2003 Stock Option Modification Letter Agreement between Premcor and Executive

Summary

This letter agreement between Premcor and the executive modifies the executive's 2003 annual stock option grant, originally provided for in their employment agreement. Under the new terms, the executive will receive a specified number of stock options in January 2003, with an exercise price set at fair market value on the grant date. The options vest over five years, or fully upon a change in control, and other terms remain as previously agreed. By signing, the executive consents to these changes and waives any claim of breach related to this modification.

EX-10.2 4 dex102.txt FORM OF LETTER AGREEMENT DATED AS OF JANUARY 22, 2003 Exhibit 10.2 [PREMCOR LOGO APPEARS HERE] Thomas D. O'Malley Chairman & Chief Executive Officer 1700 East Putnam Avenue, Suite 500 Old Greenwich, CT 06870 telephone: (001) 203 ###-###-#### facsimile: (001) 203 ###-###-#### January 22, 2003 [Executive's Name] [Address] [Address] Dear [Executive's Name]: On [execution date] you executed an Employment Agreement ("Agreement") with the Company that provided that you would receive an annual grant of stock options under terms defined in the Agreement. Management and the Company's Board of Directors has determined that it is desirable to modify the terms for the year 2003 only of the grant of stock options. Under these new terms, during the month of January of the year 2003, you will receive a grant of options to purchase [See Schedule A attached hereto] shares of Company common stock at an exercise price per share equal to Fair Market Value (as defined in the Plan) on the date of grant (the "Annual Options"). Subject to your continued employment with the Company, such Annual Options will vest in equal installments on each of the first five anniversaries of the date of grant, and will become fully vested upon the occurrence of a Change in Control of the Company. Other terms and conditions of the Annual Options shall be as set forth your Agreement, in the Plan, and an option agreement between you and the Company. If the Company should, prior to any Annual Option grant, be involved in any merger, reorganization, stock split or spinoff or other similar event, the number of shares subject to the Annual Options yet to be granted, as provided above, shall be adjusted on a pro rata basis. Your acceptance of this letter shall serve as your consent to the change in terms with respect to your Annual Options. This letter shall also serve as a waiver by you of the change in terms of your Annual Options as a purported breach of your employment agreement. Please execute one copy of this letter and return it to James R. Voss, Senior Vice President and Chief Administrative Officer. Sincerely, /s/ Thomas D. O'Malley Thomas D. O'Malley Agreed and Accepted: Date: - -------------------------------------------- ---------------------------- [Name] Schedule A Number of Options - ----------------- Michael D. Gayda 40,000 William E. Hantke 40,000 James R. Voss 40,000 Joseph D. Watson 40,000 Henry M. Kuchta 75,000