HOLLY LOGISTIC SERVICES, L.L.C. Exhibit 10.1
ANNUAL INCENTIVE PLAN
(As Amended and Restated Effective October 24, 2018)
1.
INTENT.

The purpose of this Annual Incentive Plan (the "Plan") is to motivate management
and the employees of Holly Logistic Services, L.L.C. (the "Company") and its
affiliates who perform services for the Company and for Holly Energy Partners,
L.P., a Delaware limited partnership, and its subsidiaries (the "Partnership")
to collectively produce outstanding results, encourage superior performance,
increase productivity, and aid in attracting and retaining key employees.
2.
PLAN GUIDELINES.

The administration of the Plan and any potential awards granted pursuant to the
Plan (a) with respect to the Company's Chief Executive Officer, President or
Chief Financial Officer, to the extent such officers are solely dedicated to the
Company (the "Covered Employees"), is vested in the Compensation Committee of
the Company's Board of Directors (the "Compensation Committee"), including the
determination that the performance goals for the applicable periods have been
achieved and (b) with respect to any other person, is delegated to the Company's
Chief Executive Officer, including the determination that the performance goals
for the applicable periods have been achieved (in each case and as applicable,
the Compensation Committee or the Company's Chief Executive Officer is
hereinafter referred to as the "Administrator"). The Plan is an additional
compensation program designed to encourage Plan participants (designated by the
Administrator) to exceed specified objective performance targets for the
designated period. The Administrator will review performance results for the
designated performance period, and thereafter will determine whether or not to
approve awards under the Plan.
3.
PERFORMANCE TARGETS.

3.1    DESIGNATION OF PERFORMANCE TARGETS. The Company's Chief Executive Officer
shall recommend, subject to the Compensation Committee's approval with respect
to Covered Employees, the performance measures and performance targets to be
used for each performance period (a "Performance Period") in determining the
bonus amounts to be paid as a result of the Plan. The length of each Performance
Period shall be established by the Committee in its sole discretion. Performance
targets may be based on Partnership, business unit and/or individual
achievements, or any combination of these, or on such other factors as the
Company's Chief Executive Officer, subject to the approval of the Compensation
Committee with respect to Covered Employees, may determine. The Company’s Chief
Executive Officer shall approve the performance measures and performance targets
to be used for each Performance Period and the length of each Performance Period
with respect to persons other than Covered Employees. Different performance
targets may be established for different participants for any Performance
Period. Satisfactory results, as determined by the Administrator in its sole
discretion, must be achieved in order for an award to be made pursuant to the
Plan.

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3.2    EQUITABLE ADJUSTMENT TO PERFORMANCE TARGETS. At its discretion, the
Administrator may adjust performance measure results for extraordinary events or
accounting adjustments resulting from significant asset purchases or
dispositions or other events not contemplated or otherwise considered by the
Administrator when the performance measures and targets were set.
4.
PARTICIPANTS.

The Administrator will designate members of management and employees of the
Company and its affiliates as eligible to participate in the Plan. Employees so
designated shall be referred to as "Participants."
5.
PARTICIPATION LEVELS.

A Participant's designated level of participation in the Plan, or target bonus,
will be determined under criteria established or approved by the Administrator
for that Performance Period. Levels of participation in the Plan may vary
according to a Participant's position and the relative impact such Participant
can have on the Company's and/or affiliates' operations. Care will be used in
communicating to any participant his performance targets and potential
performance amount for a Performance Period. The amount of target bonus a
participant may receive for any Performance Period, if any, will depend upon the
performance level achieved (unless waived) for that Performance Period, as
determined by the Administrator. No Participant shall have any claim to be
granted any award under the Plan, and there is no obligation for uniformity of
treatment of Participants. The terms and conditions of awards need not be the
same respecting each Participant.
6.
AWARD PAYOUT.

Awards typically will be determined after the end of the Performance Period.
Awards will be paid in cash annually, unless otherwise determined by the
Administrator; provided, that, in no event will awards be paid to Participants
later than March 15 of the calendar year following the calendar year to which
such award relates; provided, that if the Administrator’s determination is not
complete by such day, such that calculation of the amount of such award is not
administratively practicable as of March 15, the award shall still be treated as
being paid no later than March 15 if payment of the award is made during the
first taxable year of the Participant in which calculation of the award amount
is administratively practicable. The Administrator will have the discretion, by
Participant and by grant, to reduce (but not to increase) some or all of the
amount of any award that otherwise would be payable by reason of the
satisfaction of the applicable performance targets. In making any such
determination, the Administrator is authorized to take into account any such
factor or factors it determines are appropriate, including but not limited to
Company, business unit and individual performance; provided, however, that the
exercise of such negative discretion with respect to one Participant may not be
used to increase the amount of any award otherwise payable to another
Participant.
7.
TERMINATION OF EMPLOYMENT.

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Termination of a Participant's employment for any reason prior to payout of an
award under the Plan will result in the Participant's forfeiture of any right,
title or interest in any such award, unless and to the extent waived by the
Administrator in its sole discretion.
8.
AMENDMENT AND TERMINATION.

The Administrator, at its sole discretion, may amend the Plan or terminate the
Plan at any time.
9.
ADMINISTRATION.

The Administrator may delegate the responsibility for the administration and
operation of the Plan to a designee of the Company or any participating
affiliate. The Administrator (or the person(s) to which administrative authority
has been delegated) shall have the authority to interpret and construe any and
all provisions of the Plan, including all performance targets and whether and to
what extent achieved. Any determination made by the Administrator (or the
person(s) to which administrative authority has been delegated) shall be final
and conclusive and binding on all persons.
10.
INDEMNIFICATION.

Neither the Company, nor any participating affiliate, nor the Board of Directors
of the Company or any participating affiliate, nor any member of any committee
of the Board of Directors or any participating affiliate, nor any employee of
the Company or any participating affiliate shall be liable for any act,
omission, interpretation, construction or determination made in connection with
the Plan in good faith; and the members of the Company's Board of Directors, the
Administrator and/or the employees of the Company or any participating affiliate
shall be entitled to indemnification and reimbursement by the Company to the
maximum extent permitted by law in respect of any claim, loss, damage or expense
(including counsel's fees) arising from their acts, omission and conduct in
their official capacity with respect to the Plan.
11.
GENERAL PROVISIONS.

11.1    NON-GUARANTEE OF EMPLOYMENT. Nothing contained in this Plan shall be
construed as a contract of employment between the Company and/or a participating
affiliate and a Participant, and nothing in this Plan shall confer upon any
Participant any right to continued employment with the Company or a
participating affiliate, or to interfere with the right of the Company or a
participating affiliate to terminate a Participant's employment, with or without
cause.
11.2    INTERESTS NOT TRANSFERABLE. No benefits under the Plan shall be subject
in any manner to alienation, sale, transfer, assignment, pledge, attachment or
other legal process, or encumbrance of any kind, and any attempt to do so shall
be void.
11.3    FACILITY PAYMENT. Any amounts payable hereunder to any person under
legal disability or who, in the judgment of the Administrator or its designee,
is unable to properly manage his or her financial affairs, may be paid to the
legal representative of such person, or may be applied

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for the benefit of such person in any manner which the Administrator or its
designee may select, and each participating affiliate shall be relieved of any
further liability for payment of such amounts.
11.4    CONTROLLING LAW. To the extent not superseded by federal law, the law of
the State of Delaware, without regard to its choice of law principles, shall be
controlling in all matters relating to the Plan.
11.5    NO RIGHTS TO AWARD. No person shall have any claim to be granted any
award under the Plan, and there is no obligation for uniformity of treatment of
Participants. The terms and conditions of awards need not be the same with
respect to each recipient.
11.6    SEVERABILITY. If any Plan provision or any award is or becomes or is
deemed to be invalid, illegal, or unenforceable in any jurisdiction or as to any
person or award, or would disqualify the Plan or any award under the law deemed
applicable by the Administrator, such provision shall be construed or deemed
amended to conform to the applicable laws, or if it cannot be construed or
deemed amended without, in the determination of the Administrator, materially
altering the intent of the Plan or the award, such provision shall be stricken
as to such jurisdiction, person or award and the remainder of the Plan and any
such award shall remain in full force and effect.
11.7    NO TRUST OR FUND CREATED. Neither the Plan nor any award shall create or
be construed to create a trust or separate fund of any kind or a fiduciary
relationship between the Company or any participating affiliate and a
Participant or any other person. To the extent that any person acquires a right
to receive payments from the Company or any participating affiliate pursuant to
an award, such right shall be no greater than the right of any general unsecured
creditor of the Company or any participating affiliate.
11.8    HEADINGS. Headings are given to the sections of the Plan solely as a
convenience to facilitate reference. Such headings shall not be deemed in any
way material or relevant to the construction or interpretation of the Plan or
any provision of it.
11.9    TAX WITHHOLDING. The Company and/or any participating affiliate may
deduct from any payment otherwise due under this Plan to a Participant (or
beneficiary) amounts required by law to be withheld for purposes of federal,
state or local taxes.
11.10    COMPLIANCE WITH SECTION 409A OF THE CODE. This Plan is intended to
comply with or be exempt from 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 Plan shall be
made in a manner that will comply with or be exempt from 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.

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