Document:

exv10w2

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

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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.

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               (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

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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

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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

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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

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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 	 
	 	 	 	 
	 

8exv10w3

Exhibit 10.3

HOLLY CORPORATION

EMPLOYEE

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 “Employee”). If the Employee
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 Employee. 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 employees, directors and consultants; and

     WHEREAS, the Company believes that entering into this Agreement with the Employee is
consistent with the stated purposes for which the Plan was adopted.

     NOW, THEREFORE, it is agreed by and between the Company and the Employee, in consideration of
services rendered by the Employee, as follows:

     1. Grant. The Company hereby grants to the Employee 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 5 (the
“Restricted Shares”).

     2. Restricted Shares. The Company shall issue in the Employee’s name the
Restricted Shares and such Restricted Shares shall be held for the Employee in book entry
form by the Company’s transfer agent with a notation that the shares are subject to
restrictions. The Employee 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 Employee 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 Employee. Effective as of the Date of Grant, the Employee 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 5.

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     4. Forfeiture and Expiration of Restrictions.

     (a) The Employee shall forfeit to the Company (i) all of the Restricted Shares
immediately and without any payment to the Employee whatsoever if the Employee’s
employment with the Company or a subsidiary of the Company is terminated before
January 1, 2009 for any reason other than death, total and permanent disability, or
retirement, as provided in Section 4(b) below, and (ii)two-thirds (2/3) of the
Restricted Shares if the Employee’s employment with the Company or a subsidiary of
the Company is so terminated after December 31, 2008 and before January 1, 2010, and
(iii) one-third (1/3) of the Restricted Shares if the Employee’s employment with the
Company or a subsidiary of the Company is so terminated after December 31, 2009 and
before January 1, 2011. After December 31, 2008, one-third (1/3) of the Restricted
Shares will be fully vested and nonforfeitable, and after December 31, 2009,
two-thirds (2/3) of the Restricted Shares shall be fully vested and nonforfeitable,
and after December 31, 2010 all Restricted Shares shall be fully vested and
nonforfeitable (“Vested Shares”).

     (b) In the event of the Employee’s (i) death, (ii) total and permanent
disability as determined by the Compensation Committee (the “Committee”) in its sole
discretion, or (iii) retirement after attaining the normal retirement age of 62 or
retirement after attaining an earlier retirement age approved by the Committee, in
its sole discretion, before lapse of all restrictions pursuant to Section 4(a)
above, the Employee shall forfeit a number of Restricted Shares equal to the number
of Restricted Shares specified in Section 1 times the percentage that the period of
full months beginning on the first day of the calendar month following the date of
death, disability or retirement and ending on December 31, 2010 bears to thirty-six
(36) and any remaining Restricted Shares that are not vested shall become Vested
Shares; 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 4(b). Unless the Committee determines otherwise, in its sole
discretion, the Employee or the Employee’s beneficiary or estate will have no right
to any Restricted Shares that remain subject to restrictions, and those Restricted
Shares will be forfeited.

     (c) In the event of a “Special Involuntary Termination” as defined in Section
4(d)(vi) before lapse of all restrictions pursuant to Section 4(a) above, all
restrictions described in Section 5 shall lapse and the Restricted Shares will
become Vested Shares and the Company shall deliver the Vested Shares to the Employee
as soon as practicable thereafter.

     (d) Definitions. For purposes of Section 4(c) above,

     (i) “Change in Control” shall mean:

     A. Any “Person” (as defined in Section 4(d)(ii) below), other
than (1) the Company or any of its subsidiaries, (2) a trustee

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or other fiduciary holding securities under an employee benefit
plan of the Company or any of its “Affiliates” (as defined in Section
4(d)(v) below), (3) an underwriter temporarily holding securities
pursuant to an offering of such securities, or (4) a corporation
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 in Section
4(d)(iii) 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
4(d)(i)(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
in Section 4(d)(iv) 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
corporation, 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 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

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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.

     (ii) “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.

     (iii) “Beneficial Owner” shall have the meaning provided in Rule 13d-3
under the 1934 Act.

     (iv) “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, “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.

     (v) “Affiliate” shall have the meaning set forth in Rule 12b-2
promulgated under section 12 of the 1934 Act.

     (vi) “Special Involuntary Termination” shall mean the occurrence of (1)
or (2) below within sixty (60) days prior to, or at any time after, a
“Change in Control” (as defined in Section 4(d)(i)), where (1) is
termination of the Employee’s employment with the Company (including
subsidiaries of the Company) by the Company for any reason other than
“Cause” (as defined in Section 4(d)(vii)) and (2) is a resignation by the
Employee from employment with the Company (including subsidiaries of the
Company) within ninety (90) days after an “Adverse Change” (as defined in
Section 4(d)(viii)) by the Company (including subsidiaries of the Company)
in the terms of the Employee’s employment.

     (vii) “Cause” shall mean:

4

 

     A. An act or acts of dishonesty on the part of the Employee
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 Employee’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.

     (viii) “Adverse Change” shall mean (A) a change in the city in which
the Employee is required to work regularly, (B) a substantial increase in
travel requirements of employment, (C) a substantial reduction in duties of
the type previously performed by the Employee, or (D) a significant
reduction in compensation or benefits (other than bonuses and other
discretionary items of compensation) that does not apply generally to
executives of the Company or its successor.

     5. Limitations on Transfer. The Employee 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 5 which expiration shall be determined pursuant to
Section 4 of this Agreement. 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 accordance
with Section 4(a) of this Agreement and pro rata forfeiture in accordance with Sections 4(a)
and (b) of this Agreement.

     6. Nontransferability of Agreement. This Agreement and all rights under this
Agreement shall not be transferable by the Employee during his life other than by will or
pursuant to applicable laws of descent and distribution. Any rights and privileges of the
Employee in connection herewith shall not be transferred, assigned, pledged or hypothecated
by the Employee 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

5

 

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 5.

     7. Adjustment of Restricted Shares. The number of Restricted Shares granted to
the Employee 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 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.

     8. 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 5 lapse.

     9. 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.

     10. Federal and State Taxes. The Employee 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 Employee 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 Employee does not make such election, the taxes shall be
payable for the year in which the restrictions lapse pursuant to Section 4. 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 Employee 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 Employee shall authorize the Company to withhold from
monies owing by the Company to the Employee an amount equal to the amount of federal, state
or local taxes required to be withheld. Authorization of the Employee to the Company to
withhold taxes pursuant to this Section 10 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

6

 

liability of the Employee has been fully paid. In the event that the Employee 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 Employee 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.

     11. 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 Employee 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 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.

     12. 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
Employee 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.

     13. No Right to Continued Employment. This Agreement shall not be construed to
confer upon the Employee any right to continue as an Employee of the Company and shall not
limit the right of the Company, in its sole discretion, to terminate the service of the
Employee at any time.

     14. 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.

     15. Amendments. This Agreement may be amended only by a written agreement
executed by the Company and the Employee. 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.

     16. 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.

     17. No Guarantee of Interests. The Board and the Company do not guarantee the
Shares (as defined in the Plan) from loss or depreciation.

7

 

     IN WITNESS WHEREOF, the Company has caused this Agreement to be executed by its officers
thereunto duly authorized, and the Employee has set his hand effective as of the date and year
first above written.

	 	 	 	 	 
	 	HOLLY CORPORATION

 	 
	 	By:  	 	 
	 	 	Matthew P. Clifton 	 
	 	 	Chief Executive Officer 	 
	 
	 	 	 
	 	By:  	
 	 
	 	 	Employee 	 
	 	 	 	 
	 

8

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