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Exhibit 10.1
ULTRAMAR DIAMOND SHAMROCK CORPORATION
INTERMEDIATE INCENTIVE AND
PERFORMANCE-BASED RESTRICTED STOCK PLAN
I. Purpose
The purpose of the Plan is to establish a program of incentive
compensation for certain designated executives, officers and other key employees
of the Company and its subsidiaries and divisions that is directly related to
the performance results of the Company and such employees. The Plan provides
"Intermediate Incentive Awards," "Performance-Based Restricted Stock Awards"
granted pursuant to the LTIP and "Excess Performance-Based Stock Awards," all
contingent upon continued employment and the Company meeting certain corporate
performance goals, to certain executives, officers and other key employees
selected by the Committee.
II. Definitions
"Affiliate" means (i) any entity that directly or indirectly is
controlled by, or is under common control with, the Company, and (ii) any entity
in which the Company has a significant equity interest, in either case as
determined by the Committee.
"Award Agreement" means the agreement between the Company and a
Participant reflecting the terms of the Participant's Intermediate Incentive
Award, Performance-Based Restricted Stock Award and Excess Performance-Based
Stock Award.
"Board" means the Board of Directors of the Company.
"Change in Control" means the occurrence of any of the following
events:
(a) the Company is merged, consolidated or reorganized with another
corporation or legal person, and as a result, less than 50% of the combined
voting power of the then-outstanding securities of such corporation or person
immediately after such transaction are held in the aggregate by the holders of
voting stock of the Company immediately prior to such transaction;
(b) the Company sells or transfers all or substantially all of its
assets to any other corporation or other legal person, and as a result, less
than 50% of the combined voting power of the then-outstanding securities of such
corporation or person are held in the aggregate by the holders of voting stock
of the Company immediately prior to such sale;
(c) there is a report filed with the Securities and Exchange Commission
on Schedule 13D or Schedule 14D-1 (or any successor schedule, form or report),
each as promulgated pursuant to the Exchange Act, disclosing that any person (as
the term "person" is used in Section 13(d)(3) or Section 14(d)(2) of the
Exchange Act) has become the beneficial owner (as the term "beneficial owner" is
defined under Rule 13d-3 or any successor rule or regulation promulgated under
the Exchange Act) of securities representing 20% or more of the combined voting
power of the then-outstanding securities of the Company entitled to vote
generally in the election of directors of the Company;
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(d) the Company files a report or proxy statement with the Securities
and Exchange Commission pursuant to the Exchange Act disclosing in response to
Form 8-K or Schedule 14A (or any successor schedule, form or report or item
therein) that a change in control of the Company has or may have occurred or
will or may occur in the future pursuant to any then-existing contract or
transaction; or
(e) if during the period of two consecutive years individuals who at
the beginning of any such period constitute the directors of the Company cease
for any reason to constitute at least a majority thereof unless the election, or
the nomination for election by the Company's shareholders, of each director of
the Company first elected during such period was approved by a vote of at least
two-thirds of the directors of the Company then still in office who were
directors of the Company at the beginning of any such period (excluding for this
purpose the election of any new director in connection with an actual or
threatened election or proxy contest).
"Code" means the Internal Revenue Code of 1986, as amended.
"Committee" means the Compensation Committee of the Board.
"Common Stock" means the common stock of the Company, par value $.01
per share.
"Company" means the Ultramar Diamond Shamrock Corporation, a Delaware
corporation, or any successor corporation.
"Designated Beneficiary" means the beneficiary or beneficiaries
designated in accordance with Article XI hereof to receive the amount, if any,
payable under the Plan upon a Participant's death.
"Effective Date" shall have the meaning set forth in Article XIX.
"Excess Performance-Based Stock Award" means the award of cash or
stock, as determined by the Committee, granted to a Participant based on the
Company's attainment of the Restricted Stock Performance Criteria established by
the Committee in accordance with Articles IV and VI in a manner which produces a
percentage of the Participant's Target Restricted Stock Award of greater than
100%, as further described in Article VI.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Intermediate Award Performance Criteria" means (i) annual percentage
growth in the Company's earnings before interest and taxes, excluding major
acquisitions and divestitures, and (ii) the Company's annual return on capital
employed, in each case as determined by the Committee.
"Intermediate Incentive Award" means a cash award, as determined by the
Committee, granted to a Participant based on the Company's attainment of the
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Performance Criteria established by the Committee in accordance with Articles IV
and V, as further described in Article IV.
"ITI Target Payout" means the amount of the target cash award
established by the Committee for each Participant granted an Intermediate
Incentive Award.
"LTIP" means the Ultramar Diamond Shamrock Corporation 1996 Long-Term
Incentive Plan.
"Participant" means any executive, officer or other key employee
designated by the Committee to participate in the Plan.
"Performance-Based Restricted Stock Award" means an award of restricted
stock, as determined by the Committee, granted to a Participant under and
pursuant to the terms and conditions of the LTIP, the vesting of which is based
on the Company's attainment of the Restricted Stock Performance Criteria
established by the Committee in accordance with Section 8 of the LTIP and
Articles IV and VI, as further described in Article VI.
"Performance Period" means the period during which performance is
measured to determine the level of attainment of an Intermediate Incentive
Award, a Performance-Based Restricted Stock Award or an Excess Performance-Based
Stock Award.
"Person" means any individual, corporation, partnership, association,
joint-stock company, trust, unincorporated organization, government or political
subdivision thereof or other entity.
"Plan" means the Ultramar Diamond Shamrock Corporation Intermediate
Incentive and Performance-Based Restricted Stock Plan.
"Restricted Shares" means the shares of restricted Common Stock granted
to a Participant in accordance with Article VI.
"Restricted Stock Performance Criteria" means the total shareholder
return on the Common Stock, including dividends and price appreciation, as
determined by the Committee. "Restricted Stock Vesting Percentage" means the
percentage of a Participant's Target Restricted Stock Award which vests based
upon the level of attainment of Restricted Stock Performance Criteria.
"Target Restricted Stock Award" means number of Restricted Shares
granted under the Plan to a Participant at the beginning of a Performance Period
in the form of a Performance-Based Restricted Stock Award.
"Year" means the calendar year.
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III. Eligibility
Participants in the Plan shall be selected by the Committee from those
executives, officers and other key employees of the Company and its subsidiaries
whose efforts contribute materially to the success of the Company, as determined
by the Committee. No person shall be a Participant unless he or she is selected
by the Committee, in its sole discretion. No person shall at any time have the
right to be selected as a Participant or, having been selected as a Participant
for one Performance Period or one type of award, to be selected as a Participant
for any other Performance Period or for any other type of award.
IV. Administration
The Committee, in its sole discretion, will determine eligibility for
participation, establish the ITI Target Payout, Target Restricted Award, maximum
Intermediate Incentive Award and maximum Excess Performance-Based Stock Award
for each Participant, establish the level of Intermediate Award Performance
Criteria and Restricted Stock Performance Criteria resulting in the payment of
Intermediate Incentive Awards and Excess Performance-Based Stock Awards, and in
the vesting of Performance-Based Restricted Stock Awards, certify each
Participant's level of attainment of such performance criteria, the amount of
Intermediate Incentive Awards, Excess Performance-Based Stock Awards and
Restricted Stock Vesting Percentage for each Participant based upon such level
of attainment, and determine the portion of any Excess Performance-Based Stock
Award which shall be payable in the form of cash or Common Stock.
Except as otherwise herein expressly provided, full power and authority
to construe, interpret, and administer the Plan shall be vested in the
Committee, including the power to amend or terminate the Plan as further
described in Article XIV. Moreover, the Committee shall have, in respect of
Performance-Based Restricted Stock Awards, all of the power and authority
granted to it under the LTIP. The Committee may at any time adopt such rules,
regulations, policies or practices as, in its sole discretion, it shall
determine to be necessary or appropriate for the administration or performance
of its responsibilities under the Plan. The Committee may at any time amend,
modify, suspend, or terminate such rules, regulations, policies, or practices.
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V. Intermediate Incentive Awards
For each Participant granted an Intermediate Incentive Award, the
Committee shall establish (i) the Performance Period, (ii) the ITI Target Payout
for the Performance Period, (iii) the maximum amount of the Intermediate
Incentive Award for the Performance Period, and (iv) the level of Intermediate
Award Performance Criteria used to determine such ITI Target Payout and maximum
amount. Each of those items, as well as any other terms and conditions of a
Participant's Intermediate Incentive Award, shall be described in detail in the
Participant's Award Agreement. Intermediate Incentive Awards will be earned by
each Participant based upon the level of attainment of the Intermediate Award
Performance Criteria during the Performance Period. As soon as practicable after
the end of each period during the Performance Period for which any payment in
respect of Intermediate Incentive Awards may be made (generally after the end of
a calendar year or Company fiscal year, if different), the Committee shall
determine the level of attainment of the Intermediate Award Performance Criteria
for each Participant and the amount, if any, of the Intermediate Incentive Award
to be paid to each Participant. Intermediate Incentive Award amounts earned but
not yet paid shall not accrue interest.
If a Change in Control occurs during a Performance Period, each
Participant shall be entitled to receive, immediately prior to, upon the
consummation of or immediately following the Change in Control (as determined by
the Committee), in respect of each Intermediate Incentive Award, a lump sum cash
payment equal to 100 percent of the ITI Target Payout for such award, minus the
lesser of (i) any amount previously paid in respect of such award and (ii) the
amount which would have been previously paid in respect of such award had such
previous payments been at 100% of the ITI Target Payout. For purposes of
clarification, the meaning of the prior sentence is that any payment made in
respect of an Intermediate Incentive Award prior to a Change in Control shall be
ignored in determining the payment in respect of such award in connection with
the Change in Control to the extent that such prior payment represented more
than 100% of the ITI Target Payment for the period for which the payment was
made.
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VI. Performance-Based Restricted Stock Awards and Excess
Performance-Based Stock Awards
Each Performance-Based Restricted Stock Award shall be comprised of
that number of actual shares of restricted Common Stock equal to the
Participant's Target Restricted Stock Award, and shall be awarded pursuant to
the LTIP and subject to the terms and conditions thereof, as well as of this
Plan. For each Participant granted a Performance-Based Restricted Stock Award,
the Committee shall establish (i) the Performance Period, (ii) the Target
Restricted Stock Award, (iii) the level of Restricted Stock Performance Criteria
used to determine the Restricted Stock Vesting Percentage and (iv) the level of
the Restricted Stock Vesting Percentage determined by the attainment of the
Restricted Stock Performance Criteria. Each of these items, as well as any other
terms and conditions of a Participant's Performance-Based Restricted Stock
Award, shall be described in detail in the Participant's Award Agreement.
Performance-Based Restricted Stock Awards shall vest based upon the level of
attainment of the Restricted Stock Performance Criteria during the Performance
Period, and the resulting Restricted Stock Vesting Percentage. As soon as
practicable after the end of each period during the Performance Period for which
any portion of a Performance-Based Restricted Stock Award may vest (generally
after the end of a calendar year or Company fiscal year, if different), the
Committee shall determine the level of attainment of the Restricted Stock
Performance Criteria for each Participant, the associated Restricted Stock
Vesting Percentage and the number of Restricted Shares, if any, as to which the
restrictions thereon shall lapse.
At the discretion of the Committee, each Participant who is granted a
Performance-Based Restricted Stock Award may also be granted an Excess
Performance-Based Stock Award in respect of such Performance-Based Restricted
Stock Award. An Excess Performance-Based Stock Award shall entitle the
Participant to receive a payment based on the attainment of Restricted Stock
Performance Criteria resulting in a Restricted Stock Vesting Percentage of
greater than 100%. For each Participant granted an Excess Performance-Based
Stock Award, the Committee shall determine the Excess Performance-Based Stock
Award earned upon the attainment of various levels of the Restricted Stock
Performance Criteria at various times during the Performance Period. Such
determination, as well as any other terms and conditions of a Participant's
Excess Performance-Based Stock Award, shall be described in detail in the
Participant's Award Agreement. Such award shall be expressed in terms of shares
of Common Stock, based on a percentage of the Participant's Target Restricted
Stock Award. Payment of an Excess Performance-Based Stock Award shall be made in
the form of Common Stock or cash having a value equal to the shares of Common
Stock otherwise payable, in the discretion of the Committee.
If a Change in Control occurs during a Performance Period, all
restrictions on any Restricted Shares awarded to a Participant (i.e., the shares
comprising the Target Restricted Stock Award in respect of any outstanding
Performance-Based Restricted Stock Award) shall lapse immediately prior to the
Change in Control.
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If determined by the Committee and set forth in an Award Agreement, a
Participant shall be entitled to payment of dividends on the Restricted Shares
comprising his Performance-Based Restricted Stock Award, whether or not such
Restricted Shares have vested.
VII. Reorganization or Discontinuance
The obligations of the Company under the Plan shall be binding upon any
successor corporation or organization resulting from a merger, consolidation or
other reorganization of the Company, or upon any successor corporation or
organization succeeding to substantially all of the assets and business of the
Company. The Company will make appropriate provision for the preservation of
Participants' rights under the Plan in any agreement or plan which it may enter
into or adopt to effect any such merger, consolidation, reorganization or
transfer of assets.
VIII. Non-Alienation of Benefits
A Participant may not assign, sell, encumber, transfer or otherwise
dispose of any rights or interests under the Plan except by will or the laws of
descent and distribution. Any attempted disposition in contravention of the
preceding sentence shall be null and void.
IX. No Claim or Right to Plan Participation
No employee or other person shall have any claim or right to be
selected as a Participant under the Plan. Neither the Plan nor any action taken
pursuant to the Plan shall be construed as giving any employee any right to be
retained in the employ of the Company.
X. Taxes
The Company shall deduct from all amounts paid under the Plan all
federal, state, local and other taxes required by law to be withheld with
respect to such payments.
Performance-Based Restricted Stock Awards granted under the Plan are
intended to constitute "performance-based compensation" for purposes of Section
162(m) of the Code, by virtue of being granted under the LTIP, specifically
including Section 8 thereof.
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XI. Designation and Change of Beneficiary
Upon notice to a Participant by the Committee of his or her right to
receive an Intermediate Incentive Award, a Performance-Based Restricted Stock
Award and/or an Excess Performance-Based Stock Award, he or she may indicate a
designation of one or more persons as the Designated Beneficiary who shall be
entitled to receive the amount, if any, payable under the Plan upon the death of
the Participant. Such designation shall be in writing to the Committee. A
Participant may, from time to time, revoke or change his or her Designated
Beneficiary without the consent of any prior Designated Beneficiary by filing a
written designation with the Committee. The last such designation received by
the Committee shall be controlling; provided, however, that no designation, or
change or revocation thereof, shall be effective unless received by the
Committee prior to the Participant's death, and in no event shall it be
effective as of a date prior to such receipt.
XII. Payments to Persons Other Than the Participant
If the Committee shall find that any person to whom any amount is
payable under the Plan is unable to care for his or her affairs because of
illness or accident, or is a minor, or has died, then any payment due to such
person or his or her estate (unless a prior claim therefor has been made by a
duly appointed legal representative) may, if the Committee so directs, be paid
to his or her spouse, a child, a relative, an institution maintaining or having
custody of such person, or any other person deemed by the Committee, in its sole
discretion, to be a proper recipient on behalf of such person otherwise entitled
to payment. Any such payment shall be a complete discharge of the liability of
the Company therefor.
XIII. No Liability of Committee Members
No member of the Committee shall be personally liable by reason of any
contract or other instrument related to the Plan executed by such member or on
his or her behalf in his or her capacity as a member of the Committee, nor for
any mistake of judgment made in good faith, and the Company shall indemnify and
hold harmless each employee, officer, or director of the Company to whom any
duty or power relating to the administration or interpretation of the Plan may
be allocated or delegated, against any cost or expense (including legal fees,
disbursements and other related charges) or liability (including any sum paid in
settlement of a claim with the approval of the Board of Directors) arising out
of any act or omission to act in connection with the Plan unless arising out of
such person's own fraud or bad faith.
XIV. Termination or Amendment of the Plan
The Committee may amend, suspend or terminate the Plan at any time;
provided, however, that no amendment or alteration shall be made that impairs
the rights of any Participant as to any outstanding Intermediate Incentive
Award, Performance-Based Restricted Stock Award or Excess Performance-Based
Stock Award without the Participant's consent.
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XV. Unfunded Plan
Participants shall have no right, title, or interest whatsoever in or
to any investments which the Company may make to aid it in meeting its
obligations under the Plan. Nothing contained in the Plan, and no action taken
pursuant to its provisions, shall create or be construed to create a trust of
any kind, or a fiduciary relationship between the Company and any Participant,
Beneficiary, legal representative or any other person. To the extent that any
person acquires a right to receive payments from the Company under the Plan,
such right shall be no greater than the right of an unsecured general creditor
of the Company. All payments to be made hereunder shall be paid from the general
funds of the Company and no special or separate fund shall be established and no
segregation of assets shall be made to assure payment of such amounts except as
expressly set forth in the Plan.
The Plan is not intended to be subject to the Employee Retirement
Income Security Act of 1974, as amended ("ERISA").
XVI. Governing Law
The terms of the Plan and all rights thereunder shall be governed by
and construed in accordance with the laws of the State of Delaware, without
reference to its principles of conflict of laws or such principles of any other
jurisdiction which could cause the application of the laws of any jurisdiction
other than the State of Delaware.
XVII. Severability
If any provision of the Plan or any award made hereunder is, becomes or
is deemed to be invalid, illegal or unenforceable in any jurisdiction or as to
any Person or award, or would disqualify the Plan or any award under any law
deemed applicable by the Committee, such provision shall be construed or deemed
amended to conform to the applicable laws, or if it cannot be construed or
deemed amended without, in the determination of the Committee, materially
altering the intent of the Plan or the award, such provision shall be stricken
as to such jurisdiction, Person or award and the remainder of the Plan and any
such award shall remain in full force and effect.
XVIII. Headings
Headings are used herein solely as a convenience to facilitate
reference and shall not be deemed in any way material or relevant to the
construction or interpretation of the Plan or any provision thereof.
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XIX. Effective Date
The Plan shall be effective as of January 1, 2000 (the "Effective
Date").
XX. Expiration Date
No award shall be made under the Plan after the tenth anniversary of
the Effective Date.
As adopted by the Company pursuant to action of the Compensation Committee of
its Board of Directors at a meeting held on November 30, 1999.
By:
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