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Exhibit 10.4
AMENDMENT TO DIAMOND SHAMROCK, INC.
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 Diamond Shamrock, Inc. Supplemental Executive Retirement Plan
(the "DS SERP"). Such amendments shall be effective as of May 1, 2000, subject
to such further limitations and restrictions as are set forth below.
1. The version of Section 2(a) (defining "Average Monthly Compensation") which
applies to any employee who was designed a Participant in the Plan on or after
December 5, 1995 shall similarly apply to each employee who (i) was designed a
Participant in the Plan prior to December 5, 1995 and (ii) remains employed by
Ultramar Diamond Shamrock Corporation on the date set forth above.
2. The version of Section 2(b) (defining "Basic Compensation") which applies to
any employee who was designed a Participant in the Plan on or after December 5,
1995 still similarly apply to each employee who (i) was designed a Participant
in the Plan prior to December 5, 1995 and (ii) remains employed by Ultramar
Diamond Shamrock Corporation on the date set forth above.
3. Section 2(f) 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:
(f) "Change in Control" shall mean the occurrence of any event which
constitutes a "Change in Control" under the Ultramar Corporation
Supplemental Executive Retirement Plan.
4. Section 2(g) is amended and restated, in its entirety, as follows:
(g) "Corporation" means Ultramar Diamond Shamrock Corporation, a
Delaware corporation.
5. Section 4(b) is amended and restated, in its entirety, as follows:
Notwithstanding the provisions of Section 4(a) hereof, the Corporation
has established a trust to provide for the payment of benefits due
under the Plan (hereafter, the "Trust"), under such circumstances
(including a Change in Control) as are specified under the terms of the
Trust. The trustee of the Trust is Sterling National Bank and Trust
Company of New York. To the extent that the Trust does not pay the
benefits under the Plan to which any Participant (or beneficiary
thereof) is entitled, the Corporation remains responsible to do so.
Moreover, all
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assets of the Trust remain, at all times, subject to the claims of the
Corporation's creditors in the event of the Corporation's insolvency,
and no Participant (or any beneficiary thereof) shall, at any time,
have a prior claim to any Trust assets.
6. A new final sentence is added to Section 9(d), as follows:
Notwithstanding any other provision of the Plan to the contrary, the
foregoing provisions of this subsection (d) shall so apply with respect
to any Participant (or any beneficiary thereof) only if such
Participant otherwise consents, in a writing in accordance with the
requirements of Section 12.11 of such Participant's employment
agreement with the Corporation, to such application of Dialogue.
7. A new Section 14 is added, effective for any person who remains employed by
Ultramar Diamond Shamrock Corporation on the date set forth above, as follows:
14. Special Change in Control Provisions.
(a) The provisions of this Section 14 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 14, remains employed by the Corporation (or any
subsidiary or affiliate of the Corporation) (collectively, "UDS") upon
the occurrence of a Change in Control (with the date on which such
Change of Control occurs being hereafter referred to as the "Change in
Control Date"). The provisions of this Section 14 shall apply,
notwithstanding any other provision of the Plan to the contrary.
(b) The Covered Participants, identified by social security
number, are as follows:
[William R. Klesse]
[R. S. Beadle]
[Timothy J. Fretthold]
[W. Paul Eisman]
[H. Pete Smith]
(c) Each Covered Participant who remains employed with UDS on
the Change in Control Date shall, within thirty (30) days following
such date, receive a lump sum distribution on account of such person's
participation in the Plan, in an amount determined under whichever of
the following subsections (f), (g) or (h) shall apply with respect to
such person.
(d) The Average Monthly Compensation of each Covered
Participant who remains employed with UDS on the Change in Control Date
shall, for all purposes of the Plan, be determined with the following
modifications:
(i) the "considered period" (as that phrase is otherwise used in
the definition of Average Monthly Compensation) shall
include the calendar year in which the Change in Control
Date occurs, as well as each of the two immediately
succeeding years,
(ii) such Covered Participant's Basic Compensation for each of
these three calendar years shall be deemed equal to the
Basic Compensation paid to such Participant during the
calendar year
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immediately preceding the calendar year in which the
Change in Control Date occurs, and
(iii) such Covered Participant's Incentive Compensation earned
with respect to each of these three calendar years shall
be deemed equal to such Participant's Incentive
Compensation earned with respect to the calendar year
immediately preceding the calendar year in which the
Change in Control Date occurs.
The aforementioned provisions of this subsection (d) shall also apply
in determining the amount of any subsequent distribution to which such
person may otherwise be entitled, except to the extent that such person
would receive a larger such distribution in the absence of the
application of this subsection (d) to such subsequent distribution.
(e) The following definitions shall apply for purposes of this
Section 14:
(i) "PBGC Factors" shall, with respect to any Covered
Participant, mean (I) 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 in which the Change in Control
Date occurs and (II) the Unisex Pension 1984 (1, -3)
mortality table.
(ii) "GATT Factors" shall, with respect to any Covered
Participant, mean the annual interest rate on 30-year
United States Treasury securities, as specified by the
Commissioner of Internal Revenue, for the month of
December in the calendar year preceding the calendar year
in which the Change in Control Date occurs and (II) the
prevailing commissioners' standard table (described in
Section 807(d)(5)(A) of the Code) used to determine
reserves for group annuity contracts issued on the Change
in Control Date, as set forth in Revenue Ruling 95-6, or
any subsequent guidance thereto.
(f) For a Covered Participant described in the foregoing
subsection (c) who, on the Change in Control Date, is at least age 59,
the lump sum payable to such person under the foregoing subsection (c)
shall be determined in the following steps, with the lump sum being the
amount determined under the following clause (ii):
(i) Determine the amount of the monthly Normal Retirement
Benefit which would otherwise be immediately payable to
such person under Section 6(a), after taking into account
the provisions of the foregoing subsection (d), with such
benefit calculated as if (A) such person was three years
older than such person's then actual age, (B) such person
terminated employment on the Change in Control Date and
(C) such person's Normal Retirement Date was
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also the Change in Control Date; provided, however, that
in making such determination, in calculating such Covered
Participant's Section 6(a) monthly Normal Retirement
Benefit (which is the starting point in calculating such
Covered Participant's Early Retirement Benefit), the
amount of any particular Other Retirement Benefit taken
into account in determining "the sum of his Other
Retirement Benefits" (as that phrase is used in Section
6(a)) shall be determined with reference to the amount of
such particular Other Retirement Benefit which would
otherwise be payable to such Covered Participant,
starting on the Change in Control Date, had such person
both terminated employment and commenced to receive such
benefit, as of such date.
(ii) Determine the immediate present value, based upon such
Covered Participant's then actual age, of the monthly
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 determined using the PBGC Factors; provided,
however, that such present value shall instead be
determined using the GATT Factors, to the extent that
doing so would result in a larger such immediate present
value.
(g) For a Covered Participant described in the forgoing
subsection (c) who, on the Change in Control Date, is less than age 59,
but no less than three years younger than the age corresponding to such
person's Early Retirement Date, the lump sum payable to such person
under the foregoing subsection (c) shall be determined in the following
steps, with the lump sum being the amount determined under the
following clause (ii):
(i) Determine the amount of the monthly Early Retirement
Benefit which would otherwise be immediately payable to
such person under Section 6(b), after taking into account
the provisions of the foregoing subsection (d), with such
benefit calculated as if (A) such person was three years
older than such person's then actual age, (B) such person
terminated employment on the Change in Control Date and
(C) such person's Early Retirement Date was also the
Change in Control Date; provided, however, that in making
such determination, in calculating such Covered
Participant's Section 6(a) monthly Normal Retirement
Benefit:
(I) to the extent such Covered Participant is at
least age 55 on the Change in Control Date, the
amount of such particular Other Retirement
Benefit taken into account in determining "the
sum of his Other Retirement Benefits" shall be
determined with reference to the amount of such
particular Other Retirement Benefit which would
otherwise be payable to such Covered Participant,
starting on the Change in Control Date, had such
person both terminated
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employment and commenced to receive such
benefit, as of such date, and
(II) to the extent such Covered Participant is less
than age 55 on the Change in Control Date, the
amount of such particular Other Retirement
Benefit taken into account in determining "the
sum of his Other Retirement Benefits" shall be
determined with reference to the amount of such
particular Other Retirement Benefit which would
otherwise be payable to such Covered
Participant, starting at age 55, but with the
amount otherwise payable at age 55 determined,
to the extent otherwise relevant under the plan
or program under, or with respect to, which such
particular Other Retirement Benefit is otherwise
paid, based upon such person's actual age on the
Change in Control Date.
(ii) Determine the immediate present value, based upon such
Covered Participant's then actual age, of the monthly
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 determined using the PBGC Factors; provided,
however, that such present value shall instead be
determined using the GATT Factors, to the extent that
doing so would result in a larger such immediate present
value.
(h) For a Covered Participant described in the foregoing
subsection (c) who, on the Change in Control Date, is more than three
years younger than the age corresponding to such person's Early
Retirement Date, the lump sum payable to such person under the
foregoing subsection (c) shall be determined in the following steps,
with the lump sum being the amount determined under the following
clause (iii):
(i) Determine the amount of the monthly Early Retirement
Benefit which would otherwise be payable to such person
under Section 6(b), after taking into account the
provisions of the foregoing subsection (d), commencing
with such person's attainment of the age corresponding to
such person's Early Retirement Date, calculated as if
such person had terminated employment on the Change in
Control Date and with the amount of the reduction for
early benefit payment under Section 6(b) being determined
as of such person were, on the Change in Control Date,
exactly the age corresponding to such person's Early
Retirement Date; provided, however, that in making such
determination, in calculating such Covered Participant's
Section 6(a) monthly Normal Retirement Benefit, the
amount of any particular Other Retirement Benefit taken
into account in determining "the sum of his Other
Retirement Benefits" shall be determined with reference
to the amount of such particular Other Retirement Benefit
which would otherwise be payable to such Covered
Participant, starting at age 55, but with the amount
otherwise payable at age 55 determined, to the extent
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otherwise relevant under the plan or program under, or
with respect to, which such particular Other Retirement
Benefit is otherwise paid, based upon such person's
actual age on the Change in Control Date.
(ii) Determine the actuarial equivalent monthly benefit
commencing on the Change in Control Date, and treating
such Covered Participant, for this purpose, as if such
person was three years older than such person's then
actual age, of the monthly benefit amount, calculated
under the foregoing clause (i), which would otherwise
commence to be paid to such person when such person
attains the age corresponding to such person's Early
Retirement Date, with such actuarial equivalence
determined using the PBGC Factors.
(iii) Determine the immediate present value, based upon such
Covered Participant's then actual age, of the monthly
benefit amount calculated under the foregoing clause
(ii), with such present value determined using the PBGC
Factors.
Notwithstanding the foregoing clauses (ii) and (iii), actuarial
equivalence, for purposes of such clause (ii), and present value, for
purposes of such clause (iii), shall instead be determined using the
GATT Factors, but only to the extent that using the GATT Factors under
both such clauses (ii) and (iii) would result in a larger lump sum
amount being determined under such clause (iii).
(i) Attached to the Plan, as Exhibit A, is a separate schedule
for each Covered Participant (together with certain supporting
schedules) illustrating the manner, in accordance with the methodology
set out in the foregoing provisions of this Section 14, in which the
lump sum payment described in the foregoing subsection (c) would be
calculated for such person, assuming that (I) the Change in Control
Date occurs on December 31, 2000 and (II) 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 under such
subsection (c) to any Covered Participant who remains employed by UDS
on such date shall 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 (including such supporting schedules) shall be dispositive in
resolving any issues which may arise in connection with determining the
amount of the lump sum provided under the foregoing subsection (c) and
otherwise payable to any such Covered Participant with respect to such
other Change in Control Date. Notwithstanding the foregoing, in the
case of that Covered Participant identified under subsection (l) of
this Section 14, the amount set forth in such person's schedule shall
be reduced in accordance with the provisions of such subsection (l).
(j) If a Covered Participant who receives a lump sum
distribution pursuant to the provisions of the foregoing subsection
(f), (g) or (h), as the case may be, continues to be employed by UDS
and thereafter becomes entitled to a subsequent distribution with
respect to the Plan, such person's
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monthly Normal Retirement Benefit, for purposes of determining the
amount, if any, of such subsequent distribution, shall be equal to the
excess of:
(i) the amount of such monthly Normal Retirement Benefit,
determined by disregarding the prior lump sum
distribution pursuant to the foregoing subsections (f),
(g) or (h), as the case may be, over,
(ii) the amount of the monthly Normal Retirement Benefit
which was taken into account under the foregoing
subsection (f), (g) or (h), as the starting point in
determining the amount of such prior lump sum determined
under such respective subsection.
Additionally, for purposes of applying the provisions of Section 6(b)
with respect to such subsequent distribution, such person shall be
treated as being three years older than such person's actual age. 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 Employee Benefits Committee.
(k) Notwithstanding any of the foregoing provisions of this
Section 14 to the contrary, in the event of a Covered Participant's
"involuntary termination, other than for Cause" (as those terms are
defined under such person's employment agreement with the Corporation),
in anticipation of a Change in Control:
(i) the foregoing provisions of this Section 14 shall apply
to such person,
(ii) pursuant thereto, a Change in Control so triggering the
application of the foregoing provisions of this Section
14 with respect to such person shall, solely with
respect to such person, be considered to have occurred
on the date immediately preceding the date on which such
person is so terminated from employment, and
(iii) such person's benefit under the UDS Pension Plan, for
purposes of determining "the sum of his Other Retirement
Benefits", 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 person's employment
agreement with the Corporation, in computing the amount
of the lump sum payment made (or to be made) to such
person in lieu of an actual increase in such person's
benefit under the UDS Pension Plan.
(l) Notwithstanding the foregoing provisions of this Section
14, any lump sum distribution otherwise payable to that Covered
Participant whose social security number is [H. Pete Smith], as
otherwise determined under the foregoing provisions of this Section 14,
shall be reduced by the amount of any lump sum distribution otherwise
paid (or payable) to such person under the Ultramar Corporation
Supplemental Executive Retirement Plan.
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(m) Each Covered Participant who remains employed with UDS on
the Change in Control Date, determined without regard to the foregoing
subsection (k), shall receive a lump sum payment in the amount
specified below, 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 Corporation;
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 (m) 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
(m) 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 (m) in the case
of any Covered Participant who terminates employment prior to the date
set forth in the foregoing clause (ii) for any reason not described in
the foregoing clause (i).
Any amount otherwise payable pursuant to this subsection (m)
to any Covered Participant (i) shall not be reduced by any amounts
previously paid to such person pursuant to any other provision of the
Plan 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 Plan.
The amount payable to each such Covered Participant, assuming
such person otherwise meets the requirements of the foregoing
provisions of this subsection (m) is the amount set forth opposite such
person's social security number, as follows:
[William R. Klesse $500,000]
[R. S. Beadle $250,000]
[Timothy J. Fretthold $500,000]
[W. Paul Eisman $250,000]
Ultramar Diamond Shamrock Corporation
By: _______________________________