Document:

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                                                                    EXHIBIT 10.2

                      ULTRAMAR DIAMOND SHAMROCK CORPORATION
                  INTERMEDIATE INCENTIVE AND PERFORMANCE-BASED
                        RESTRICTED STOCK AWARD AGREEMENT

         THIS AGREEMENT (the "Agreement") is made, effective as of February 7,
2000 (hereinafter the "date of grant"), between Ultramar Diamond Shamrock
Corporation (the "Company") and ____________ (the "Participant").

                                 R E C I T A L S

         WHEREAS, the Company maintains the Ultramar Diamond Shamrock
Corporation Intermediate Incentive and Performance-Based Restricted Stock Plan
(the "Plan"), which is incorporated into and forms a part of this Agreement; and

         WHEREAS, the Committee has determined that it would be in the best
interests of the Company and the stockholders to grant the Intermediate
Incentive Award, Performance-Based Restricted Stock Award and Excess
Performance-Based Stock Award provided for herein to the Participant pursuant to
the Plan, the LTIP (as to the Performance-Based Restricted Stock Award) and the
terms set forth herein.

         NOW, THEREFORE, IT IS AGREED, in consideration of the mutual covenants
hereinafter set forth, the parties hereto agree as follows:

     Section 1. Definitions. All capitalized terms not otherwise defined herein
shall have the same meanings as in the Plan. As used in this Agreement, the
following terms shall have the meanings set forth below:

     "Disability" shall mean the Participant's incapacity due to physical or
mental illness to substantially perform his duties on a full-time basis for six
consecutive months or for 180 days in any 210 consecutive day period.

     "Retirement" shall mean a Participant's (i) early retirement (retirement
from active employment with the Company or a subsidiary in accordance with the
early retirement provisions of a pension plan maintained by the Company or such
subsidiary); or (ii) normal retirement (retirement from active employment with
the Company or a subsidiary in accordance with the normal retirement provisions
of a pension plan maintained by the Company or such subsidiary).

     Section 2. Terms of Intermediate Incentive Award.

         (a) Performance Period. The Performance Period is the period beginning
     on January 1, 2000 and ending on December 31, 2002.

         (b) ITI Target Payout. The ITI Target Payout for the Performance Period
     is $_____________.

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          (c) Maximum Amount of Intermediate Incentive Award. The maximum amount
     of the Intermediate Incentive Award for the Performance Period is 200% of
     the ITI Target Payout, as further described herein.

          (d) Intermediate Award Performance Criteria. The level of Intermediate
     Award Performance Criteria used to determine the portion of the ITI Target
     Payout earned by the Participant is set forth on Schedule A attached hereto
     and made part of this Agreement.

          (e) Intermediate Incentive Award.

                  (i) Except as otherwise provided herein, if the Total Company
         Performance Percentage (determined in accordance with the Year 2 Matrix
         on Schedule A) for the second year in the Performance Period (i.e.,
         2001) is zero percent (0%), the Participant shall receive an
         Intermediate Incentive Award for the Performance Period equal to the
         product of (A) ITI Target Payout, multiplied by (B) the Total Company
         Performance Percentage (determined in accordance with the Year 3 Matrix
         on Schedule A); provided, that, in no event shall the maximum
         Intermediate Incentive Award payable to the Participant for the
         Performance Period exceed two hundred percent (200%) of the ITI Target
         Payout. Such payment shall be made in cash as soon as practicable
         following the end of the third year in the Performance Period (i.e,
         2002) and the Committee's determination of the applicable Total Company
         Performance Percentage.

                  (ii) Except as otherwise provided herein, if the Total Company
         Performance Percentage (determined in accordance with the Year 2 Matrix
         on Schedule A) for the second Year in the Performance Period (i.e.,
         2001) is greater than zero percent (0%), the Participant shall receive
         an Intermediate Incentive Award in respect of the second Year in the
         Performance Period equal to fifty percent (50%) of the product of (A)
         the ITI Target Payout, multiplied by (B) the Total Company Performance
         Percentage (determined in accordance with the Year 2 Matrix on Schedule
         A); and the Participant shall receive an Intermediate Incentive Award
         for the third Year in the Performance Period equal to the product of
         (C) the ITI Target Payout, multiplied by (D) the Total Company
         Performance Percentage (determined in accordance with the Year 3 Matrix
         on Schedule A), minus the amount of the Intermediate Incentive Award
         earned for the second Year in the Performance Period, but in no event
         shall the Intermediate Incentive Award for the third Year in the
         Performance Period be less than $0. The payment referenced in the first
         clause of the preceding sentence shall be made in cash as soon as
         practicable following the end of the second year in the Performance
         Period (i.e, 2001) and the Committee's determination of the applicable
         Total Company Performance Percentage, and the payment referenced in the
         second clause of the preceding sentence shall be made in cash as soon
         as practicable following the end of the third year in the Performance
         Period (i.e, 2002) and the

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         Committee's determination of the applicable Total Company Performance
         Percentage.

          (f) Termination of Employment. If the Participant's employment with
     the Company or any of its Affiliates terminates after the first quarter of
     the second year of the Performance Period on account of the Participant's
     Retirement, Disability or death, the Participant (or his estate or
     Designated Beneficiary, if applicable) shall be entitled to a pro-rata
     portion of the remaining Intermediate Incentive Award earned in accordance
     with Section 2(e) of this Agreement, determined at the end of the
     Performance Period, and based on the ratio of the number of whole calendar
     months the Participant was employed during the Performance Period and the
     total number of calendar months in the Performance Period through the end
     of the year in which the Participant's employment with the Company
     terminated. If the Participant's employment with the Company or any of its
     Affiliates terminates under any other circumstances, any unpaid
     Intermediate Incentive Award will be forfeited on the date of such
     termination of employment; provided, however, the Committee may, in its
     sole discretion, determine that the Participant will be entitled to receive
     a pro-rata or other portion of the Intermediate Incentive Award.

          (g) Change in Control. Notwithstanding any provision of this Agreement
     to the contrary, if a Change in Control occurs during the Performance
     Period, the Performance Period will be deemed to end on the effective date
     of the Change in Control and the Participant shall be entitled to receive a
     lump sum cash payment determined in accordance with the second paragraph of
     Article V of the Plan.

     Section 3. Performance-Based Restricted Stock Award.

          (a) Performance Period. The Performance Period is the period beginning
     on January 1, 2000 and ending on December 31, 2002.

          (b) Target Restricted Stock Award. The Target Restricted Stock Award
     for the Performance Period is __________ Restricted Shares.

          (c) Restricted Stock Performance Criteria. The level of Restricted
     Stock Performance Criteria used to determine the Restricted Stock Vesting
     Percentage, and the Restricted Stock Vesting Percentage determined by the
     attainment of the Restricted Stock Performance Criteria, is set forth on
     Schedule B attached hereto and made part of this Agreement.

          (d) Performance-Based Restrictive Stock Award. The Participant is
     hereby granted a number of Restricted Shares equal to the Target Restricted
     Stock Award pursuant to and subject to the terms and conditions of the
     LTIP, this Agreement and the Plan. The purchase price to the Participant of
     such Restricted Shares is zero. Any Restricted Shares which have not become
     vested in accordance with such terms and conditions shall remain subject to
     the restrictions on transferability described in Section 3(j) of this
     Agreement, and the forfeiture conditions described in Section 3(f) and (g)
     of this Agreement.

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          (e) Vesting of Restricted Shares. For each of the three calendar years
     in the Performance Period, the Participant shall become contingently vested
     in a number of Restricted Shares equal to the product of (i) the Restricted
     Stock Vesting Percentage for such year (determined by the TSR Percentage
     Point Spread for such year in accordance with the "Total Shareholder Return
     Incentive Scale" set forth on Schedule B), but not greater than 100%,
     multiplied by (ii) one-third (1/3) of the Target Restricted Stock Award.
     Other than as described in Section 3(f) below, such contingently vested
     Restricted Shares shall become actually vested as of the last day of the
     Performance Period, provided that the Participant remains actively employed
     with the Company and its Affiliates through the last day of the Performance
     Period.

     In addition, at the end of the Performance Period the Participant shall
     have the opportunity to become vested in those Restricted Shares which have
     not become vested in accordance with the preceding paragraph, by applying
     the following formula:

                                 A = (B x C) - D

     where:

         A = the number of additional Restricted Shares vesting at the end of
             the Performance Period in accordance with this paragraph, but not
             less than zero or greater than the number of unvested Restricted
             Shares at the end of the Performance Period.

         B = the Restricted Stock Vesting Percentage based on the TSR Percentage
             Point Spread for the entire Performance Period in accordance with
             the "Total Shareholder Return Incentive Scale" set forth on
             Schedule B (with no cap other than as set forth in Schedule B).

         C = the number of Restricted Shares in the Target Restricted Stock
             Award.

         D = the number of Restricted Shares which would have become vested
             during the Performance Period in accordance with the first
             paragraph of this Section 3(e) if the 100% cap had not applied to
             the Restricted Stock Vesting Percentage during the Performance
             Period. For example, if one-third of the Participant's Restricted
             Shares for 2001 was 200, and the Restricted Stock Vesting
             Percentage would have been 120% but for the 100% cap, the
             Participant will be deemed to have vested in 240 Restricted Shares
             for that year for purposes of this clause.

         (f) Termination of Employment. If the Participant's employment with
     the Company and its Affiliates terminates during the Performance Period on
     account of the Participant's Retirement, Disability or death, the
     Participant (or his estate or Designated Beneficiary, if applicable) shall
     actually vest in any Restricted Shares

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     which are contingently vested in accordance with the first paragraph of
     Section 3(e) as soon as practicable following the end of the calendar year
     of such termination. In addition, if the Participant's employment is
     terminated on account of Retirement, Disability or death after the first
     quarter of a calendar year, the Participant (or his estate or Designated
     Beneficiary, if applicable) shall become vested in a pro-rata portion of
     the Restricted Shares which otherwise would become contingently vested in
     accordance with the first paragraph of Section 3(e) of this Agreement for
     such year, based on the ratio of the number of whole calendar months the
     Participant was employed during such year to the total number of months in
     such year (which is 12) (the "Termination Year Restricted Shares"). The
     Termination Year Restricted Shares shall either (i) vest in accordance with
     the first paragraph of Section 3(e) as soon as practicable following the
     end of the calendar year of such termination, or (ii) to the extent such
     vesting is not attained, forfeit and be returned to the Company as of the
     last day of the calendar year of such termination. Any Restricted Shares
     which are not (X) Termination Year Restricted Shares or (Y) contingently
     vested in the case of a termination on account of Retirement, Disability or
     death, shall forfeit and be returned to the Company on the date of the
     Participant's termination of employment; provided, however, the Committee
     may, in its sole discretion, determine that the Participant will become
     vested in a pro-rata or other portion of the Restricted Shares upon his
     termination of employment.

          (g) Forfeiture of Restricted Shares at the End of the Performance
     Period. If the Participant remains employed with the Company or an
     Affiliate through the Performance Period, all Restricted Shares which have
     not vested in accordance with Section 3(e) as of the last day of the
     Performance Period shall be forfeited and returned to the Company as of
     such day.

          (h) Certificates. Certificates evidencing the Restricted Shares shall
     be issued by the Company and shall be registered in the Participant's name
     on the stock transfer books of the Company on or as soon as practicable
     following the date hereof, but shall remain in the physical custody of the
     Company or its designee at all times prior to the vesting of such
     Restricted Shares, following which such certificates shall be delivered to
     the Participant. Notwithstanding any provision of this Agreement to the
     contrary, cash, rather than certificates, shall be issued for fractional
     Shares.

          (i) Legend on Certificates. The certificates representing the vested
     Restricted Shares delivered to the Participant in accordance with Section
     3(h) shall be subject to such stop transfer orders and other restrictions
     as the Committee may deem advisable under the Plan, the LTIP or the rules,
     regulations, and other requirements of the Securities and Exchange
     Commission, any stock exchange upon which such Shares are listed, and any
     applicable Federal or state laws, and the Committee may cause a legend or
     legends to be put on any such certificates to make appropriate reference to
     such restrictions.

          (j) Transferability. The Restricted Shares may not, at any time prior
     to becoming vested hereunder, be assigned, alienated, pledged, attached,
     sold or

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     otherwise transferred or encumbered by the Participant and any such
     purported assignment, alienation, pledge, attachment, sale, transfer or
     encumbrance shall be void and unenforceable against the Company or any
     Affiliate; provided that the designation of a Designated Beneficiary shall
     not constitute an assignment, alienation, pledge, attachment, sale,
     transfer or encumbrance.

          (k) Securities Laws. Upon the vesting of any Restricted Shares, the
     Participant will make or enter into such written representations,
     warranties and agreements as the Committee may reasonably request in order
     to comply with applicable securities laws or with this Agreement.

          (l) Change in Control. Notwithstanding any provision of this Agreement
     to the contrary, if a Change in Control occurs during the Performance
     Period, the Performance Period will be deemed to end on the effective date
     of the Change in Control and the Participant shall become vested in all
     unvested Restricted Shares immediately prior to the Change in Control.

          (m) Rights of a Stockholder. Except as otherwise provided in this
     Agreement, the Participant shall have, with respect to all Restricted
     Shares granted pursuant to this Agreement (whether or not vested), all of
     the rights of a stockholder of the Company, including the right to vote the
     Restricted Shares and to receive any cash dividends.

     Section 4. Excess Performance-Based Stock Award. In the event the
Restricted Stock Vesting Percentage for any of the first, second or third
calendar year in the Performance Period exceeds one hundred percent (100%), the
Participant shall be entitled to receive an Excess Performance-Based Stock Award
in the form of a lump sum payment in respect of such calendar year, payable in
the form of either shares of Common Stock or cash equal to the fair market value
(as determined by the Committee) at the time of payment of a number of shares of
Common Stock, determined by multiplying one-third (1/3) of the Target Restricted
Stock Award by the excess of (i) the actual Restricted Stock Vesting Percentage
for the year, minus (ii) one hundred percent (100%). Such payment in respect of
all calendar years in the Performance Period shall be made as soon as
practicable after the end of the Performance Period. The terms and conditions of
the payment of an Excess Performance-Based Stock Award, including the conditions
under which it may be paid or forfeited upon termination of employment, shall be
as close as is practicable to those pursuant to which the Performance-Based
Restricted Stock Award becomes vested or forfeits in accordance with Section 3,
as determined in good faith by the Committee.

     Section 5. No Right to Continued Employment. Neither the Plan nor this
Agreement shall be construed as giving the Participant the right to be retained
in the employ of the Company or any Affiliate. Further, the Company or an
Affiliate may at any time dismiss the Participant, free from any liability or
any claim under the Plan or this Agreement, except as otherwise expressly
provided herein.

     Section 6. Withholding. The Participant agrees to make appropriate
arrangements with the Company for satisfaction of any applicable federal, state
or local

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income tax, withholding requirements or like requirements, including the payment
to the Company upon the vesting of the Restricted Shares (or such later date as
may be applicable under Section 83 of the Code), or other settlement in respect
of, the Restricted Shares of all such taxes and requirements and the Company
shall be authorized to take such action as may be necessary in the opinion of
the Company's counsel (including, without limitation, withholding vested
Restricted Shares or cash otherwise deliverable to Participant hereunder and/or
withholding amounts from any compensation or other amount owing from the Company
to the Participant) to satisfy all obligations for the payment of such taxes.

     Section 7. Notices. Any notice necessary under this Agreement shall be
addressed to the Company in care of its Secretary at the principal executive
office of the Company and to the Participant at the address appearing in the
personnel records of the Company for such Participant or to either party at such
other address as either party hereto may hereafter designate in writing to the
other. Any such notice shall be deemed effective upon receipt thereof by the
addressee.

     Section 8. Choice of Law. THE INTERPRETATION, PERFORMANCE AND ENFORCEMENT
OF THIS AGREEMENT SHALL BE GOVERNED BY THE LAWS OF THE STATE OF DELAWARE WITHOUT
REGARD TO IT PRINCIPLES OF CONFLICTS OF LAW, OR SUCH PRINCIPLES OF ANY OTHER
JURISDICTION WHICH COULD CAUSE THE APPLICATION OF THE LAWS OF ANY JURISDICTION
OTHER THAN THE STATE OF DELAWARE.

     Section 9. Awards Subject to Plan, Etc. By entering into this Agreement the
Participant agrees and acknowledges that the Participant has received and read a
copy of the Plan. The Intermediate Incentive Award, the Performance-Based
Restricted Stock Award and the Excess Performance-Based Stock Award are subject
to the Plan, and the Performance-Based Restricted Stock Award is further subject
to the LTIP. The terms and provisions of the Plan, and the LTIP to the extent
applicable, as each may be amended from time to time are hereby incorporated
herein by reference. In the event of a conflict between any term or provision
contained herein and a term or provision of the Plan or the LTIP, the applicable
terms and provisions of the Plan or the LTIP will govern and prevail.

     Section 10. Signature in Counterparts. This Agreement may be signed in
counterparts, each of which shall be an original, with the same effect as if the
signatures thereto and hereto were upon the same instrument.

          IN WITNESS WHEREOF, the parties hereto have executed this Agreement.

          ULTRAMAR DIAMOND SHAMROCK CORPORATION

               By:
               Title:

                              [Name of Participant]<PAGE>   1

                                                                    Exhibit 10.3

                        AMENDMENT TO ULTRAMAR CORPORATION
                     SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN

         Ultramar Diamond Shamrock Corporation, a Delaware corporation, pursuant
to authority granted by its Board of Directors, hereby adopts the following
amendments to the Ultramar Corporation Supplemental Executive Retirement Plan.
Such amendments shall be effective as of May 1, 2000, subject to such further
limitations and restrictions as are set forth below.

1. The first sentence of Section 4.1(c) (defining "Average Annual Compensation")
is amended and restated in its entirety, effective for any person who remains
employed by Ultramar Diamond Shamrock Corporation on the date set forth above,
as follows:

         "AVERAGE ANNUAL COMPENSATION" shall be determined in the same manner as
         under the Pension Plan except as otherwise set forth herein, and
         provided that, Average Annual Compensation shall also include an
         "average bonus" if (i) the Participant's employment with a
         Participating Employer is terminated for any reason other than Cause on
         or after the first day of the month in which he attains age fifty-five
         (55) or (ii) the Participant remains employed with the Company (or any
         subsidiary or affiliate of the Company) upon the occurrence of a Change
         in Control.

2. Clause (i) of Section 4.1(m) (defining "SERP Interest Rate"), is amended and
restated, in its entirety, as follows:

         (i) with respect to the computation of the amount of a lump sum benefit
         upon a Change in Control under Section 4.2(e), the interest rate issued
         by the Pension Benefit Guaranty Corporation for private sector lump sum
         payments, as such rate is in effect on the first day of the calendar
         year that contains the date of the distribution.

3. Section 4.1(q)(defining "Trust") is amended and restated in its entirety, as
follows:

                  (q) "TRUST" shall mean the Ultramar Diamond Shamrock
         Corporation Benefits Trust between the Company and Sterling National
         Bank and Trust Company of New York, as it may be amended from time to
         time.

4. The first sentence of Section 4.2(b) is amended and restated, in its
entirety, as follows:

         A Participant who retires from employment with a Participating Employer
         (other than on account of a termination for Cause) on or after the
         first day of the month following his attainment of age sixty-two (62)
         (with the determination of such Participant's then age calculated by
         taking into account any additional years considered added to such
         Participant's actual age pursuant to the terms of any separate
         agreement between the Participant and the Company pertaining to such
         person's participation in the SERP) and who is entitled to a benefit
         under the Pension Plan shall be entitled to receive the greater of the
         Supplemental Pension determined under Section 4.2(a) or this Section
         4.2(b).

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5. The first sentence of clause (ii) of Section 4.2(e) is amended and restated,
in its entirety, effective for any person who remains employed by Ultramar
Diamond Shamrock Corporation on the date set forth above, as follows:

         If there is a Change in Control, each Participant who remains employed
         by the Company (or any subsidiary or affiliate) on the Change in
         Control Date shall be (i) one hundred percent (100%) vested in his
         Supplemental Pension and (ii) paid a single lump sum payment in cash
         equal to the Actuarial Equivalent lump sum value of his Supplemental
         Pension, determined as of the date of the Change in Control using the
         SERP Interest Rate and SERP Mortality Table, in lieu of all other
         benefits under the SERP; provided that any amendment of the SERP made
         within the six-month period ending on the effective date of the Change
         in Control shall be ignored for purposes of computing the amount of the
         lump sum payment under this clause (ii) to the extent that the
         application of such amendment would cause the amount of the lump sum to
         be less than that computed without application of such amendment.

6. Section 4.4(a) is amended and restated, in its entirety, as follows:

                  (a) Any benefit payable to a Participant or Spouse hereunder
         shall be paid by the Company. Notwithstanding the foregoing, such
         benefits shall instead be paid from the Trust, under such circumstances
         (including a Change in Control) as are specified under the terms of the
         Trust. To the extent that the Trust does not pay the benefits under the
         SERP to which any Participant (or Spouse) is entitled, the Company
         remains responsible to do so. Moreover, all assets of the Trust remain,
         at all times, subject to the claims of the Company's creditors in the
         event of the Company's insolvency, and no Participant (or any Spouse
         thereof) shall, at any time, have a prior claim to any Trust assets.

7. Section 4.5 is amended and restated, in its entirety, effective for any
person who remains employed by Ultramar Diamond Shamrock Corporation on the date
set forth above, as follows:

                  4.5 ADDITIONAL TERMS. A Participant shall, subject only to the
         provisions of Section 15, which shall govern in the event of any
         conflict, receive such additional terms (including, but not limited to,
         years of age and/or service for vesting and/or benefit accrual purposes
         under the SERP) as determined by the Committee, in its sole discretion.

8. A new Section 15 is added, effective for any person who remains employed by
Ultramar Diamond Shamrock Corporation on the date set forth above, as follows:

                  15. Special Change in Control Provisions.

                           (a) The provisions of this Section 15 shall apply
                  with respect to each Participant in the group listed in
                  subsection (b) hereof (each, hereafter, a "Covered
                  Participant") who, except as otherwise provided in this
                  Section 15, remains employed by the Company (or any subsidiary
                  or affiliate of the Corporation) (collectively, "UDS") upon
                  the occurrence of a Change in Control. The provisions of this
                  Section 15 shall apply, notwithstanding any other provision of
                  the SERP to the contrary.

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(b)The Covered Participants, identified by social security number, are as
follows:

         [Jean Gaulin]
         [Christopher Havens]
         [H. Pete Smith]

         (c) For purposes of this Section 15, the term "SERP Side Letter" means,
with respect to any Covered Participant, that separate agreement between such
person and the Company pertaining to such person's participation in the SERP, as
such agreement may be amended from time to time.

         (d) Notwithstanding any provisions of the SERP (or of any particular
Covered Participant's SERP Side Letter) to the contrary, the amount of any lump
sum otherwise payable to such person under the SERP on account of being employed
by UDS upon the occurrence of a Change in Control shall be determined in the
following steps, with the lump sum being the amount determined under the
following clause (ii):

         (ii)  Determine the amount of the annual SERP benefit which would
               otherwise be immediately payable to such person, starting on the
               Change in Control Date, and determined as if such person
               terminated employment on the Change in Control Date, and after
               taking into account the foregoing provisions of the SERP, as well
               as such person's SERP Side Letter (other than any provision
               thereof relating to the conversion of such annual SERP benefit
               into a lump sum amount); provided, however, that in making such
               determination, in the event that such person is under age
               sixty-two (62) on the Change in Control Date, (A) the Pension
               Plan benefit and the Other Pension Benefits otherwise taken into
               account in such determination shall be the amount of such
               respective benefits otherwise payable to such person at age
               sixty-two (62) , but with such benefit amounts determined as if
               such person terminated employment on the Change in Control Date,
               and (B) there shall be no reduction on account of early payment
               of the SERP benefit pursuant to the provisions of Section 4.2(c)
               (or otherwise).

         (ii)  Determine the immediate present value, based upon such Covered
               Participant's actual age on the Change in Control Date, of the
               annual benefit amount, calculated under the foregoing clause (i),
               which would otherwise be paid to such person, starting on the
               Change in Control Date, with such present value being determined
               using the interest rate and mortality table set forth in Section
               4.1(m)(i) and Section 4.1(n)(i), respectively (except to the
               extent that a larger lump sum would result from using the
               interest rate and mortality table set forth in Section 4.1(m)(ii)
               and Section 4.1(n)(ii), respectively, in which event the interest
               rate and mortality table set forth in Section 4.1(m)(ii) and
               Section 4.1(n)(ii), respectively, shall instead apply).)

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                                                                          4

         (e) Attached to the SERP, as Exhibit A, is a separate schedule for each
Covered Participant illustrating the manner, in accordance with the forgoing
provisions of this Section 15 and the other provisions of the SERP (and the
terms of such person's SERP Side Letter, as such agreement may be modified
pursuant to the foregoing provisions of this Section 15), in which the lump sum
payment to such person with respect to the SERP would, in the event that such
person remains employed by UDS upon the occurrence of a Change in Control, be
calculated for such person, assuming that (I) the Change in Control Date occurs
on December 31, 2000, (II) such lump sum distribution also occurs on that date
and (III) such person remains employed by UDS on that date. In the event of a
Change in Control occurring on December 31, 2000, the amount of the lump sum
payable to any Covered Participant who remains employed by UDS on such date
shall (assuming such lump sum is also paid on that same date) be the amount set
forth with respect to such person in the relevant attached schedule. In the
event that a Change in Control Date occurs on some other date, the methodology
set out in such schedules shall be dispositive in resolving any issues which may
arise in connection with determining the amount of the lump sum otherwise
payable to any such Covered Participant who so remains employed by UDS upon the
occurrence of such other Change in Control Date.

         (f) If a Covered Participant who receives a lump sum distribution on
account of being employed by UDS on a Change in Control Date continues to be
employed by UDS and thereafter becomes entitled to a subsequent distribution
with respect to the SERP, the amount of such subsequent SERP benefit, expressed
as an annual benefit, which annual benefit is the starting point in determining
the amount of such subsequent distribution, shall be equal to the excess of:

         (i)  the amount of the annual SERP benefit, otherwise payable at that
              time (or, at age sixty-two (62), in the event that such person is
              then under age sixty-two (62), determined under the SERP and after
              taking into account the provisions of such person's SERP Side
              Letter, over

         (ii) the amount of the annual SERP benefit which was taken into account
              under clause (i) of the subsection (d) of this Section 15 as the
              starting point in determining the amount of such prior lump sum
              distribution.

         In all other respects, the amount of any subsequent distribution shall
be determined in accordance with such rules of uniform application as may be
established by the Compensation Committee.

         (g) Notwithstanding any other provision of the SERP (or of the Covered
Participant's SERP Side Letter) to the contrary, in the event of such person's
"involuntary termination, other than for Cause" (as those terms are defined
under such person's employment agreement with the Company), in anticipation of a
Change in Control:

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                                                                          5

         (i)  the foregoing provisions of this Section 15, and all other
              provisions of the SERP (and of such person's SERP Side Letter)
              shall apply to such person to the same extent as if a Change in
              Control had, solely with respect to such person, occurred on the
              date immediately preceding the date on which such person is so
              terminated from employment, and

         (ii) such Participant's benefit under the Pension Plan, for purposes of
              determining the offset under Section 4.2(a), Section 4.2(b) and
              such person's SERP Side Letter for such person's Pension Plan
              benefit, to the extent otherwise applicable, shall be computed by
              including the additional years of age and service credit which
              were (or will be) taken into account, pursuant to the provisions
              of Section 5.5(i)(a)(3) of such Participant's employment agreement
              with the Company, in computing the amount of the lump sum payment
              made (or to be made) to such Participant in lieu of an actual
              increase in such Participant's benefit under the Pension Plan.

         (h) If that Covered Participant whose social security number is
[Christopher Havens] remains employed with UDS on the Change in Control Date,
determined without regard to the foregoing subsection (e), such person shall
receive a lump sum payment of $500,000 upon the earlier of:

         (i)  such person's "involuntary termination, other than for Cause," as
              those terms are defined under the employment agreement between
              such person and the Company; provided, however, that an
              "involuntary termination" shall not be deemed to have occurred for
              purposes of this clause (i) in the event that such person
              voluntarily terminates employment on account of a significant
              reduction, occurring not later than the Change in Control Date, in
              such person's duties or the addition, occurring not later than the
              Change in Control Date, of duties which, in either case, are
              materially inconsistent with such person's then title or position,
              such that no amount shall be paid pursuant to this subsection (h)
              to such person; and further, provided, however, that an
              "involuntary termination" shall be deemed to have occurred for
              purposes of this clause (i) in the event that such person
              voluntarily terminates employment on account of a significant
              reduction, occurring subsequent to the Change in Control Date, in
              such person's duties or the addition, occurring subsequent to the
              Change in Control Date, of duties which, in either case, are
              materially inconsistent with such person's title or position as in
              effect on the Change in Control Date, such that an amount shall be
              paid pursuant to this subsection (h) to such person, or

         (ii) twelve months following the Change in Control Date, provided such
              person is still employed by UDS on such date.

No amount shall be payable pursuant to this subsection (h) in the event that
such Covered Participant terminates employment prior to the date set forth in
the foregoing clause (ii) for any reason not described in the foregoing clause
(i).

<PAGE>   6

                                                                          6

         Any amount otherwise payable pursuant to this subsection (h) to such
Covered Participant (i) shall not be reduced by any amounts previously paid to
such person pursuant to any other provision of the SERP and (ii) shall be
disregarded in determining the amount of any future benefits otherwise payable
to such person pursuant to any other provision of the SERP.

         (i) Notwithstanding any other provision of the SERP to the contrary, to
the extent that any subsequent amendment to this Section 15 would adversely
affect the determination of any particular Covered Participant's SERP benefit,
such amendment shall be effective with respect to such person only if such
person consents, in writing, to the application of such amendment, other than an
amendment to subsection (f) of this Section 15, as to which the consent of
Covered Participants shall not be required.

                                    Ultramar Diamond Shamrock Corporation

                                    By:

                                    Accepted and agreed to with respect to the
                                    calculation of their benefits under the
                                    Ultramar Corporation Supplemental Retirement
                                    Plan

                                    By:
                                       ---------------------------------
                                        Jean Gaulin

                                    By:
                                       ---------------------------------
                                        Christopher Havens

                                    By:
                                       ---------------------------------
                                        H. Pete Smith

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