TESORO PETROLEUM CORP /NEW/
MANAGEMENT STABILITY AGMT. - JOSEPH M. MONROE
<DOCUMENT>
<TYPE>EX-10.30
<SEQUENCE>12
<FILENAME>d03997exv10w30.txt
<DESCRIPTION>MANAGEMENT STABILITY AGMT. - JOSEPH M. MONROE
<TEXT>
<PAGE>

                                                                   Exhibit 10.30

                         MANAGEMENT STABILITY AGREEMENT

      This Management Stability Agreement is dated November 6, 2002, between
Tesoro Petroleum Corporation, a Delaware corporation (the "Company"), and Joseph
M. Monroe ("Employee").

                                    Recitals:

      WHEREAS, the Board of Directors of the Company has determined that it is
in the best interest of the Company to reduce uncertainty to certain key
employees of the Company in the event of certain fundamental events involving
the control or existence of the Company;

      WHEREAS, the Board of Directors of the Company has determined that an
agreement protecting certain interests of key employees of the Company in the
event of certain fundamental events involving the control or existence of the
Company is in the best interest of the Company because it will assist the
Company in attracting and retaining key employees such as this Employee; and

      WHEREAS, the Employee is relying on this Agreement and the obligations of
the Company hereunder in continuing to work for the Company.

      NOW, THEREFORE, THE PARTIES AGREE AS FOLLOWS:

      1. Termination Following Change of Control.

      Should Employee at any time within two years of a change of 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"
(following a change of control), "cause" shall be limited to the conviction of
or a plea of nolo contendere to the charge of a felony (which, through lapse of
time or otherwise, is not subject to appeal), a material breach of fiduciary
duty to the Company through the misappropriation of Company funds or property)
or (ii) voluntary termination by Employee for "good reason upon change of
control" (as defined below), the Company (or its successor) shall pay to
Employee within ten days of such termination the following severance payments
and benefits:

            (a) A lump-sum payment equal to two and one-half times the base
            salary of the Employee at the then current rate; and

            (b) A lump-sum payment equal to (i) two and one-half times the sum
            of the target bonuses under all of the Company's incentive bonus
            plans applicable to the Employee for the year in which the
            termination occurs or the year in which the change of control
            occurred, whichever is greater, and (ii) if termination occurs in
            the fourth quarter of a calendar year, the sum of the target bonuses
            under all of the Company's incentive bonus plans applicable



                                                                          Page 1
<PAGE>

            to Employee for the year in which the termination occurs prorated
            daily based on the number of days from the beginning of the calendar
            year in which the termination occurs to and including the date of
            termination.

The Company (or its successor) shall also provide continuing coverage and
benefits comparable to all life, health and disability plans of the Company for
a period of 30 months from the date of termination, and Employee shall receive
two and one-half years additional service credit under the current non-qualified
supplemental pension plans, or successors thereto, of the Company applicable to
the Employee on the date of termination.

                  For purposes of this Agreement, a "change of control" shall be
            deemed to have occurred if (i) there shall be consummated (A) any
            consolidation or merger of the Company in which the Company is not
            the continuing or surviving corporation or pursuant to which shares
            of the Company's Common Stock would be converted into cash,
            securities or other property, other than a merger of the Company
            where a majority of the Board of Directors of the surviving
            corporation are, and for a two year period after the merger continue
            to be, persons who were directors of the Company immediately prior
            to the merger or were elected as directors, or nominated for
            election as directors, by a vote of at least two-thirds of the
            directors then still in office who were directors of the 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 the Company, or (ii) the
            shareholders of the Company shall approve any plan or proposal for
            the liquidation or dissolution of the 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 the Company or a subsidiary thereof or any employee
            benefit plan sponsored by the Company or a subsidiary thereof, shall
            become the beneficial owner (within the meaning of Rule 13d-3 under
            the Exchange Act) of securities of the Company representing 20
            percent or more of the combined voting power of the 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 of Directors of the Company shall cease for any reason to
            constitute at least a majority thereof, unless the election or the
            nomination by the Board of Directors for election by the Company's
            shareholders of each new director during such period was approved by
            a vote of at least two-thirds of the



                                                                          Page 2
<PAGE>

            directors then still in office who were directors at the beginning
            of such period.

            For purposes of this Section 1, "good reason upon change of control"
            shall exist if any of the following occurs:

            (i) without Employee's express written consent, the assignment to
            Employee of any duties inconsistent with the employment of Employee
            immediately prior to the change of control, or a significant
            diminution of Employee's positions, duties, responsibilities and
            status with the Company from those immediately prior to a change of
            control or a diminution in Employee's titles or offices as in effect
            immediately prior to a change of control, or any removal of Employee
            from, or any failure to reelect Employee to, any of such positions;

            (ii) a reduction by the Company in Employee's base salary in effect
            immediately prior to a change of control;

            (iii) the failure by the Company to continue in effect any thrift,
            stock ownership, pension, life insurance, health, dental and
            accident or disability plan in which Employee is participating or is
            eligible to participate at the time of the change of control (or
            plans providing Employee with substantially similar benefits),
            except as otherwise required by the terms of such plans as in effect
            at the time of any change of control or the taking of any action by
            the Company which would adversely affect Employee's participation in
            or materially reduce Employee's benefits under any of such plans or
            deprive Employee of any material fringe benefits enjoyed by Employee
            at the time of the change of control or the failure by the Company
            to provide the Employee with the number of paid vacation days
            to which Employee is entitled in accordance with the vacation
            policies of the Company in effect at the time of a change of
            control;

            (iv) the failure by the Company to continue in effect any incentive
            plan or arrangement (including without limitation, the Company's
            Incentive Compensation Plan and similar incentive compensation
            benefits) in which Employee is participating at the time of a change
            of control (or to substitute and continue other plans or
            arrangements providing the Employee with substantially similar
            benefits), except as otherwise required by the terms of such plans
            as in effect at the time of any change of control;

            (v) the failure by the Company to continue in effect any plan or
            arrangement with respect to securities of the Company (including,
            without limitation, any plan or arrangement to receive and exercise


                                                                          Page 3
<PAGE>

            stock options, stock appreciation rights, restricted stock or grants
            thereof or to acquire stock or other securities of the Company) in
            which Employee is participating at the time of a change of control
            (or to substitute and continue plans or arrangements providing the
            Employee with substantially similar benefits), except as otherwise
            required by the terms of such plans as in effect at the time of any
            change of control or the taking of any action by the Company which
            would adversely affect Employee's participation in or materially
            reduce Employee's benefits under any such plan;

            (vi) the relocation of the Company's principal executive offices to
            a location outside the San Antonio, Texas, area, or the Company's
            requiring Employee to be based anywhere other than at the location
            of the Company's principal executive offices, except for required
            travel on the Company's business to an extent substantially
            consistent with Employee's present business travel obligations, or,
            in the event Employee consents to any such relocation of the
            Company's principal executive or divisional offices, the failure by
            the Company to pay (or reimburse Employee for) all reasonable moving
            expenses incurred by Employee relating to a change of Employee's
            principal residence in connection with such relocation and to
            indemnify Employee against any loss (defined as the difference
            between the actual sale price of such residence and the higher of
            (a) Employee's aggregate investment in such residence or (b) the
            fair market value thereof as determined by a real estate appraiser
            reasonably satisfactory to both Employee and the Company at the time
            the Employee's principal residence is offered for sale in connection
            with any such change of residence;

            (vii) any failure by the Company to obtain the assumption of this
            Agreement by any successor or assign of the Company;

      In the event of a change of control as "change of control" is defined in
any stock option plan or stock option agreement pursuant to which the Employee
holds options to purchase common stock of the Company, Employee shall retain the
rights to all accelerated vesting and other benefits under the terms thereof.

      The Company shall pay any attorney fees incurred by Employee in reasonably
seeking to enforce the terms of this Paragraph 1.

      2. Complete Agreement.

      This Agreement constitutes the entire agreement between the parties and
cancels and supersedes all other agreements between the parties which may have
related to the subject matter contained in this Agreement.


                                                                          Page 4
<PAGE>

      3. Modification; Amendment; Waiver.

      No modification, amendment or waiver of any provisions of this Agreement
shall be effective unless approved in writing by both parties. The failure at
any time to enforce any of the provisions of this Agreement shall in no way be
construed as a waiver of such provisions and shall not affect the right of
either party thereafter to enforce each and every provision hereof in accordance
with its terms.

      4. Governing Law; Jurisdiction.

      This Agreement and performance under it, and all proceedings that may
ensue from its breach, shall be construed in accordance with and under the laws
of the State of Texas.

      5. Severability.

      Whenever possible, each provision of this Agreement shall be interpreted
in such manner as to be effective and valid under applicable law, but if any
provision of this Agreement shall be held to be prohibited by or invalid under
applicable law, such provision shall be ineffective only to the extent of such
prohibition or invalidity, without invalidating the remainder of such provision
or the remaining provisions of this Agreement.

      6. Assignment.

      The rights and obligations of the parties under this Agreement shall be
binding upon and inure to the benefit of their respective successors, assigns,
executors, administrators and heirs, provided, however, that the Company may not
assign any duties under this Agreement without the prior written consent of the
Employee.

      7. Limitation.

      This Agreement shall not confer any right or impose any obligation on the
Company to continue the employment of Employee in any capacity, or limit the
right of the Company or Employee to terminate Employee's employment.

      8. Notices.

      All notices and other communications under this Agreement shall be in
writing and shall be given in person or by telegraph, facsimile or first class
mail, certified or registered with return receipt requested, and shall be deemed
to have been duly given when delivered personally or three days after mailing or
one day after transmission of a telegram or facsimile, as the case may be, to
the representative persons named below:


                                                                          Page 5
<PAGE>

      If to the Company:                  Corporate Secretary
                                          Tesoro Petroleum Corporation
                                          300 Concord Plaza Drive
                                          San Antonio, Texas 78216-6999

      If to the Employee:                 Joseph M. Monroe
                                          153 Sendero Verde
                                          San Antonio, Texas 78261

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

                          COMPANY:        TESORO PETROLEUM CORPORATION

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


                          EMPLOYEE:       /s/ JOSEPH M. MONROE
                                          -------------------------------------
                                          Joseph M. Monroe


                                                                          Page 6

</TEXT>
</DOCUMENT>
