ULTRAMAR DIAMOND SHAMROCK CORP
EXHIBIT 10.20
<DOCUMENT>
<TYPE>EX-10.20
<SEQUENCE>5
<FILENAME>d70401_ex10-20.htm
<DESCRIPTION>EXHIBIT 10.20
<TEXT>

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     <!-- Control Number: 70401                                                            -->
     <!-- Rev Number:     1.0                                                              -->
     <!-- Client Name:    Ultramar Diamons Shamroch Corp.                                  -->
     <!-- Project Name:   10-K                                                             -->
     <!-- Firm Name:      ADP                                                              -->
     <TITLE>Exhibit 10.20</TITLE>
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<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>FIRST
AMENDMENT TO EMPLOYMENT AGREEMENT</FONT></H1>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Christopher Havens
(&#147;Executive&#148;) and Ultramar Diamond Shamrock Corporation, a Delaware
corporation (the &#147;Company&#148;), hereby enter into this First Amendment to
the Employment Agreement between Executive and the Company, dated as of November
27, 1996, and effective as of December 3, 1996 (the &#147;Agreement&#148;). </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>WHEREAS, the Executive serves as
Executive Vice President, Marketing and Retail Operations, of the Company; and </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>WHEREAS, the Executive and the
Company entered into the Agreement as of the date stated above; and </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>WHEREAS, Section 12.8 of
the Agreement provides that it may be amended only by an instrument in writing
approved by the Company and signed by the Executive and the Company; and </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>WHEREAS, the Company
considers it in the best interests of its stockholders to foster the continuous
employment of certain key management personnel; and </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>WHEREAS, the Company wishes
to amend the Agreement to add certain provisions approved by the Compensation
Committee of the Board of Directors of the Company at a meeting held on May 1,
2000. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>NOW, THEREFORE, in
consideration of the promises and mutual covenants contained herein and in the
Agreement, it is agreed that, effective as of May 1, 2000, the Agreement shall
be amended as follows: </FONT></P>

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<P ALIGN=CENTER><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>I. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>A new final sentence is
added to Section 4.2 of the Agreement as follows: </FONT></P>

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Notwithstanding
any other provision of the Agreement, or the terms of the Ultramar Diamond Shamrock
Corporation Retirement Restoration Plan (the &#147;RRP&#148;), to the contrary, Executive (and
Executive&#146;s beneficiaries) shall be entitled to no benefits under, or with respect to,
the RRP, in acknowledgment of the fact that such benefits will be provided under the
supplemental executive retirement plan of the Company in which Executive participates.</FONT></TD>
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<P ALIGN=CENTER><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>II. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Section 5.2(i) of the
Agreement is hereby deleted and substituted with the following: </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Havens First Amendment to Employment Agreement
<BR>Page 2 of 7</FONT></P>

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
If the Company determines in good faith that the Executive has incurred a
Disability (as defined below) during the Term, the Company may give the
Executive written notice of its intention to terminate its obligations under
this Agreement, which notice may, but need not, include a statement of the
Company&#146;s intent to terminate the Executive&#146;s employment. In such
event, the Company&#146;s obligations under this Agreement, and the
Executive&#146;s employment (if applicable), will terminate effective on the
30th day after receipt of such notice by the Executive (the &#147;Disability
Termination Date&#148;), provided that within the 30 days after such receipt,
the Executive will not have returned to full-time performance of his duties. The
Executive will continue to receive his annual base salary until the Disability
Termination Date. The Executive will continue to receive benefits until the
Disability Termination Date, provided that if the Company has not elected to
terminate the Executive&#146;s employment under this provision (but rather to
terminate only its obligations under this Agreement), the Executive&#146;s right
to continue to receive benefits following the Disability Termination Date will
be governed by the policies and procedures of the Company generally applicable
to disabled employees. In that event, the Executive will be considered an
&#147;employee at will&#148; following the Disability Termination Date, and
either the Executive or the Company may thereafter terminate the
Executive&#146;s employment for any reason or for no reason, and the rights and
obligations of the Executive and the Company upon such termination will be
governed by the policies and procedures of the Company applicable to employees
at will, and by applicable law.</FONT></TD>
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In
the event of the Executive&#146;s disability, the Company will pay the Executive, promptly
after the Disability Termination Date, (a) the unpaid annual base salary to which he is
entitled, pursuant to Section 4.1, through the Disability Termination Date, (b) for any
accrued but unused vacation days, to the extent and in the amounts, if any, provided
under the Company&#146;s usual policies and arrangements, and (c) a lump sum in cash in an
amount equal to 50% of his annual base salary at the Disability Termination Date. This
Section 5.2 will not limit the entitlement of the Executive, the Executive&#146;s estate or
beneficiaries to any disability or other benefits then available to the Executive under
any disability insurance or other benefit plan or policy that is maintained by the
Company for the Executive&#146;s benefit; provided that (i) any amounts paid as base salary
shall offset, on a dollar-for-dollar basis (but not below zero), the Company&#146;s obligation
to pay the Executive short-term disability benefits under any short-term disability plan,
program or arrangement of the Company, in respect of the same period for which such base
salary is paid, and (ii) any benefits paid pursuant to the Company&#146;s long-term disability
plan shall reduce, on a dollar-for-dollar basis (but not below zero), the Company&#146;s
obligation to pay the Executive base salary in respect of the same period for which such
benefits are paid; provided, however, that any such offset or reduction shall not affect,
or be affected by, the payments provided to be made in accordance with clauses (a), (b),
or (c) of this Section 5.2(i).</FONT></TD>
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<P ALIGN=CENTER><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>III. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Section 5.5(i)(a) of the
Agreement shall be revised to read as follows: </FONT></P>
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<FONT FACE="Times New Roman, Times, Serif"><FONT SIZE="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)
<I>Form and Amount</I>. Upon Executive&#146;s involuntary termination, other than for Cause, the
Company shall:</FONT></FONT></TD>
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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)
subject to Section 5.5(iii), pay or provide Executive</FONT></TD>
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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1)
his annual salary and benefits until the date of termination,</FONT></TD>
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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2)
within five business days after any revocation period in the release described in Section
5.5(iii) has expired, a lump sum cash payment equal to three multiplied by the sum of (x)
and (y), where (x) is Executive&#146;s highest annual base salary in effect during the three
years prior to his date of termination, and (y) is the highest annual incentive
compensation earned by Executive during the three years prior to his termination;
provided, however, that all amounts received by Executive pursuant to the
Ultramar Diamond Shamrock Corporation Intermediate Incentive and
Performance-Based Restricted Stock Plan shall not be considered &#147;annual incentive
compensation&#148; for purposes of this Section 5.5(i)(a)(2),</FONT></FONT></TD>
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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Havens First Amendment to Employment Agreement
<BR>Page 3 of 7</FONT></P>

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3)
three additional years of age and service credit under all Company-sponsored employee
benefit plans, including all retirement income plans and welfare benefit plans, policies
or programs or arrangements in which Executive participates, including any savings,
pension, supplemental executive retirement or other retirement income or welfare benefit,
short or long-term disability, and any other deferred compensation, group and/or
executive life, health, retiree health, medical/hospital, or other insurance (whether
funded by actual insurance or self-insured by the Company), expense reimbursement or
other employee benefit plans, policies, programs or arrangements or any equivalent
successor plans, policies, programs or arrangements that may not now exist or may be
adopted hereafter by the Company (but only to the extent that eligibility, vesting, or
the timing or amount of the benefit are dependent upon age and service); provided,
however, that in the case of a qualified defined benefit pension plan
(hereafter, the &#147;Qualified Plan&#148;), (i) if such aforementioned involuntary termination
occurs prior to, or contemporaneous with, the occurrence of an event entitling Executive
to a lump sum payment under the provisions of either the Ultramar Corporation
Supplemental Executive Retirement Plan (or any equivalent successor plan, policy, program
or arrangement) (collectively, the &#147;Ultramar SERP&#148;) or the Diamond Shamrock, Inc.
Supplemental Executive Retirement Plan (or any equivalent successor plan, policy, program
or arrangement) (collectively, the &#147;DS SERP&#148;) pertaining to &#147;Change in Control&#148; (as
defined in either the Ultramar SERP or the DS SERP, as the case may be), disregarding for
this purpose, any &#147;Change in Control&#148; occurring prior to December 4, 1996 (collectively,
a &#147;SERP Lump Sum Payment&#148;), in lieu of granting any such actual additional years of age
and service credit under the Qualified Plan, an amount equal to the present value of the
additional benefit Executive would have accrued if he had been credited for all purposes
with the three additional years of age and service under the Qualified Plan as of his
date of termination with the Company will be paid in a lump sum in cash within five
business days after any revocation period in the release described in Section 5.5(iii)
has expired and (ii) if such aforementioned involuntary termination occurs following the
occurrence of an event entitling Executive to a SERP Lump Sum Payment, in lieu of
granting any such additional years of age and service credit under the Qualified Plan, an
amount equal to the excess of (A) the present value of the additional benefit Executive
would have accrued if he had been credited for all purposes with the three additional
years of age and service under the Qualified Plan as of his date of termination with the
Company over (B) the amount by which the SERP Lump Sum Payment would, under the terms of
the Ultramar SERP or DS SERP (as the case may be), have been reduced had the
aforementioned involuntary termination instead occurred contemporaneous with the
occurrence of the event entitling Executive to the SERP Lump Sum Payment, will be paid in
a lump sum in cash within five business days after any revocation period in the release
described in Section 5.5(iii) has expired, with (i) in the event that Executive&#146;s
aforementioned involuntary termination occurs on or after a &#147;Change in Control&#148; of the
Company, as defined in Section 6.2 (or prior to, but in anticipation of, such a &#147;Change
in Control&#148;), such present value being determined, in each such case, using the interest
rate and mortality table set forth in Section 4.1(m)(i) and 4.1(n)(i), respectively, of
the Ultramar SERP and (ii) in the event that Executive&#146;s aforementioned involuntary
termination occurs prior to such a &#147;Change in Control&#148; of the Company (other than such a
termination in anticipation of such a &#147;Change in Control&#148;), such present value being
determined, in each such case, using the interest rate and mortality table set forth in
Section 4.1(m)(ii) and 4.1(n)(ii), respectively, of the Ultramar SERP, and further,
provided, in crediting the three additional years of age and service for purposes of
calculating current and unused vacation such additional years shall be applied
in determining the amount of annual vacation to which Executive is entitled, but shall
not be deemed to cause Executive to have earned three additional years worth of unused
vacation,</FONT></FONT></TD>
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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Havens First Amendment to Employment Agreement
<BR>Page 4 of 7</FONT></P>

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(4)
within five business days after any revocation period in the release described in Section
5.5(iii) has expired, a lump sum cash payment equal to three times the maximum amount the
Company could have contributed on behalf of Executive to all of the Company-sponsored
qualified and nonqualified defined contribution retirement plans in which Executive
participated for any of the three years ending on the date of Executive&#146;s termination of
employment, assuming that Executive made the maximum voluntary contributions thereto,</FONT></TD>
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<FONT FACE="Times New Roman, Times, Serif"><FONT SIZE="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(5)
for a period of three years after the date of Executive&#146;s termination of employment, the
continuation of the employee welfare benefits set forth in Section 4.2 (other than
short-term or long-term disability benefits), except as offset by benefits paid by other
sources as set forth in Section 8.2, or as provided in Section 5.5(ii) (provided,
however, that in the event that any such continued coverage is not permitted
under the terms of any applicable welfare plan or policy, the Company shall provide
Executive with the after-tax economic equivalent of any coverage foregone, such economic
equivalent to be deemed to be no less than the total cost to Executive of obtaining such
coverage on an individual basis and to be paid quarterly in advance without discount);</FONT></FONT></TD>
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<P ALIGN=CENTER><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>IV. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Section 5.5(i) of the
Agreement shall be amended by striking the period at the end of Subsection
5.5(i)(b) and inserting the following in lieu thereof: </FONT></P>

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;
and (c) the Company shall provide Executive with outplacement services for a period of
one year commencing on the date his employment is terminated in accordance with the
Company&#146;s executive outplacement policy in effect at the time his employment is
terminated or immediately prior to a Change in Control (if prior to his termination of
employment), whichever is more generous.</FONT></TD>
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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Havens First Amendment to Employment Agreement
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<P ALIGN=CENTER><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>V. </FONT></P>


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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Section 5.5(ii) of the
Agreement shall be amended by striking the reference to &#147;Section
5.5(i)(a)(4)&#148; and inserting &#147;Section 5.5(i)(a)(5)&#148; in lieu
thereof and adding a new sentence to the end thereof, which shall read as
follows: </FONT></P>

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Notwithstanding
the above, if Executive&#146;s continued participation in any of the benefits referenced in
Section 5.5(i)(a)(5) would violate any applicable law or cause any benefits plan, policy,
or arrangement of the Company to fail to qualify for tax-favored status, the Company
shall not be required to provide such benefits to Executive through the Company&#146;s plans,
policies, or arrangements, but instead shall either (A) arrange to make a substantially
similar benefit available to Executive at not cost to the Executive or (B) pay Executive
a sufficient amount of cash to allow Executive to purchase, on an after-tax basis, a
substantially similar benefit on the open market at no incremental cost to Executive.</FONT></TD>
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<P ALIGN=CENTER><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>VI. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Section 5.5 of the
Agreement shall be amended by adding a new subsection (iv) to the end thereof
which shall read as follows: </FONT></P>
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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I>Other Severance Benefits</I>. Notwithstanding any provision of this Agreement
to the contrary, Executive shall be entitled to receive the greater of (a) the
termination payments and benefits provided under Section 5.5 of this Agreement,
or (b) the termination payments and benefits provided by any other
Company-sponsored plan, program or policy which has as its primary purpose the
provision of severance benefits, but in no event shall Executive be eligible to
receive termination payments and benefits provided under both this Agreement and
any such plan, program or policy.</FONT></TD>
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<P ALIGN=CENTER><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>VII. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Section 8 of the Agreement
shall be revised to read as follows: </FONT></P>

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<TD ALIGN=LEFT WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>8. </FONT></TD>
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
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<FONT FACE="Times New Roman, Times, Serif"><FONT SIZE="2">Mitigation and Offset.</FONT></FONT></TD>
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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8.1&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Executive&#146;s right to receive when due the payments and other benefits
provided for under and in accordance with the terms of this Agreement is
absolute, unconditional and subject to no set-off, counterclaim or legal
equitable defense. Any claim which the Company may have against Executive,
whether for breach of this Agreement or otherwise, shall be brought in a
separate action or proceeding and not part of any action or proceeding brought
by Executive to enforce the rights against the Company under this Agreement.</FONT></TD>
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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Havens First Amendment to Employment Agreement
<BR>Page 6 of 7</FONT></P>

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8.2&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Executive shall not have any duty to mitigate the amounts payable by the Company
under this Agreement upon any termination of employment by seeking new
employment following termination. All amounts payable pursuant to this Agreement
shall be paid without reduction regardless of any amount of salary, compensation
or other amounts which may be paid or payable to Executive as the result of
Executive&#146;s employment by another employer; provided,
however, that Executive&#146;s coverage under the Company&#146;s welfare
benefit plans will be reduced to the extent that Executive becomes covered under
any comparable employee benefit plan made available by another employer and
covering the same type of benefits. Executive shall report to the Company any
such benefits actually received by him.</FONT></TD>
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<P ALIGN=CENTER><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>VIII. </FONT></P>


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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Section 12.5(i) of the
Agreement shall be amended to read as follows: </FONT></P>

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)
To The Company. If to the Company, addressed to the attention of the Chief
Executive Officer at P.O. Box 696000, San Antonio, Texas, 78269-6000,
with a copy sent to the attention of the General Counsel at such address.</FONT></FONT></TD>
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<P ALIGN=CENTER><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>IX. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Section 12 of the Agreement
shall be amended to add a new Subsection 12.11 which shall read as follows: </FONT></P>

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
12.11 Dialogue. Unless Executive otherwise consents by the execution of an
instrument in writing that specifically refers to Section 12.11 of this
Agreement, no claim or dispute arising out of or related to this Agreement or
any other agreement, policy, plan, program or arrangement, including without
limitation, any qualified or nonqualified retirement plan, stock option plan or
agreement, or any other equity incentive plan in which Executive participated
prior to his termination, shall be subject to the Company&#146;s <I>Dialogue</I>
Dispute Resolution Program.</FONT></TD>
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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Havens First Amendment to Employment Agreement
<BR>Page 7 of 7</FONT></P>


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<P ALIGN=CENTER><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>X. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>The model release attached
to this First Amendment as &#147;Exhibit A&#148; shall be substituted for the
exhibit referred to in Section 5.5(iii) of the Agreement. </FONT></P>

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<P ALIGN=CENTER><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>XI. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Except as otherwise
provided herein, the Agreement shall remain in full force and effect. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>IN WITNESS WHEREOF, the
parties have executed this Agreement as of the first day of May, 2000. </FONT></P>

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<TD WIDTH=100%><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B></B><BR><BR>
<BR>/s/ Christopher Havens<BR>&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;<BR>
Christopher Havens</FONT></TD>
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<TD WIDTH=100%><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>ULTRAMAR DIAMOND SHAMROCK CORPORATION</B><BR><BR>
<BR>By: /s/ Jean Gaulin <BR>&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;<BR>
TITLE&nbsp;&nbsp;Chairman, President and CEO</FONT></TD>
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