SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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SCHEDULE 13D
Under the Securities Exchange Act of 1934
DIAMOND SHAMROCK, INC.
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(Name of Issuer)
Common Stock, Par Value $0.01 Per Share
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(Title of Class of Securities)
252747100
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(CUSIP Number)
Patrick J. Guarino, Esq. William P. Rogers, Jr., Esq.
Senior Vice President, General Counsel Cravath, Swaine & Moore
and Secretary--Ultramar Corporation 825 Eighth Avenue
Two Pickwick Plaza, Suite 300 New York, New York 10019
Greenwich, Connecticut 06830
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(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)
September 22, 1996
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(Date of Event Which Requires Filing of this Statement)
If the filing person has previously filed a statement on
Schedule 13G to report the acquisition which is the subject of this
Schedule 13D, and is filing this schedule because of
Rule 13d-1(b)(3) or (4), check the following box [ ] .
Check the following box if a fee is being paid with this
statement |X . (A fee is not required only if the reporting person:
(1) has a previous statement on file reporting beneficial ownership
of more than five percent of the class of securities described in
Item 1; and (2) has filed no amendment subsequent thereto reporting
beneficial ownership of five percent or less of such class.) (See
Rule 13d-7.)
Note: Six copies of this statement, including all exhibits,
should be filed with the Commission. See Rule 13d-1(a) for other
parties to whom copies are to be sent.
*The remainder of this cover page shall be filled out for a
reporting person's initial filing on this form with respect to the
subject class of securities, and for any subsequent amendment
containing information which would alter disclosures provided in a
prior cover page.
The information required on the remainder of this cover page
shall not be deemed to be "filed" for the purpose of Section 18 of
the Securities Exchange Act of 1934 ("Act") or otherwise subject to
the liabilities of that section of the Act but shall be subject to
all other provisions of the Act (however, see the Notes).
(Continued on following page(s))
(Page 1 of 7 Pages)
<PAGE>
CUSIP NO. 25274710 SCHEDULE 13D Page 2 of 7 Pages
-------- --- ---
1 NAMES OF REPORTING PERSON
Ultramar Corporation
S.S. or I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
13-3663331
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP * (a) [ ]
(b) [ ]
3 SEC USE ONLY
4 SOURCE OF FUNDS *
WC, BK, OO
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(D) OR 2(E) [ ]
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
- - - - - - - - - -
7 SOLE VOTING POWER
NUMBER OF 5,858,500 <F1>
SHARES
BENEFICIALLY 8 SHARED VOTING POWER
OWNED BY None
EACH REPORTING
PERSON WITH 9 SOLE DISPOSITIVE POWER
_ _ _ _ _ _ _ _ _ 5,858,500 <F1>
10 SHARED DISPOSITIVE POWER
None
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
5,858,500 <F1>
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES * [ ]
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
16.6% <F2>
14 TYPE OF REPORTING PERSON *
CO
* SEE INSTRUCTIONS BEFORE FILLING OUT
<PAGE>
[FN]
<F1> The shares of common stock of Diamond Shamrock, Inc.
(the "Issuer") covered by this report are purchasable by
Ultramar Corporation ("Ultramar") upon exercise of an option
granted to Ultramar pursuant to a Stock Option Agreement dated
as of September 22, 1996, and described in Item 4 of this
report. Prior to the exercise of the option, Ultramar is not
entitled to any rights as a shareholder of the Issuer as to
the shares covered by the option. The number of shares of
common stock of the Issuer purchasable by Ultramar under the
option will be reduced if necessary so that the value of the
option at the time of its exercise does not exceed $60 million
(such value being the market price of a share of common stock
of the Issuer on the trading day prior to exercise of the
option minus the option exercise price multiplied by the
quantity of shares purchasable under the option). The option
may only be exercised upon the happening of certain events,
none of which has occurred as of the date hereof. Prior to
such exercise, Ultramar expressly disclaims beneficial
ownership of the shares of common stock of the Issuer which
are purchasable by Ultramar upon exercise of the option.
The number of shares indicated represents approximately
19.9% of the total outstanding shares of common stock of the
Issuer as of September 19, 1996, excluding shares issuable
upon exercise of the option.
<F2> Adjusted to reflect the issuance by the Issuer of
5,858,500 shares of common stock as described herein.
Page 3 of 7 Pages
<PAGE>
Item 1. Security and Issuer
This Schedule 13D relates to the common stock, par value $0.01
per share (the "Common Stock," an individual share of which is a
"Share"), of Diamond Shamrock, Inc. (the "Issuer"), a Delaware
corporation. The principal executive offices of the Issuer are
located at 9830 Colonnade Boulevard, San Antonio, Texas 78230.
Item 2. Identity and Background
This Schedule 13D is filed by Ultramar Corporation
("Ultramar"), a Delaware corporation engaged in the refining and
marketing of petroleum products principally in California and
Eastern Canada. Ultramar's principal offices are located at Two
Pickwick Plaza, Suite 300, Greenwich, Connecticut 06830.
During the last five years, to the best of Ultramar's
knowledge, neither Ultramar nor any of its executive officers or
directors has been convicted in a criminal proceeding (excluding
traffic violations or similar misdemeanors) or has been a party to
a civil proceeding of a judicial or administrative body of
competent jurisdiction resulting in a judgment, decree or final
order enjoining future violations of, or prohibiting or mandating
activities subject to, federal or state securities laws, or finding
any violation with respect to such laws.
Except for Mr. Jean Gaulin, Chairman of the Board and Chief
Executive Officer, and Mr. Stanley Hart and Ms. Madeleine
Saint-Jacques, who are directors, each of whom is a citizen of
Canada, all executive officers and directors of Ultramar are
citizens of the United States. The name, business address and
present principal occupation (including the name and address of the
corporation or organization in which such employment is conducted)
of each executive officer and director is set forth in Schedule A
to this Schedule 13D and is specifically incorporated herein by
reference.
Item 3. Source and Amount of Funds or Other Consideration
This Statement relates to an option granted to Ultramar by the
Issuer to purchase shares of Common Stock from the Issuer as
described in Item 4 below (the "Stock Option"). The Stock Option
entitles Ultramar to purchase up to 5,858,500 shares of Common
Stock (the "Option Shares") under the circumstances specified in
the Stock Option Agreement dated as of September 22, 1996, between
Ultramar and the Issuer (the "Stock Option Agreement") and as
described in Item 4 below, for a purchase price of $27.55 per Share
(the "Purchase Price"). The number of Option Shares will be reduced
if necessary so that the value of the Stock Option at the time of
its exercise does not exceed $60 million (such value being the
market price of a Share on the trading day prior to exercise of the
Stock Option minus the Purchase Price multiplied by the number of
Option Shares purchased). Reference is hereby made to the Stock
Option Agreement, which is included as Exhibit 10.1 to the Ultramar
Current Report on Form 8-K, dated as of September 25, 1996, File
No. 1-11154 (the "Ultramar 8-K"), for the full text of its terms,
including the conditions upon which it may be exercised.
The Stock Option was granted by the Issuer as an inducement to
Ultramar to enter into the Agreement and Plan of Merger, dated as
of September 22, 1996, among Ultramar and the Issuer (the "Merger
Agreement"). Pursuant to the Merger Agreement and subject to the
conditions set forth therein (including approval by the
stockholders of Ultramar and the Issuer and various regulatory
agencies), the Issuer will merge with and into Ultramar (the
"Merger") with Ultramar continuing as the surviving corporation,
and each issued and outstanding Share will be converted into the
right to receive 1.02 shares of common stock, par value $0.01 per
share, of Ultramar. If the merger is consummated, the Stock Option
will not be exercised. No monetary consideration was paid by
Ultramar to the Issuer for the Stock Option.
Page 4 of 7 Pages
<PAGE>
If Ultramar elects to exercise the Stock Option, it currently
anticipates that the funds to pay the Purchase Price will be
generated by a combination of available working capital, bank or
other borrowings and/or the sale, in whole or in part, of Option
Shares following such exercise.
Item 4. Purpose of Transaction
As stated above, the Stock Option was granted to Ultramar in
connection with the execution of the Merger Agreement. A copy of
the Merger Agreement is included as Exhibit 2.1 to the Ultramar 8-K
and is incorporated herein by reference in its entirety. If the
Merger is consummated, the size of Ultramar's Board of Directors
shall be increased to twelve with six members of the Issuer's
present Board of Directors becoming members of Ultramar's Board of
Directors.
Ultramar has the right to cause the Issuer to prepare and file
up to three registration statements under the Securities Act of
1933, in order to permit the sale by Ultramar of any Option Shares
purchased under the Stock Option.
The descriptions herein of the Stock Option Agreement and the
Merger Agreement are qualified in their entirety by reference to
such agreements, copies of which were filed as Exhibits 10.1 and
2.1, respectively, to the Ultramar 8-K.
Item 5. Interest in Securities of the Issuer
As a result of the issuance of the Stock Option, Ultramar may
be deemed to be the beneficial owner of 5,858,500 shares of Common
Stock of the Issuer, which would represent approximately 16.6% of
the shares of Common Stock outstanding after exercise of the Stock
Option (based on the number of shares of Common Stock outstanding
on September 19, 1996, as set forth in the Merger Agreement).
Ultramar will have sole voting and dispositive power with respect
to such shares.
The Option Shares described herein are subject to the Stock
Option, which is not currently exercisable. Nothing herein shall be
deemed to be an admission by Ultramar as to the beneficial
ownership of any shares of Common Stock, and, prior to exercise of
the Stock Option, Ultramar disclaims beneficial ownership of all
Option Shares.
Except as described herein, neither Ultramar nor, to the best
of Ultramar's knowledge, any other person referred to in Schedule A
attached hereto beneficially owns or has acquired or disposed of
any shares of Common Stock of the Issuer during the past 60 days.
Item 6. Contracts, Arrangements, Understandings or
Relationships with Respect to Securities of the Issuer
Except for the Merger Agreement and the Stock Option
Agreement, none of the persons named in Item 2 has any contracts,
arrangements, understandings or relationships (legal or otherwise)
with any persons with respect to any securities of the Issuer,
including, but not limited to, transfers or voting of any
securities, finder's fees, joint ventures, loan or option
arrangements, puts or calls, guarantees of profits, division of
profits or loss, or the giving or withholding of proxies.
Item 7. Materials to be Filed as Exhibits
Exhibit Description
1 Stock Option Agreement, dated as of September 22,
1996, between Diamond Shamrock, Inc., as Issuer, and
Ultramar Corporation, as Grantee (incorporated by
reference from Exhibit 10.1 to the Ultramar 8-K).
Page 5 of 7 Pages
<PAGE>
2 Agreement and Plan of Merger, dated as of September
22, 1996, among Ultramar Corporation and Diamond
Shamrock, Inc. (incorporated by reference from
Exhibit 2.1 to the Ultramar 8-K).
SIGNATURE
After reasonable inquiry and to the best of my knowledge and
belief, I certify that the information set forth in this
Schedule 13D is true, complete and accurate.
October 1, 1996 Ultramar Corporation
By: /s/ Patrick J. Guarino
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Patrick J. Guarino
Senior Vice President,
General Counsel and Secretary
Page 6 of 7 Pages
<PAGE>
SCHEDULE A
Names of Directors Principal Occupation Name and Address of
and Officers or Employment Organization
- ------------------ -------------------- -------------------
Jean Gaulin Chief Executive Officer Ultramar Corporation
Director and Officer and Chairman of the Board Two Pickwick Plaza
of Ultramar Corporation Greenwich, CT 06830
H. Pete Smith Senior Vice President and Ultramar Corporation
Officer Chief Financial Officer Two Pickwick Plaza
of Ultramar Corporation Greenwich, CT 06830
Patrick J. Guarino Senior Vice President, Ultramar Corporation
Officer General Counsel and Two Pickwick Plaza
Secretary of Ultramar Greenwich, CT 06830
Corporation
Byron Allumbaugh Chairman of Ralphs Ralphs Grocery Co.
Director Grocery Company P.O. Box 54143
Los Angeles, CA 90054
H. Frederick Christie Consultant 655 Deep Valley
Director Drive, Suite 125
Rolling Hills
Estates, CA 90274
Stanley Hartt Chairman, President and CAMDEV Corporation
Director Chief Executive Officer 40 King Street West,
of Camdev Corporation Suite 2700
Toronto, Ontario M5H 3Y2
CANADA
Russel H. Herman Owner and Principal of 5 Alden Road
Director International Energy Greenwich, CT 06831
Consultants Ltd.
William F. Luce Retired 88 Old Army Road
Director Scarsdale, NY 10583
Madeleine Saint-Jacques Chairman of the Board Saint-Jacques Vallee
Director of Saint-Jacques Vallee Young & Rubicam Inc.
Young & Rubicam Inc. 1600 Rene-Levesque
Blvd., West
Montreal, Quebec H3H 1P9
CANADA
C. Barry Schaefer Managing Director with The Bridgeford Group
Director The Bridgeford Group 280 Park Avenue
New York, NY 10017
Page 7 of 7 Pages
