Document:

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                                  PREMCOR INC.
                              8182 MARYLAND AVENUE
                                    SUITE 600
                               ST. LOUIS, MO 63105

                                                                January 31, 2002

Mr. William C. Rusnack
12 Edgewood Rd.
St. Louis, MO 63124

Dear Mr. Rusnack:

     This letter agreement (the "Agreement") confirms our understanding and
agreement with respect to your termination of employment with Premcor Inc. (the
"Company") as follows:

     1. Termination Of Employment. You hereby resign, effective as of January
31, 2002, from any executive officer positions that you hold with the Company
and any of its affiliates, and from any membership on any Board of Directors of
the Company or any of its affiliates or any committee thereof. From January 31,
2002 through February 28, 2002 (the "Termination Date"), you shall continue to
be an employee of the Company, but your cash compensation will be limited to
solely your base salary at the rate in effect as such time. Effective as of the
Termination Date, your employment with the Company and its affiliates shall
terminate.

     2. Severance Payments and Benefits. The termination of your employment with
the Company hereunder shall be treated as having occurred pursuant to section
V.1 of the 1998 Memorandum of Agreement between you and Clark Refining and
Marketing, Inc. (the "MOA"). Therefore, in accordance with, and in full
satisfaction of, the MOA, the Company will pay or provide to you the following:

          a. To the extent accrued but not theretofore paid, subject to Section
     1 above, the amount of your unpaid Basic Compensation (as defined in the
     MOA) for the current fiscal year through and including the Termination
     Date, plus any other compensation and benefit amounts that are accrued but
     unpaid as of the Termination Date (including any accrued but unpaid bonus
     to which you are entitled as of January 31, 2002 pursuant to the terms of a
     Company bonus plan);

          b. A lump sum cash payment in the amount of $3,375,000, which, along
     with the payment described in Section 2(a), will be paid to you within
     three (3) business days following the expiration of the "Revocation Period"
     (described in subsection (d) of Appendix A hereto); provided that you have
     not exercised your right to revoke this Agreement as described in
     subsection (d) of Appendix A hereto;

          c. Reasonable job relocation counseling services of a firm chosen from
     time to time by you for a period not to exceed 18 months after the
     Termination Date to be paid directly by the Company;

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                                                                               2

          d. Until the earlier of one year after the Termination Date and your
     commencement of full time employment with a new employer, the Company shall
     maintain for your benefit all life insurance, medical, dental, health and
     accident and disability plans, programs or arrangements in which you were
     entitled to participate immediately prior to the Termination Date at a cost
     to you no greater than you paid while employed, provided that your
     continued participation is possible under the general terms and provisions
     of such plans and programs. In the event that your participation is barred,
     the Company shall arrange to provide you, at the Company's expense, with
     benefits substantially similar to those which you are entitled to receive
     under such plans, programs or arrangements or pay cash in an amount after
     tax sufficient to enable you to purchase substantially similar coverage for
     a one-year period on an individual basis at a cost to you no greater than
     you paid while employed. In the case of your commencement of full time
     employment with a new employer within the one-year period, the Company
     agrees to make up any differential in benefits between what you would have
     received from the Company in the one-year period and what you receive from
     your new employer, so that you are ensured of receiving the same benefits
     which you would have been entitled to receive from the Company had your
     employment with the Company continued for the one-year period at a cost to
     you no greater than you paid while employed (the payments and benefits
     described in this Section 2, the "Severance Benefits"); and

          e. On the Termination Date, the Company will no longer pay for any
     golf club membership fees, assessments or dues on your behalf or for any
     tax or financial planning services for you, but the Company will not seek
     reimbursement for any such amount previously paid to you or on your behalf.

Except as otherwise expressly provided in this Agreement, your entitlement to
benefits under the employee benefit, compensation, equity and incentive plans,
programs or arrangements, maintained by the Company, shall be determined under
the terms of the respective plans as in effect from time to time, with such
entitlement based on the fact that your employment with the Company ceased on
your Termination Date. Payments under this Section 2 shall be in lieu of all
benefits that may be otherwise payable to you or on your behalf pursuant to the
terms of any severance pay arrangement of the Company or any other, similar
arrangement of the Company providing benefits upon involuntary termination of
employment.

     3. Additional Benefits. In addition to the Severance Benefits to which you
are entitled under the MOA, the Company shall provide you with the following
additional benefits (the "Additional Benefits"):

          a. As of the Termination Date, your time vesting options to purchase
     300,000 shares of common stock of the Company (the "Common Stock") shall
     become fully vested and shall remain subject to the terms and conditions of
     the Company's 1999 Stock Incentive Plan (the "Plan") and your time vesting
     nonqualified stock option agreement with the Company pursuant to such Plan,
     with the following modifications:

               (i) Such time options will expire either (x) 190 calendar days
          after the closing date of an initial public offering of the Company's
          common stock, if such closing date occurs prior to December 31, 2002,
          or (y) if no initial public offering of the

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                                                                               3

          Company's common stock closes prior to December 31, 2002, then as of
          the close of business on December 31, 2002. All such options shall be
          exercisable until the applicable expiration date as determined in this
          clause (i), above; and

               (ii) The Company waives its call rights with respect to such
          options.

          b. As of the Termination Date, your performance options to purchase up
     to 300,000 shares shall become subject to the following terms:

               (i) Such performance options will expire on the expiration date
          determined in Section 3(a)(i) above. The vesting schedule for such
          options will remain as specified in your employment agreement, the
          language of which, for the avoidance of doubt, is reproduced as
          follows:

          "...the Options (the "Performance Options") shall vest on the ninth
          anniversary of their grant date, but shall accelerate upon the
          achievement of the share prices set forth below for Common Stock: (i)
          following an initial public offering, as an average closing price for
          any 180 day consecutive period, or (ii) in a Change in Control;

                     Per Share Price                 % Vested
                     ---------------                 --------
                      below $12.00                      0%
                     $12.00 - $14.99                   10%
                     $15.00 - $17.99                   20%
                     $18.00 - $19.99                   30%
                     $20.00 - $24.99                   50%
                     $25.00 - $29.99                   75%
                      above $29.99                    100%"

          ; and

               (ii) The Company waives its call rights with respect to such
          options.

          c. Following an initial public offering of the Company's common stock,
     in addition to the standard procedures for option exercise, you will have
     the right to exercise your vested options, subject to the expiration
     provisions in the Plan and the applicable nonqualified stock option
     agreement, through a cashless exercise effectuated by means of a
     broker-loan program that the Company will help facilitate for you.

          d. In the event of a change in the outstanding capital stock of the
     Company by reason of stock dividend or split, reorganization,
     recapitalization or other similar event, your options (including, without
     limitation, the exercise price and price targets) will be adjusted in the
     same manner as options held by executives of the Company.

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                                                                               4

          e. Following the completion of the Company's initial public offering,
     if any, the Company will file a Form S-8, which will register shares of
     common stock issuable upon exercise of options and other awards granted
     pursuant to the Plan.

     4. MOA/Gross-Up. The MOA will be terminated as of January 31, 2002 and will
thereafter be of no further force or effect, except that section V.4 of the MOA
(providing for a gross-up payment upon the incurrence of certain excise taxes)
shall be included herein by reference as if it were part of this Agreement.

     5. Condition to Benefits. As a condition of your receipt of the benefits
described in Sections 2 and 3, above, you (i) shall execute and not revoke the
General Release attached hereto as Appendix A, (ii) shall execute the Lock-Up
Agreement addressed to Morgan Stanley & Co. Incorporated in connection with the
Company's proposed initial public offering, in the form attached hereto as
Appendix B, and (iii) shall comply with the covenants contained in Sections 6
and 7 of this Agreement. You will not be entitled to the Severance Benefits or
the Additional Benefits if you revoke this Agreement as described in subsection
(d) of Appendix A, if you fail to execute, or breach the provisions of, the
Lock-Up Agreement referred to in clause (ii) of the preceding sentence, or if
you intentionally and materially breach the covenants referred to in clause
(iii) of that sentence.

     6. Covenants.

          a. You agree that you shall maintain the confidentiality of, and shall
     not use for the benefit of yourself or others, any confidential or
     proprietary information (including, without limitation, "know-how," trade
     secrets, details of client or consultant contracts, pricing policies,
     compensation arrangements, business acquisition plans, new personnel
     acquisition plans, and other projects and inventions and research projects
     of the Company or its affiliates learned by you heretofore) concerning the
     Company or any of its affiliates until the date, if any, upon which: (i)
     the relevant information becomes available to the public or is made
     available to you from a source which is not bound by an obligation of
     confidentiality to the Company or its affiliates; or (ii) you are required
     to disclose such information by any court or governmental or regulatory
     authority of competent jurisdiction (in which case you shall notify the
     Company and, after such notification, shall be entitled to disclose or make
     use of such information only to the extent it is so required).

          b. You agree to give the Company and its new chief executive officer
     your reasonable business cooperation and assistance in facilitating the
     transition of the Company's leadership from you to the new chief executive
     officer, as reasonably requested during the period commencing on the
     Termination Date and ending June 30, 2002 (the "Cooperation Period"). Such
     cooperation and assistance will include devoting a reasonable amount of
     time to meeting with Company personnel, including travel to the various
     locations of the Company's facilities to meet with personnel at those
     locations, for the purpose of facilitating the transition. For providing
     such cooperation and assistance after the Termination Date, you shall
     receive a per diem rate based on your base salary as of the Termination
     Date for each day after February 28, 2002 that you cooperate with and
     assist the Company and its new chief executive officer, at their reasonable
     request. The Company will reimburse you for reasonable expenses incurred

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                                                                               5

     in cooperating with and assisting the Company and its chief executive
     officer, upon presentation of appropriate documentation. You shall at all
     times during the Cooperation Period be an independent contractor with
     respect to the Company, and the Company shall not withhold or deduct from
     any amounts payable under this Section 6(b) any amount or amounts in
     respect of income taxes or other employment taxes of any other nature on
     your behalf. Under no circumstances shall you, in your capacity as a
     independent contractor, have or claim to have power of decision hereunder
     in any activity on behalf of the Company, have the power or authority
     hereunder to obligate, bind or commit the Company in any respect, direct
     the work of any employee of the Company or make any management decisions on
     behalf of the Company. The Company shall not, with respect to your
     cooperation and assistance, exercise or have the power to exercise such
     level of control over you as would indicate or establish that a
     relationship of employer and employee exists between you and the Company.

          c. You agree not to make any derogatory comments, whether verbally or
     in writing, regarding the Company or any of its officers, directors,
     employees, stockholders or affiliates (other than as required by law).
     Neither the Company in any formal statement, nor Blackstone Capital
     Partners III Merchant Banking Fund L.P. and its affiliated investors in the
     Company ("Blackstone") will make any derogatory comments about you, whether
     verbally or in writing (other than as required by law), and the Company
     agrees to direct its officers and directors not to make any derogatory
     comments about you, whether verbally or in writing (other than as required
     by law). You agree not to, directly or indirectly, make any statement or
     release any information, or encourage others to make any statement or
     release any information that may reasonably be expected to embarrass or
     criticize the Company or any of its affiliates or shareholders (other than
     as required by law). Neither the Company in any formal statement, nor
     Blackstone will, directly or indirectly, make any statement or release any
     information, or encourage others to make any statement or release any
     information, that may reasonably be expected to embarrass or criticize you
     (other than as required by law), and the Company agrees to direct its
     officers and directors not to, directly or indirectly, make any statement
     or release any information, or encourage others to make any statement or
     release any information, that may reasonably be expected to embarrass or
     criticize you (other than as required by law). Your covenants contained in
     this Section 6(c) are not intended to prohibit you from making favorable
     comments about a company by which you are employed at the time of such
     comments when comparing that company or its operations, products or
     financial performance with the Company or its operations, products or
     financial performance. The covenants contained in this Section 6(c) shall
     expire on February 28, 2007.

          d. The Company and you acknowledge and agree that the remedies
     available to the Company or you, as applicable, at law for a breach or
     threatened breach of any of the provisions of this Section 6 would be
     inadequate and, in recognition of this fact, the Company and you agree
     that, in the event of a breach or threatened breach, in addition to any
     remedies at law, the Company or you, as applicable, shall be entitled to
     obtain equitable relief in the form of specific performance, temporary
     restraining order or permanent injunction or any other equitable remedy
     that may be available. In addition, if

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                                                                               6

     you materially breach any of the provisions of this Section 6, the Company
     will have no obligation to make any further payments or provide any
     benefits under this Agreement.

     7. Return of Property to the Company. All memoranda, notes, lists, records
and other documents or papers (and all copies thereof), including items stored
in computer memories, on microfilm or by other means, made or compiled by you,
or made available to you relating to the Company or its affiliates or its
business, excluding documentation you received as a participant in any employee
benefit plan or arrangement of the Company, are and shall remain the property of
the Company and shall be delivered to the Company promptly upon the execution of
this Agreement.

     8. Governing Law. This Agreement will be governed, construed and
interpreted under the laws of the State of New York, without regard to conflicts
of laws principles.

     9. Legal Fees. The Company shall pay you all reasonable legal and
professional fees and expenses you incur in seeking to obtain or enforce any
right or benefit provided by this Agreement, if you are successful in obtaining
such right or benefit, as determined by an arbiter in accordance with Section 10
below. The Company shall pay your reasonable legal fees actually incurred in
negotiating this Agreement, up to an aggregate of $10,000.

     10. Arbitration. Disputes arising from the operation of this Agreement
shall be resolved by arbitration, other than disputes arising under Section 6(a)
and actions for equitable relief as provided in Section 6(d). In the event that
any dispute which shall be resolved by arbitration, is not able to be resolved
by mutual agreement of the parties within sixty calendar (60) days of the giving
of such notice, you and the Company hereby agree to promptly submit such a
dispute to binding arbitration in New York, New York in accordance with New York
law and the rules and procedures of the American Arbitration Association.
Disputes arising under Sections 6(a) and 6(d) of this Agreement shall be
litigated in New York, New York and any action with respect to the arbiter or
the arbitration process (including, but not limited to, the enforcement of the
arbiter's decision) shall be brought in New York, New York. Any judgment from a
court in New York may, thereafter, be filed in any other court having
jurisdiction.

     11. Withholding Taxes. The Company may withhold from any amounts payable
under this Agreement such Federal, state and local taxes as may be required to
be withheld pursuant to any applicable law.

     12. No Mitigation. You shall not be required to mitigate the amount of any
payment provided for pursuant to this Agreement by seeking other employment or
otherwise and, except as provided in Section 2(d), any such employment shall not
mitigate the Company's obligations hereunder.

     13. Binding Agreement/Successors. This Agreement shall enure to the benefit
of and be binding upon you and your heirs, executors, administrators and other
legal personal representatives and upon the Company and its successors and
assigns, but neither this Agreement nor any rights or obligations hereunder
shall be assignable or otherwise subject to hypothecation by you (except by will
or by operation of the laws of intestate succession) or by the Company,

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                                                                               7

except that the Company may assign this Agreement to any successor (whether by
merger, purchase or otherwise) to all or substantially all of the stock, assets
or businesses of the Company, if such successor expressly agrees to assume the
obligations of the Company hereunder. In the event of your death, any amounts
owed to you under this Agreement shall be paid to your estate.

     14. Entire Agreement/Counterparts. This constitutes the entire agreement
between the parties, and specifically supersedes all agreements and
understandings between the parties (including, without limitation, the 1998
Memorandum of Agreement between you and Clark Refining and Marketing, Inc.,
except as provided in Section 4 above), other than under any existing stock
option agreement as modified herein, any director and officer liability
insurance maintained for you by the Company, any indemnity to the extent
provided to you under the Company's by-laws and certificate of incorporation,
any existing indemnity agreement between you and the Company, any existing
stockholders' agreement between you and the Company and any benefit plan of the
Company pursuant to which you are entitled to accrued benefits (other than any
severance or bonus arrangement). It may not be modified or changed except by
written instrument executed by all parties. This Agreement may be executed in
counterparts, each of which shall constitute an original and which together
shall constitute a single instrument.

                            [Continued on next page.]

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                                                                               8

     If this letter correctly sets forth your understanding of our agreement
with respect to the foregoing matters, please so indicate by signing below on
the line provided for your signature.

                                      Very truly yours,

                                      Premcor Inc.

                                      By: /s/ Jeffry N. Quinn
                                         ----------------------------
                                      Name:  Jeffry N. Quinn
                                      Title: Executive Vice President

Reviewed, approved and agreed:

/s/ William C. Rusnack
-----------------------------
William C. Rusnack

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                                   APPENDIX A

                                 General Release
                                 ---------------

     a. For and in consideration of the Severance Benefits and the Additional
Benefits, you hereby agree on behalf of yourself, your agents, assignees,
attorneys, successors, assigns, heirs and executors, to, and you do hereby,
fully and completely forever release the Company and its affiliates,
predecessors and successors and all of their respective past and/or present
officers, directors, partners, members, managing members, managers, employees,
agents, representatives, administrators, attorneys, insurers and fiduciaries in
their individual and/or representative capacities (hereinafter collectively
referred to as the "Releasees"), from any and all causes of action, suits,
agreements, promises, damages, disputes, controversies, contentions,
differences, judgments, claims, debts, dues, sums of money, accounts,
reckonings, bonds, bills, specialities, covenants, contracts, variances,
trespasses, extents, executions and demands of any kind whatsoever, which you or
your heirs, executors, administrators, successors and assigns ever had, now have
or may have against the Releasees or any of them, in law, admiralty or equity,
whether known or unknown to you, for, upon, or by reason of, any matter, action,
omission, course or thing whatsoever occurring up to the date this Agreement is
signed by you, including, without limitation, in connection with or in
relationship to your employment or other service relationship with the Company
or its affiliates, the termination of any such employment or service
relationship and any applicable employment, compensatory or equity arrangement
with the Company or its respective affiliates; provided that such released
claims shall not include any claims to enforce your rights under, or with
respect to, this Agreement, any existing stock option agreement as modified
herein, any director and officer liability insurance maintained for you by the
Company, any indemnity to the extent provided to you under the Company's by-laws
and certificate of incorporation, any existing indemnity agreement between you
and the Company, any existing stockholders' agreement between you and the
Company and any benefit plan of the Company pursuant to which you are entitled
to accrued benefits (other than any severance or bonus arrangement) (such
released claims are collectively referred to herein as the "Released Claims").

     b. Notwithstanding the generality of clause (a) above, the Released Claims
include, without limitation, (i) any and all claims under Title VII of the Civil
Rights Act of 1964, the Age Discrimination in Employment Act of 1967, the Civil
Rights Act of 1971, the Civil Rights Act of 1991, the Fair Labor Standards Act,
the Employee Retirement Income Security Act of 1974, the Americans with
Disabilities Act, the Family and Medical Leave Act of 1993, and any and all
other federal, state or local laws, statutes, rules and regulations pertaining
to employment or otherwise, and (ii) any claims for wrongful discharge, breach
of contract, fraud, misrepresentation or any compensation claims, or any other
claims under any statute, rule or regulation or under the common law, including
compensatory damages, punitive damages, attorney's fees, costs, expenses and all
claims for any other type of damage or relief.

     C. THIS MEANS THAT, BY SIGNING THIS AGREEMENT, YOU WILL HAVE WAIVED ANY
RIGHT YOU MAY HAVE HAD TO BRING A LAWSUIT OR MAKE ANY CLAIM AGAINST THE
RELEASEES BASED ON

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                                                                               2

ANY ACTS OR OMISSIONS OF THE RELEASEES UP TO THE DATE OF THE SIGNING OF THIS
AGREEMENT.

     d. You represent that you have read carefully and fully understand the
terms of this Agreement, and that you have been advised to consult with an
attorney and have had the opportunity to consult with an attorney prior to
signing this Agreement. You acknowledge that you are executing this Agreement
voluntarily and knowingly and that you have not relied on any representations,
promises or agreements of any kind made to you in connection with your decision
to accept the terms of this Agreement, other than those set forth in this
Agreement. You acknowledge that you have been given at least twenty-one days to
consider whether you want to sign this Agreement and that the Age Discrimination
in Employment Act gives you the right to revoke this Agreement within seven (7)
days after it is signed, and you understand that you will not receive any
payments due you under this Agreement until such seven (7) day revocation period
(the "Revocation Period") has passed and then, only if you have not revoked this
Agreement. To the extent you have executed this Agreement within less than
twenty-one (21) days after its delivery to you, you hereby acknowledge that your
decision to execute this Agreement prior to the expiration of such twenty-one
(21) day period was entirely voluntary.

                                                  /s/ William C. Rusnack
                                                  -----------------------------
                                                  William C. Rusnack<PAGE>

                                  PREMCOR INC.
                              8182 MARYLAND AVENUE
                                    SUITE 600
                               ST. LOUIS, MO 63105

                                                                January 31, 2002

Mr. Ezra C. Hunt
201 Woodward Boulevard
Tulsa, Oklahoma 74114

Dear Mr. Hunt:

     This letter agreement (the "Agreement") confirms our understanding and
agreement with respect to your termination of employment with Premcor Inc.
("Premcor"), The Premcor Refining Group (the "Company"), and their affiliates as
follows:

     1. Termination Of Employment. Effective as of January 31, 2002 (the
"Termination Date"), your employment with the Company and its affiliates shall
terminate. You hereby resign, effective as of the Termination Date, from any
other positions that you hold with the Company and any of its affiliates
(including, without limitation, membership on any Board of Directors or
committee thereof). The termination of your employment with the Company
hereunder shall be treated as having occurred pursuant to section 8(c) of your
employment agreement with the Company dated February 26, 2001 (the "Employment
Agreement"). Therefore, in accordance with, and in full satisfaction of, the
Employment Agreement, the Company will pay or provide to you all of the payments
and benefits to which you are entitled pursuant to and in accordance with
Section 8(c)(iii) of the Employment Agreement (the payments and benefits to be
paid and provided pursuant to such section, the "Severance Benefits"), which are
as follows:

          a. (i) Your accrued but unpaid Base Salary (as defined in the
     Employment Agreement) through the Termination Date; (ii) any annual bonus
     earned but unpaid as of the Termination Date for any previously completed
     calendar year; and (iii) reimbursement for any unreimbursed business
     expenses properly incurred by you in accordance with Company policy prior
     to the Termination Date; and

          b. Subject to your continued compliance with the provisions of Section
     9 of the Employment Agreement, you shall receive in cash an aggregate
     amount equal to $1,500,000 (such amount is equal to two times the sum of
     (i) your current Base Salary of $375,000 and (ii) your annual target bonus
     of 100% of Base Salary), which amount shall be payable in accordance with
     normal payroll practices of the Company in substantially equal installments
     over the 24 month period following the Termination Date; provided that the
     aggregate amount described in this clause (ii) shall be reduced by the
     present value of any other cash severance or termination benefits payable
     to you under any other plans, programs or arrangements of the Company or
     its affiliates; and

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          c. The Company, at its expense, shall provide you with reasonable job
     relocation counseling services of a firm chosen from time to time by you,
     for a period not to exceed 18 months after the Termination Date; and

          d. The Company shall maintain in full force and effect, for your
     continued benefit, until the earlier of (i) one year after the date of the
     termination of your employment or (ii) your commencement of full time
     employment with a new employer, all life insurance, medical, dental, health
     and accident and disability plans, programs or arrangements in which you
     were entitled to participate immediately prior to the Termination Date at a
     cost to you no greater than you paid while employed by the Company,
     provided that your continued participation is possible under the general
     terms and provisions of such plans and programs. In the event that the your
     participation is barred, the Company shall arrange to provide you, at the
     Company's expense, with benefits substantially similar to those which you
     are entitled to receive under such plans, programs or arrangements, or pay
     cash in an amount after tax sufficient to enable you to purchase
     substantially similar coverage for a one year period on an individual
     basis, at a cost to you no greater than you paid while employed. In the
     case of your commencement of full time employment with a new employer
     within the one year period, the Company agrees to make up any differential
     in benefits between what you would have received from the Company in the
     one year period and what you received from your new employer, so that you
     are ensured of receiving the same benefits which you would have been
     entitled to receive from the Company had your employment with the Company
     continued for the one year period at a cost to you no greater than you paid
     while employed.

     2. Additional Benefits. In addition to the Severance Benefits to which you
are entitled under the Employment Agreement as described in Section 1 above, the
Company shall provide you with the following additional benefits (the
"Additional Benefits"):

          a. As of the Termination Date, notwithstanding the provisions of the
     applicable stock option agreement granted under the Premcor Inc. 1999 Stock
     Incentive Plan (the "Premcor Plan"), your time vesting option to purchase
     60,000 shares of common stock of Premcor ("Common Stock") shall become
     vested with respect to one-third of the shares of Common Stock subject
     thereto (20,000 shares) and shall remain subject to the terms and
     conditions of the Premcor Plan and your nonqualified stock option agreement
     with Premcor pursuant to such Plan, with the following modifications:

               (i) Such time option will expire either (x) 190 calendar days
          after the closing date of an initial public offering of the Company's
          Common Stock, if such closing date occurs prior to December 31, 2002,
          or (y) if no initial public offering of the Company's Common Stock
          closes prior to December 31, 2002, then as of the close of business on
          December 31, 2002. All such options shall be exercisable until the
          applicable expiration date as determined in this clause (i), above;
          and

               (ii) Premcor waives its call rights with respect to such options.

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                                                                               3

          b. You hereby acknowledge that your performance vesting option to
     purchase 60,000 shares of Common Stock is not exercisable and terminates
     effective as of the Termination Date.

     3. Employment Agreement/Gross-Up. The Employment Agreement will be
terminated as of the Termination Date and will thereafter be of no further force
or effect, except that section 8(f) of the Employment Agreement (providing for a
gross-up payment upon the incurrence of certain excise taxes) and Sections 9 and
10 of the Employment Agreement (providing for your agreement to be bound by
certain restrictive covenants) shall be included herein by reference as if it
were part of this Agreement.

     4. General Release. As a condition of your receipt of the benefits
described in Section 2 above, you shall execute the General Release, attached
hereto as Appendix A, you shall execute the Lock-Up Agreement addressed to
Morgan Stanley & Co. Incorporated in connection with the Company's proposed
initial public offering, in the form attached hereto as Appendix B, and you are
agreeing to the covenants contained herein; provided that you will not be
entitled to the Severance Benefits or the Additional Benefits if you revoke this
Agreement as described in subsection (d) of Appendix A.

     5. Covenants.

          a. You agree and acknowledge that you are bound, and will continue to
     be bound, by the restrictive covenants set forth in Sections 9 and 10 of
     the Employment Agreement.

          b. You agree to give Premcor and its new chief executive officer your
     reasonable business cooperation and assistance in facilitating the
     transition of Premcor leadership from you to the new chief financial
     officer, as reasonably requested during the period commencing on the
     Termination Date and ending February 28, 2002 (the "Cooperation Period").
     For providing such cooperation and assistance from the Termination Date
     through February 28, 2002, which shall be on a regular basis, you will
     continue to receive your Base Salary only as compensation. The Company will
     reimburse you for reasonable expenses incurred in cooperating with and
     assisting the Company and its chief executive officer, upon presentation of
     appropriate documentation. You shall at all times during the Cooperation
     Period be an independent contractor with respect to the Company, and the
     Company shall not withhold or deduct from any amounts payable under this
     Section 5(b) any amount or amounts in respect of income taxes or other
     employment taxes of any other nature on your behalf. Under no circumstances
     shall you, in your capacity as a independent contractor, have or claim to
     have power of decision hereunder in any activity on behalf of the Company
     or any of its affiliates, have the power or authority hereunder to
     obligate, bind or commit Premcor in any respect, direct the work of any
     employee of the Company or any of its affiliates or make any management
     decisions on behalf of the Company or any of its affiliates. The Company
     shall not, with respect to your cooperation and assistance, exercise or
     have the power to exercise such level of control over you as would indicate
     or establish that a relationship of employer and employee exists between
     you and The Company.

<PAGE>

                                                                               4

          c. You agree not to make any derogatory comments, whether verbally or
     in writing, regarding Premcor, the Company or any of their affiliates, or
     any officers, directors, employees, stockholders or affiliates thereof
     (other than as required by law). The Company agrees to direct its officers
     and directors not to make any derogatory comments about you, whether
     verbally or in writing (other than as required by law). You agree not to,
     directly or indirectly, make any statement or release any information, or
     encourage others to make any statement or release any information that may
     reasonably be expected to embarrass or criticize the Company or any of its
     affiliates or shareholders (other than as required by law). The Company
     agrees to direct its officers and directors not to, directly or indirectly,
     make any statement or release any information, or encourage others to make
     any statement or release any information that may reasonably be expected to
     embarrass or criticize you (other than as required by law).

          d. The Company and you acknowledge and agree that the remedies
     available to the Company or you, as applicable, at law for a breach or
     threatened breach of any of the provisions of this Section 5 would be
     inadequate and, in recognition of this fact, the Company and you agree
     that, in the event of a breach or threatened breach, in addition to any
     remedies at law, the Company or you, as applicable, shall be entitled to
     obtain equitable relief in the form of specific performance, temporary
     restraining order or permanent injunction or any other equitable remedy
     that may be available. In addition, if you materially breach any of the
     provisions of this Section 5, the Company will have no obligation to make
     any further payments or provide any benefits under this Agreement
     (including, without limitation, the monetary consideration required to be
     paid and benefits required to be provided, pursuant to Section 2 of this
     Agreement).

     6. Return of Property to the Company. All memoranda, notes, lists, records
and other documents or papers (and all copies thereof), including items stored
in computer memories, on microfilm or by other means, made or compiled by you,
or made available to you relating to the Company or its affiliates or its
business, excluding documentation you received as a participant in any employee
benefit plan or arrangement of the Company, are and shall remain the property of
the Company and shall be delivered to the Company promptly upon the execution of
this Agreement.

     7. Governing Law. This Agreement will be governed, construed and
interpreted under the laws of the State of New York, without regard to conflicts
of laws principles.

     8. Legal Fees. The Company shall pay you all reasonable legal and
professional fees and expenses you incur in seeking to obtain or enforce any
right or benefit provided by this Agreement, if you are successful in obtaining
such right or benefit, as determined by an arbiter in accordance with Section 10
below.

     9. Arbitration. Disputes arising from the operation of this Agreement shall
be resolved by arbitration, other than disputes arising under Section 5(a) and
actions for equitable relief as provided in Section 5(d). In the event that any
dispute which shall be resolved by arbitration, is not able to be resolved by
mutual agreement of the parties within sixty calendar

<PAGE>

                                                                               5

(60) days of the giving of such notice, you and the Company hereby agree to
promptly submit such a dispute to binding arbitration in New York, New York in
accordance with New York law and the rules and procedures of the American
Arbitration Association. Disputes arising under Section 6 of this Agreement
shall be litigated in New York, New York and any action with respect to the
arbiter or the arbitration process (including, but not limited to, the
enforcement of the arbiter's decision) shall be brought in New York, New York.
Any judgment from a court in New York may, thereafter, be filed in any other
court having jurisdiction.

     10. Withholding Taxes. The Company may withhold from any amounts payable
under this Agreement such Federal, state and local taxes as may be required to
be withheld pursuant to any applicable law.

     11. No Mitigation. You shall not be required to mitigate the amount of any
payment provided for pursuant to this Agreement by seeking other employment or
otherwise and any such employment shall not mitigate the Company's obligations
hereunder.

     12. Binding Agreement/Successors. This Agreement shall enure to the benefit
of and be binding upon you and your heirs, executors, administrators and other
legal personal representatives and upon the Company and its successors and
assigns, but neither this Agreement nor any rights or obligations hereunder
shall be assignable or otherwise subject to hypothecation by you (except by will
or by operation of the laws of intestate succession) or by the Company, except
that the Company may assign this Agreement to any successor (whether by merger,
purchase or otherwise) to all or substantially all of the stock, assets or
businesses of the Company, if such successor expressly agrees to assume the
obligations of the Company hereunder. In the event of your death, any amounts
owed to you under this Agreement shall be paid to your estate.

     13. Entire Agreement/Counterparts. This constitutes the entire agreement
between the parties, and specifically supersedes all agreements and
understandings between the parties (including, without limitation, the
Employment Agreement between you and the Company, except as provided in Section
3 above), other than under existing stock option agreements as modified herein,
any director and officer liability insurance maintained for you by the Company,
and any existing stockholders' agreement between you and the Company or Premcor.
It may not be modified or changed except by written instrument executed by all
parties. This Agreement may be executed in counterparts, each of which shall
constitute an original and which together shall constitute a single instrument.

<PAGE>

                                                                               6

     If this letter correctly sets forth your understanding of our agreement
with respect to the foregoing matters, please so indicate by signing below on
the line provided for your signature.

                                            Very truly yours,

                                            The Premcor Refining Group.

                                            By: /s/ Jeffry N. Quinn
                                               ----------------------------
                                            Name:  Jeffry N. Quinn
                                            Title: Executive Vice President

Reviewed, approved and agreed:

/s/ Ezra C. Hunt
-----------------------------
Ezra C. Hunt

<PAGE>

                                   APPENDIX A

                                 General Release

     a. For and in consideration of the Severance Benefits and the Additional
Benefits, you hereby agree on behalf of yourself, your agents, assignees,
attorneys, successors, assigns, heirs and executors, to, and you do hereby,
fully and completely forever release the Company and its affiliates,
predecessors and successors and all of their respective past and/or present
officers, directors, partners, members, managing members, managers, employees,
agents, representatives, administrators, attorneys, insurers and fiduciaries in
their individual and/or representative capacities (hereinafter collectively
referred to as the "Releasees"), from any and all causes of action, suits,
agreements, promises, damages, disputes, controversies, contentions,
differences, judgments, claims, debts, dues, sums of money, accounts,
reckonings, bonds, bills, specialities, covenants, contracts, variances,
trespasses, extents, executions and demands of any kind whatsoever, which you or
your heirs, executors, administrators, successors and assigns ever had, now have
or may have against the Releasees or any of them, in law, admiralty or equity,
whether known or unknown to you, for, upon, or by reason of, any matter, action,
omission, course or thing whatsoever occurring up to the date this Agreement is
signed by you, including, without limitation, in connection with or in
relationship to your employment or other service relationship with the Company
or its affiliates, the termination of any such employment or service
relationship and any applicable employment, compensatory or equity arrangement
with the Company or its respective affiliates; provided that such released
claims shall not include any claims to enforce your rights under, or with
respect to, this Agreement any applicable stock option agreement, any
subscription or stockholders' agreement and indemnification provisions in the
Company's by-laws (such released claims are collectively referred to herein as
the "Released Claims").

     b. Notwithstanding the generality of clause (a) above, the Released Claims
include, without limitation, (i) any and all claims under Title VII of the Civil
Rights Act of 1964, the Age Discrimination in Employment Act of 1967, the Civil
Rights Act of 1971, the Civil Rights Act of 1991, the Fair Labor Standards Act,
the Employee Retirement Income Security Act of 1974, the Americans with
Disabilities Act, the Family and Medical Leave Act of 1993, and any and all
other federal, state or local laws, statutes, rules and regulations pertaining
to employment or otherwise, and (ii) any claims for wrongful discharge, breach
of contract, fraud, misrepresentation or any compensation claims, or any other
claims under any statute, rule or regulation or under the common law, including
compensatory damages, punitive damages, attorney's fees, costs, expenses and all
claims for any other type of damage or relief.

     C. THIS MEANS THAT, BY SIGNING THIS AGREEMENT, YOU WILL HAVE WAIVED ANY
RIGHT YOU MAY HAVE HAD TO BRING A LAWSUIT OR MAKE ANY CLAIM AGAINST THE
RELEASEES BASED ON ANY ACTS OR OMISSIONS OF THE RELEASEES UP TO THE DATE OF THE
SIGNING OF THIS AGREEMENT.

<PAGE>

                                                                               2

     d. You represent that you have read carefully and fully understand the
terms of this Agreement, and that you have been advised to consult with an
attorney and have had the opportunity to consult with an attorney prior to
signing this Agreement. You acknowledge that you are executing this Agreement
voluntarily and knowingly and that you have not relied on any representations,
promises or agreements of any kind made to you in connection with your decision
to accept the terms of this Agreement, other than those set forth in this
Agreement. You acknowledge that you have been given at least twenty-one days to
consider whether you want to sign this Agreement and that the Age Discrimination
in Employment Act gives you the right to revoke this Agreement within seven (7)
days after it is signed, and you understand that you will not receive any
payments due you under this Agreement until such seven (7) day revocation period
(the "Revocation Period") has passed and then, only if you have not revoked this
Agreement. To the extent you have executed this Agreement within less than
twenty-one (21) days after its delivery to you, you hereby acknowledge that your
decision to execute this Agreement prior to the expiration of such twenty-one
(21) day period was entirely voluntary.

                                                /s/ Ezra C. Hunt
                                                -----------------------------
                                                Ezra C. Hunt

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