1
Exhibit 10.3
AMENDMENT TO ULTRAMAR CORPORATION
SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN
Ultramar Diamond Shamrock Corporation, a Delaware corporation, pursuant
to authority granted by its Board of Directors, hereby adopts the following
amendments to the Ultramar Corporation Supplemental Executive Retirement Plan.
Such amendments shall be effective as of May 1, 2000, subject to such further
limitations and restrictions as are set forth below.
1. The first sentence of Section 4.1(c) (defining "Average Annual Compensation")
is amended and restated in its entirety, effective for any person who remains
employed by Ultramar Diamond Shamrock Corporation on the date set forth above,
as follows:
"AVERAGE ANNUAL COMPENSATION" shall be determined in the same manner as
under the Pension Plan except as otherwise set forth herein, and
provided that, Average Annual Compensation shall also include an
"average bonus" if (i) the Participant's employment with a
Participating Employer is terminated for any reason other than Cause on
or after the first day of the month in which he attains age fifty-five
(55) or (ii) the Participant remains employed with the Company (or any
subsidiary or affiliate of the Company) upon the occurrence of a Change
in Control.
2. Clause (i) of Section 4.1(m) (defining "SERP Interest Rate"), is amended and
restated, in its entirety, as follows:
(i) with respect to the computation of the amount of a lump sum benefit
upon a Change in Control under Section 4.2(e), the interest rate issued
by the Pension Benefit Guaranty Corporation for private sector lump sum
payments, as such rate is in effect on the first day of the calendar
year that contains the date of the distribution.
3. Section 4.1(q)(defining "Trust") is amended and restated in its entirety, as
follows:
(q) "TRUST" shall mean the Ultramar Diamond Shamrock
Corporation Benefits Trust between the Company and Sterling National
Bank and Trust Company of New York, as it may be amended from time to
time.
4. The first sentence of Section 4.2(b) is amended and restated, in its
entirety, as follows:
A Participant who retires from employment with a Participating Employer
(other than on account of a termination for Cause) on or after the
first day of the month following his attainment of age sixty-two (62)
(with the determination of such Participant's then age calculated by
taking into account any additional years considered added to such
Participant's actual age pursuant to the terms of any separate
agreement between the Participant and the Company pertaining to such
person's participation in the SERP) and who is entitled to a benefit
under the Pension Plan shall be entitled to receive the greater of the
Supplemental Pension determined under Section 4.2(a) or this Section
4.2(b).
2
2
5. The first sentence of clause (ii) of Section 4.2(e) is amended and restated,
in its entirety, effective for any person who remains employed by Ultramar
Diamond Shamrock Corporation on the date set forth above, as follows:
If there is a Change in Control, each Participant who remains employed
by the Company (or any subsidiary or affiliate) on the Change in
Control Date shall be (i) one hundred percent (100%) vested in his
Supplemental Pension and (ii) paid a single lump sum payment in cash
equal to the Actuarial Equivalent lump sum value of his Supplemental
Pension, determined as of the date of the Change in Control using the
SERP Interest Rate and SERP Mortality Table, in lieu of all other
benefits under the SERP; provided that any amendment of the SERP made
within the six-month period ending on the effective date of the Change
in Control shall be ignored for purposes of computing the amount of the
lump sum payment under this clause (ii) to the extent that the
application of such amendment would cause the amount of the lump sum to
be less than that computed without application of such amendment.
6. Section 4.4(a) is amended and restated, in its entirety, as follows:
(a) Any benefit payable to a Participant or Spouse hereunder
shall be paid by the Company. Notwithstanding the foregoing, such
benefits shall instead be paid from the Trust, under such circumstances
(including a Change in Control) as are specified under the terms of the
Trust. To the extent that the Trust does not pay the benefits under the
SERP to which any Participant (or Spouse) is entitled, the Company
remains responsible to do so. Moreover, all assets of the Trust remain,
at all times, subject to the claims of the Company's creditors in the
event of the Company's insolvency, and no Participant (or any Spouse
thereof) shall, at any time, have a prior claim to any Trust assets.
7. Section 4.5 is amended and restated, in its entirety, effective for any
person who remains employed by Ultramar Diamond Shamrock Corporation on the date
set forth above, as follows:
4.5 ADDITIONAL TERMS. A Participant shall, subject only to the
provisions of Section 15, which shall govern in the event of any
conflict, receive such additional terms (including, but not limited to,
years of age and/or service for vesting and/or benefit accrual purposes
under the SERP) as determined by the Committee, in its sole discretion.
8. A new Section 15 is added, effective for any person who remains employed by
Ultramar Diamond Shamrock Corporation on the date set forth above, as follows:
15. Special Change in Control Provisions.
(a) The provisions of this Section 15 shall apply
with respect to each Participant in the group listed in
subsection (b) hereof (each, hereafter, a "Covered
Participant") who, except as otherwise provided in this
Section 15, remains employed by the Company (or any subsidiary
or affiliate of the Corporation) (collectively, "UDS") upon
the occurrence of a Change in Control. The provisions of this
Section 15 shall apply, notwithstanding any other provision of
the SERP to the contrary.
3
3
(b)The Covered Participants, identified by social security number, are as
follows:
[Jean Gaulin]
[Christopher Havens]
[H. Pete Smith]
(c) For purposes of this Section 15, the term "SERP Side Letter" means,
with respect to any Covered Participant, that separate agreement between such
person and the Company pertaining to such person's participation in the SERP, as
such agreement may be amended from time to time.
(d) Notwithstanding any provisions of the SERP (or of any particular
Covered Participant's SERP Side Letter) to the contrary, the amount of any lump
sum otherwise payable to such person under the SERP on account of being employed
by UDS upon the occurrence of a Change in Control shall be determined in the
following steps, with the lump sum being the amount determined under the
following clause (ii):
(ii) Determine the amount of the annual SERP benefit which would
otherwise be immediately payable to such person, starting on the
Change in Control Date, and determined as if such person
terminated employment on the Change in Control Date, and after
taking into account the foregoing provisions of the SERP, as well
as such person's SERP Side Letter (other than any provision
thereof relating to the conversion of such annual SERP benefit
into a lump sum amount); provided, however, that in making such
determination, in the event that such person is under age
sixty-two (62) on the Change in Control Date, (A) the Pension
Plan benefit and the Other Pension Benefits otherwise taken into
account in such determination shall be the amount of such
respective benefits otherwise payable to such person at age
sixty-two (62) , but with such benefit amounts determined as if
such person terminated employment on the Change in Control Date,
and (B) there shall be no reduction on account of early payment
of the SERP benefit pursuant to the provisions of Section 4.2(c)
(or otherwise).
(ii) Determine the immediate present value, based upon such Covered
Participant's actual age on the Change in Control Date, of the
annual benefit amount, calculated under the foregoing clause (i),
which would otherwise be paid to such person, starting on the
Change in Control Date, with such present value being determined
using the interest rate and mortality table set forth in Section
4.1(m)(i) and Section 4.1(n)(i), respectively (except to the
extent that a larger lump sum would result from using the
interest rate and mortality table set forth in Section 4.1(m)(ii)
and Section 4.1(n)(ii), respectively, in which event the interest
rate and mortality table set forth in Section 4.1(m)(ii) and
Section 4.1(n)(ii), respectively, shall instead apply).)
4
4
(e) Attached to the SERP, as Exhibit A, is a separate schedule for each
Covered Participant illustrating the manner, in accordance with the forgoing
provisions of this Section 15 and the other provisions of the SERP (and the
terms of such person's SERP Side Letter, as such agreement may be modified
pursuant to the foregoing provisions of this Section 15), in which the lump sum
payment to such person with respect to the SERP would, in the event that such
person remains employed by UDS upon the occurrence of a Change in Control, be
calculated for such person, assuming that (I) the Change in Control Date occurs
on December 31, 2000, (II) such lump sum distribution also occurs on that date
and (III) such person remains employed by UDS on that date. In the event of a
Change in Control occurring on December 31, 2000, the amount of the lump sum
payable to any Covered Participant who remains employed by UDS on such date
shall (assuming such lump sum is also paid on that same date) be the amount set
forth with respect to such person in the relevant attached schedule. In the
event that a Change in Control Date occurs on some other date, the methodology
set out in such schedules shall be dispositive in resolving any issues which may
arise in connection with determining the amount of the lump sum otherwise
payable to any such Covered Participant who so remains employed by UDS upon the
occurrence of such other Change in Control Date.
(f) If a Covered Participant who receives a lump sum distribution on
account of being employed by UDS on a Change in Control Date continues to be
employed by UDS and thereafter becomes entitled to a subsequent distribution
with respect to the SERP, the amount of such subsequent SERP benefit, expressed
as an annual benefit, which annual benefit is the starting point in determining
the amount of such subsequent distribution, shall be equal to the excess of:
(i) the amount of the annual SERP benefit, otherwise payable at that
time (or, at age sixty-two (62), in the event that such person is
then under age sixty-two (62), determined under the SERP and after
taking into account the provisions of such person's SERP Side
Letter, over
(ii) the amount of the annual SERP benefit which was taken into account
under clause (i) of the subsection (d) of this Section 15 as the
starting point in determining the amount of such prior lump sum
distribution.
In all other respects, the amount of any subsequent distribution shall
be determined in accordance with such rules of uniform application as may be
established by the Compensation Committee.
(g) Notwithstanding any other provision of the SERP (or of the Covered
Participant's SERP Side Letter) to the contrary, in the event of such person's
"involuntary termination, other than for Cause" (as those terms are defined
under such person's employment agreement with the Company), in anticipation of a
Change in Control:
5
5
(i) the foregoing provisions of this Section 15, and all other
provisions of the SERP (and of such person's SERP Side Letter)
shall apply to such person to the same extent as if a Change in
Control had, solely with respect to such person, occurred on the
date immediately preceding the date on which such person is so
terminated from employment, and
(ii) such Participant's benefit under the Pension Plan, for purposes of
determining the offset under Section 4.2(a), Section 4.2(b) and
such person's SERP Side Letter for such person's Pension Plan
benefit, to the extent otherwise applicable, shall be computed by
including the additional years of age and service credit which
were (or will be) taken into account, pursuant to the provisions
of Section 5.5(i)(a)(3) of such Participant's employment agreement
with the Company, in computing the amount of the lump sum payment
made (or to be made) to such Participant in lieu of an actual
increase in such Participant's benefit under the Pension Plan.
(h) If that Covered Participant whose social security number is
[Christopher Havens] remains employed with UDS on the Change in Control Date,
determined without regard to the foregoing subsection (e), such person shall
receive a lump sum payment of $500,000 upon the earlier of:
(i) such person's "involuntary termination, other than for Cause," as
those terms are defined under the employment agreement between
such person and the Company; provided, however, that an
"involuntary termination" shall not be deemed to have occurred for
purposes of this clause (i) in the event that such person
voluntarily terminates employment on account of a significant
reduction, occurring not later than the Change in Control Date, in
such person's duties or the addition, occurring not later than the
Change in Control Date, of duties which, in either case, are
materially inconsistent with such person's then title or position,
such that no amount shall be paid pursuant to this subsection (h)
to such person; and further, provided, however, that an
"involuntary termination" shall be deemed to have occurred for
purposes of this clause (i) in the event that such person
voluntarily terminates employment on account of a significant
reduction, occurring subsequent to the Change in Control Date, in
such person's duties or the addition, occurring subsequent to the
Change in Control Date, of duties which, in either case, are
materially inconsistent with such person's title or position as in
effect on the Change in Control Date, such that an amount shall be
paid pursuant to this subsection (h) to such person, or
(ii) twelve months following the Change in Control Date, provided such
person is still employed by UDS on such date.
No amount shall be payable pursuant to this subsection (h) in the event that
such Covered Participant terminates employment prior to the date set forth in
the foregoing clause (ii) for any reason not described in the foregoing clause
(i).
6
6
Any amount otherwise payable pursuant to this subsection (h) to such
Covered Participant (i) shall not be reduced by any amounts previously paid to
such person pursuant to any other provision of the SERP and (ii) shall be
disregarded in determining the amount of any future benefits otherwise payable
to such person pursuant to any other provision of the SERP.
(i) Notwithstanding any other provision of the SERP to the contrary, to
the extent that any subsequent amendment to this Section 15 would adversely
affect the determination of any particular Covered Participant's SERP benefit,
such amendment shall be effective with respect to such person only if such
person consents, in writing, to the application of such amendment, other than an
amendment to subsection (f) of this Section 15, as to which the consent of
Covered Participants shall not be required.
Ultramar Diamond Shamrock Corporation
By:
Accepted and agreed to with respect to the
calculation of their benefits under the
Ultramar Corporation Supplemental Retirement
Plan
By:
---------------------------------
Jean Gaulin
By:
---------------------------------
Christopher Havens
By:
---------------------------------
H. Pete Smith