EXHIBIT 10.59

                                    AGREEMENT

This  Agreement  is entered into and  effective as of March 3, 1998,  between H.
Pete  Smith  ("Executive")  and  Ultramar  Diamond  Shamrock   Corporation  (the
"Company").

Executive and the Company are parties to an Employment  Agreement dated November
25, 1996, as amended (the "Employment Agreement"), and to a Relocation Agreement
dated December 2, 1996 (the "Relocation Agreement").

In  consideration  of  the  promises  and  mutual  benefits  contained  in  this
Agreement, Executive and the Company amend said agreements as follows:

1.   The first and second  sentences of paragraph 2 of the Relocation  Agreement
     are amended and restated as follows:

     "The Employee may, at his election, voluntarily terminate his employment on
     June 1, 2000 (the "Walk Right") by giving  written notice to the Company on
     or before March 1, 2000. If such election is not received by the Company on
     or before  March 1,  2000,  the Walk  Right  shall  terminate  and be of no
     further force and effect."

2.   The fourth  sentence of paragraph 2 of the Relocation  Agreement is amended
     and restated as follows:

     "A termination  from  employment on any date other than June 1, 2000 and by
     means other than the written notice as specified in this agreement shall be
     covered  by the  Employment  Agreement,  and  any  payments  due  shall  be
     determined in accordance with the Employment Agreement."

3.   The first  sentence of  subparagraph  (a) of paragraph 2 of the  Relocation
     Agreement is amended and restated as follows:

     "(a)  Regardless of anything to the contrary in the  Employment  Agreement,
     the amount of  severance  to be paid in a single lump sum on or before June
     30, 2000 shall be  $1,498,200.00.  Executive  will also be paid the present
     value of the  benefit  accrued  through  said  termination  date  under the
     Ultramar  Corporation  Supplemental  Retirement  Benefit  Plan (the "SERP")
     applied in accordance  with Sections 5.4 (I) and 5.5 (I) of the  Employment
     Agreement for a termination with Good Reason."

4.   Subparagraph (a) to the last paragraph of Section 5.5 (I) of the Employment
     Agreement, as amended, is amended and restated as follows.

    "(a) the lump sum payment to which the Executive would be entitled upon the
     occurrence  of such event  under the  Diamond  Shamrock R & M  Supplemental
     Retirement  Plan (as in effect on the  Effective  Date),  but  taking  into
     account any subsequent  amendments thereto which do not decrease the amount
     of benefits or the right to receive benefits) (the "Diamond Shamrock SERP")
     if the Executive had participated  therein  immediately prior to and at all
     times following the Effective Date; over".

Said amendments are effective as of March 3, 1998.



/s/ H. PETE SMITH
    H. PETE SMITH



ULTRAMAR DIAMOND SHAMROCK CORPORATION


By: /s/ ROGER R. HEMMINGHAUS
        ROGER R. HEMMINGHAUS
        CHIEF EXECUTIVE OFFICER