FOURTH AMENDMENT TO EMPLOYMENT AGREEMENT
Exhibit 10.1
FOURTH AMENDMENT TO EMPLOYMENT AGREEMENT
This Fourth Amendment (“Amendment”) to the Employment Agreement dated December 3, 2003,
between Tesoro Corporation (“Company”) and Xxxxx X. Xxxxx (“Executive”), as amended February 2,
2006, November 1, 2006, and December 12, 2008 (“Agreement”), is entered into this 4th day of
August, 2009, by and between the Company and Executive, sometimes collectively referred to herein
as the “Parties.”
WITNESSETH:
WHEREAS, the Company and Executive have previously entered into an employment agreement which
has been amended on three occasions; and
WHEREAS, the Company and Executive desire to amend the Agreement again to reflect certain
changes they have agreed to.
NOW, THEREFORE, 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 Executive hereby agree as
follows:
1. Section 2 of the Agreement is hereby amended by deleting the current language and replacing
it with the following language:
“2. TERM OF EMPLOYMENT. The term of this Agreement shall begin on the
Effective Date, and shall expire and Executive’s employment with the Company shall
end on December 31, 2011. The period during which Executive is employed hereunder
shall be referred to as the ‘Employment Period.’ Either the Company or the
Executive shall have the right to terminate the Employment Period at any time during
the term hereof, in accordance with Section 5, below.”
2. Section 3 of the Agreement is hereby amended by adding the following language at the end of
Section 3(a):
“At the direction of the Board, Executive shall assist the Company in
identifying and recruiting, if necessary a potential successor to the chief
executive officer position. Executive further agrees to ensure that a smooth
transition occurs and when the successor chief executive officer is elected by the
Board, if requested by the Board, Executive shall transition from President and
Chief Executive Officer to non-executive Chairman of the Board.”
3. Section 5 of the Agreement is hereby amended by moving Section 5(f) to Section 5(g), and
creating a new Section 5(f), as reflected below:
“(f) RETIREMENT BY EXECUTIVE. Executive shall terminate his employment by
retirement during the Employment Period on the date a successor chief executive
officer is elected by the Board. Provided, however, Executive
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shall continue to serve as Chairman of the Board for up to one (1) year after
his termination of employment by retirement for $1.00 if requested by the Board. In
no event shall Retirement by Executive, as provided in this Section 5(f), constitute
Termination by the Company Without Cause or Termination By Executive for Good
Reason, for purposes of Section 6(e) of this Agreement.”
4. Section 6 of the Agreement is hereby amended by moving Section 6(f) to Section 6(g),
Section 6(g) to Section 6(h), and creating a new Section 6(f), as reflected below:
“(f) TERMINATION BY EXECUTIVE FOR RETIREMENT. In lieu of any other benefits
under this agreement, in the event that Executive terminates his employment by
retiring pursuant to Section 5(f) above, the Company shall pay Executive the amounts
as described below in subsections (i), (ii), and (vi) except for the special
completion bonus, and if at such time Executive has fulfilled the conditions set
forth in Section 3(a) above to the satisfaction of the Board, the Company shall, in
addition pay Executive the amounts as described below in subsections (iii), (iv),
(v) and the special completion bonus in (vi):
(i) Any accrued but unpaid Base Salary for services rendered to the
date of termination, any accrued but unpaid expenses required to be
reimbursed under this Agreement, any vacation accrued to the date of
termination, and any earned but unpaid bonuses for any prior period;
provided, however, that such earned but unpaid bonuses shall be paid in a
cash lump sum on the first business day following the end of the six (6)
month period commencing on the date of Executive’s termination of employment
by retirement;
(ii) Any benefits to which Executive may be entitled pursuant to the
plans, policies, and arrangements referred to in Section 4(f) hereof shall
be determined and paid in accordance with the terms of such plans, policies,
and arrangements;
(iii) The amount of Executive’s Base Salary from the date of his
retirement through December 31, 2011, paid in a cash lump sum on the first
business day following the end of the six (6) month period commencing on the
date of Executive’s termination of employment by retirement;
(iv) A prorated bonus through Executive’s retirement date may be
awarded at the Board’s discretion based, in part, on Executive’s performance
in facilitating a smooth transition of the successor chief executive
officer, and the Company’s business results. Such prorated bonus, if any,
shall be paid in a cash lump sum on the first business day following the end
of the six (6) month period commencing on the date of Executive’s
termination of employment by retirement;
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(v) All of Executive’s unvested equity awards, including stock options,
restricted stock, SARs, and/or phantom stock will vest upon Executive’s
retirement as President and Chief Executive Officer and all such stock
options, SARs and/or phantom stock along with those already vested prior to
the date of such retirement shall have the full remaining original term of
each grant to be exercised;
(vi) Executive’s lump sum benefit under the Tesoro Corporation Amended
and Restated Executive Security Plan shall be determined as of the date of
Executive’s retirement as provided under the terms of such plan; provided,
however, that if such benefit, calculated as of the date of Executive’s
retirement, is less than the amount of Executive’s lump sum benefit
thereunder, determined as of May 31, 2009, Executive shall receive a special
completion bonus for the difference, payable in a cash lump sum on the first
business day following the end of the six (6) month period commencing on the
date of Executive’s termination of employment by retirement.”
IN WITNESS WHEREOF, the parties hereto have duly executed this Fourth Amendment as of the day and
year first above written.
| TESORO CORPORATION |
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| By: | /s/ XXXXXXX X. XXXXXXX | |||
| XXXXXXX X. XXXXXXX | ||||
| Executive Vice President, General Counsel and Secretary | ||||
| Date: | August 4, 2009 | |||
| EXECUTIVE: |
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| /s/ XXXXX X. XXXXX | ||||
| XXXXX X. XXXXX, Executive |
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| Date: | August 4, 0000 | |||
| XXXXXX XXXXXXXXX TO EMPLOYMENT AGREEMENT | Page 3 of 3 |
