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Press release from Business Wire

Tesoro Provides Update on New CEO Arrival

Thursday, May 06, 2010

Tesoro Provides Update on New CEO Arrival19:51 EDT Thursday, May 06, 2010 SAN ANTONIO (Business Wire) -- Tesoro Corporation (NYSE:TSO) previously disclosed on a Form 8-K filed with the SEC that Gregory J. Goff became President and Chief Executive Officer and a member of Tesoro's Board of Directors on May 1, 2010. As an inducement to his employment with Tesoro, Mr. Goff was granted on May 5, 2010 the following long-term incentive awards for fiscal year 2010: 118,000 stock options to purchase Tesoro common stock with an exercise price equal to $12.93 (the fair market value of a share of Tesoro common stock on May 5, 2010) that vest in equal installments on the first three anniversaries of grant subject to continued employment with Tesoro and that have a ten-year term; 68,000 restricted shares of Tesoro common stock that vest in equal installments on the first three anniversaries of grant subject to continued employment with Tesoro; and $1,200,000 of performance cash units that vest at the end of a thirty-three month performance period (commencing on April 1, 2010 and ending on December 31, 2012) based on Tesoro's relative total shareholder return against a peer group and the S&P 500 Index and Tesoro's absolute total shareholder return over the performance period, subject to continued employment with Tesoro, and that are paid out in cash. The stock options and restricted shares were granted outside of a stockholder-approved plan, pursuant to the “Employment Inducement Awards” exemption in Section 303A.08 of the New York Stock Exchange Listed Company Manual. Tesoro Corporation, a Fortune 150 company, is an independent refiner and marketer of petroleum products. Tesoro, through its subsidiaries, operates seven refineries in the western United States with a combined capacity of approximately 665,000 barrels per day. Tesoro's retail-marketing system includes over 880 branded retail stations, of which over 380 are company operated under the Tesoro®, Shell®, Mirastar® and USA Gasoline™ brands.