THIRD AMENDMENT TO AMENDED AND RESTATED EMPLOYMENT AGREEMENT
EXHIBIT 10.7
THIRD AMENDMENT TO
AMENDED AND RESTATED EMPLOYMENT AGREEMENT
AMENDED AND RESTATED EMPLOYMENT AGREEMENT
This
Third Amendment (the “Amendment”) is entered into as of
December 12, 2008 (the
“Effective Date”) as an amendment to the Amended and Restated Employment Agreement entered into by
and between Tesoro Corporation (the “Company”) and Xxxxx X. Xxxxx (the “Executive”) as of December
3, 2003, as subsequently amended (the “Agreement”).
In consideration of the mutual promises, covenants and conditions set forth herein, including
but not limited to Executive’s employment and the payments and benefits described herein, the
sufficiency of which is hereby acknowledged, the Company and the Executive hereby agree as follows:
1. Section 4 of the Agreement is hereby amended by deleting the first paragraph of subsection
(f) thereof to read as follows:
(f) SUPPLEMENTAL ANNUAL RETIREMENT BENEFIT. Executive shall be entitled to
participate in the Company’s Amended and Restated Executive Security Plan as currently in
effect or as amended hereafter, but excluding any such amendment which would reduce
Executive’s benefits thereunder, and shall receive a benefit upon his Separation from
Service for any reason, other than for Cause, in an amount calculated under such plan using
the greater of (i) his actual “Service” or (ii) 20 years of “Service” and payable in the
form of a lump sum payable first day of the seventh (7th) calendar month
following Executive’s Separation from Service, determined using the actuarial equivalent of
an unreduced single life annuity with a 50% right of survivorship to his current spouse,
Xxxx X. Xxxxx if she survives Executive.
2. Section 19 of the Agreement is hereby amended by inserting the following subsection (f) to read as follows:
(f) DEFERRED COMPENSATION. This Agreement is, to the extent applicable, intended to
meet the requirements of Section 409A of the Code and shall be administered, construed and
interpreted in a manner that is intended to meet those requirements. Notwithstanding any
provision of this Agreement to the contrary, for purposes of determining the timing of any
payment under this Agreement that is subject to Code Section 409A and is required to be made
upon the Executive’s termination of
employment, the Executive’s employment shall not be considered terminated until he has
experienced a separation from service. For purposes of this Agreement, a “separation from
service” occurs when the Company and the Executive reasonably anticipate a permanent
reduction in the level of bona fide services performed by the Executive for the Company and
its affiliates to 20% or less of the average level of bona fide services performed by the
Executive for the Company and its affiliates (whether as an employee or an independent
contractor) in the immediately preceding thirty-six (36) months. The determination of
whether a separation from service has occurred shall be made by the Compensation Committee
in accordance with the provisions of Section 409A.
IN WITNESS WHEREOF, the parties hereto have duly executed this Amendment as of the day and
year first above written.
| TESORO CORPORATION | ||||||
| /s/ Xxxxxxx X. Xxxxxxx | ||||||
Date:
December 12, 2008
|
||||||
| Title: Senior Vice President, General Counsel & Secretary | ||||||
Date:
December 15, 2008 |
/s/ Xxxxx X. Xxxxx | |||||
Address: 000 Xxxxxxxxx Xxx Xxxxxxx, Xxxxx 00000 |
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