-Term Incentive Plan,
amended and restated as of May 2, 1995 (Exhibit 4.1
to the Company's Form S-8 Registration Statement No.
33-59025).
10.72 *X Diamond Shamrock, Inc. Nonqualified 401(k)Plan (Exhibit
4.1 to the Company's Form S-8 Registration Statement
No. 33-64645).
13.1 . Management's Discussion and Analysis of Financial
Condition and Results of Operation from the Company's
Annual Report to Shareholders for the year ended
December 31, 1995.
13.2 . Consolidated Financial Statements and Selected
Financial Data from the Company's Annual Report to
Shareholders for the year ended December 31, 1995.
13.3 . Report of Independent Accountants from the Company's
Annual Report to Shareholders for the year ended
December 31, 1995.
21.1 . Subsidiaries of the Company.
23.1 . Consent of Price Waterhouse LLP.
24.1 . Power of Attorney of the Company
24.2 . Powers of Attorney of directors and officers of the
Company.
27.1 . Financial Data Schedule
_______________________________
* Each document marked with an asterisk is incorporated herein by
reference to the designated document previously filed with the
Securities and Exchange Commission.
# The Company hereby agrees pursuant to Item 601(b)(4)(III)(A) of
Regulation S-K to furnish a copy of this agreement to the Securities
and Exchange Commission upon reqeust.
. Indicates a document filed with this report.
X Indicates the document which constitutes an executive contract
or compensation plan or arrangement.
W4964.TW