Document:

exv10w1

Exhibit 10.1

SEPARATION AND WAIVER OF LIABILITY AGREEMENT

     I, William J. Finnerty, am an employee of Tesoro Corporation. My last day of employment is
March 31, 2010 (the “Separation Date”). I have voluntarily agreed to accept certain separation
benefits being offered to me upon my separation from service with Tesoro Corporation, on the terms
and conditions set forth below, and voluntarily enter into this Separation and Waiver of Liability
Agreement (“Agreement”).

1. Payments and Other Considerations.

In consideration of the payments and benefits listed below, and other good and valuable
consideration (the “Consideration”), the sufficiency of which I acknowledge, I make the following
agreements and RELEASE AND FOREVER DISCHARGE the persons and organizations specified in Paragraph 4
below. I acknowledge that the Consideration is in addition to anything of value to which I am
already entitled. This release and these agreements are made for myself, and on behalf of my heirs,
executors, legal representatives, administrators, successors, and assigns. As used in this
Agreement, the term “Consideration” shall include the following:

(a) Cash payment to me of the sum of TWO MILLION FOUR HUNDRED FIFTY-THREE THOUSAND TWO
HUNDRED FIFTY-TWO AND NO/100 DOLLARS ($2,453,252.00) in separation pay (hereinafter, the
“Separation Pay”). I understand and agree that Tesoro Corporation will deduct from this
Separation Pay withholdings for federal income taxes, social security taxes, any other
deductions required by law, and any other deductions agreed to by me in writing. The
Separation Pay shall be paid as follows (assuming Employee has timely executed and not
revoked the Agreement): SEVENTY-FIVE THOUSAND FIVE HUNDRED FORTY-TWO AND NO/100 DOLLARS
($75,542.00) shall be paid each calendar month during the six (6) month period beginning
April 1, 2010, and TWO MILLION AND NO/100 DOLLARS ($2,000,000.00) shall be paid in a lump
sum on October 1, 2010. I acknowledge and agree that these payments are not otherwise
required by Tesoro Corporation’s policies, procedures, and practices and that I would not be
entitled to the Separation Pay but for the promises made by me in this Agreement. These
payments shall be made via direct deposit to the account information I provide to Tesoro
Corporation.

(b) My spouse, my eligible dependents and I shall continue to participate in, and
receive group health coverage under, Tesoro Corporation’s group health plans that provide
group health coverage to retirees of Tesoro Corporation from time to time, but only to the
extent such plans continue to be available to the Tesoro Corporation’s retirees and only
until the earliest to occur of (i) two and one-half (21/2) years after the date of
termination, (ii) my death (or in the case of coverage for my qualified beneficiary, the
death of that qualified beneficiary), or (iii) the date on which I become (or in the case of
coverage for my qualified beneficiary, my qualified beneficiary becomes) eligible for
coverage under any other group health plan of a subsequent employer providing comparable
coverage (the “Continuation Coverage Period”); provided that Tesoro Corporation shall pay
for 100% of such group health coverage, and the premiums that otherwise would be charged to
me for such coverage but for this Paragraph 1(c) shall be taxable to me; the group health
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coverage benefits provided by Tesoro Corporation under this Paragraph 1(c) during any
taxable year of mine will not affect such benefits provided by Tesoro Corporation in another
taxable year during the Continuation Coverage Period; and the right to the benefits provided
under this Paragraph 1(c) is not subject to liquidation or exchange for another benefit.

(c) Subject to the terms and conditions of the applicable executive long-term incentive
plans governing the option awards or restricted stock awards, I will continue to vest in all
stock option awards or restricted stock awards over the two (2) year period commencing on
the Separation Date. With respect to option awards granted to me after February 2, 2005, I
will have two (2) years after the Separation Date to exercise all options, to the extent
vested, unless by virtue of the particular stock option award, the option grant expires on
an earlier date.

I acknowledge that, prior to entering this Agreement, I have already received or have been advised
that I will receive payment from Tesoro Corporation for the following items in accordance with
applicable state law, less standard deductions as required by law:

(i) All previously unpaid salary earned through the Separation Date;

(ii) All unused vacation pay earned through the Separation Date, and

(iii) The benefits available to me as a retiree under Tesoro’s retirement plans.

2. Forfeiture of Unvested Phantom Stock Options.

All of my unvested phantom stock options will be forfeited on the Separation Date.

3. Consulting Services.

I agree to provide consulting services as requested from time to time by Tesoro Corporation, its
subsidiaries and affiliates, specifically, I agree to consult with the Chief Executive Officer from
time to time at his request, but no more than eight (8) hours per week, on matters including, but
not limited to, Tesoro Corporation’s involvement with industry trade groups including the National
Association of Petrochemical Refiners and the Western States Petroleum Association, and on-going
matters related to governmental affairs impacting the refining industry as a whole, and special
projects that may arise. I will be reimbursed for all reasonable expenses associated with the
consulting services. I agree to continue as a consultant for Tesoro Corporation and affiliates
until the earlier of (i) the last day of the six (6) month period commencing on the Separation Date
(the “Consulting Period”) or (ii) the day on which I commence employment elsewhere. I shall
further be required to provide the Senior Vice President, Administration of Tesoro Companies, Inc.
with written notice indicating that I have commenced employment elsewhere if such commencement is
during the Consulting Period, in which case, the Consulting Period will terminate on the date that
I commence employment elsewhere.

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4. Persons and Organizations Released.

I release Tesoro Corporation, any subsidiary or other affiliated companies, successors, and assigns
and all of their past, present, and future shareholders, owners, agents, representatives, officers,
directors, administrators, trustees, insurers, successors, and employees. Collectively, these
persons and organizations are referred to in this Agreement as “Tesoro.”

5. Matters Released.

I release Tesoro from all existing, past and present, known and unknown claims, demands, and causes
of action of any nature for all existing, past and present, known and unknown damages and remedies
of any nature, which have accrued or which may ever accrue to me or to others on whose behalf I
enter into this Agreement, resulting from or relating to any act or omission of any kind occurring
on or before the date of signing this Agreement.

This release includes but is not limited to all claims under any federal, state, or local
employment law or regulation. I understand and agree that this release is intended to include but
is not limited to all claims that I could assert concerning the terms and conditions of my
employment, concerning anything that happened to me while I was an employee, or concerning the
separation of my employment.

This release includes but is not limited to claims under Title VII of the Civil Rights Act of 1964,
as amended; the Civil Rights Act of 1991; 42 U.S.C. § 1981; the Americans with Disabilities Act;
the Rehabilitation Act of 1973; Executive Order 11246; the Age Discrimination in Employment Act, as
amended by the Older Workers Benefit Protection Act; the Worker Adjustment and Retraining
Notification Act (“WARN”), the Employment Retirement Income Security Act, as amended; the
retaliation provisions of the Texas Workers’ Compensation Act, the Texas Commission on Human Rights
Act, Chapter 451 of the Texas Labor Code; the Fair Labor Standards Act; the Equal Pay Act; and the
Family and Medical Leave Act.

This release also includes but is not limited to all claims under any other state, federal, or
local law or regulation and all claims at common law (including but not limited to negligence,
contract, or tort claims). The release also includes all claims for back pay, front pay, damages,
liquidated damages, exemplary and punitive damages, injunctive relief, costs, or attorneys’ fees.

This release is not intended to waive rights or claims, if any, that arise after the date this
Agreement is executed. Further, this release is not intended to waive vested rights, if any, that
I might have in any written benefit plan or program. I understand that the terms and conditions
contained within any such benefit plan or program, specifically including those relating to any
vested rights that I may have in such plan or program, shall be controlling.

In addition, notwithstanding the foregoing, nothing in this Agreement shall prevent me from filing
a charge with any federal, state or administrative agency, but I agree not to participate in, and
waive any rights with respect to, any monetary or financial relief arising from any such proceeding
that relates to the matters released by this Agreement.

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6. OWBPA Compliance.

I acknowledge that the release and waiver provisions of this Agreement comply with the requirements
of the Older Workers Benefit Protection Act, 29 U.S.C. § 626(f)(1) (A)-(G). I have knowingly and
voluntarily agreed, for the consideration set forth herein, to waive, among other things, any and
all rights and claims I may have against Tesoro under the Age Discrimination in Employment Act of
1967, as amended, 29 U.S.C. § 621 et seq. (“ADEA”). I specifically acknowledge that the waiver of
rights under the ADEA is written in a manner that I understand, that the waiver specifically refers
to claims arising under the ADEA, that I have not waived any rights or claims under the ADEA that
arise after the date this Agreement is executed, that my waiver of rights or claims under the ADEA
is in exchange for consideration in addition to anything of value that I am otherwise entitled to
receive from Tesoro.

7. Consultation with Attorney.

I have voluntarily chosen to sign this Agreement and to agree to its terms and provisions. I have
also been advised and have had the opportunity to request, before signing, sufficient time to
thoroughly discuss all terms, provisions, and aspects of this Agreement with an attorney.

8. Understanding of Agreement.

In signing this Agreement, I have relied on my own judgment and/or the advice of my attorney, and
not on any statement or representation of Tesoro. I understand the terms and conditions of this
Agreement, agree to abide by it, and voluntarily execute it without reservation. I understand that
this agreement is a full, complete, and final release of any and all claims that I may have against
Tesoro.

9. Confidentiality and Non-Disclosure of Proprietary Information.

I acknowledge that I have had access to and become familiar with various trade secrets and
proprietary and confidential information of Tesoro, including, but not limited to, the identity,
responsibilities, and/or income of employees, costs of doing business, financial information,
formulas, processes, and suppliers, compilations of information, records, customer information,
methods of doing business, information about past, present, pending, and/or planned transactions,
and other confidential information (collectively referred to as “Confidential Information”), which
are owned by Tesoro and regularly used in the operation of its business, and as to which Tesoro
takes precautions to prevent dissemination to persons other than certain directors, officers, and
employees. I acknowledge that the Confidential Information (i) is secret and not known in the
industry; (ii) gives Tesoro an advantage over competitors who do not know or use the Confidential
Information; (iii) is of such value and nature as to make it reasonable and necessary to protect
and preserve the confidentiality and secrecy of the Confidential Information; and (iv) constitutes
a valuable, special, and unique asset of Tesoro, the disclosure of which could cause substantial
injury and loss of profits and goodwill to Tesoro. Confidential Information does not include
material, data, documents, and/or information that Tesoro has voluntarily placed in the public
domain; that has been lawfully and independently developed and publicly disclosed by third parties;
that constitutes general knowledge and skills that I gained during the time period of my employment
with Tesoro, or that otherwise enters the public domain though lawful means.

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I agree that I will not in any way use or disclose any Confidential Information, directly or
indirectly, at any time in the future, and shall otherwise protect such information from
unauthorized use or disclosure by others. All files, records, documents, information, data, and
similar items relating to the business of Tesoro, or its prospects, services, suppliers, products,
customers, finances, data processing, purchasing, accounting, or marketing systems, whether
prepared by me or otherwise coming into my possession, will remain the exclusive property of
Tesoro, and in any event must be promptly delivered to Tesoro Corporation upon execution of this
Agreement.

As a result of my employment by Tesoro, I may have had access to, or knowledge of, confidential
business information or trade secrets of third parties. I also agree to preserve and protect the
confidentiality of such third-party confidential information and trade secrets to the same extent,
and on the same basis, as the privileged confidential business and/or trade secret information of
Tesoro.

10. Return of Property and Confidential Information.

I agree that all documents or materials that I obtained while employed by Tesoro and that contain
or disclose privileged, confidential business and/or trade-secret information are and remain the
property of Tesoro. I agree that I will immediately deliver any such materials, including all
copies, to Tesoro Corporation. I also agree that I will examine all of my personal computers for
any privileged, confidential business and/or trade-secret information and return copies of such
information to Tesoro Corporation and then delete such information from such computers, without
retaining any copies thereof. I further agree to return, if I have not already returned such
property, all company property, which includes but is not limited to computers, equipment,
identification badges, computer passwords, keys, credit cards, books, records, and any other items
belonging to Tesoro Corporation, subject to arranging for the continued use of certain equipment
during the Consulting Period.

11. Non-Disparagement.

I agree not to disclose or make public (directly or indirectly) any facts or allegations about any
Tesoro employees. I also agree not to disparage or communicate negatively about the business,
products, services, customers, management, or employment/compensation/benefit practices and
policies of Tesoro. To the extent allowed by law, I also agree not to help, encourage, or
participate (directly or indirectly) in any claims or lawsuits against Tesoro for any claims
related to any individual’s employment (or separation from employment) with Tesoro.

12. Non-Solicitation of Employees.

I agree that for a period of two (2) years after my last day of active employment with Tesoro that
I will not, either directly or indirectly, on my own behalf or on behalf of others, solicit,
attempt to hire, or hire any person currently employed by Tesoro or who was employed by Tesoro at
any time during the six (6) months prior to such solicitation or job offer, to work for Employee or
for another entity, firm, corporation, or individual.

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13. Breach.

I agree that upon any breach or threatened breach by me of, or challenge by me to, Paragraphs 9
through 12, I will forfeit the right to payment of any Consideration otherwise due me under
Paragraph 1(a) and return to Tesoro Corporation any cash Consideration previously paid to me under
Paragraph 1(a). I further agree that any breach or threatened breach of Paragraphs 9 through 12
cannot be remedied solely by money damages, and that in addition to any other remedies Tesoro may
have, any such breach or threatened breach shall entitle Tesoro to obtain injunctive relief against
me. Nothing herein, however, shall be construed as limiting Tesoro’s right to pursue any other
available remedy at law or in equity, including recovery of damages and termination of this
Agreement; provided further, that any breach of Paragraphs 9 through 12 by me will result in
forfeiture of all rights to the payments referenced in Paragraph 1, above.

14. Outplacement Compensation.

In consideration of the promises and agreements contained herein, Tesoro Corporation agrees to
provide me with outplacement services through a firm chosen solely by Tesoro Corporation, for a six
(6) month period beginning on the date of the execution of this Agreement. However, such
outplacement services shall cease upon my acceptance of a position offer, even if such acceptance
of a position offer is within the six (6) month period as described above.

15. Independent Covenants.

The covenants in Paragraphs 9 through 14 of this Agreement shall be construed as agreements
independent of any other provision of this Agreement, and the existence of any claim or cause of
action that I might have against Tesoro, whether predicated on this Agreement or otherwise, shall
not constitute a defense to the enforcement by Tesoro of such covenants.

16. Entire Agreement.

This Agreement represents the entire agreement between Tesoro and me, and there are no other
agreements or understandings other than those contained in this Agreement. I do not rely upon any
other consideration, promise or agreement not contained in this Agreement. This Agreement
substitutes for all prior and contemporaneous agreements and understandings, written or oral,
between Tesoro and me related to the subject matter of this Agreement. I understand that this
Agreement may not be changed unless the modification is in writing and signed by both the Executive
Vice President, General Counsel and Secretary of Tesoro Corporation and me.

17. Governing Law and Disputes.

This Agreement is entered into and performable in San Antonio, Texas, and shall be governed by,
construed, and enforced in accordance with, and subject to, federal law where applicable or, to the
extent that federal law does not control, the laws of the State of Texas. Venue shall lie
exclusively with the United States District Court in San Antonio, Texas, where applicable, or with
the courts of Bexar County, Texas. I irrevocably and unconditionally waive all right to trial by
jury in any lawsuit, action, proceeding, or counterclaim (whether based in contract, tort, or
otherwise) arising out of or relating to this Agreement or arising out of or relating to my

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employment by Tesoro Corporation. This waiver of jury trial and forum selection provision applies
to disputes between me and Tesoro.

18. Headings.

The headings in this Agreement have been used for administrative convenience only and shall not be
used in interpreting or construing the meaning of any provision in this Agreement.

19. Invalid Provision.

If any provision of this Agreement is or may be held by a court of competent jurisdiction to be
invalid, void, or unenforceable to any extent, the validity of the remaining parts, terms, or
provisions of this Agreement will not be affected thereby.

20. Counterparts.

This Agreement may be executed in a number of identical counterparts, each of which for all
purposes is deemed an original and all of which constitute collectively one Agreement.

21. Acceptance of the Agreement.

I have been provided and understand that I have at least twenty-one (21) days from receipt of this
Agreement to decide whether to accept it. I understand that I may elect to accept this Agreement
and execute it any time prior to the expiration of this period. I have been provided with a full
opportunity to review and consider all terms, provisions and aspects of the Agreement. I
understand that if I fail to execute and return this Agreement within four (4) days of the
twenty-one (21) day period, the Agreement will be considered rejected and I will not be entitled to
the Consideration offered by Tesoro Corporation. I also understand that I shall have seven (7)
full days following execution of the Agreement during which I may revoke the Agreement in its
entirety. I understand that any revocation within this period must be submitted, in writing, to
Tesoro Corporation and state, “I hereby revoke my acceptance of the release provisions of my
Separation and Waiver of Liability Agreement.” Revocation must be personally delivered to Tesoro
Corporation — attention General Counsel, or delivered by express overnight delivery service to
Tesoro Corporation — attention General Counsel, in either case within seven (7) days of execution
of this Agreement.

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22. Effective Date of the Agreement.

The release provisions of this Agreement will become effective and enforceable on the first day
after the revocation period has expired, provided that I have not revoked my acceptance of this
Agreement. If the last day of the revocation period is a Saturday, Sunday, or legal holiday in
Texas, then the revocation period will not expire until the next following day which is not a
Saturday, Sunday, or legal holiday. I understand that if I revoke the release provisions under the
Agreement, I will not receive the Consideration, as defined above.

ACCEPTED:

Executive:

William J. Finnerty

	 	 	 	 	 
	                        /s/ WILLIAM F. FINNERTY
 	 	 
	 

Date: March 18, 2010

	 	 	 	 	 
	TESORO CORPORATION

 	 	 
	By:  	/s/ BRUCE A. SMITH
 	 	 
	 	Bruce A. Smith 	 	 
	 	Chairman of the Board of Directors, President and Chief Executive Officer 	 	 

Date: March 17, 2010

8exv10w2

Exhibit 10.2

AMENDED AND RESTATED EMPLOYMENT AGREEMENT

     This Amended and Restated Employment Agreement (the “Agreement”) is entered into as of
February 1, 2010 (the “Effective Date”) by and between Tesoro Corporation (the “Company”), and
Everett D. Lewis (the “Executive”);

WITNESSETH THAT:

     WHEREAS, the Company wishes to employ the Executive as its Executive Vice President and Chief
Operating Officer and the Executive wishes to continue such employment; and

     WHEREAS, the Company and Executive wish to formalize the continuation of the employment
relationship in accordance with the terms and conditions set forth below in this Agreement.

     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. EMPLOYMENT.

The Company shall employ Executive, and Executive shall be employed by the Company upon the terms
and subject to the conditions set forth in this Agreement.

2. TERM OF EMPLOYMENT.

The term of this Agreement shall be a one (1) year period beginning on the Effective Date and
ending on January 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.

3. DUTIES AND RESPONSIBILITIES.

(a) Executive shall serve as Executive Vice President and Chief Operating 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) Executive shall devote substantially all of his working time, attention and energies to
the business of the Company and affiliated entities. Executive may make and manage his
personal investments (provided such investments in other activities do not violate, in any
material respect, the provisions of Section 8 of this Agreement), be involved in charitable
and professional activities and, with the consent of the Board of Directors of the Company
(the “Board”) (which shall not unreasonably be withheld or delayed) serve on

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boards of other for profit entities, provided such activities do not materially interfere
with the performance of his duties hereunder.

4. COMPENSATION AND BENEFITS.

(a) ANNUAL BASE SALARY. During the Employment Period, the Executive shall receive an
annual base salary (the “Base Salary”) at an annual rate of $700,000, or such higher rate as
may be determined from time to time by the Board. The Base Salary shall be paid at such
intervals as the Company pays executive salaries generally. During the Employment Period,
the Base Salary shall be reviewed at least annually, beginning no more than twelve (12)
months after the last salary increase awarded to the Executive prior to the Effective Date.
Any increase in the Base Salary shall not serve to limit or reduce any other obligation to
the Executive under this Agreement. The Base Salary shall not be reduced after any such
increase and the term “Base Salary” shall refer to the Base Salary as so increased.

(b) ANNUAL BONUS. In addition to the Base Salary, during the Employment Period, Executive
will be entitled to participate in an annual incentive compensation plan of the Company.
The Executive’s target annual bonus will be 90% of his Base Salary as in effect for such
year (the “Target Bonus”), and will be determined based upon achievement of performance
goals established by the Company pursuant to such plan.

(c) OTHER COMPENSATION. During the Employment Period, Executive shall be entitled to
participate in any incentive or supplemental compensation plan or arrangement maintained or
instituted by the Company to such extent, if any, as the Compensation Committee of the Board
may in its sole discretion from time to time specify.

(d) WELFARE BENEFIT PLANS. During the Employment Period, Executive and/or the Executive’s
family, as the case may be, shall be eligible for participation in and shall receive all
benefits under welfare benefit plans, practices, policies and programs provided by the
Company (including, without limitation, medical, prescription drugs, dental, vision,
disability, employee life, group life, accidental death and travel accident insurance plans
and programs, pensions, profit sharing programs, incentive compensation and savings plans
and all other similar plans and benefits which the Company from time to time makes available
to executives) to the extent applicable generally to other peer executives of the Company.

(e) FEE REIMBURSEMENTS. During the Employment Period, the Company will reimburse the
Executive as provided in the Company’s policies, programs 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
or a duly authorized committee thereof determines such fees are reasonable and in the best
interest of the Company. All such reimbursements will be made in any event no later than
the last day of Executive’s taxable year following the taxable year in which the expense was
incurred. The expenses reimbursed by the Company during any taxable year of Executive will
not affect the expenses reimbursed

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by the Company in another taxable year. Further, this right to reimbursement is not subject
to liquidation or exchange for another benefit.

(f) EXPENSE REIMBURSEMENT. During the Employment Period, the Executive shall be entitled
to receive prompt reimbursement for all reasonable expenses incurred by the Executive in
accordance with the expense reimbursement policies, programs, practices and procedures of
the Company in effect for the Executive when the Executive incurs such reimbursable
expenses. All such reimbursements will be made in any event no later than the last day of
Executive’s taxable year following the taxable year in which the expense was incurred. The
expenses reimbursed by the Company during any taxable year of Executive will not affect the
expenses reimbursed by the Company in another taxable year. Further, this right to
reimbursement is not subject to liquidation or exchange for another benefit.

(g) OFFICE AND SUPPORT STAFF. During the Employment Period, the Executive shall be
entitled to an appropriate office at the Company’s principal place of business.

(h) VACATION. During the Employment Period, Executive shall be entitled to vacation each
year in accordance with the Company’s executive vacation policy in effect from time to time,
but in no event less than four (4) weeks paid vacation per calendar year and an additional
one (1) week for five years of service; and an additional second week for ten years of
service. The Executive shall be entitled to such periods of sick leave as is customarily
provided by the Company for its senior executive employees.

5. TERMINATION OF EMPLOYMENT.

Executive’s employment hereunder may be terminated under the following circumstances:

(a) DEATH. Executive’s employment hereunder shall terminate upon Executive’s death.

(b) TOTAL DISABILITY. The Company may terminate Executive’s employment hereunder upon
Executive becoming “Totally Disabled”. For purposes of this Agreement, Executive shall be
“Totally Disabled” if Executive has been physically or mentally incapacitated so as to
render Executive incapable of performing Executive’s material usual and customary duties,
with or without reasonable accommodation as required by law, under this Agreement for six
(6) consecutive months (such consecutive absence not being deemed interrupted by Executive’s
return to service for less than ten (10) consecutive business days if absent thereafter for
the same illness or disability). Any such termination shall be upon thirty (30) days
written notice given at any time thereafter while Executive remains Totally Disabled,
provided that a termination for Total Disability hereunder shall not be effective if
Executive returns to full performance of his duties within such thirty (30) day period.

(c) TERMINATION BY THE COMPANY FOR CAUSE. The Company may terminate Executive’s employment
hereunder for “Cause” at any time. If the Company elects to terminate Executive’s
employment for Cause, the Company shall provide ten

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(10) days written notice of the Company’s intent to terminate Executive’s employment for
“Cause.”

(i) For purposes of this Agreement, the term “Cause” shall be limited to (A) willful
misconduct by Executive with regard to the Company which has a material adverse
effect on the Company; (B) the willful refusal of Executive to follow the proper
written direction of the Chief Executive Officer, provided that the foregoing
refusal shall not be “Cause” if Executive in good faith believes that such direction
is illegal, unethical or immoral and promptly so notifies the Board; (C) the willful
refusal by the Executive to perform the duties required of him hereunder (other than
any such failure resulting from incapacity due to physical or mental illness) after
a written demand for performance is delivered to the Executive by the Chief
Executive Officer which specifically identifies the manner in which it is believed
that the Executive has willfully refused to perform his duties hereunder; (D) the
material breach by the Executive of any of the restrictive covenants of Section 8
hereof or of a fiduciary duty to the Company; (E) the misappropriation by the
Executive of Company funds or property; or (F) the Executive being convicted of or
making a plea of nolo contendere to the charge of a felony (other than a felony
involving a traffic violation or as a result of vicarious liability). For purposes
of this paragraph, no act, or failure to act, on Executive’s part shall be
considered “willful” unless done or omitted to be done, by him not in good faith and
without reasonable belief that his action or omission was in the best interests of
the Company.

(ii) The ten (10) day notice of intent to terminate for Cause shall mean a notice
that shall indicate the specific termination provision in Section 5(c)(i) relied
upon and shall set forth in reasonable detail the facts and circumstances which
provide for a basis for termination for Cause. Further, the ten (10) day notice of
intent to terminate for Cause shall set the date of termination at least ten (10)
days after the date of the notice. Any purported termination for Cause which is
held by a court or arbitrator not to have been based on the grounds set forth in
this Agreement or not to have followed the procedures set forth in this Agreement
shall be deemed a termination by the Company without Cause.

(d) VOLUNTARY TERMINATION BY EXECUTIVE. Executive may terminate employment hereunder with
or without Good Reason at any time upon thirty (30) days written notice to the Company.

(i) A Termination for Good Reason means a termination by Executive pursuant to a
Notice of Termination for Good Reason as described more fully below given within
thirty (30) days after the occurrence of the Good Reason event, unless such
circumstances are fully corrected prior to the date of termination specified in the
Notice of Termination for Good Reason. For purposes of this Agreement, “Good
Reason” shall mean the occurrence or failure to cause the occurrence, as the case
may be, without Executive’s express written consent, of any of the following
circumstances: (A) a material adverse change in the executive office to whom
Executive regularly reports; (B) a material adverse

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change in the bonus plans, programs or arrangements in which Executive is entitled
to participate (the “Bonus Plans”) other than a material adverse change in the Bonus
Plans that adversely affects other similarly situated executives in a manner
proportionate to the material adverse effect of such change on Executive, (C) any
material breach by the Company of any provision of this Agreement, including without
limitation Section 10 hereof; and (D) the failure of any successor to the Company
(whether direct or indirect and whether by merger, acquisition, consolidation or
otherwise) to assume in a writing delivered to Executive upon the assignee becoming
such, the obligations of the Company hereunder. Expiration of the term of this
Agreement in accordance with the first sentence of Section 2 hereof is not a
termination by the Executive for Good Reason.

(ii) A Notice of Termination for Good Reason shall mean a written notice that shall
indicate the specific Good Reason event relied upon and shall set forth in
reasonable detail the facts and circumstances claimed to provide a basis for
Termination for Good Reason. The failure by Executive to set forth in the Notice of
Termination for Good Reason any facts or circumstances which contribute to the
showing of Good Reason shall not waive any right of Executive hereunder or preclude
Executive from thereafter timely asserting such fact or circumstance in enforcing
his rights hereunder. The Notice of Termination for Good Reason shall provide for a
date of termination not less than thirty (30) nor more than sixty (60) days after
the date such Notice of Termination for Good Reason is given. The Company shall
have at least thirty (30) days from receipt of the notice to remedy the condition.

(e) TERMINATION BY THE COMPANY WITHOUT CAUSE. The Company may terminate Executive’s
employment hereunder without Cause at any time upon thirty (30) days written notice to
Executive. Expiration of the term of this Agreement in accordance with the first sentence
of Section 2 hereof is not a termination by the Company without Cause.

(f) EFFECT OF TERMINATION. Upon any termination of employment, Executive shall immediately
resign from all positions with the Company or any of its subsidiaries held by him at such
time.

6. COMPENSATION FOLLOWING TERMINATION OF EMPLOYMENT.

In the event that Executive’s employment hereunder is terminated, Executive shall be entitled to
the following compensation and benefits upon such termination:

(a) TERMINATION IN THE EVENT OF DEATH. In the event that Executive’s employment is
terminated by reason of Executive’s death, the Company shall pay the following amounts to
Executive’s beneficiary or estate:

(i) Any accrued but unpaid Base Salary for services rendered to the date of death
paid pursuant to the timing arrangement under which the Company

5

 

normally compensates employees for services performed during a payroll period, any
accrued but unpaid expenses required to be reimbursed under this Agreement paid in
accordance with Section 4(e) or (f), any unused vacation as of the date of
termination paid in accordance with the Company’s executive vacation policy, and any
earned but unpaid cash bonuses for any prior period to the same extent as earned and
paid to other similarly situated executives and a pro-rata target annual bonus or
annual incentive compensation payment for the period in which such termination
occurred, paid at the time and in the form specified for payment under the terms of
such bonus or incentive compensation plan;

(ii) Any benefits to which Executive may be entitled pursuant to the plans,
programs, policies and arrangements (including those referred to in Section 4(d)
hereof), as determined and paid in accordance with the terms of such plans,
programs, policies and arrangements;

(iii) An amount equal to the Base Salary (at the rate in effect as of the date of
Executive’s death) which would have been payable to Executive if Executive had
continued in employment for one additional year, which amount will be paid to
Executive’s estate or beneficiary in twelve (12) substantially equal monthly
installments beginning in the first calendar month after the date of Executive’s
death; and

(iv) As of the date of termination by reason of Executive’s death, stock options and
restricted stock awarded to Executive shall be fully vested and Executive’s estate
or beneficiary shall have up to one (1) year from the date of death to exercise all
such options. The treatment of any other awards, for example, phantom stock
options, performance unit awards and restricted stock units, will be governed in
accordance with the terms of the plan and the award agreement governing such award.

(b) TERMINATION IN THE EVENT OF TOTAL DISABILITY. In the event that Executive’s employment
is terminated by reason of Executive’s Total Disability as determined in accordance with
Section 5(b), the Company shall pay the following amounts to Executive:

(i) Any accrued but unpaid Base Salary for services rendered to the date of
termination paid pursuant to the timing arrangement under which the Company normally
compensates employees for services performed during a payroll period, any accrued
but unpaid expenses required to be reimbursed under this Agreement paid in
accordance with Section 4(e) or (f), any unused vacation as of the date of
termination paid in accordance with the Company’s executive vacation policy, and any
earned but unpaid cash bonuses for any prior period to the same extent as earned and
paid to other similarly situated executives paid at the time and in the form
specified for payment under the terms of such bonus plan. Executive also shall be
eligible for a pro-rata target annual bonus or annual incentive compensation payment
for the year in which Executive is terminated; provided, however, that payment of
such bonus or incentive compensation will be made as

6

 

soon as administratively practicable following six (6) months from the Executive’s
termination of employment;

(ii) Any benefits to which Executive may be entitled pursuant to the plans,
programs, policies and arrangements (including those referred to in Section 4(d)
hereof) shall be determined and paid in accordance with the terms of such plans,
programs, policies and arrangements;

(iii) An amount equal to the Base Salary (at the rate in effect as of the date of
Executive’s Total Disability) which would have been payable to Executive if
Executive had continued in active employment for one (1) year following termination
of employment, less any payments under any long-term disability plan or arrangement
paid for by the Company, which amount will be paid to Executive one-half in a lump
sum as soon as administratively practicable following six (6) months after such
termination and one-half in substantially equal monthly installments during the two
(2) year period beginning as soon as administratively practicable following six (6)
months after the date of Executive’s termination; and

(iv) As of the date of termination by reason of Executive’s Total Disability,
Executive shall be fully vested in all stock option and restricted stock awards and
Executive shall have up to one (1) year from the date of termination by reason of
total disability to exercise all such options. The treatment of any other awards,
for example, phantom stock options, performance unit awards and restricted stock
units, will be governed in accordance with the terms of the plan and the award
agreement governing such award.

	(c)	 	TERMINATION FOR CAUSE. In the event that Executive’s employment is terminated by the
Company for Cause, the Company shall pay the following amounts to Executive:

(i) Any accrued but unpaid Base Salary for services rendered to the date of
termination paid pursuant to the timing arrangement under which the Company normally
compensates employees for services performed during a payroll period, any accrued
but unpaid expenses required to be reimbursed under this Agreement paid in
accordance with Section 4(e) or (f), any unused vacation as of the date of
termination paid in accordance with the Company’s executive vacation policy, and any
earned but unpaid cash bonuses for any prior period to the same extent as earned and
paid to other similarly situated executives paid at the time and in the form
specified for payment under the terms of such bonus plan; provided that such bonuses
shall not be paid until six (6) months have elapsed from Executive’s termination of
employment;

(ii) Any benefits to which Executive may be entitled pursuant to the plans,
programs, policies and arrangements (including those referred to in Section 4(d)
hereof) shall be determined and paid in accordance with the terms of such plans,
programs, policies and arrangements; and

7

 

(iii) Any options or restricted stock that have not vested prior to the date of such
termination of employment shall be cancelled and any options held by Executive, to
the extent they have not been exercised or paid in full, shall be cancelled, whether
or not then vested. The treatment of any other awards, for example, phantom stock
options, performance unit awards and restricted stock units, will be governed in
accordance with the terms of the plan and the award agreement governing such award.

(d) VOLUNTARY TERMINATION BY EXECUTIVE. In the event that Executive voluntarily terminates
employment other than for Good Reason, the Company shall pay the following amounts to
Executive:

(i) Any accrued but unpaid Base Salary for services rendered to the date of
termination paid pursuant to the timing arrangement under which the Company normally
compensates employees for services performed during a payroll period, any accrued
but unpaid expenses required to be reimbursed under this Agreement paid in
accordance with Section 4(e) or (f), any unused vacation as of the date of
termination paid in accordance with the Company’s executive vacation policy, and any
earned but unpaid cash bonuses for any prior period to the same extent as earned and
paid to other similarly situated executives paid at the time and in the form
specified for payment under the terms of such bonus plan; provided that such bonuses
shall not be paid until six (6) months have elapsed from Executive’s termination of
employment;

(ii) Any benefits to which Executive may be entitled pursuant to the plans,
programs, policies and arrangements (including those referred to in Section 4(d)
hereof) shall be determined and paid in accordance with the terms of such plans,
programs, policies and arrangements; and

(iii) The treatment of any options, restricted stock or other awards shall be
governed in accordance with the terms of such plan(s) under which the options,
restricted stock or other awards were granted.

(e) TERMINATION BY THE COMPANY WITHOUT CAUSE; TERMINATION BY EXECUTIVE FOR GOOD REASON. In
the event that Executive’s employment is terminated by the Company for reasons other than
death, Total Disability or Cause, or Executive terminates his employment for Good Reason,
the Company shall pay the following amounts to Executive:

(i) Any accrued but unpaid Base Salary for services rendered to the date of
termination paid pursuant to the timing arrangement under which the Company normally
compensates employees for services performed during a payroll period, any accrued
but unpaid expenses required to be reimbursed under this Agreement paid in
accordance with Section 4(e) or (f), any unused vacation as of the date of
termination paid in accordance with the Company’s executive vacation policy, and any
earned but unpaid cash bonuses for any prior period to the same extent as earned and
paid to other similarly situated executives paid at the time and in the

8

 

form specified for payment under the terms of such bonus plan; provided, however,
that such earned but unpaid bonuses shall not be paid until six (6) months have
elapsed from Executive’s termination of employment;

(ii) Any benefits to which Executive may be entitled pursuant to the plans,
programs, policies and arrangements (including those referred to in Section 4(d)
hereof) shall be determined and paid in accordance with the terms of such plans,
programs, policies and arrangements;

(iii) An amount equal to $2,800,000, of which one-half shall be paid in a lump sum
as soon as administratively practicable following six (6) months after such
termination and one-half shall be paid in substantially equal monthly installments
during the two (2) year period beginning as soon as administratively practicable
following six (6) months after the date of Executive’s termination;

(iv) Executive and Executive’s spouse and eligible dependents shall continue to
participate in, and receive group health coverage under, the Company’s group health
plans that provide group health coverage to retirees of the Company from time to
time, but only to the extent such plans continue to be available to the Company’s
retirees and only until the earliest to occur of (A) two and one-half (21/2) years
after the date of termination, (B) Executive’s death (or in the case of coverage for
a qualified beneficiary of Executive, the death of that qualified beneficiary), or
(C) the date on which Executive (or in the case of coverage for a qualified
beneficiary of Executive, the qualified beneficiary) becomes eligible for coverage
under any other group health plan of a subsequent employer providing comparable
coverage (the “Continuation Coverage Period”); provided that the Company shall pay
for 100% of such group health coverage, and the premiums that otherwise would be
charged to Executive for such coverage but for this Section 6(e)(iv) shall be
taxable to Executive; the group health plan coverage benefits provided by the
Company under this Section 6(e)(iv) during any taxable year of Executive will not
affect such benefits provided by the Company in another taxable year during the
Continuation Coverage Period; and the right to the benefits provided under this
Section 6(e)(iv) is not subject to liquidation or exchange for another benefit;

(v) Except to the extent prohibited by law, and except as otherwise provided in this
Section 6(e), Executive will be 100% vested in all benefits, awards, and grants
accrued but unpaid as of the date of termination under any non-qualified pension
plan or supplemental executive plan in which Executive was a participant as of the
date of termination. Executive shall also be eligible for a annual bonus or annual
incentive compensation payment, at the same time, on the same basis, and to the same
extent payments are made to senior executives, pro-rated for the fiscal year in
which the Executive is terminated; provided, however, that payment of such bonus or
incentive compensation will be made as soon as administratively practicable
following six (6) months from the Executive’s termination from employment with the
Company; and

9

 

(vi) Subject to the terms and conditions of the applicable executive long-term
incentive plans governing the option or restricted stock awards, Executive shall
continue to vest in all stock option and restricted stock awards over the two (2)
year period commencing on the date of such termination of employment. With respect
to option awards granted to Executive after February 2, 2005, Executive shall have
two (2) years after the date of termination of employment to exercise all options,
to the extent vested, unless by virtue of the particular stock option award, the
option grant expires on an earlier date. The treatment of any other awards, for
example, phantom stock options, performance unit awards and restricted stock units,
will be governed in accordance with the terms of the plan and the award agreement
governing such award.

(f) NO OTHER BENEFITS OR COMPENSATION. Except as may be provided under this Agreement,
under the Indemnity Agreement or under the terms of any incentive compensation, employee
benefit, or fringe benefit plan applicable to Executive at the time of Executive’s
termination or resignation of employment, Executive shall have no right to receive any other
compensation, or to participate in any other plan, arrangement or benefit, with respect to
future periods after such termination or resignation.

(g) NO MITIGATION; NO SET-OFF. In the event of any termination of employment hereunder,
Executive shall be under no obligation to seek other employment and, except as otherwise
provided in Section 6(e)(iv), there shall be no offset against any amounts due Executive
under this Agreement on account of any remuneration attributable to any subsequent
employment that Executive may obtain. Except as otherwise provided in Section 6(e)(iv), the
amounts payable hereunder shall not be subject to setoff, counterclaim, recoupment, defense
or other right, which the Company may have against the Executive or others, except upon
obtaining by the Company of a final unappealable judgment against Executive.

7. COMPENSATION PAYABLE FOLLOWING CHANGE IN CONTROL.

(a) PAYMENTS FOLLOWING A CHANGE IN CONTROL. Notwithstanding anything to the contrary
contained herein, should Executive at any time within two (2) years following a change in
control cease to be an employee of the Company (or its successor), by reason of (i)
involuntary termination by the Company (or its successor) other than for “Cause” (including
involuntary termination due to Total Disability), or (ii) voluntary termination by Executive
for “Good Reason”, the Company (or its successor) shall pay to Executive except as otherwise
expressly set forth herein, commencing as soon as administratively practicable following six
(6) months from such termination of employment (the “Commencement Date”), the following
severance payments and benefits:

(i) An amount equal to $3,325,000 payable in a lump sum if the applicable change in
control qualifies as a change in control event within the meaning of Section 409A of
the Code, and otherwise such amount shall be paid one-half in a lump sum and
one-half in substantially equal monthly installments during the two

10

 

(2) year period beginning on the Commencement Date. Payment of the amount specified
under this Paragraph 7(a)(i) shall be in lieu of any amount payable under Paragraph
6(b)(iii) or Paragraph 6(e)(iii).

(ii) Except as otherwise provided in this Section 7(a), Executive will be 100%
vested in all benefits, awards, and grants (including stock option grants and
restricted stock awards, all of such stock options granted after February 2, 2006
remaining exercisable for a period of at least three (3) years following the Change
in Control, or the remaining stock option term if less) accrued but unpaid as of the
Change in Control under any non-qualified pension plan, supplemental executive plan
and/or incentive compensation plan, in which Executive was a participant as of the
date of termination. Executive shall also receive a pro rata annual bonus or annual
incentive compensation payment (the “bonus payment”) equal to his Base Salary
multiplied by his annual incentive target bonus percentage, each as then in effect,
pro-rated as of the effective date of the termination. The bonus payment shall be
in a lump sum. The treatment of any other awards, for example, phantom stock
options, performance unit awards and restricted stock units, will be governed in
accordance with the terms of the plan and the award agreement governing such award.
The rights under this Paragraph 7(a)(ii) shall be in lieu of any rights the
Executive would otherwise be entitled to receive under Paragraphs 6(b)(i) and (iv)
or Paragraphs 6(e)(v) and (vi).

For purposes of this Agreement, following a Change in Control, the term “Company” shall
include the entity surviving such Change in Control.

(b) POTENTIAL REDUCTION IN PAYMENTS BY THE COMPANY.

(i) Notwithstanding any contrary provision, if any Payment would be subject to the
Excise Tax, then the Payment shall be either

	 	(A)	 	delivered in full pursuant to the terms of this
Agreement or
	 
	 	(B)	 	reduced in accordance with this Section 7(b) to
the extent necessary to avoid the Excise Tax,

based on which of (A) or (B) would result in the greater Net After-Tax Receipt to
the Executive.

For purposes of this Section 7(b),

“Payment” means any payment, distribution, or other benefit provided by the Company
to or for the benefit of Executive, whether paid or payable or distributed or
distributable pursuant to the terms of this Agreement or otherwise that constitutes
a “parachute payment” within the meaning of Section 280G of the Code;

“Excise Tax” means the excise imposed by Section 4999 of the Code or any similar or
successor provision thereto; and

11

 

“Net After-Tax Receipt” means the present value (as determined in accordance with
Section 280G of the Code) of the payments net of all applicable federal, state and
local income, employment, and other applicable taxes and the Excise Tax.

(ii) If Payments are reduced, the reduction shall be accomplished first by reducing
cash Payments under this Agreement and then by forfeiting any equity-based awards
that vest under this Agreement, starting with the most recently granted equity-based
awards, to the extent necessary to accomplish such reduction.

(iii) All determinations under this Section 7(b) shall be made by the Company’s
independent accountants or compensation consultants (the “Third Party”) and all such
determinations shall be conclusive, final and binding on the parties hereto. The
Company and Executive shall furnish to the Third Party such information and
documents as the Third Party may reasonably request in order to make a determination
under this Section 7(b). The Company shall bear all fees and costs of the Third
Party with respect to all determinations under or contemplated by this Section 7(b).

(c) CHANGE IN CONTROL means (i) there shall be consummated (A) any consolidation or merger
of Company in which Company is not the continuing or surviving corporation or pursuant to
which shares of Company’s Common Stock would be converted into cash, securities or other
property, other than a merger of Company where a majority of the board of directors of the
surviving corporation are, and for a one-year period after the merger continue to be,
persons who were directors of Company immediately prior to the merger or were elected as
directors, or nominated for election as director, by a vote of at least two-thirds of the
directors then still in office who were directors of Company immediately prior to the
merger, or (B) any sale, lease, exchange or transfer (in one transaction or a series of
related transactions) of all or substantially all of the assets of Company, or (ii) the
shareholders of Company shall approve any plan or proposal for the liquidation or
dissolution of Company, or (iii) (A) any “person” (as such term is used in Sections 13(d)
and 14(d)(2) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)), other
than Company or a subsidiary thereof or any employee benefit plan sponsored by Company or a
subsidiary thereof, shall become the beneficial owner (within the meaning of Rule 13d-3
under the Exchange Act) of securities of Company representing 35 percent or more of the
combined voting power of Company’s then outstanding securities ordinarily (and apart from
rights accruing in special circumstances) having the right to vote in the election of
directors, as a result of a tender or exchange offer, open market purchases, privately
negotiated purchases or otherwise, and (B) at any time during a period of one-year
thereafter, individuals who immediately prior to the beginning of such period constituted
the Board shall cease for any reason to constitute at least a majority thereof, unless
election or the nomination by the Board for election by Company’s shareholders of each new
director during such period was approved by a vote of at least two-thirds of the directors
then still in office who were directors at the beginning of such period.

12

 

8. RESTRICTIVE COVENANTS.

(a) COMPETITIVE ACTIVITY. Executive covenants and agrees that at all times during
Executive’s period of employment with the Company, and for one (1) year thereafter,
Executive will not engage in, assist, or have any active interest or involvement, whether as
an employee, agent, consultant, creditor, advisor, officer, director, stockholder (excluding
holding of less than 3% of the stock of a public company), partner, proprietor or any type
of principal whatsoever in any person, firm, or business entity which, directly or
indirectly, is engaged in the business competitive with that conducted and carried on by the
Company, without the Company’s specific written consent to do so. Notwithstanding the
foregoing, Executive may be employed by or provide services to, an investment banking firm
or consulting firm that provides services to entities described in the previous sentence,
provided that Executive does not personally represent or provide services to such entities.

(b) NON-SOLICITATION. Executive covenants and agrees that at all times during Executive’s
period of employment with the Company, and for a period of two (2) years after the
termination thereof, whether such termination is voluntary or involuntary by wrongful
discharge, or otherwise, Executive will not directly and personally knowingly (i) induce any
customers of the Company or corporations affiliated with the Company to patronize any
similar business which competes with any material business of the Company; (ii) request or
advise any customers of the Company or corporations affiliated with the Company to withdraw,
curtail or cancel such customer’s business with the Company; or (iii) individually or
through any person, firm, association or corporation with which he is now, or may hereafter
become associated, solicit, entice or induce any then employee of the Company, or any
subsidiary of the Company, to leave the employ of the Company, or such other corporation, to
accept employment with, or compensation from the Executive, or any person, firm, association
or corporation with which Executive is affiliated without prior written consent of the
Company. The foregoing shall not prevent Executive from serving as a reference for
employees.

(c) PROTECTED INFORMATION. Executive recognizes and acknowledges that Executive has had
and will continue to have access to various confidential or proprietary information
concerning the Company, corporations affiliated with the Company, and its clients and third
parties doing business with the Company of a special and unique value which may include,
without limitation, (i) books and records relating to operation, finance, accounting, sales,
personnel and management, (ii) policies and matters relating particularly to operations such
as customer service requirements, costs of providing service and equipment, operating costs
and pricing matters, and (iii) various trade or business secrets including customer lists,
route sheets, business opportunities, marketing or business diversification plans, business
development and bidding techniques, methods and processes, financial data and the like, to
the extent not generally known in the industry (collectively, the “Protected Information”).
Executive therefore covenants and agrees that Executive will not at any time, either while
employed by the Company or afterwards, knowingly make any independent use of, or knowingly
disclose to any other person or organization (except as authorized by the Company) any of
the Protected Information, provided that (I) while employed by the Company, Executive may in
good

13

 

faith make disclosures he believes desirable, and (II) Executive may comply with legal
process.

9. ENFORCEMENT OF COVENANTS.

(a) RIGHT TO INJUNCTION. Executive acknowledges that a breach of the covenants set forth
in Section 8 hereof will cause irreparable damage to the Company with respect to which the
Company’s remedy at law for damages may be inadequate. Therefore, in the event of breach or
threatened breach of the covenants set forth in Section 8 by Executive, Executive and the
Company agree that the Company shall be entitled to the following particular forms of
relief, in addition to remedies otherwise available to it at law or equity: injunctions,
both preliminary and permanent, enjoining or restraining such breach or threatened breach,
and Executive hereby consents to the issuance thereof forthwith and without bond by any
court of competent jurisdiction.

(b) SEPARABILITY OF COVENANTS. The covenants contained in Section 8 hereof constitute a
series of separate covenants, one for each applicable State in the United States and the
District of Columbia, and one for each applicable foreign country. If in any judicial
proceeding, a court shall hold that any of the covenants set forth in Section 8 exceed the
time, geographic, or occupational limitations permitted by applicable laws, Executive and
the Company agree that such provisions shall and are hereby reformed to the maximum time,
geographic, or occupational limitations permitted by such laws. Further, in the event a
court shall hold unenforceable any of the separate covenants deemed included herein, then
such unenforceable covenant or covenants shall be deemed eliminated from the provisions of
this Agreement for the purpose of such proceeding to the extent necessary to permit the
remaining separate covenants to be enforced in such proceeding. Executive and the Company
further agree that the covenants in Section 8 shall each be construed as a separate
agreement independent of any other provisions of this Agreement, and the existence of any
claim or cause of action by Executive against the Company whether predicated on this
Agreement or otherwise, shall not constitute a defense to the enforcement by the Company of
any of the covenants of Section 8.

10. INDEMNIFICATION.

The Company shall indemnify and hold harmless Executive to the fullest extent permitted by law and
in accordance with the existing Indemnification Agreement dated September 15, 2008 between Company
and the Executive (the “Indemnification Agreement”) for any action or inaction of Executive while
serving as an officer and director of the Company or, at the Company’s request, as an officer or
director of any other, entity or as a fiduciary of any benefit plan. The Company shall cover the
Executive under directors and officers liability insurance both during and, while potential
liability exists, after the Employment Period in the same amount and to the same extent as the
Company covers its other officers and directors.

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11. DISPUTES AND PAYMENT OF ATTORNEY’S FEES.

The Company and the Executive each irrevocably and unconditionally waives all right to trial by
jury in any lawsuit, action, proceeding, or counterclaim (whether based in contract, tort, or
otherwise) arising out of or relating to this Agreement or arising out of or relating to the
Executive’s employment by the Company. The Executive and the Company each further agree that the
exclusive forums for the resolution of any disputes between them are the state and Federal courts
located in Bexar County, Texas. This waiver of jury trial and forum selection provision applies to
disputes between the parties as well as any claim by the Executive against any agent,
representative, or employee of the Company.

If at any time during the term of this Agreement or for a period of four (4) years after the
expiration of this Agreement there should arise any dispute as to the validity, interpretation or
application of any term or condition of this Agreement, the Company agrees, upon written demand by
Executive, to promptly reimburse Executive’s reasonable costs and reasonable attorney’s fees
incurred by Executive in connection with reasonably seeking to enforce the terms of this Agreement.
Such reimbursement shall be made within thirty (30) days of Executive’s written request for
reimbursement providing supporting documentation of the expenses, but in any event not later than
the last day of the Executive’s taxable year following the taxable year in which the expense was
incurred. The expenses paid by the Company during any taxable year of Executive will not affect
the expenses paid by the Company in another taxable year. This right to reimbursement is not
subject to liquidation or exchange for another benefit. Notwithstanding the foregoing, to the
extent that Executive is not the prevailing party on any issue contested by Executive at any level
of the process, then (a) the Company’s obligation to reimburse Executive with respect to such issue
shall cease; and (b) within sixty (60) days of the entry of an order on any issue on which
Executive does not prevail, Executive shall repay the Company the amount of any costs and
attorney’s fees previously reimbursed by the Company that are attributable to that issue.

The provisions of this Section 11, without implication as to any other section hereof, shall
survive the expiration or termination of this Agreement and of Executive’s employment hereunder.

12. WITHHOLDING OF TAXES.

The Company may withhold from any compensation and benefits payable under this Agreement all
applicable federal, state, local, or other taxes.

13. SOURCE OF PAYMENTS.

All payments provided under this Agreement, other than payments made pursuant to a plan which
provides otherwise, shall be paid from the general funds of the Company, and no special or separate
fund shall be established, and no other segregation of assets made, to assure payment. Executive
shall have no right, title or interest whatever in or to any investments which the Company may make
to aid the Company in meeting its obligations hereunder. To the extent that any person acquires a
right to receive payments from the Company hereunder, such right shall be no greater than the right
of an unsecured creditor of the Company.

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14. ASSIGNMENT.

Except as otherwise provided in this Agreement, this Agreement shall inure to the benefit of and be
binding upon the parties hereto and their respective heirs, representatives, successors and
assigns. This Agreement shall not be assignable by Executive (but any payments due hereunder which
would be payable at a time after Executive’s death shall be paid to Executive’s designated
beneficiary or, if none, his estate) and shall be assignable by the Company only to any financially
solvent corporation or other entity resulting from the reorganization, merger or consolidation of
the Company with any other corporation or entity or any corporation or entity to or with which the
Company’s business or substantially all of its business or assets may be sold, exchanged or
transferred, and it must be so assigned by the Company to, and accepted as binding upon it by, such
other corporation or entity in connection with any such reorganization, merger, consolidation,
sale, exchange or transfer in a writing delivered to Executive in a form reasonably acceptable to
Executive (the provisions of this sentence also being applicable to any successive such
transaction).

15. ENTIRE AGREEMENT; AMENDMENT.

This Agreement shall supersede any and all existing oral or written agreements, representations, or
warranties between Executive and the Company or any of its subsidiaries or affiliated entities
relating to the terms of Executive’s employment by the Company. It may not be amended except by a
written agreement signed by both parties.

16. GOVERNING LAW.

This Agreement shall be governed by and construed to 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.

17. REQUIREMENT OF TIMELY PAYMENTS.

If any amounts which are required, or determined to be paid or payable, or reimbursed or
reimbursable, to Executive under this Agreement (or any other plan, agreement, policy or
arrangement with the Company) are not so paid promptly at the times provided herein or therein,
such amounts shall accrue interest, compounded monthly, at the short-term applicable federal rate,
from the date such amounts were required or determined to have been paid or payable, reimbursed or
reimbursable to Executive, until such amounts and any interest accrued thereon are finally and
fully paid, provided, however, that in no event shall the amount of interest contracted for,
charged or received hereunder, exceed the maximum non-usurious amount of interest allowed by
applicable law.

18. NOTICES

Any notice, consent, request or other communication made or given in connection with this Agreement
shall be in writing and shall be deemed to have been duly given when delivered or mailed by
registered or certified mail, return receipt requested, by facsimile, by e-mail or by hand
delivery, to those listed below at their following respective addresses (and facsimile

16

 

numbers), or at such other address (or facsimile numbers) as each may specify by notice to the
others:

	 	 	 
	To the Company:

	 	Tesoro Corporation

19100 Ridgewood Parkway

San Antonio, Texas 78259

Attention: Corporate Secretary

	 
	 	 
	To Executive:

	 	Everett D. Lewis

19. MISCELLANEOUS.

(a) WAIVER. The failure of a party to insist upon strict adherence to any term of this
Agreement 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
Agreement.

(b) SEPARABILITY. Subject to Section 9 hereof, if any term or provision of this Agreement
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 Agreement 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 Agreement.

(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 Agreement 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 Agreement.

(f) DEFERRED COMPENSATION. This Agreement is intended to meet the requirements of Section
409A of the Code and may be administered in a manner that is intended to meet those
requirements and shall be construed and interpreted in accordance with such intent, and any
reference to the termination or cessation of employment of Executive in Sections 6 and 7 of
this Agreement shall be interpreted to require a separation from service of Executive within
the meaning of Section 409A of the Code. To the extent that an award or payment, or the
settlement or deferral thereof, is subject to Section 409A of the Code, except as the
Committee otherwise determines in writing, the award shall be granted, paid, settled or
deferred in a manner that will meet the

17

 

requirements of Section 409A of the Code, including regulations or other guidance issued
with respect thereto, such that the grant, payment, settlement or deferral shall not be
subject to the excise tax applicable under Section 409A of the Code. If Executive is a
specified employee within the meaning of Section 409A of the Code, then to the extent the
Company determines that any amounts payable to Executive under this Agreement upon
termination of employment that are otherwise scheduled to be paid within six (6) months
following termination of employment (the “6-month period”) cannot be paid under Section 409A
of the Code within the 6-month period, then payment of such amounts will not occur until the
6-month period has elapsed. Any provision of this Agreement that would cause the award or
the payment, settlement or deferral thereof to fail to satisfy Section 409A of the Code
shall be amended (in a manner that as closely as practicable achieves the original intent of
this Agreement) to comply with Section 409A of the Code on a timely basis, which may be made
on a retroactive basis, in accordance with regulations and other guidance issued under
Section 409A of the Code. In the event additional regulations or other guidance is issued
under Section 409A of the Code or a court of competent jurisdiction provides additional
authority concerning the application of Section 409A with respect to the payments described
in Sections 4, 6 and 7 of the Agreement, then the provisions of such Sections shall be
amended to permit such payments to be made at the earliest time permitted under such
additional regulations, guidance or authority that is practicable and achieves the original
intent of this Agreement.

     IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as of the day and
year first above written.

	 	 	 	 	 
	TESORO CORPORATION

 	 	 
	By:  	/s/ BRUCE A. SMITH
 	 	 
	 	Bruce A. Smith 	 	 
	 	Chairman of the Board of Directors, President and Chief Executive Officer 	 	 

Date: March 17, 2010

	 	 	 	 	 
	EXECUTIVE

Everett D. Lewis

 	 	 
	/s/ EVERETT D. LEWIS
 	 	 

Date: March 18, 2010

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