HOLLY ENERGY PARTNERS, L.P.
LONG-TERM INCENTIVE PLAN

PERFORMANCE UNIT AGREEMENT
This Performance Unit Agreement (the “Agreement”) is made and entered into by
and between Holly Logistic Services, L.L.C., a Delaware limited liability
company (the “Company”), and you. This Agreement is entered into as of the ___
day of _________, 2020 (the “Date of Grant”).
W I T N E S S E T H:
WHEREAS, the Company has adopted the Holly Energy Partners, L.P. Long-Term
Incentive Plan (the “Plan”) to attract, retain and motivate employees,
executives, directors and consultants;
WHEREAS, the Company believes that a grant to you of performance units of Holly
Energy Partners, L.P. (the “Partnership”) as part of your compensation for
services provided to the Company and/or the Partnership is consistent with the
stated purposes for which the Plan was adopted; and
WHEREAS, a copy of the Plan has been furnished to you and shall be deemed a part
of this Agreement (“Agreement”) as if fully set forth herein and the terms
capitalized but not defined herein or on Appendix A attached hereto shall have
the meanings set forth in the Plan.
NOW, THEREFORE, in consideration of the services rendered by you, it is agreed
by and between the Company and you, as follows:
1.The Grant. The Company hereby grants to you as of the Date of Grant an Award
of ______ performance units (the “Performance Units”), subject to the terms and
conditions set forth in this Agreement. Depending on the performance of the
Partnership, you may earn from 0% to 200% of the Performance Units, based on the
terms set forth in Section 3.
2.Distribution Equivalent Rights. As long as you hold the Performance Units
granted pursuant to this Agreement, you will be entitled to receive distribution
equivalent rights (“DERs”) in accordance with this Section 2. In the event the
Partnership makes a distribution in respect of outstanding Units and, on the
record date for such distribution, you hold Performance Units that have not yet
become earned and payable under this Agreement, the Company shall pay you an
amount in cash equal to the distribution amounts you would have received if you
were the holder of record, as of such record date, of a number of Units equal to
the number of such Performance Units set forth in Section 1 that have not become
earned and payable as of such record date, such payment to be made on or
promptly following the date that the Partnership makes such distribution
(however, in no event shall the DERs be paid later than 30 days following the
date on which the Partnership makes such distribution to unitholders generally).
Notwithstanding this Section 2, the Performance Units granted pursuant to this
Agreement do not and shall not entitle you to any rights of a holder of Units,
including the right to vote, prior to the date Units are delivered to you in
settlement of the Performance Units pursuant to Section 5.

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3.Terms of Award. The Performance Units represent an Award for the “Performance
Period” which begins on October 1 of the calendar year of the Date of Grant
(“Year One”) and ends on September 30 of the third calendar year following Year
One (“Year Three”). If you are employed by the Partnership and the Company on
December 1 of Year Three, you will be entitled to a payment of Units in the
amount determined under this Section 3 and/or Section 4, as applicable, and
payable at the time indicated in Section 4 and/or Section 5, as applicable. The
period of time beginning on the Date of Grant and ending on December 1 of Year
Three is referred to as the “Service Period.”
(a)    Performance Measure. The number of Performance Units earned for the
Performance Period is determined by calculating the Partnership’s performance on
the two measures listed below over the Performance Period. The two performance
measures are EBITDA and Total Unitholder Return. Notwithstanding anything to the
contrary in this Agreement, the Committee may make adjustments to the
definitions of the performance measures or to the performance targets
established with respect to the Award in its sole discretion as it determines to
be appropriate or advisable to avoid rewarding or penalizing you for unexpected
events that occur following the Date of Grant that were not taken into
consideration in establishing the metrics and targets.
(b)    Units Payable. The number of Units payable is equal to the result of
multiplying the total number of Performance Units set forth in Section 1 by the
Performance Unit Payout Percentage. The number of Units payable will be rounded
down to the nearest Unit. No fractional Units will be issued pursuant to this
Agreement. In its sole discretion, the Committee may make a payment to you
assuming a Performance Percentage of up to 200% of the Performance Units instead
of the Performance Unit Payout Percentage as determined pursuant to this Section
3(b).
4.Early Termination. In the event you cease to provide services to the
Partnership and the Company prior to December 1 of Year Three on account of an
event described in this Section 4, the number of Performance Units with respect
to which payment at the end of the Performance Period is based shall be
determined as follows:
(a)    Termination Generally. Subject to subsections (b), (c) and (d) below, if
your employment relationship with the Company and its subsidiaries is terminated
for any reason (including if you voluntarily separate from employment (other
than due to your Retirement) or are terminated by action of the Company
(including termination for Cause but other than a Special Involuntary
Termination)), then all Performance Units hereunder will be forfeited.
(b)    Termination Due to Death, Disability or Retirement. In the event that you
cease to provide services to the Partnership and the Company prior to December 1
of Year Three due to your (i) death, (ii) total and permanent disability as
determined by the Compensation Committee of the Company’s Board of Directors
(the “Committee”) in its sole discretion, or (iii) Retirement, then you (or your
beneficiary, if applicable) shall forfeit a number of the Performance Units
equal to the number of Performance Units specified in Section 1 hereof times the
percentage that (A) the number of days beginning on the day on which the date of
Retirement occurs and ending on the last day of the Service Period, (B) bears to
the total number of days in the Service Period. In the event
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of such forfeiture, the number of Units payable hereunder shall be equal to the
result of multiplying the number of remaining Performance Share Units by the
target Performance Unit Payout Percentage. In its sole discretion, the Committee
may make a payment to you assuming a Performance Percentage of up to 200% of the
Performance Units instead of the pro-rata number of Performance Units as
determined pursuant to this Section 4(b). Payment with respect to the remaining
Units shall be made as soon as administratively practicable following your
Retirement, but in no event later than 90 days after the date your employment or
service relationship terminates.
(c)    Special Involuntary Termination. In the event of a Special Involuntary
Termination before December 1 of Year Three, the Performance Units will become
immediately vested and nonforfeitable assuming a Performance Unit Payout
Percentage of one hundred percent (100%) instead of the Performance Unit Payout
Percentage that would otherwise be determined at the end of the Performance
Period in accordance with Section 3. Payment shall be made as soon as
administratively practicable following the Special Involuntary Termination, but
in no event later than 90 days after the date your employment or service
relationship terminates. Payment pursuant to this Section 4(c) is in lieu of
payment pursuant to Section 4(b) and if you receive payment pursuant to this
Section 4(c) you will not be entitled to any payment pursuant to Section 4(b).
(d)    Effect of Employment Agreement. Notwithstanding any provision herein to
the contrary, in the event of any inconsistency between this Section 4 and any
employment, change in control, or similar agreement entered into by and between
you and the Company, the terms of the employment, change in control or similar
agreement shall control.
(e)    Leave of Absence. With respect to the Award, the Company may, in its sole
discretion, determine that if you are on leave of absence for any reason you
will be considered to still be in the employ of, or providing services for, the
Company, provided that rights to the Restricted Units during a leave of absence
will be limited to the extent to which those rights were earned or vested when
the leave of absence began.    
5.Payment of Performance Units.
(a)The number of Units payable hereunder shall be payable as soon as reasonably
practicable following December 1 of Year Three (or such earlier time as
specified under Section 4(b) or (c)), but in no event later than two and
one-half months after the end of the calendar year in which the Performance
Period closes (or such earlier time as specified under Section 4(b) or (c)), in
the amount determined in accordance with Section 3, as adjusted by Section 4, if
applicable. Such payment will be subject to withholding for taxes and other
applicable payroll adjustments. The Committee’s determination of the amount
payable shall be binding upon you and your beneficiary or estate. The number of
Units payable will be rounded down to the nearest Unit. No fractional Units will
be issued pursuant to this Agreement.
(b)    If you are a “specified employee” within the meaning of Treasury
Regulation § 1.409A-1(i) as of the date of your “separation from service”
(within the meaning of Treasury Regulation § 1.409A-1(h)), then you will not be
entitled to receive
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Units in settlement of Performance Units until the earlier of (i) the date which
is six (6) months after your “separation from service” for any reason other than
death, or (ii) the date of your death. The provisions of this Section 5(b) shall
only apply if and to the extent required to avoid the imputation of any tax,
penalty, or interest pursuant to Section 409A of the Code.
6.Payment of Taxes. The Company may require you to pay to the Company (or an
Affiliate of the Company if you are an employee of an Affiliate of the Company),
an amount the Company deems necessary to satisfy its (or its Affiliate’s)
current or future withholding with respect to federal, state or local income or
other taxes that you incur as a result of the Award. With respect to any tax
withholding (and to the extent permissible pursuant to Rule 16b-3 under the
Exchange Act, if applicable), you may (a) direct the Company to withhold from
the Units to be issued to you under this Agreement the number of Units necessary
to satisfy the Company’s withholding of such taxes, which determination will be
based on the Units’ Fair Market Value at the time such determination is made;
(b) deliver to the Company Units sufficient to satisfy the Company’s tax
withholding, based on the Units’ Fair Market Value at the time such
determination is made; or (c) deliver cash to the Company sufficient to satisfy
its tax withholding. If you desire to elect to use the Unit withholding option
described in subparagraph (a), you must make the election at the time and in the
manner the Company prescribes and the maximum number of Units that may be so
withheld or surrendered shall be a number of Units that have an aggregate Fair
Market Value on the date of withholding or repurchase of up to the aggregate
amount of such tax liabilities determined based on the greatest withholding
rates for federal, state, foreign and/or local tax purposes, including payroll
taxes, that may be utilized without creating adverse accounting treatment with
respect to the Award. The Committee, in its discretion, may deny your request to
satisfy its tax withholding using a method described under subparagraph (a) or
(b). In the event the Company determines that the aggregate Fair Market Value of
the Units withheld as payment of any tax withholding is insufficient to
discharge that tax withholding, then you must pay to the Company, in cash, the
amount of that deficiency immediately upon the Company’s request. In the event
that you fail to make arrangements that are acceptable to the Committee for
providing to the Company, at the time or times required, the amounts of federal,
state and local taxes required to be withheld with respect to the Performance
Units granted to you under this Agreement, the Company shall have the right to
purchase and/or to sell to one or more third parties in either market or private
transactions sufficient Units otherwise paid or payable pursuant to this Award
to provide the funds needed for the Company to make the required tax payment or
payments.
7.Adjustment of Performance Units. The number of Performance Units granted to
you pursuant to this Agreement shall be adjusted to reflect distributions of the
Partnership paid in units, unit splits or other changes in the capital structure
of the Partnership, all in accordance with the Plan. All provisions of this
Agreement shall be applicable to such new or additional or different units or
securities distributed or issued pursuant to the Plan to the same extent that
such provisions are applicable to the units with respect to which they were
distributed or issued. In the event that the outstanding Units of the
Partnership are exchanged for a different number or kind of units or other
securities, or if additional, new or different units are distributed with
respect to the Units through merger, consolidation, or sale of all or
substantially all of the assets of the Partnership, each remaining unit subject
to this Agreement shall have substituted for it a like number and kind of units
or shares of new or replacement securities as determined in the sole discretion
of the Committee, subject to the terms and provisions of the Plan.
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8.Compliance with Securities and Other Applicable Laws. Notwithstanding any
provision of this Agreement to the contrary, the issuance of Units (including
Performance Units) will be subject to compliance with all applicable
requirements of federal, state, or foreign law with respect to such securities
and with the requirements of any stock exchange or market system upon which the
Units may then be listed. No Units will be issued hereunder if such issuance
would constitute a violation of any applicable federal, state, or foreign
securities laws or other law or regulations or the requirements of any stock
exchange or market system upon which the Units may then be listed. In addition,
Units will not be issued hereunder unless (a) a registration statement under the
Securities Act, is at the time of issuance in effect with respect to the Units
issued or (b) in the opinion of legal counsel to the Company, the Units issued
may be issued in accordance with the terms of an applicable exemption from the
registration requirements of the Securities Act. The inability of the Company to
obtain from any regulatory body having jurisdiction the authority, if any,
deemed by the Company’s legal counsel to be necessary to the lawful issuance and
sale of any Units subject to the Award will relieve the Company of any liability
in respect of the failure to issue such Units as to which such requisite
authority has not been obtained. As a condition to any issuance hereunder, the
Company may require you to satisfy any qualifications that may be necessary or
appropriate to evidence compliance with any applicable law or regulation and to
make any representation or warranty with respect to such compliance as may be
requested by the Company. From time to time, the Board and appropriate officers
of the Company are authorized to take the actions necessary and appropriate to
file required documents with governmental authorities, stock exchanges, and
other appropriate Persons to make Units available for issuance.
9.Legends. The Company may at any time place legends referencing any
restrictions imposed on the Units pursuant to Section 8 of this Agreement on all
certificates representing Units issued with respect to this Award.
10.Furnish Information. You agree to furnish to the Company all information
requested by the Company to enable it to comply with any reporting or other
requirements imposed upon the Company by or under any applicable statute or
regulation.
11.Remedies. The Company shall be entitled to recover from you reasonable
attorneys’ fees incurred in connection with the successful enforcement of the
terms and provisions of this Agreement whether by an action to enforce specific
performance or for damages for its breach or otherwise to the extent allowed by
applicable law.
12.Execution of Receipts and Releases. Any payment of cash or any issuance or
transfer of Performance Units or other property to you, or to your legal
representative, heir, legatee or distributee, in accordance with the provisions
hereof, will, to the extent thereof, be in full satisfaction of all claims of
such Persons hereunder. In addition, the Company may require you or your legal
representative, heir, legatee or distributee, as a condition precedent to such
payment or issuance, to execute a general release of all claims in favor of the
Company, the Partnership, any Affiliate and the employees, officers,
stockholders or board members of the foregoing in such form as the Company may
determine. In the event the period you are given to review, execute and revoke a
release provided pursuant to this Section 12 spans two calendar years, any
payment to you pursuant to this Agreement will be made in the second calendar
year.
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13.Severability. If any provision of this Agreement is held to be illegal,
invalid or unenforceable under any applicable law, then such provision will be
deemed to be modified to the minimum extent necessary to render it legal, valid
and enforceable; and if such provision cannot be so modified, then this
Agreement will be construed as if not containing the provision held to be
invalid, and the rights and obligations of the parties will be construed and
enforced accordingly.
14.Administration. This Agreement shall at all times be subject to the terms and
conditions of the Plan. The Committee shall have sole and complete discretion
with respect to all matters reserved to it by the Plan and decisions of a
majority of the Committee with respect thereto and this Agreement shall be final
and binding upon you and the Company. All determinations with respect to the
achievement of the applicable performance goals, including the calculation of
and any adjustment to the applicable performance metrics, will be made by the
Committee in its discretion which determination will be final and binding. In
the event of any conflict between the terms and conditions of this Agreement and
the Plan, the provisions of the Plan shall control.
15.No Right to Continued Employment. This Agreement shall not be construed to
confer upon you any right to continue as an employee, officer or service
provider of the Company and shall not limit the right of the Company, in its
sole discretion, to terminate your service at any time.
16.Governing Law. All questions arising with respect to the provisions of this
Agreement shall be determined by application of the laws of the State of Texas,
without giving any effect to any conflict of law provisions thereof, except to
the extent Texas state law is preempted by federal law. The obligation of the
Company to sell and deliver Units hereunder is subject to applicable laws and to
the approval of any governmental authority required in connection with the
authorization, issuance, sale, or delivery of such Units.
17.Consent to Texas Jurisdiction and Venue. You hereby consent and agree that
state courts located in Dallas, Texas and the United States District Court for
the Northern District of Texas each shall have personal jurisdiction and proper
venue with respect to any dispute between you and the Company arising in
connection with the Performance Units or this Agreement. In any dispute with the
Company, you will not raise, and you hereby expressly waive, any objection or
defense to any such jurisdiction as an inconvenient forum.
18.Amendments. This Agreement may be amended by the Board or by the Committee at
any time (a) if the Board or the Committee determines, in its sole discretion,
that amendment is necessary or advisable in light of any addition to or change
in any federal or state, tax or securities law or other law or regulation, which
change occurs after the Date of Grant and by its terms applies to the Award; or
(b) other than in the circumstances described in clause (a) or provided in the
Plan, with your consent.
19.No Liability for Good Faith Determinations. The General Partner, the
Partnership, the Company, HFC and the members of the Committee, the Board and
the HFC Board shall not be liable for any act, omission or determination taken
or made in good faith with respect to this Agreement or the Performance Units
granted hereunder.
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20.No Guarantee of Interests. None of the Board, the HFC Board, the General
Partner, the Partnership, HFC nor the Company guarantee the Units from loss or
depreciation.
21.Nontransferability of Agreement. This Agreement and all rights under this
Agreement shall not be transferable by you during your life other than by will
or pursuant to applicable laws of descent and distribution. Any of your rights
and privileges in connection herewith shall not be transferred, assigned,
pledged or hypothecated by you or by any other person or persons, in any way,
whether by operation of law, or otherwise, and shall not be subject to
execution, attachment, garnishment or similar process. In the event of any such
occurrence, this Agreement shall automatically be terminated and shall
thereafter be null and void. Notwithstanding the foregoing, all or some of the
Units or rights under this Agreement may be transferred to a spouse pursuant to
a domestic relations order issued by a court of competent jurisdiction.
22.Company Records. Records of the Company or its subsidiaries regarding your
period of service, termination of service and the reason(s) therefor, leaves of
absence, re-employment, and other matters shall be conclusive for all purposes
hereunder, unless determined by the Company to be incorrect.
23.Notice. All notices required or permitted under this Agreement must be in
writing and personally delivered or sent by mail and shall be deemed to be
delivered on the date on which it is actually received by the person to whom it
is properly addressed or, if earlier, the date it is sent via certified United
States mail.
24.Waiver of Notice. Any person entitled to notice hereunder may waive such
notice in writing.
25.Certain Covenants.
(a)    Protection of Confidential Information. You acknowledge that in the
course of your employment with the Company and the Partnership, you have
obtained and will continue to obtain confidential, proprietary and/or trade
secret information of the Company and the Partnership, relating to, among other
things, (i) programs, strategies, information or materials related to the
business, services, manner of operation and activities of the Company and the
Partnership, (ii) customers or prospects of the Company and the Partnership,
(iii) computer hardware or software used in the course of the Company and
Partnership business, and (iv) marketing strategies or other activities of the
Company and Partnership from or on behalf of any of its clients, (hereinafter
collectively referred to as “Confidential Information”); provided, however,
that, for purposes of this Agreement, the term Confidential Information shall
not include any information that is known generally to the public or accessible
to a third party on an unrestricted basis. You recognize that such Confidential
Information has been developed by the Company and Partnership at great expense;
is a valuable, special and unique asset of the Company and Partnership which it
uses in its business to obtain competitive advantage over its competitors; is
and shall be proprietary to the Company and Partnership; is and shall remain the
exclusive property of the Company and Partnership; and, is not to be transmitted
to any other person, entity or thing. Accordingly, as a
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material inducement to the Company to enter into this Agreement with you and in
partial consideration for the granting of the Award, you hereby:
(i)    warrant and represent that you have not disclosed, copied, disseminated,
shared or transmitted any Confidential Information to any person, firm,
corporation or entity for any reason or purpose whatsoever, except in the course
of carrying out your duties and responsibilities of employment with the Company
and Partnership;
(ii)    agree not to so disclose, copy, disseminate, share or transmit any
Confidential Information in the future;
(iii)    agree not to make use of any Confidential Information for your own
purposes or for the benefit of any person, firm, corporation or other entity,
except that, in the course of carrying out the duties and responsibilities of
your employment, you may use Confidential Information for the benefit of any
Affiliate of the Company or Partnership;
(iv)    warrant and represent that all Confidential Information in your
possession, custody or control that is or was a property of the Company and
Partnership has been or shall be returned to the Company or Partnership by or on
the date of the your termination; and
(v)    agree that you will not reveal, or cause to be revealed, this Agreement
or its terms to any third party (other than your attorney, tax advisor, or
spouse on the condition that they also not reveal this Agreement or its terms to
any other person), except as required by law.
Your covenants in this Section 25(a) are in addition to, and do not supersede,
your obligations under any confidentiality, invention or trade secret agreements
executed by you, or any laws protecting the Confidential Information.
(b)    Non-Solicitation. You agree that during the term of your employment with
the Company, Partnership or their Affiliates and for a period of one year
following your termination of employment with the Company, Partnership and their
Affiliates, you will not, directly or indirectly, for your benefit or for the
benefit of others, solicit any employee or service provider of the Company,
Partnership or their Affiliates to terminate his or her employment or his, her
or its service relationship with the Company, Partnership or their Affiliates;
provided, however, that (y) after the termination of your employment for any
reason, such employees and service providers shall only include such employees
and service providers that you directly worked with in the twelve months
preceding the date of termination of your employment, and (z) it will not
constitute a violation of this Section 25(b) if an employee or service provider
of the Company, Partnership or their Affiliates accepts employment or a service
relationship with a Person not affiliated with the Company, Partnership or their
Affiliates (i) pursuant to a general solicitation advertising the position, (ii)
as a result of communications initiated by the employee or service provider of
the Company, Partnership or their Affiliates (and not in response to any
solicitation by you) or (iii) where the employment or service relationship
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with the Company, Partnership or their Affiliates with respect to such person
was terminated more than six months prior to any action by you that would
otherwise be a violation of this Section 25(b).
(c)    Extent of Restrictions. You acknowledge that the restrictions contained
in this Section 25 correctly set forth the understanding of the parties at the
time this Agreement is entered into, are reasonable and necessary to protect the
legitimate interests of the Company and Partnership, and that any violation will
cause substantial injury to the Company and Partnership. In the event of any
such violation, the Company and Partnership shall be entitled, in addition to
any other remedy, to preliminary or permanent injunctive relief. You waive, to
the maximum extent permissible by law, any defenses or other objections to such
remedies or the enforceability of this Section 25. To the maximum extent
permissible by law, if any court having jurisdiction shall find that any part of
the restrictions set forth this Section 25 are unreasonable in any respect, it
is the intent of the parties that the restrictions set forth herein shall not be
terminated, but that the restrictions set forth in this Section 25 shall remain
in full force and effect to the extent (as to time periods and other relevant
factors) that the court shall find reasonable.
(d)    Limitations. In the event any breach of the covenants set forth in this
Section 25 comes to the attention of the Company or Partnership, this Award and
the Performance Units granted hereunder that have not at such time been settled
shall be immediately forfeited to the Company and the Company and Partnership
shall take into consideration such breach in determining whether to recommend
the grant of any future similar award to you, as a factor weighing against the
advisability of granting any such future award to you. However, nothing in this
Agreement will prevent you from: (i) making a good faith report of possible
violations of applicable law to any governmental agency or entity or (ii) making
disclosures that are protected under the whistleblower provisions of applicable
law. For the avoidance of doubt, nothing herein shall prevent you from making a
disclosure that: (A) is made (1) in confidence to a federal, state or local
government official, either directly or indirectly, or to an attorney; and (2)
solely for the purpose of reporting or investigating a suspected violation of
law; or (B) is made in a complaint or other document filed in a lawsuit or other
proceeding, if such filing is made under seal. Further, an individual who files
a lawsuit for retaliation by an employer of reporting a suspected violation of
law may make disclosures without violating this Section 25 to the attorney of
the individual and use such information in the court proceeding.
26.Clawback. This Agreement is subject to any written clawback policies that the
Company, with the approval of the Board or the Committee, may adopt to the
extent allowed by applicable law. Any such policy may subject your Award and
amounts paid or realized with respect to the Award under this Agreement to
reduction, cancelation, forfeiture or recoupment if certain specified events or
wrongful conduct occur, including but not limited to an accounting restatement
due to the Company’s or Partnership’s material noncompliance with financial
reporting regulations or other events or wrongful conduct specified in any such
clawback policy adopted by the Company or Partnership, including any policy to
conform to the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010
and rules promulgated thereunder by the Securities and Exchange Commission and
that the Company or the Partnership determines should apply to this Agreement.
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27.Compliance with Section 409A. This Agreement is intended to comply and shall
be administered in a manner that is intended to comply with Section 409A of the
Code and shall be construed and interpreted in accordance with such intent.
Payment under this Agreement shall be made in a manner that will comply with
Section 409A of the Code, including regulations or other guidance issued with
respect thereto, except as otherwise determined by the Committee. The applicable
provisions of Section 409A of the Code are hereby incorporated by reference and
shall control over any contrary provisions herein that conflict therewith.
Termination from employment, separation from service and similar terms used in
this Agreement shall mean a “separation from service” within the meaning of
Treasury Regulation § 1.409A-1(h). Each payment under this Agreement is
considered a separate payment for purposes of Section 409A of the Code.
Notwithstanding anything in this Agreement to the contrary, if you are a
“specified employee” under Section 409A of the Code at the time of separation
from service and if payment of any amount under this Agreement is required to be
delayed for a period of six months after the separation from service pursuant to
Section 409A of the Code, payment of such amount shall be delayed as required by
Section 409A of the Code, and the accumulated postponed amount shall be paid in
a lump sum payment within 10 days after the end of the six-month period. If you
die during the postponement period prior to the payment of postponed amount, the
accumulated postponed amount shall be paid to the personal representative of
your estate within 60 days after the date of your death.
28.Successors. This Agreement shall be binding upon you, your legal
representatives, heirs, legatees and distributees, and upon the Company, its
successors and assigns.
29.Company Action. Any action required of the Company shall be by resolution of
the Board or by a person or entity authorized to act by resolution of the Board.
30.Headings. The titles and headings of Sections are included for convenience of
reference only and are not to be considered in construction of the provisions
hereof.
31.The Plan. This Agreement is subject to all the terms, conditions, limitations
and restrictions contained in the Plan.

HOLLY LOGISTIC SERVICES, L.L.C.

    
Michael C. Jennings
Chief Executive Officer
Appendix A
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Defined Terms
For purposes of the Agreement, the following terms shall have the meanings
assigned below:

“Adverse Change” means, without your express written consent, (i) a change in
your principal office to a location more than 25 miles from your work address as
of the Date of Grant, (ii) a material increase (without adequate consideration)
or a material reduction in duties of the type previously performed by you, or
(iii) a material reduction in your base compensation (other than bonuses and
other discretionary items of compensation) that does not apply generally to
employees of the Company or its successor. You must provide notice to the
Company of the event alleged to constitute an Adverse Change within ninety (90)
days of the occurrence of such event and the Company shall be given the
opportunity to remedy the alleged Adverse Change and/or to contest your
assertion that an Adverse Change event has occurred within thirty (30) days from
receipt of such notice.

“Affiliate” has the meaning provided in Rule 12b-2 under the Exchange Act.

“Beneficial Owner” has the meaning provided in Rule 13d-3 under the Exchange
Act.

“Cause” means (i) an act or acts of dishonesty on your part constituting a
felony or serious misdemeanor and resulting or intended to result directly in
gain or personal enrichment at the expense of the Company; (ii) gross or willful
and wanton negligence in the performance of the material and substantial duties
of your employment with the Company or its subsidiaries; or (iii) conviction of
a felony involving moral turpitude. The existence of Cause shall be determined
by the Committee, in its sole and absolute discretion.
“Change in Control” means, notwithstanding the definition of such term in the
Plan:
(i)    Any Person, other than HFC or any of its wholly-owned subsidiaries, the
General Partner, the Partnership, the Company, or any of their subsidiaries, a
trustee or other fiduciary holding securities under an employee benefit plan of
HFC, the Partnership, the Company or any of their Affiliates, an underwriter
temporarily holding securities pursuant to an offering of such securities, or
any entity owned, directly or indirectly, by the holders of the voting
securities of HFC, the Company, the General Partner or the Partnership in
substantially the same proportions as their ownership in HFC, the Company, the
General Partner or the Partnership, respectively, is or becomes the Beneficial
Owner, directly or indirectly, of securities of HFC, the Company, the General
Partner or the Partnership (not including in the securities beneficially owned
by such Person any securities acquired directly from HFC, the General Partner,
the Partnership, the Company or their Affiliates) representing more than 40% of
the combined voting power of HFC’s, the Company’s, the General Partner’s or the
Partnership’s then outstanding securities, excluding any Person who becomes such
a Beneficial Owner in connection with a transaction described in clause (iii)(A)
below.
(ii)    The individuals who as of the Date of Grant constitute the HFC Board and
any New Director cease for any reason to constitute a majority of the HFC Board.
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(iii)    There is consummated a merger or consolidation of HFC, the Company, the
General Partner or the Partnership with any other entity, except if:
(A)    the merger or consolidation results in the voting securities of HFC, the
Company, the General Partner or the Partnership outstanding immediately prior
thereto continuing to represent (either by remaining outstanding or by being
converted into voting securities of the surviving entity or any parent thereof)
at least 60% of the combined voting power of the voting securities of HFC, the
Company, the General Partner or the Partnership, as applicable, or such
surviving entity or any parent thereof outstanding immediately after such merger
or consolidation; or
(B)    the merger or consolidation is effected to implement a recapitalization
of HFC, the Company, the General Partner or the Partnership (or similar
transaction) in which no Person is or becomes the Beneficial Owner, directly, or
indirectly, of securities of HFC, the Company, the General Partner or the
Partnership, as applicable, (not including in the securities beneficially owned
by such Person any securities acquired directly from HFC, the Company, the
General Partner or the Partnership or their Affiliates other than in connection
with the acquisition by HFC, the Company, the General Partner or the Partnership
or its Affiliates of a business) representing more than 40% of the combined
voting power of HFC’s, the Company’s, the General Partner’s or the
Partnership’s, as applicable, then outstanding securities.
(iv)    The holders of the voting securities of HFC, the Company, the General
Partner or the Partnership approve a plan of complete liquidation or dissolution
of HFC, the Company, the General Partner or the Partnership or an agreement for
the sale or disposition by the Company of all or substantially all of the
Company’s assets, other than a sale or disposition by holders of the voting
securities of HFC, the Company, the General Partner or the Partnership of all or
substantially all of HFC’s, the Company’s, the General Partner’s or the
Partnership’s assets, as applicable, to an entity at least 60% of the combined
voting power of the voting securities of which is owned by the direct and
indirect holders of the voting securities of HFC, the Company, the General
Partner or the Partnership in substantially the same proportions as their
ownership of the voting securities of HFC, the Company, the General Partner or
the Partnership, as applicable, immediately prior to such sale.
“EBITDA” is defined as the Partnership’s earnings before interest, taxes,
depreciation and amortization of for each 12 month period during the Performance
Period.
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“EBITDA Performance Percentage” means the percentage set forth in the table
below determined in accordance with the Partnership’s actual aggregate EBITDA
achievement during the Performance Period compared with aggregate Target EBITDA
during the Performance Period:

EBITDA Achievement Relative to Target EBITDA

EBITDA Performance Percentage
Target EBITDA plus 2.5%Maximum (200% of Target)< Target EBITDA plus 2.5% but
better than Target EBITDAInterpolate between 100% and 200%Target EBITDATarget
(100%)<Target EBITDA but better than Target EBITDA minus 5%Interpolate between
50% and 100%Target EBITDA minus 5%50% of Target (Minimum)< Target EBITDA minus
5%Zero

Notwithstanding the table above, the Committee retains the ability to adjust the
EBITDA Performance Percentage in its discretion regardless of the Partnership’s
actual EBITDA or the Target EBITDA established with respect to any, or each,
Oct. 1-Sept. 30 period within the Performance Period.

“General Partner” means HEP Logistics Holdings, L.P.

“HFC” means HollyFrontier Corporation.

“HFC Board” means Board of Directors of HFC.

“New Director” means an individual whose election by the HFC Board, or
nomination for election by the holders of the voting securities of HFC, was
approved by a vote of at least two-thirds of the directors then still in office
who either were directors at the Date of Grant or whose election or nomination
for election was previously so approved or recommended. However, “New Director”
shall not include a director whose initial assumption of office is in connection
with an actual or threatened election contest, including but not limited to a
consent solicitation relating to the election of directors of HFC.

“Peer Group” means Archrock Partners, L.P., Crestwood Equity Partners LP, Delek
Logistics Partners, LP, Enable Midstream Partners, LP., Enlink Midstream
Partners, LP, MPLX LP, PBF Logistics LP, Philips 66 Partners LP, Shell Midstream
Partners, L.P., Summit Midstream Partners, LP. and TC Pipelines, LP. If a member
of the Peer Group ceases to be a public company during the Performance Period
(whether by merger, consolidation, liquidation or otherwise) or it fails to file
financial statements with the SEC in a timely manner, it shall be treated as if
it had not been a Peer Group member for the entire Performance Period.

“Performance Unit Payout Percentage” means the percentile obtained by dividing
the sum of (i) the EBITDA Performance Percentage and (ii) the TUR Performance
Percentage, by two.
“Person” has the meaning given in Section 3(a)(9) of the Exchange Act as
modified and used in Sections 13(d) and 14(d) of the Exchange Act.
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“Retirement” means your termination of employment other than for Cause on or
after the date on which you: (i) have achieved ten years of continuous service
with the Company, and (ii) are age sixty (60).

“Special Involuntary Termination” means the occurrence of (i) or (ii) within 60
days prior to, or at any time after, a Change in Control, where (i) is
termination by the Company of your (a) employment with the Company (including
subsidiaries of the Company) or (b) provision of executive services to the
Partnership and the Company, for any reason other than Cause and (ii) is a
resignation by you from employment or service with the Company (including
subsidiaries of the Company) within 90 days after an Adverse Change in the terms
of your employment.
“Target EBITDA” means the sum of the EBITDA targets established by the Committee
for each Oct. 1-Sept. 30 period during the Performance Period. The target EBITDA
will be communicated to you within the fourth quarter of each calendar year
within the Performance Period.
“Total Unitholder Return” or TUR, means (i) the sum of (A) unit price
appreciation (calculated as the closing price of the Units for the last business
day of the Performance Period less the closing price of the Units for the first
business day of the Performance Period), plus (B) cumulative distributions
during the Performance Period, plus (C) any additional value or compensation
received by unitholders such as units received from spinoffs, divided by (ii)
the closing price of the Units on the first business day of the Performance
Period, adjusted to take into account any unit splits, changes in capitalization
or other similar events. Such determinations and adjustments shall be made by
the Committee in its discretion.
“TUR Performance Percentage” means the percentage set forth in the table below
determined in accordance with the percentile ranking of the Total Unitholder
Return of the Partnership compared to the TUR of each entity in the Peer Group
achieved during the Performance Period:

Ranking of the Partnership within Peer Group

TUR Performance Percentage
90th percentile or better
Maximum (200% of Target)
<90th percentile but better than 50th percentile
Interpolate between 100% and 200%
50th percentile
Target (100%)
<50th percentile but better than 25th percentile
Interpolate between 25% and 100%
25th percentile
25% of Target (Minimum)
<25th percentile
Zero

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