TESORO CORPORATION AMENDED AND RESTATED EXECUTIVE SECURITY PLAN

1.1

"Affiliate" means each entity that would be considered a single employer with the Company under Section 414(b) or Section 414(c) of the Code, except that the phrase "at least 50%" shall be substituted for the phrase "at least 80%" as used therein.

1.2

"Aggregated Plan" means all agreements, methods, programs and other arrangements that are aggregated with this Plan under Section 1.409A-1(c) of the Regulations.

1.3

"Basic Compensation" shall have the meaning of such term, as set forth in the Tesoro Corporation Retirement Plan, as in effect on the date of a Participant’s Retirement, but determined without regard to any compensation limits imposed by the Code, and, further provided, a normal bonus otherwise includible as Basic Compensation shall be credited in the calendar year in which such bonus is earned and not in the calendar year when paid, if different.

1.4

"Beneficiary" means the person or legal entity designated in writing by a Participant to receive, after his death, any death benefits provided by the Plan. If no designation is in effect at the time of the Participant’s death, or if no designated person shall survive the Participant, the Beneficiary shall be the Participant’s estate.

1.5

"Board" means the Board of Directors of the Company.

1.6

"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), 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 13c-3 under the Securities Exchange Act of 1934) 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.

1.7

"Chief Executive Officer" means the Chief Executive Officer of the Company.

1.8

"Code" means the Internal Revenue Code of 1986, as amended from time to time.

1.9

"Committee" means the Tesoro Corporation Employee Benefits Committee appointed by the Compensation Committee of the Board or such other committee designated by the Compensation Committee of the Board to discharge the duties of the Committee hereunder.

1.10

"Company" means Tesoro Corporation, a Delaware corporation, or any successor thereto.

1.11

"Disabled" or "Disability" means that a Participant is entitled to benefits under the long-term disability plan of the Company or an Affiliate.

1.12

"Distribution Schedule" means the method of distributions elected (or deemed elected) by a Participant, which method may be either a lump sum payment or an annuity, pursuant to which distribution of the Participant’s benefit hereunder shall be made or shall commence. Such election shall be made at the time and in the manner described in Section 3.2 hereof and shall be subject to the provisions thereof.

1.13

"Early Retirement Date" means the date on which a Participant has either: (i) both attained age 55 and is credited with at least 5 years of Service or (ii) attained age 50 and

is credited with at least eighty (80) points, with points credited for this purpose by adding the aggregate of a Participant’s age and Service, each of which shall be determined in years and completed months rather than completed years only, and including "deemed years of age" granted pursuant to an employment agreement, change in control agreement, separation agreement or any other agreement between a Participant and the Company or an Affiliate.

1.14

"Earnings" shall mean the amount determined by dividing a Participant’s aggregate Basic Compensation for the three (3) calendar years out of the last seven (7) calendar years (including the year of such Participant’s Retirement) for which the Participant’s Basic Compensation was the greatest by the number of full calendar months of employment during such three (3)-calendar year period.

1.15

"Funded Plan" means the Tesoro Petroleum Corporation Funded Executive Security Plan.

1.16

"Lump Sum Interest Rate" means the discount rate used for the Company’s financial disclosure purposes under Financial Accounting Standards Statement No. 158 for the December 31 prior to or coincident with the Participant’s Retirement Date.

1.17

"Lump Sum Mortality Table" means the mortality table used for the Company’s financial disclosure purposes under Financial Accounting Standards Statement No. 158 for the December 31 prior to or coincident with the Participant’s Retirement Date. For this purpose, the mortality table will be a unisex table based on 95% of the male rates and 5% of the female rates.

1.18

"Other Retirement Income" means the retirement income payable to a Participant from the following sources and assumed to commence at the earliest date possible coincident with or immediately following the Participant’s Retirement Date:

•

Qualified and nonqualified retirement benefits from a prior employer of the Participant if said prior employer or employer facility was acquired by or merged into the Company or any Affiliate at any time and benefit service with the prior employer is recognized by the Company for any retirement plan, qualified or nonqualified, pursuant to the terms of an acquisition agreement or as otherwise provided under a separate agreement with the Company or an Affiliate.

•

Social Security Benefit as defined in Section 1.28 hereof.

1.19

"Participant" means an officer of the Company or an Affiliate with the title of Senior Vice President or above who is recommended for participation by the Chief Executive Officer and approved by the Compensation Committee of the Board as eligible to participate.

1.20

"Plan" means the Tesoro Corporation Amended and Restated Executive Security Plan, effective January 1, 2009 (except as otherwise specifically noted herein), as amended from time to time.

1.21

"Regulations" means the Treasury Regulations promulgated under the Code.

1.22

"Retirement" means a Participant’s Separation from Service on or after the earlier of: (i) his Early Retirement Date or (ii) a Change in Control.

1.23

"Retirement Date" means the date of a Participant’s Retirement.

1.24

"Retirement Plan" means the Tesoro Corporation Retirement Plan, as amended from time to time.

1.25

"Retirement Plan Benefit" means the amount of monthly benefit payable from the Retirement Plan to a Participant in the form of a straight life annuity and assumed to commence at the earliest date possible coincident with or immediately following the Participant’s Retirement Date.

1.26

"Separation from Service" means a reasonably anticipated permanent reduction in the level of bona fide services performed by the Participant for the Company and its Affiliates to 20% or less of the average level of bona fide services performed by the Participant for the Company and its Affiliates (whether as an employee or an independent contractor) in the immediately preceding thirty-six (36) months (or the full period of service to the Company and its Affiliates if the Participant has been providing services to the Company and its Affiliates for fewer than thirty-six (36) months). The determination of whether a Separation from Service has occurred shall be made by the Committee in accordance with the provisions of Section 409A of the Code and the Regulations promulgated thereunder.

1.27

"Service" means a Participant’s "Vesting Service," as such term is defined in the Retirement Plan, but calculated in years and completed months rather than completed years only, and including "deemed service" granted pursuant to an employment agreement, change in control agreement, separation agreement or any other agreement between a Participant and the Company or an Affiliate.

1.28

"Social Security Benefit" means the monthly primary insurance amount estimated by the Committee to be payable to the Participant at age 65 under the federal Social Security Act, provided, however, that:

(a)

the Social Security Benefit for a Participant who terminates employment prior to age 65 will be calculated assuming:

(i)

the Participant will not receive any future wages which would be treated as wages for purposes of the federal Social Security Act, and

(ii)

the Participant will elect to begin receiving his Social Security Benefit as of the earliest age then allowable under said Social Security Act, or if later, at actual date of Retirement.

(b)

the Social Security Benefit, once calculated, will be frozen as of the date the Participant terminates employment.

1.29

"Subsidiary" means any entity in which the Company owns or otherwise controls, directly or indirectly, stock or other ownership interests having the voting power to elect a majority of the board of directors, or other governing group having functions similar to a board of directors, as determined by the Committee.

2.1

Each Participant is eligible to receive a benefit under this Plan upon his Retirement. Such benefit shall commence as provided in Section 4.1 hereof. Except as provided in Section V hereof, no benefit is payable hereunder in the event of a Participant’s Separation from Service prior to Retirement except in the event of such Participant’s Disability, as provided in Section 2.2 below, or a Change in Control, as provided in Section 4.5 below.

2.2

In the event a Participant becomes Disabled while in the active employment of the Company or an Affiliate and eligible to participate hereunder, he shall be entitled to the retirement benefit determined under Section 3.1 payable on the first day of the month following the date on which such Participant has both attained the age of 65 and is credited with at least 5 years of Service, but based upon the Service the Participant would have accrued had he remained in active employment until such date and continued at the same rate of Earnings until that date. Notwithstanding the foregoing, no Participant shall be entitled to credit for Service after the date on which such Participant is no longer considered Disabled.

2.3

Notwithstanding anything herein to the contrary, if a Participant who is receiving, or may be entitled to receive, a benefit hereunder, engages in competition with the Company (without prior authorization given by the Committee in writing) or is discharged for cause, or performs acts of willful malfeasance or gross negligence in a matter of material importance to the Company, payments thereafter payable hereunder to such Participant or such Participant’s Beneficiary will, at the discretion of the Committee, be forfeited and the Company will have no further obligation hereunder to such Participant or Beneficiary.

3.1

The monthly retirement benefit under this Plan will equal 4% of Earnings times the first 10 years of Service, plus 2% of Earnings times the next 10 years of Service, plus 1% of Earnings times the next 10 years of Service, actuarially reduced by seven percent (7%) per year from age sixty (60) for Participants who have not attained age 55 with ten (10) years of Service by December 31, 2005 and who retire prior to age sixty (60), and offset by any Retirement Plan Benefit and any Other Retirement Income. Notwithstanding the foregoing, no credit will be included under this Plan formula for Service in excess of 30

years. The amount payable under this Plan shall also be reduced by the amount of the vested Basic Pension paid or payable under the Funded Plan (without regard to whether a smaller, adjusted amount is in fact paid from such Funded Plan after retirement because of prior distributions made from such Funded Plan to enable the Participant to pay tax