exv10w3



 





Exhibit 10.3




AGREEMENT




     THIS
AGREEMENT dated this 1st day of November, 2006, is between Tesoro Corporation, a
Delaware corporation, whose address is 300 Concord Plaza Drive, San Antonio, Texas 78216
(hereinafter “Tesoro”) and Bruce A. Smith, whose address is 400 Elizabeth Road, San Antonio, Texas
78209 (hereinafter “Smith”).



     WHEREAS, Smith has been instrumental in selecting and coordinating the purchase of the art and
artifacts used at Tesoro’s corporate headquarters (the “Art”). The Art, subject to this Agreement
is attached hereto as Exhibit “A” and incorporated herein for all purposes, has been purchased for
the benefit of guests and employees at the Tesoro corporate headquarters, reflecting Smith’s taste
and experience.



     AND WHEREAS, Tesoro would like to grant Smith the option to purchase the Art pursuant to the
terms and conditions of this Agreement.



     NOW THEREFORE, in order to accomplish the purposes of the Parties as set forth herein, the
Parties agree as follows.




	 	1.	 	If Tesoro decides to sell any of the Art while Smith is still employed by
Tesoro, prior to offering any of the Art for sale, Tesoro shall notify Smith in writing
of Tesoro’s intention to sell, and Smith shall have ten (10) days after receipt of such
notice in which to elect to purchase the Art offered for sale for the Purchase Price
reflected on Exhibit “A” for the specific piece of Art. If Smith elects to purchase
any of the Art, he shall notify Tesoro in writing on or before the expiration of the
10th day after receipt of such notice and pay the Purchase Price as
reflected, together with any applicable sales tax, to Tesoro. Upon receipt of the
Purchase Price, Tesoro shall deliver the Art to Smith. If Smith does not elect to
purchase such Art, Tesoro is free of any obligation to Smith and may sell or dispose of
such Art as it sees fit.
	 
	 	2.	 	If Smith’s employment with Tesoro terminates for any reason, Smith shall have the
option for a period of thirty (30) days following his termination, in which to elect
to purchase any or all of the Art at the Purchase Price(s) reflected on Exhibit “A”
for the specific pieces of Art that Smith elects to purchase. If Smith elects to
purchase any or all of the Art, Smith shall notify Tesoro in writing of his election
to purchase such Art on or before the expiration of the 30th day
following his termination and pay to Tesoro the Purchase Price(s) reflected on
Exhibit “A” for the specific pieces of Art that Smith elects to purchase, together
with any applicable sales tax. Upon receipt of the Purchase Price, Tesoro shall
deliver such Art to Smith. If Smith does not elect to purchase a specific piece of
Art, Tesoro is free of any obligation to Smith and may sell or dispose of such Art
as it sees fit.




 









 












	 	 	 	In addition, in consideration of Smith’s many and valuable contributions to Tesoro
and its shareholders, Smith shall have the option to acquire for Zero Dollars
($0.00) full ownership of three soapstone sculptures of Inuit subject matter
currently at Tesoro’s corporate headquarters.
	 
	 	3.	 	Tesoro is under no obligation to preserve or maintain the Art, nor shall Tesoro
be liable to Smith for any risk of loss or damage to the Art.
	 
	 	4.	 	This Agreement comprises the full and complete agreement of the parties with
respect to the matters set forth herein, and supersedes and cancels all prior
communications, understandings and agreements between the parties hereto, whether
written or oral, expressed or implied.
	 
	 	5.	 	In the event of any ambiguity in the interpretation of any of the terms or
conditions of this Agreement, such ambiguity shall not be resolved for or against any
party on the basis that such party did or did not author the same.
	 
	 	6.	 	This Agreement shall be governed by and construed in accordance with the laws
of the State of Texas.





     UNDERSTOOD
AND AGREED to this 1st day of November, 2006.



	 	 	 
	TESORO CORPORATION
	 

	 	 
	By:

	 	/s/ Charles S. Parrish
	 

	 	 
	 

	 	Charles S. Parrish
	 

	 	Senior Vice President,
	 

	 	General Counsel and Secretary
	 

	 	 

	 

	 	/s/ Bruce A. Smith

	 

	 	 
	 

	 	Bruce A. Smith







2