Exhibit 10.2
HOLLY CORPORATION
EXECUTIVE
RESTRICTED STOCK AGREEMENT
     This Restricted Stock Agreement (the “Agreement”) is made and entered into
by and between HOLLY CORPORATION, a Delaware corporation (the “Company”), and
_____________ (the “Executive”). If the Executive presently is or subsequently
becomes employed by a subsidiary of the Company, the term “Company” shall be
deemed to refer collectively to the Company and the subsidiary or subsidiaries
which employ the Executive. This Agreement is effective as of the 7th day of
March, 2008 (the “Date of Grant”).
WITNESSETH:
     WHEREAS, the Company has adopted the HOLLY CORPORATION LONG-TERM INCENTIVE
COMPENSATION PLAN (the “Plan”) to attract, retain and motivate Executives,
directors and consultants; and
     WHEREAS, the Company believes that entering into this Agreement with the
Executive is consistent with the stated purposes for which the Plan was adopted.
     NOW, THEREFORE, it is agreed by and between the Company and the Executive,
in consideration of services rendered by the Executive, as follows:
     1. Grant. The Company hereby grants to the Executive as of the Date of
Grant an award of ______ Shares (as defined in the Plan), subject to the terms
and conditions set forth in this Agreement, including, without limitation, those
described in Section 8 (the “Restricted Shares”).
     2. Restricted Shares. The Company shall issue in the Executive’s name the
Restricted Shares and such Restricted Shares shall be held for the Executive in
book entry form by the Company’s transfer agent with a notation that the shares
are subject to restrictions. The Executive hereby agrees that the Restricted
Shares shall be held subject to restrictions as provided in the Agreement until
such time as the Restricted Shares become Vested Shares (as defined in Section 4
below). The Executive hereby agrees that if part or all of the Restricted Shares
are forfeited pursuant to this Agreement, the Company shall have the right to
direct the Company’s transfer agent to cancel such forfeited Restricted Shares
or, at the Company’s election, transfer such Restricted Shares to the Company or
to any designee of the Company.
     3. Rights of Executive. Effective as of the Date of Grant, the Executive is
a stockholder with respect to all of the Restricted Shares granted to him/her
pursuant to Section 1 and has all of the rights of a stockholder with respect to
all such Restricted Shares, including the right to vote such Restricted Shares
and the right to receive all dividends and other distributions paid with respect
to such Restricted Shares; provided, however, that such Restricted Shares shall
be subject to the restrictions hereinafter described, including, without
limitation, those described in Section 8.

 

--------------------------------------------------------------------------------

 

     4. Forfeiture and Expiration of Restrictions.
          (a) Except as otherwise provided in Sections 5, 6 or 7 below, as
applicable, the forfeiture and other restrictions on the Restricted Shares
granted pursuant to this Agreement shall lapse and such Restricted Shares shall
vest in accordance with the following schedule:
               (i) One-third (1/3) of the Restricted Shares (the “2009 Shares”)
will be fully vested if (A) the Executive meets the Employment Requirement (as
defined below) on January 1, 2009, and (B) the Company achieves the Performance
Standard (as defined below) for a quarter in the period beginning October 1,
2008 and ending December 31, 2011. If the Executive fails to meet the Employment
Requirement or if the Performance Standard is not achieved for a quarter in the
period beginning October 1, 2008 and ending December 31, 2011, the 2009 Shares
shall be forfeited.
               (ii) One-third (1/3) of the Restricted Shares (the “2010 Shares”)
will be fully vested if (A) the Executive meets the Employment Requirement (as
defined below) on January 1, 2010, and (B) the Company achieves the Performance
Standard (as defined below) for a quarter in the period beginning October 1,
2009 and ending December 31, 2011. If the Executive fails to meet the Employment
Requirement or if the Performance Standard is not achieved for a quarter in the
period beginning October 1, 2009 and ending December 31, 2011, the 2010 Shares
shall be forfeited.
               (iii) One-third (1/3) of the Restricted Shares (the “2011
Shares”) will be fully vested if (A) the Executive meets the Employment
Requirement (as defined below) on January 1, 2011 and (B) the Company achieves
the Performance Standard (as defined below) for a quarter in the period
beginning October 1, 2010 and ending December 31, 2011. If the Executive fails
to meet the Employment Requirement or if the Performance Standard is not
achieved for a quarter in the period beginning October 1, 2010 and ending
December 31, 2011, the 2011 Shares shall be forfeited.
If the Executive meets the applicable Employment Requirement, the 2009 Shares,
the 2010 Shares and/or the 2011 Shares, as the case may be, will become vested
on the date, if any, that the Compensation Committee (the “Committee”) certifies
that the Company has met the Performance Standard applicable for the 2009
Shares, the 2010 Shares and/or the 2011 Shares, as the case may be. Restricted
Shares that become vested as provided above (or, as applicable, pursuant to
Sections 5, 6 or 7 hereof) are hereinafter referred to as “Vested Shares.”
          (b) For purposes of this Agreement, the following terms shall have the
meanings assigned below:
               (i) “Employment Requirement” shall mean the continuous employment
of the Executive by the Company or a subsidiary on and after the Date of Grant
through the date specified.
               (ii) “Performance Standard” shall mean, for any quarter, an
average Quarterly Adjusted Net Income (as defined below) per diluted share of
not less than $1.00, computed as a simple average of the Quarterly Adjusted Net
Income per diluted

2

--------------------------------------------------------------------------------

 

share for each quarter in the period beginning October 1, 2008 and ending at the
end of the quarter being considered.
               (iii) “Quarterly Adjusted Net Income” shall mean the net income
for a quarter, as reported by the Company in its filings with the Securities and
Exchange Commission, adjusted to exclude the effects of recoveries or
liabilities resulting from litigation and administrative proceedings involving
the Company and its subsidiaries.
     5. Termination Due to Death or Disability. In the event the Executive’s
employment with the Company or a subsidiary terminates due to the Executive’s
death or total and permanent disability (as determined by the Committee in its
sole discretion) before lapse of all restrictions on the Restricted Shares
pursuant to Section 4 above, the Executive shall forfeit a number of Restricted
Shares equal to the number of Restricted Shares specified in Section 1
multiplied by a fraction, (a) the numerator of which is the number of full
months beginning on the first day of the calendar month following the date of
the Executive’s termination due to death or disability and ending on
December 31, 2010, and (b) the denominator of which is thirty-six (36). Any
Restricted Shares that are not forfeited pursuant to the preceding sentence and
that remain unvested on the Executive’s date of termination shall become Vested
Shares on such date; provided, however, that any fractional shares will be
forfeited to the Company. In its sole discretion, the Committee may decide to
vest all of the Restricted Shares in lieu of the prorated number of Restricted
Shares as provided in this Section 5.
     6. Special Involuntary Termination.
               (a) In the event the Executive’s employment with the Company and
its subsidiaries terminates due to a Special Involuntary Termination (as defined
below) before lapse of all restrictions on the Restricted Shares pursuant to
Section 4 above, the Executive shall remain eligible to vest in (a) any
Restricted Shares with respect to which the Employment Requirement has been
satisfied, plus (b) all remaining Restricted Shares awarded pursuant to this
Agreement as if the Employment Requirement with respect thereto had been
satisfied, provided that such Restricted Shares shall only become Vested Shares
if the Company achieves the Performance Standard during the applicable period
specified in Section 4(a) hereof. Any portion of the Restricted Shares that
remain eligible to vest as of the Executive’s date of termination pursuant to
the preceding sentence, but that have not become Vested Shares as of
December 31, 2011 (i.e., because the Performance Standard has not been satisfied
for the applicable period) shall be cancelled and forfeited to the Company on
December 31, 2011.
               (b) For purposes of this Agreement, the following terms shall
have the meanings assigned below:
               (i) “Special Involuntary Termination” shall mean the occurrence
of (A) or (B) below within sixty (60) days prior to, or at any time after, a
Change in Control (as defined below), where (A) is termination of the
Executive’s employment with the Company (including subsidiaries of the Company)
by the Company for any reason other than Cause (as defined below) and (B) is a
resignation by the Executive from employment with the Company (including
subsidiaries of the Company) within ninety (90) days after an Adverse Change (as
defined below) in the terms of the Executive’s employment.

3

--------------------------------------------------------------------------------

 

               (ii) “Adverse Change” shall mean, without the express written
consent of the Executive, (A) a material change in the geographic location at
which the Executive is required to work regularly, (B) a material reduction in
duties of the type previously performed by the Executive, or (C) a material
reduction in the Executive’s base compensation (other than bonuses and other
discretionary items of compensation) that does not apply generally to executives
of the Company or its successor. The Executive shall 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 within thirty (30) days from
receipt of such notice.
               (iii) “Cause” shall mean (A) an act or acts of dishonesty on the
part of the Executive constituting a felony or serious misdemeanor and resulting
or intended to result directly in gain or personal enrichment at the expense of
the Company, (B) gross or willful and wanton negligence in the performance of
the Executive’s material and substantial duties of employment with the Company,
or (C) conviction of a felony involving moral turpitude. The existence of Cause
shall be determined by the Committee in its sole and absolute discretion.
               (iv) “Change in Control” shall mean:
               A. Any Person (as defined below), other than (I) the Company or
any of its subsidiaries, (II) a trustee or other fiduciary holding securities
under an employee benefit plan of the Company or any of its Affiliates (as
defined below), (III) an underwriter temporarily holding securities pursuant to
an offering of such securities, or (IV) an entity owned, directly or indirectly,
by the stockholders of the Company in substantially the same proportions as
their ownership of stock of the Company, is or becomes the Beneficial Owner (as
defined below), directly or indirectly, of securities of the Company (not
including in the securities beneficially owned by such Person any securities
acquired directly from the Company or its Affiliates) representing more than
forty percent (40%) of the combined voting power of the Company’s then
outstanding securities, or more than forty percent (40%) of the then outstanding
common stock of the Company, excluding any Person who becomes such a Beneficial
Owner in connection with a transaction described in Section 6(b)(iv)(C)(I)
below.
               B. The individuals who as of the Date of Grant constitute the
Board of Directors of the Company and any New Director (as defined below) cease
for any reason to constitute a majority of the Board of Directors.
               C. There is consummated a merger or consolidation of the Company
or any direct or indirect subsidiary of the Company with any other entity,
except if: (I) the merger or consolidation results in the voting securities of
the Company 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 sixty percent (60%) of the
combined voting power of the voting securities of the Company or such surviving

4

--------------------------------------------------------------------------------

 

entity or any parent thereof outstanding immediately after such merger or
consolidation; or (II) the merger or consolidation is effected to implement a
recapitalization of the Company (or similar transaction) in which no Person is
or becomes the Beneficial Owner, directly or indirectly, of securities of the
Company (not including in the securities beneficially owned by such Person any
securities acquired directly from the Company or its Affiliates other than in
connection with the acquisition by the Company or its Affiliates of a business)
representing more than forty percent (40%) of the combined voting power of the
Company’s then outstanding securities.
               D. The stockholders of the Company approve a plan of complete
liquidation or dissolution of the Company 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 the Company of all or substantially all of
the Company’s assets to an entity at least sixty percent (60%) of the combined
voting power of the voting securities of which is owned by the stockholders of
the Company in substantially the same proportions as their ownership of the
Company immediately prior to such sale.
               (v) “Person” shall have the meaning given in section 3(a)(9) of
the Securities Exchange Act of 1934 (the “1934 Act”) as modified and used in
sections 13(d) and 14(d) of the 1934 Act.
               (vi) “Beneficial Owner” shall have the meaning provided in
Rule 13d-3 under the 1934 Act.
               (vii) “New Director” shall mean an individual whose election by
the Company’s Board of Directors or nomination for election by the Company’s
stockholders was approved by a vote of at least two-thirds (2/3) 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, the term “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 the Company.
               (viii) “Affiliate” shall have the meaning set forth in Rule 12b-2
promulgated under section 12 of the 1934 Act.
     7. Other Termination of Employment. In the event the Executive’s employment
with the Company or a subsidiary terminates, for any reason other than the
reasons set forth in Sections 5 and 6 of this Agreement, before lapse of all
restrictions on the Restricted Shares pursuant to Section 4 above, the Executive
shall remain eligible to vest in (a) any Restricted Shares with respect to which
the Employment Requirement has been satisfied, plus (b) a number of Restricted
Shares equal to the product of one-third of the Restricted Shares awarded
pursuant to this Agreement, multiplied by a fraction, (i) the numerator of which
is the number of full months during the calendar year in which such termination
occurred that the Executive was employed with the Company or a subsidiary
(counting the month in which the Executive’s termination occurred as a full
month), and (ii) the denominator of which is twelve (12), provided

5

--------------------------------------------------------------------------------

 

that such Restricted Shares shall only become Vested Shares if the Company
achieves the Performance Standard during the applicable period specified in
Section 4(a) hereof or, with respect to those Restricted Shares described in
clause (b) above, for a quarter in the period beginning October 1 of the year in
which such termination occurs and ending of December 31, 2011. Any portion of
the Restricted Shares awarded hereunder that are not eligible to vest in
accordance with the preceding sentence at the time of the Executive’s
termination shall automatically be cancelled and forfeited to the Company as of
the date of the Executive’s termination of employment. Any portion of the
Restricted Shares that remain eligible to vest as of the Executive’s date of
termination pursuant to the first sentence of this Section 7 but that have not
become Vested Shares as of December 31, 2011 (i.e., because the Performance
Standard has not been satisfied for the applicable period) shall be cancelled
and forfeited to the Company on December 31, 2011.
     8. Limitations on Transfer. The Executive agrees that he shall not dispose
of (meaning, without limitation, sell, transfer, pledge, exchange, hypothecate
or otherwise dispose of) any Restricted Shares hereby acquired prior to the
expiration of the relevant restrictions imposed by this Section 8, which
expiration shall be determined pursuant to Sections 4, 5, 6 and 7 of this
Agreement, as applicable. Any attempted disposition of the Restricted Shares in
violation of the preceding sentence shall be null and void, and the Company
shall not recognize or give effect to such transfer on its books and records or
recognize the person or persons to whom such proposed transfer has been made as
the legal or beneficial holder thereof. Notwithstanding the foregoing, part or
all of the Restricted Shares or rights under this Agreement may be transferred
to a spouse pursuant to a domestic relations order issued by a court of
competent jurisdiction; provided, however, such Restricted Shares shall continue
to be held pursuant to Section 2 of this Agreement, and the transferee under the
domestic relations order shall agree that the Restricted Shares so transferred
shall continue to be subject to the terms of this Agreement, including
forfeiture, in whole or in part, in accordance with Sections 4, 5, 6 and 7 of
this Agreement, as applicable.
     9. Nontransferability of Agreement. This Agreement and all rights under
this Agreement shall not be transferable by the Executive during his life other
than by will or pursuant to applicable laws of descent and distribution. Any
rights and privileges of the Executive in connection herewith shall not be
transferred, assigned, pledged or hypothecated by the Executive 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 Restricted Shares or rights under this Agreement may be
transferred to a spouse pursuant to a domestic relations order issued by a court
of competent jurisdiction, subject to the limitations on such transfer described
in Section 8.
     10. Adjustment of Restricted Shares. The number of Restricted Shares
granted to the Executive pursuant to this Agreement shall be adjusted to reflect
stock dividends, stock splits or other changes in the capital structure of the
Company, all in accordance with the Plan. All provisions of this Agreement shall
be applicable to such new or additional or different shares or securities
distributed or issued pursuant to the Plan to the same extent that such
provisions are applicable to the shares with respect to which they were
distributed or issued. In the event that

6

--------------------------------------------------------------------------------

 

the outstanding Shares (as defined in the Plan) of the Company are exchanged for
a different number or kind of shares or other securities, or if additional, new
or different shares are distributed with respect to the Shares (as defined in
the Plan) through merger, consolidation, or sale of all or substantially all of
the assets of the Company, each remaining share subject to this Agreement shall
have substituted for it a like number and kind of shares of new or replacement
securities as determined in the sole discretion of the Committee, subject to the
terms and provisions of the Plan.
     11. Delivery of Vested Shares. No Vested Shares shall be delivered pursuant
to this Agreement until the approval of any governmental authority required in
connection with this Agreement, or the issuance of Vested Shares hereunder, has
been received by the Company. The Committee will delay delivery of Vested Shares
until the restrictions of Section 8 lapse.
     12. Securities Act. The Company shall have the right, but not the
obligation, to cause the Restricted Shares to be registered under the
appropriate rules and regulations of the Securities and Exchange Commission. The
Company shall not be required to deliver any Vested Shares of stock hereunder
if, in the opinion of counsel for the Company, such delivery would violate the
Securities Act of 1933 or any other applicable federal or state securities laws
or regulations.
     13. Federal and State Taxes. The Executive may incur certain liabilities
for Federal, state or local taxes and the Company may be required by law to
withhold such taxes for payment to taxing authorities. If the Executive makes
the election permitted by section 83(b) of the Internal Revenue Code, the taxes
shall be due and payable for the year in which this Agreement is executed. If
the Executive does not make such election, the taxes shall be payable for the
year in which the restrictions lapse pursuant to Sections 4, 5, 6 and 7, as
applicable. Upon determination of the year in which such taxes are due and the
determination by the Company of the amount of taxes required to be withheld, if
any, the Executive shall either pay to the Company, in cash or by certified or
cashier’s check, an amount equal to the taxes required to be paid on such
transaction, or the Executive shall authorize the Company to withhold from
monies owing by the Company to the Executive an amount equal to the amount of
federal, state or local taxes required to be withheld. Authorization of the
Executive to the Company to withhold taxes pursuant to this Section 13 shall be
in form and content acceptable to the Committee. An authorization to withhold
taxes pursuant to this provision shall be irrevocable unless and until the tax
liability of the Executive has been fully paid. In the event that the Executive
fails 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 Restricted Shares
granted to the Executive under this Agreement, the Company shall have the right
to purchase at current market price as determined by the Committee and/or to
sell to one or more third parties in either market or private transactions
sufficient Vested Shares to provide the funds needed for the Company to make the
required tax payment or payments.
     14. Definitions; Copy of Plan. To the extent not specifically provided
herein, all terms used in this Agreement shall have the same meanings ascribed
to them in the Plan. By the execution of this Agreement, the Executive
acknowledges receipt of a copy of the Plan. 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

7

--------------------------------------------------------------------------------

 

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.
     15. 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 the Executive and the Company. In the event of any
conflict between the terms and conditions of this Agreement and the Plan, the
provisions of the Plan shall control.
     16. No Right to Continued Employment. This Agreement shall not be construed
to confer upon the Executive any right to continue as an Executive of the
Company and shall not limit the right of the Company, in its sole discretion, to
terminate the service of the Executive at any time.
     17. Governing Law. This Agreement shall be interpreted and administered
under the laws of the State of Texas, without giving effect to any conflict of
laws provisions.
     18. Amendments. This Agreement may be amended only by a written agreement
executed by the Company and the Executive. Any such amendment shall be made only
upon the mutual consent of the parties, which consent (of either party) may be
withheld for any reason.
     19. No Liability for Good Faith Determinations. The Company and the members
of the Committee and the Board shall not be liable for any act, omission or
determination taken or made in good faith with respect to this Agreement or the
Restricted Shares granted hereunder.
     20. No Guarantee of Interests. The Board and the Company do not guarantee
the Shares (as defined in the Plan) from loss or depreciation.
     IN WITNESS WHEREOF, the Company has caused this Agreement to be executed by
its officers thereunto duly authorized, and the Executive has set his hand
effective as of the date and year first above written.

            HOLLY CORPORATION
      By:           Matthew P. Clifton        Chief Executive Officer   

                  By:           Executive             

8