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FIRST AMENDMENT TO EMPLOYMENT AGREEMENT

William R. Klesse (“Executive”) and Ultramar Diamond Shamrock Corporation, a
Delaware corporation (the “Company”), hereby enter into this First Amendment to
the Employment Agreement between Executive and the Company, dated as of October
23, 1996, and effective as of December 3, 1996 (the “Agreement”).

WHEREAS, the Executive serves as Executive Vice President, Operations, of the
Company; and

WHEREAS, the Executive and the Company entered into the Agreement as of the date
stated above; and

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

WHEREAS, the Company considers it in the best interests of its stockholders to
foster the continued employment of certain key management personnel; and

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.

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:

I.

A new final sentence is added to Section 4.2 of the Agreement as follows:

  Notwithstanding any other provision of the Agreement, or the terms of the
Ultramar Diamond Shamrock Corporation Retirement Restoration Plan (the “RRP”),
to the contrary, Executive (and Executive’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.

II.

Section 5.2(i) of the Agreement is hereby deleted and substituted with the
following:

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        (i) 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’s intent to terminate the Executive’s employment. In such event, the
Company’s obligations under this Agreement, and the Executive’s employment (if
applicable), will terminate effective on the 30th day after receipt of such
notice by the Executive (the “Disability Termination Date”), 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’s employment
under this provision (but rather to terminate only its obligations under this
Agreement), the Executive’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 “employee at will” following the Disability
Termination Date, and either the Executive or the Company may thereafter
terminate the Executive’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.

  In the event of the Executive’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’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’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’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’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’s long-term disability plan shall
reduce, on a dollar-for-dollar basis (but not below zero), the Company’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).

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III.

Section 5.5(i)(a) of the Agreement shall be revised to read as follows:

        (i) Form and Amount. Upon Executive’s involuntary termination, other
than for Cause, the Company shall:

          (a) subject to Section 5.5(iii), pay or provide Executive

            (1) his annual salary and benefits until the date of termination,

            (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’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 “annual incentive compensation” for purposes of this
Section 5.5(i)(a)(2),

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            (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 “Qualified Plan”), (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 “Ultramar SERP”) or the Diamond Shamrock, Inc. Supplemental
Executive Retirement Plan (or any equivalent successor plan, policy, program or
arrangement) (collectively, the “DS SERP”) pertaining to “Change in Control” (as
defined in either the Ultramar SERP or the DS SERP, as the case may be),
disregarding for this purpose, any “Change in Control” occurring prior to
December 4, 1996 (collectively, a “SERP Lump Sum Payment”), 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’s aforementioned involuntary termination occurs on or after
a “Change in Control” of the Company, as defined in Section 6.2 (or prior to,
but in anticipation of, such a “Change in Control”), such present value being
determined, in both cases, 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 Employee’s aforementioned involuntary termination occurs prior
to such a “Change in Control” of the Company (other than such a termination in
anticipation of such a “Change in Control”), such present value being
determined, in each such case, using in the interest rate and mortality table
set forth in Section 4.1(m)(ii) and 4.1(n)(ii), respectively, of the Ultramar
SERP; further, provided, however, that, in determining the amount of the benefit
which Executive is entitled to receive, determined with respect to the DS SERP,
the three additional years of age and service credit which the Company would
otherwise pay, or provide, Executive under the DS SERP shall not, pursuant to
this clause (3), be taken into account under the DS SERP, to the extent that
Executive was otherwise previously so credited with three additional years of
age and service credit under the terms of the DS SERP pertaining to “Change in
Control;” 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,

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Klesse First Amendment to Employment Agreement
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            (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’s termination of employment,
assuming that Executive made the maximum voluntary contributions thereto,

            (5) for a period of three years after the date of Executive’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 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);

IV.

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:

  ; 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’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.

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Klesse First Amendment to Employment Agreement
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V.

Section 5.5(ii) of the Agreement shall be amended by striking the reference to
“Section 5.5(i)(a)(4)” and inserting “Section 5.5(i)(a)(5)” in lieu thereof and
adding a new sentence to the end thereof which shall read as follows:

  Notwithstanding the above, if Executive’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’s plans, policies, or
arrangements, but instead shall either (A) arrange to make a substantially
similar benefit available to Executive at no 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.

VI.

Section 5.5 of the Agreement shall be amended by adding a new subsection (iv) to
the end thereof which shall read as follows:

        (iv) Other Severance Benefits. 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.

VII.

Section 8 of the Agreement shall be revised to read as follows:

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Klesse First Amendment to Employment Agreement
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8. Mitigation and Offset.

               8.1       Executive’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.

               8.2      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’s employment by another employer; provided,
however, that Executive’s coverage under the Company’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.

VIII.

Section 12.5(i) of the Agreement shall be amended to read as follows:

            (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.

IX.

Section 12 of the Agreement shall be amended to add a new Subsection 12.11 which
shall read as follows:

            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’s Dialogue Dispute
Resolution Program.

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Klesse First Amendment to Employment Agreement
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X.

The model release attached to this First Amendment as “Exhibit A“ shall be
substituted for the exhibit referred to in Section 5.5(iii) of the Agreement.

XI.

Except as otherwise provided herein, the Agreement shall remain in full force
and effect.

IN WITNESS WHEREOF, the parties have executed this Agreement as of the first day
of May, 2000.

/s/ William R. Klesse
——————————————
William R. Klesse

ULTRAMAR DIAMOND SHAMROCK CORPORATION

By: /s/ Jean Gaulin
——————————————
Title  Chairman, President and CEO

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FIRST AMENDMENT TO EMPLOYMENT AGREEMENT

Timothy J. Fretthold (“Executive”) and Ultramar Diamond Shamrock Corporation, a
Delaware corporation (the “Company”), hereby enter into this First Amendment to
the Employment Agreement between Executive and the Company, dated as of October
23, 1996, and effective as of December 3, 1996 (the “Agreement”).

WHEREAS, the Executive serves as Executive Vice President, Chief Administrative
and Legal Officer, of the Company; and

WHEREAS, the Executive and the Company entered into the Agreement as of the date
stated above; and

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

WHEREAS, the Company considers it in the best interests of its stockholders to
foster the continued employment of certain key management personnel; and

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.

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:

I.

A new final sentence is added to Section 4.2 of the Agreement as follows:

  Notwithstanding any other provision of the Agreement, or the terms of the
Ultramar Diamond Shamrock Corporation Retirement Restoration Plan (the “RRP”),
to the contrary, Executive (and Executive’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.

II.

Section 5.2(i) of the Agreement is hereby deleted and substituted with the
following:

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Fretthold First Amendment to Employment Agreement
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        (i) 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’s intent to terminate the Executive’s employment. In such event, the
Company’s obligations under this Agreement, and the Executive’s employment (if
applicable), will terminate effective on the 30th day after receipt of such
notice by the Executive (the “Disability Termination Date”), 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’s employment
under this provision (but rather to terminate only its obligations under this
Agreement), the Executive’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 “employee at will” following the Disability
Termination Date, and either the Executive or the Company may thereafter
terminate the Executive’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.

  In the event of the Executive’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’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’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’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’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’s long-term disability plan shall
reduce, on a dollar-for-dollar basis (but not below zero), the Company’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 made in
accordance with clauses (a), (b), or (c) of this Section 5.2(i).

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Fretthold First Amendment to Employment Agreement
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III.

Section 5.5(i)(a) of the Agreement shall be revised to read as follows:

        (i) Form and Amount. Upon Executive’s involuntary termination, other
than for Cause, the Company shall:

          (a) subject to Section 5.5(iii), pay or provide Executive

             (1) his annual salary and benefits until the date of termination,

             (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’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 “annual incentive compensation” for purposes of this
Section 5.5(i)(a)(2),

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Fretthold First Amendment to Employment Agreement
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             (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 “Qualified Plan”), (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 “Ultramar SERP”) or the Diamond Shamrock, Inc. Supplemental
Executive Retirement Plan (or any equivalent successor plan, policy, program or
arrangement) (collectively, the “DS SERP”) pertaining to “Change in Control” (as
defined in either the Ultramar SERP or the DS SERP, as the case may be),
disregarding for this purpose, any “Change in Control” occurring prior to
December 4, 1996 (collectively, a “SERP Lump Sum Payment”), 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’s aforementioned involuntary termination occurs on or after
a “Change in Control” of the Company, as defined in Section 6.2 (or prior to,
but in anticipation of, such a “Change in Control”), such present value being
determined, in both cases, 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 Employee’s aforementioned involuntary termination occurs prior
to such a “Change in Control” of the Company (other than such a termination in
anticipation of such a “Change in Control”), such present value being
determined, in each such case, using in the interest rate and mortality table
set forth in Section 4.1(m)(ii) and 4.1(n)(ii), respectively, of the Ultramar
SERP; further, provided, however, that, in determining the amount of the benefit
which Executive is entitled to receive, determined with respect to the DS SERP,
the three additional years of age and service credit which the Company would
otherwise pay, or provide, Executive under the DS SERP shall not, pursuant to
this clause (3), be taken into account under the DS SERP, to the extent that
Executive was otherwise previously so credited with three additional years of
age and service credit under the terms of the DS SERP pertaining to “Change in
Control;” 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,

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Fretthold First Amendment to Employment Agreement
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             (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’s termination of employment,
assuming that Executive made the maximum voluntary contributions thereto,

             (5) for a period of three years after the date of Executive’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 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);

IV.

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:

  ; 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’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.

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Fretthold First Amendment to Employment Agreement
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V.

Section 5.5(ii) of the Agreement shall be amended by striking the reference to
“Section 5.5(i)(a)(4)” and inserting “Section 5.5(i)(a)(5)” in lieu thereof and
adding a new sentence to the end thereof, which shall read as follows:

  Notwithstanding the above, if Executive’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’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.

VI.

Section 5.5 of the Agreement shall be amended by adding a new subsection (iv) to
the end thereof which shall read as follows:

        (iv) Other Severance Benefits. 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.

VII.

Section 8 of the Agreement shall be revised to read as follows:

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Fretthold First Amendment to Employment Agreement
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8. Mitigation and Offset.

        8.1        Executive’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.

        8.2       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’s employment by another employer; provided, however,
that Executive’s coverage under the Company’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.

VIII.

Section 12.5(i) of the Agreement shall be amended to read as follows:

        (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.

IX.

Section 12 of the Agreement shall be amended to add a new Subsection 12.11 which
shall read as follows:

        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’s Dialogue Dispute
Resolution Program.

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X.

The model release attached to this First Amendment as “Exhibit A” shall be
substituted for the exhibit referred to in Section 5.5(iii) of the Agreement.

XI.

Except as otherwise provided herein, the Agreement shall remain in full force
and effect.

IN WITNESS WHEREOF, the parties have executed this Agreement as of the first day
of May, 2000.

/s/ Timothy J. Fretthold
——————————————
Timothy J. Fretthold

ULTRAMAR DIAMOND SHAMROCK CORPORATION

By: /s/ Jean Gaulin
——————————————
TITLE  Chairman, President and CEO

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FIRST AMENDMENT TO EMPLOYMENT AGREEMENT

W. Paul Eisman (“Executive”) and Ultramar Diamond Shamrock Corporation, a
Delaware corporation (the “Company”), hereby enter into this First Amendment to
the Employment Agreement between Executive and the Company, dated as of October
23, 1996, and effective as of December 3, 1996 (the “Agreement”).

WHEREAS, the Executive serves as Senior Vice President, Supply and Development,
of the Company; and

WHEREAS, the Executive and the Company entered into the Agreement as of the date
stated above; and

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

WHEREAS, the Company considers it in the best interests of its stockholders to
foster the continued employment of certain key management personnel; and

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.

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:

I.

A new final sentence is added to Section 4.2 of the Agreement as follows:

  Notwithstanding any other provision of the Agreement, or the terms of the
Ultramar Diamond Shamrock Corporation Retirement Restoration Plan (the “RRP”),
to the contrary, Executive (and Executive’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.

II.

Section 5.2(i) of the Agreement is hereby deleted and substituted with the
following:

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        (i) 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’s intent to terminate the Executive’s employment. In such event, the
Company’s obligations under this Agreement, and the Executive’s employment (if
applicable), will terminate effective on the 30th day after receipt of such
notice by the Executive (the “Disability Termination Date”), 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’s employment
under this provision (but rather to terminate only its obligations under this
Agreement), the Executive’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 “employee at will” following the Disability
Termination Date, and either the Executive or the Company may thereafter
terminate the Executive’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.

  In the event of the Executive’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’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’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’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’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’s long-term disability plan shall
reduce, on a dollar-for-dollar basis (but not below zero), the Company’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).

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III.

Section 5.5(i)(a) of the Agreement shall be revised to read as follows:

         (i) Form and Amount. Upon Executive’s involuntary termination, other
than for Cause, the Company shall:

           (a) subject to Section 5.5(iii), pay or provide Executive

             (1) his annual salary and benefits until the date of termination,

             (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’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 “annual incentive compensation” for purposes of this
Section 5.5(i)(a)(2),

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             (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 “Qualified Plan”), (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 “Ultramar SERP”) or the Diamond Shamrock, Inc. Supplemental
Executive Retirement Plan (or any equivalent successor plan, policy, program or
arrangement) (collectively, the “DS SERP”) pertaining to “Change in Control” (as
defined in either the Ultramar SERP or the DS SERP, as the case may be),
disregarding for this purpose, any “Change in Control” occurring prior to
December 4, 1996 (collectively, a “SERP Lump Sum Payment”), 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’s aforementioned involuntary termination occurs on or after
a “Change in Control” of the Company, as defined in Section 6.2 (or prior to,
but in anticipation of, such a “Change in Control”), such present value being
determined, in both cases, 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 Employee’s aforementioned involuntary termination occurs prior
to such a “Change in Control” of the Company (other than such a termination in
anticipation of such a “Change in Control”), such present value being
determined, in each such case, using in the interest rate and mortality table
set forth in Section 4.1(m)(ii) and 4.1(n)(ii), respectively, of the Ultramar
SERP; further, provided, however, that, in determining the amount of the benefit
which Executive is entitled to receive, determined with respect to the DS SERP,
the three additional years of age and service credit which the Company would
otherwise pay, or provide, Executive under the DS SERP shall not, pursuant to
this clause (3), be taken into account under the DS SERP, to the extent that
Executive was otherwise previously so credited with three additional years of
age and service credit under the terms of the DS SERP pertaining to “Change in
Control;” 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,

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Fretthold First Amendment to Employment Agreement
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             (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’s termination of employment,
assuming that Executive made the maximum voluntary contributions thereto,

            (5) for a period of three years after the date of Executive’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);

IV.

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:

  ; 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’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.

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Fretthold First Amendment to Employment Agreement
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V.

Section 5.5(ii) of the Agreement shall be amended by striking the reference to
“Section 5.5(i)(a)(4)” and inserting “Section 5.5(i)(a)(5)” in lieu thereof and
adding a new sentence to the end thereof which shall read as follows:

  Notwithstanding the above, if Executive’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’s plans, policies, or
arrangements, but instead shall either (A) arrange to make a substantially
similar benefit available to Executive at no 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.

VI.

Section 5.5 of the Agreement shall be amended by adding a new subsection (iv) to
the end thereof which shall read as follows:

          (iv) Other Severance Benefits. 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.

VII.

Section 8 of the Agreement shall be revised to read as follows:

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Fretthold First Amendment to Employment Agreement
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8. Mitigation and Offset.

        8.1       Executive’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.

        8.2       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’s employment by another employer; provided, however,
that Executive’s coverage under the Company’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.

VIII.

Section 12.5(i) of the Agreement shall be amended to read as follows:

        (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.

IX.

Section 12 of the Agreement shall be amended to add a new Subsection 12.11 which
shall read as follows:

        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’s Dialogue Dispute
Resolution Program.

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Fretthold First Amendment to Employment Agreement
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X.

The model release attached to this First Amendment as “Exhibit A” shall be
substituted for the exhibit referred to in Section 5.5(iii) of the Agreement.

XI.

Except as otherwise provided herein, the Agreement shall remain in full force
and effect.

IN WITNESS WHEREOF, the parties have executed this Agreement as of the first day
of May, 2000.

/s/ W. Paul Eisman
——————————————
W. Paul Eisman

ULTRAMAR DIAMOND SHAMROCK CORPORATION

By: /s/ Jean Gaulin
——————————————
TITLE  Chairman, President and CEO