SECOND AMENDMENT TO EMPLOYMENT AGREEMENT
Exhibit 10.1
SECOND AMENDMENT TO
EMPLOYMENT AGREEMENT
EMPLOYMENT AGREEMENT
This Second Amendment to Employment Agreement (“Second Amendment”) is entered into as of June
8, 2007 (the “Effective Date”) as a Second Amendment to the Employment Agreement entered into by
and between Tesoro Corporation (the “Company”) and Xxxxxxx X. Xxxxxx (the “Executive”) as of August
3, 2004 (the “Employment Agreement”), as amended by that certain First Amendment to Employment
Agreement dated as of February 2, 2006 (the “First Amendment”) by and between the Company and the
Executive.
W I T N E S S E T H:
WHEREAS, the Company and the Executive have previously entered into the Employment Agreement
and the First Amendment;
WHEREAS, effective as of June 8, 2007, the Executive received a promotion from Executive Vice
President and Chief Financial Officer to Executive Vice President and Chief Administrative Officer;
and
WHEREAS, the Company and the Executive wish to further amend the Employment Agreement by
entering into this Second Amendment so as to (i) reflect the Executive’s promotion from Executive
Vice President and Chief Financial Officer to Executive Vice President and Chief Administrative
Officer and change (ii) the amount of certain fee reimbursements to the Executive;
NOW, THEREFORE, in consideration of the mutual promises, covenants and conditions set
forth herein including, but not limited to, the 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. Defined Terms. Capitalized terms not otherwise defined in this Second Amendment
shall have the meaning set forth in the Employment Agreement.
2. Amendments.
(a) All references in the Employment Agreement to “Chief Financial Officer” are hereby amended
to read “Chief Administrative Officer”. Without limiting the generality of the foregoing, the
Employment Agreement is hereby amended as follows:
(i) The first recital set forth in the Employment Agreement under
“WITNESSETH” is hereby amended to read, in its entirety, as follows:
“WHEREAS, the Company wishes to employ the Executive as its
Executive Vice President and Chief Administrative Officer and the
Executive wishes to continue such employment; and”
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(ii) Section 3(a) of the Employment Agreement is hereby amended to read, in
its entirety, as follows:
(a) Executive shall serve as Executive Vice President and Chief
Administrative Officer of the Company. In such capacities,
Executive shall perform such duties and have the power, authority
and functions commensurate with such positions in similarly sized
public companies and such other authority and functions consistent
with such positions as may be assigned to Executive from time to
time by the Chief Executive Officer.
(b) Section 4(a) of the Employment Agreement is hereby amended to read, in its entirety, as
follows:
(a) ANNUAL BASE SALARY. During the Employment Period, the Executive shall
receive an annual base salary (the “Annual Base Salary”) at an annual rate of
$608,000 less applicable taxes, or such higher rate as may be determined from time
to time by the Board of Directors of the Company (the “Board). The annual Base
Salary shall be paid at such intervals as the Company pays executive salaries
generally. During the Employment Period, the Annual Base Salary shall be reviewed
at least annually, beginning no more than 12 months after the last salary increase
awarded to the Executive prior to the Effective Date. Any increase in the Annual
Base Salary shall not serve to limit or reduce any other obligation to the Executive
under this Agreement. The Annual Base Salary shall not be reduced after any such
increase and the term “Annual Base Salary” shall refer to the Annual Base Salary as
so increased.
(c) Section 4(e) of the Employment Agreement is hereby amended to read, in its entirety, as
follows:
(e) FEE REIMBURSEMENTS.
The Company will reimburse the Executive as provided in the Company’s policies
and procedures for an initiation fee or fees and dues for a country, luncheon or
social club or clubs. In addition, the Company will reimburse the Executive for
additional initiation fees to the extent the Board of Directors or a duly authorized
committee thereof determines such fees are reasonable and in the best interest of
the Company.
3. Acknowledgement and Waiver. The Company and the Executive acknowledge and agree
that the promotion of the Executive from Executive Vice President and Chief Financial Officer to
Executive Vice President and Chief Administrative Officer and the related change in his positions,
duties and responsibilities shall not be deemed to constitute (i) a material diminution of
Executive’s positions, duties or responsibilities under the Employment Agreement or the assignment
to the Executive of duties or responsibilities that are inconsistent with the Executive’s position,
(ii) the removal of the Executive from officer positions with the Company specified in the
Employment Agreement, or (iii) a material breach by the Company of any
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provision of the Employment Agreement, for purposes of the definition of “Good Reason” set
forth in the Employment Agreement. The Executive hereby irrevocably waives any claim that the
promotion from Executive Vice President and Chief Financial Officer to Executive Vice President and
Chief Administrative Officer constitutes Good Reason under the terms of the Employment Agreement.
4. Employment Agreement Remains in Full Force and Effect. Except as expressly amended
by this Second Amendment, the Employment Agreement, as amended by the First Amendment, shall remain
in full force and effect and all of the terms of the Employment Agreement, as amended by the First
Amendment, are hereby incorporated into this Second Amendment.
5. Governing Law. This Second Amendment shall be governed by and construed in
accordance with the laws of the State of Texas applicable to agreements made and to be performed in
that State, without regard to its conflict of laws provisions.
6. Miscellaneous.
(a) Waiver. The failure of a party to insist upon strict adherence to any term of this Second
Amendment on any occasion shall not be considered a waiver thereof or deprive that party of the
right thereafter to insist upon strict adherence to that term or any other term of this Second
Amendment.
(b) Separability. If any term or provision of this Second Amendment is declared illegal or
unenforceable by any court of competent jurisdiction, and cannot be modified to be enforceable,
such term or provision shall immediately become null and void, leaving the remainder of this Second
Amendment in full force and effect.
(c) Headings. Section headings are used herein for convenience of reference only and shall
not affect the meaning of any provision of this Second Amendment.
(d) Rules of Construction. Whenever the context so requires, the use of the singular shall be
deemed to include the plural and vice versa.
(e) Counterparts. This Second Amendment may be executed in any number of counterparts, each
of which so executed shall be deemed to be an original, and such counterparts will together
constitute but one Second Amendment.
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IN WITNESS WHEREOF, the parties hereto have duly executed this Second Amendment as of the day
and year first above written.
| TESORO CORPORATION |
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| /s/ XXXXX X. XXXXX | ||||
| By: Xxxxx X. Xxxxx | ||||
| Title: | Chairman of the Board of Directors, President and Chief Executive Officer |
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| /s/ XXXXXXX X. XXXXXX | ||||
| Xxxxxxx X. Xxxxxx, Executive | ||||
| Address: 000 Xxxxxxxxxx Xxx Xxxxxxx, Xxxxx 00000 |
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