Document:

exv10w2

Exhibit 10.2

INDEMNIFICATION AGREEMENT

     This INDEMNIFICATION AGREEMENT (the “Agreement”) is made and entered into as of the
_____ day of _______ 20__, by and between Holly Energy Partners, L.P., a Delaware limited
partnership (including any successors thereto, the “Company”), and [__________]
(“Indemnitee”).

RECITALS:

     1. Competent and experienced persons are reluctant to serve or to continue to serve
corporations as directors, officers, or in other capacities unless they are provided with adequate
protection through insurance or indemnification (or both) against claims and actions against them
arising out of their service to and activities on behalf of those corporations.

     2. Uncertainties relating to the availability of adequate insurance for directors and officers
have increased the difficulty for corporations to attract and retain competent and experienced
persons.

     3. The Board of Directors (the “Board”) of Holly Logistic Services, L.L.C.
(“HLS”), a Delaware limited liability company and the general partner of the General
Partner (as defined below), has determined that the continuation of present trends in litigation
will make it more difficult to attract and retain competent and experienced persons, that this
situation is detrimental to the best interests of the Company’s unitholders, and that the Company
should act to assure the officers and directors of HLS that there will be increased certainty of
adequate protection in the future.

     4. It is reasonable, prudent, and necessary for the Company to obligate itself contractually
to indemnify the officers and directors of HLS to the fullest extent permitted by applicable law in
order to induce them to serve or continue to serve the Company.

     5. Indemnitee is willing to serve and continue to serve the Company or its Subsidiaries on the
condition that he be indemnified to the fullest extent permitted by law.

     6. Concurrently with the execution of this Agreement, Indemnitee is agreeing to serve or to
continue to serve as a director of HLS or an officer of HLS and/or one or more of the Company’s
Subsidiaries.

AGREEMENTS:

     NOW, THEREFORE, in consideration of the foregoing premises, Indemnitee’s agreement to serve or
continue to serve as a director of HLS or an officer of HLS and/or one or more of the Company’s
Subsidiaries, and the covenants contained in this Agreement, the Company and Indemnitee hereby
covenant and agree as follows:

 

 

     1. Certain Definitions.

          For purposes of this Agreement:

          (a) Acquiring Person: shall mean (i) any Person other than Holly, the General
Partner, the Company, any Subsidiary, any employee benefit plan of Holly, the General Partner, the
Company or any Subsidiary or any trustee or other fiduciary holding securities under an employee
benefit plan of the Company or any Subsidiary of the Company and (ii) members of a group (within
the meaning of Section 13(d)(3) or Section 14(d)(2) of the Securities Exchange Act of 1934) of
which any Person described in clause (i) is a member with respect to the Voting Securities of
Holly, the General Partner or the Company.

          (b) Affiliate: shall mean any Person that directly, or indirectly, through one or
more intermediaries, controls, is controlled by, or is under common control with the Person
specified.

          (c) Beneficial Owner: shall mean the beneficial owner of a security as determined
pursuant to Rule 13d-3 promulgated under the Securities Exchange Act of 1934, as amended.

          (d) Change of Control: shall mean the occurrence of one of the following:

          (i) Any Person, or more than one Person acting as a group (as defined in Treasury regulation
1.409A-3(g)(5)(v)(B)), other than (1) Holly, the General Partner, the Company or any of their
respective subsidiaries, (2) a trustee or other fiduciary holding securities under an employee
benefit plan of Holly, the General Partner, the Company or any of their Affiliates, (3) an
underwriter temporarily holding securities pursuant to an offering of such securities, or (4) a
corporation (or other entity) owned, directly or indirectly, by stockholders or unitholders, as
applicable, of Holly, the General Partner, or the Company in substantially the same proportions as
their ownership of interests in Holly, the General Partner, or the Company, as applicable, becomes
the Beneficial Owner, directly or indirectly, of securities of Holly, the General Partner, or the
Company representing (A) more than fifty percent (50%) of the combined voting power of the then
outstanding securities of Holly, the General Partner or the Company, or (B) more than fifty percent
(50%) of the then outstanding common stock or membership interests, as applicable, of Holly or the
General Partner, excluding any Person who becomes such a Beneficial Owner in connection with a
transaction described in Section 1(c)(iii)(A) below.

          (ii) During any period of 12 consecutive months, a majority of the members of the Board of
Directors of Holly (the “Holly Board”) are replaced by the directors whose appointment or
election is not endorsed by a majority of the members of the Holly Board prior to the date of the
appointment or election.

          (iii) There is consummated a merger or consolidation of Holly, the General Partner, the
Company or any direct or indirect Subsidiary of Holly, the General Partner, or the Company with any
other corporation or entity, except if:

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               (A) the merger or consolidation results in the Voting Securities of Holly, the General
Partner, or the Company, as applicable, 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 fifty percent (50%) of the combined voting power
of the Voting Securities of Holly, the General Partner, the Company 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 (or similar
transaction) of Holly, the General Partner, or the Company, as applicable, in which no Person
becomes the Beneficial Owner, directly or indirectly, of securities of Holly, the General Partner,
or the Company representing more than fifty percent (50%) of the combined voting power of the then
outstanding securities of Holly, the General Partner, or the Company.

          (iv) The stockholders or unitholders, as applicable, of Holly or the Company approve a plan of
complete liquidation or dissolution of Holly or the Company, as applicable, or an agreement for the
sale or disposition by Holly or the Company of all or substantially all of the assets of Holly or
the Company, as applicable, other than a sale or disposition by Holly or the Company of all or
substantially all of their respective 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, membership
interest holders or unitholders, as applicable, of Holly, the General Partner or the Company in
substantially the same proportions as their ownership of Holly, the General Partner or the Company,
as applicable, immediately prior to such sale.

          (e) Claim: shall mean any threatened, pending, or completed action, suit, or
proceeding (including, without limitation, securities laws actions, suits, and proceedings and also
any cross claim or counterclaim in any action, suit, or proceeding), whether civil, criminal,
arbitral, administrative, or investigative in nature, or any inquiry or investigation (including
discovery), whether conducted by the Company or any other Person, that Indemnitee in good faith
believes might lead to the institution of any action, suit, or proceeding.

          (f) Expenses: shall mean all costs, expenses (including attorneys’ and expert
witnesses’ fees), and obligations paid or incurred in connection with investigating, defending
(including affirmative defenses and counterclaims), being a witness in, or participating in
(including on appeal), or preparing to defend, be a witness in, or participate in, any Claim
relating to any Indemnifiable Event.

          (g)
 General Partner: shall mean the entity or entities holding the direct or indirect
general partnership interest in the Company, including, as of the date of this Agreement, HLS
and HEP Logistics Holdings, L.P.

          (h) Governing Formation Documents: shall mean the bylaws, partnership agreements,
limited liability company agreements, and other constituent documents (as same may be amended from
time to time) of the Company, HEP Logistics Holdings, L.P., HLS and all of their subsidiaries.

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          (i) Holly: shall mean Holly Corporation, a Delaware corporation.

          (j) Indemnifiable Event: shall mean any actual or alleged act, omission, statement,
misstatement, event, or occurrence related to the fact that Indemnitee is or was a director,
officer, employee, agent, or fiduciary of the Company, or is or was serving at the request of the
Company as a director, officer, employee, agent, or fiduciary of any of the Company’s parent(s) or
Subsidiaries and/or any other corporation, partnership, joint venture, employee benefit plan,
trust, or other enterprise, or by reason of any actual or alleged thing done or not done by
Indemnitee in any such capacity. For purposes of this Agreement, the Company agrees that
Indemnitee’s service on behalf of or with respect to the General Partner, HLS, any Subsidiary of
the Company or any employee benefits plan of the Company shall be deemed to be at the request of
the Company.

          (k) Indemnifiable Liabilities: shall mean all Expenses and all other liabilities,
damages (including, without limitation, punitive, exemplary, and the multiplied portion of any
damages), judgments, payments, fines, penalties, amounts paid in settlement, and awards paid or
incurred that arise out of, or in any way relate to, any Indemnifiable Event.

          (l) Person: shall mean any individual, partnership, corporation, limited liability
company, trust or other entity.

          (m) Potential Change of Control: shall be deemed to have occurred if (i) Holly, the
General Partner, or the Company enters into an agreement, the consummation of which would result in
the occurrence of a Change of Control; (ii) any Person (including the Company) publicly announces
an intention to take or to consider taking actions that, if consummated, would constitute a Change
of Control; (iii) any Acquiring Person who is or becomes the Beneficial Owner, directly or
indirectly, of securities of Holly, the General Partner, or the Company representing 10% or more of
the combined voting power of the then outstanding Voting Securities of Holly, the General Partner,
or the Company, as applicable, increases his beneficial ownership of such securities by 5% or more
over the percentage so owned by that Person on the date hereof; or (iv) the Board adopts a
resolution to the effect that, for purposes of this Agreement, a Potential Change of Control has
occurred.

          (n) Reviewing Party: shall mean (i) a member or members of the Board who are not
parties to the particular Claim for which Indemnitee is seeking indemnification or (ii) if a Change
of Control has occurred and Indemnitee so requests, or if the members of the Board so elect, or if
all of the members of the Board are parties to such Claim, Special Counsel.

          (o) Special Counsel: shall mean special, independent legal counsel selected by
Indemnitee and approved by the Company (which approval shall not be unreasonably withheld), and who
has not otherwise performed material services for the Company or for Indemnitee within the last
three years (other than as Special Counsel under this Agreement or similar agreements).

          (p) Subsidiary: shall mean, with respect to any Person, any corporation or other
entity of which a majority of the voting power of the Voting Securities is owned, directly or
indirectly, by that Person.

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          (q) Voting Securities: any securities or other equity interests that vote generally
in the election of directors, in the admission of general partners, or in the selection of any
other similar governing body, or, in the case of a partnership or limited liability company, that
manage the partnership or limited liability company.

     2. Indemnification and Expense Advancement.

          (a) The Company shall indemnify Indemnitee and hold Indemnitee harmless to the fullest extent
permitted by law, as soon as practicable but in any event no later than 30 days after written
demand is presented to the Company, from and against any and all Indemnifiable Liabilities.
Notwithstanding the foregoing, the obligations of the Company under Section 2(a) shall be subject
to the condition that the Reviewing Party shall not have determined (in a written opinion, in any
case in which Special Counsel is involved) that Indemnitee is not permitted to be indemnified under
applicable law. Any determination under this Section 2(a) shall be made promptly by the Reviewing
Party.

          (b) If so requested by Indemnitee, the Company shall advance to Indemnitee all reasonable
Expenses incurred by Indemnitee to the fullest extent permitted by law (or, if applicable,
reimburse Indemnitee for any and all reasonable Expenses incurred by Indemnitee and previously paid
by Indemnitee) within ten business days after such request (an “Expense Advance”). The
Company shall be obligated from time to time at the request of Indemnitee to make or pay an Expense
Advance in advance of the final disposition or conclusion of any Claim. In connection with any
request for an Expense Advance, if requested by the Company, Indemnitee or Indemnitee’s counsel
shall submit an affidavit stating that the Expenses to which the Expense Advances relate are
reasonable. Any dispute as to the reasonableness of any Expense shall not delay an Expense Advance
by the Company. If, when, and to the extent that the Reviewing Party determines that (i) Indemnitee
would not be permitted to be indemnified with respect to a Claim under applicable law or (ii) the
amount of the Expense Advance was not reasonable, the Company shall be entitled to be reimbursed by
Indemnitee and Indemnitee hereby agrees to reimburse the Company without interest (which agreement
shall be an unsecured obligation of Indemnitee) for (x) all related Expense Advances theretofore
made or paid by the Company in the event that it is determined that indemnification would not be
permitted or (y) the excessive portion of any Expense Advances in the event that it is determined
that such Expenses Advances were unreasonable, in either case, if and to the extent such
reimbursement is required by applicable law; provided, however, that if Indemnitee has commenced
legal proceedings in a court of competent jurisdiction to secure a determination that Indemnitee
could be indemnified under applicable law, or that the Expense Advances were reasonable, any
determination made by the Reviewing Party that Indemnitee would not be permitted to be indemnified
under applicable law or that the Expense Advances were unreasonable shall not be binding, and the
Company shall be obligated to continue to make Expense Advances, until a final judicial
determination is made with respect thereto (as to which all rights of appeal therefrom have been
exhausted or lapsed), which determination shall be conclusive and binding. If there has been a
Change of Control, the Reviewing Party shall be Special Counsel, if Indemnitee so requests. If
there has been no determination by the Reviewing Party or if the Reviewing Party determines that
Indemnitee substantively is not permitted to be
indemnified in whole or part under applicable law or that any Expense Advances were
unreasonable, Indemnitee shall have the right to commence litigation in any court in the states of

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Texas or Delaware having subject matter jurisdiction thereof and in which venue is proper seeking
an initial determination by the court or challenging any such determination by the Reviewing Party
or any aspect thereof, and the Company hereby consents to service of process and to appear in any
such proceeding. Any determination by the Reviewing Party otherwise shall be conclusive and binding
on the Company and Indemnitee.

          (c) Nothing in this Agreement, however, shall require the Company to indemnify Indemnitee with
respect to any Claim initiated by Indemnitee, other than a Claim solely seeking enforcement of the
Company’s indemnification obligations to Indemnitee or a Claim authorized by the Board.

     3. Change of Control. If there is a Potential Change of Control or a Change of Control and
if Indemnitee requests in writing that Special Counsel be the Reviewing Party, then Special Counsel
shall be the Reviewing Party. In such a case, the Company agrees not to request or seek
reimbursement from Indemnitee of any indemnification payment or Expense Advances unless Special
Counsel has rendered its written opinion to the Company and Indemnitee that the Company was not or
is not permitted under applicable law to indemnify Indemnitee or that such Expense Advances were
unreasonable. However, if Indemnitee has commenced legal proceedings in a court of competent
jurisdiction to secure a determination that such indemnification is permitted under applicable law
or that the Expense Advances were reasonable, any determination made by Special Counsel that
Indemnitee would not be permitted to be indemnified under applicable law or that the Expense
Advances were unreasonable shall not be binding, and the Company shall be obligated to continue to
make Expense Advances, until a final judicial determination is made with respect thereto (as to
which all rights of appeal therefore have been exhausted or lapsed), which determination shall be
conclusive and binding. The Company agrees to pay the reasonable fees of Special Counsel and to
indemnify Special Counsel against any and all expenses (including attorneys’ fees), claims,
liabilities, and damages arising out of or relating to this Agreement or Special Counsel’s
engagement pursuant hereto.

     4. Indemnification for Additional Expenses. The Company shall indemnify Indemnitee against
any and all costs and expenses (including attorneys’ and expert witnesses’ fees) and, if requested
by Indemnitee, shall (within two business days of that request) advance those costs and expenses to
Indemnitee, that are incurred by Indemnitee if Indemnitee, whether by formal proceedings or through
demand and negotiation without formal proceedings: (a) seeks to enforce Indemnitee’s rights under
this Agreement, (b) seeks to enforce Indemnitee’s rights to expense advancement or indemnification
under any other agreement or provision of the Governing Formation Documents now or hereafter in
effect relating to Claims for Indemnifiable Events, or (c) seeks recovery under any directors’ and
officers’ liability insurance policies maintained by the Company or HLS, in each case regardless of
whether Indemnitee ultimately prevails; provided that a court of competent jurisdiction has not
found Indemnitee’s claim for indemnification or expense advancements under the foregoing clauses
(a), (b) or (c) to be frivolous, presented for an improper purpose, without evidentiary
support, or otherwise sanctionable under Federal Rule of Civil Procedure No. 11 or an analogous
rule or law, and provided further, that if a court makes such a finding, Indemnitee shall reimburse
the Company for all amounts previously advanced to Indemnitee pursuant to this Section 4. Subject
to the provisos contained in the preceding sentence, to the fullest extent permitted by applicable
law,

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the Company waives any and all rights that it may have to recover its costs and expenses from
Indemnitee.

     5. Partial Indemnity. If Indemnitee is entitled under any provision of this Agreement to
indemnification by the Company for some, but not all, of Indemnitee’s Indemnifiable Liabilities,
the Company shall indemnify Indemnitee for the portion thereof to which Indemnitee is entitled.

     6. Contribution.

          (a) Contribution Payment. To the extent the indemnification provided for under any
provision of this Agreement is determined (in the manner hereinabove provided) not to be permitted
under applicable law, the Company, in lieu of indemnifying Indemnitee, shall, to the extent
permitted by law, contribute to the amount of any and all Indemnifiable Liabilities incurred or
paid by Indemnitee for which such indemnification is not permitted. The amount the Company
contributes shall be in such proportion as is appropriate to reflect the relative fault of
Indemnitee, on the one hand, and of the Company and any and all other parties (including directors
of HLS or officers of the Company, other than Indemnitee, and other Persons not Affiliates of the
Company) who may be at fault (collectively, including the Company, the “Third Parties”), on
the other hand.

          (b) Relative Fault. The relative fault of the Third Parties and the Indemnitee shall
be determined (i) by reference to the relative fault of Indemnitee as determined by the court or
other governmental agency or (ii) to the extent such court or other governmental agency does not
apportion relative fault, by the Reviewing Party after giving effect to, among other things, the
relative intent, knowledge, access to information, and opportunity to prevent or correct the
relevant events, of each party, and other relevant equitable considerations. The Company and
Indemnitee agree that it would not be just and equitable if contribution were determined by pro
rata allocation or by any other method of allocation that does not take account of the equitable
considerations referred to in this Section 6(b).

          (c) Contribution Guidelines. The provisions in this Section 6(c) are to be used as
guidelines by the Company and Indemnitee in determining the amount to be contributed by the Company
to the extent the use of such guidelines is not prohibited by applicable law or by court order.

               (i) The amount to be contributed by the Company is to be an amount equal to (A) the total
Indemnifiable Liabilities incurred with respect to the Indemnifiable Event assessed against or
incurred or paid by Indemnitee for which such indemnification is not permitted (the “Ineligible
Amounts”) minus (B) the product of (1) the total Indemnifiable Liabilities incurred
with respect to the Indemnifiable Event assessed against or incurred or paid
by Indemnitee and all Third Parties (“Total Contribution Amounts”) multiplied
by (2) the relative fault of Indemnitee (expressed as a percentage).

               (ii) If any Third Parties shall have settled Claims against them arising by reason of (or in
part out of) the same Indemnifiable Event (“Settled Parties”), then: (A) if the
Indemnifiable Liabilities assessed against or incurred or paid by Indemnitee take into account the

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relative fault of the Settled Parties, then the amount to be contributed by the Company is to be an
amount equal to the amount by which the Indemnifiable Liabilities assessed against or incurred or
paid by Indemnitee exceeds the product of (1) the sum of Indemnifiable Liabilities assessed
against or incurred or paid by the Indemnitee and all Third Parties other than the Settled Parties
multiplied by (2) a fraction, the numerator of which is the relative fault of Indemnitee
and the denominator of which is the sum of the relative fault of the Third Parties other than the
Settled Parties plus the relative fault of Indemnitee (expressed as a percentage), and (B) if the
Indemnifiable Liabilities assessed against Indemnitee take into account, in lieu of the relative
fault of the Settled Parties, amounts actually paid by the Settled Parties in settlement of such
Indemnifiable Event, then the amount that the Company shall be obligated to contribute pursuant to
this Section 6 shall be an amount equal to the amount by which the Ineligible Amounts assessed
against or incurred or paid by Indemnitee exceed the product of (1) the relative fault of
Indemnitee (expressed as a percentage) multiplied by (2) the sum of the Indemnified
Liabilities assessed against or incurred or paid by the Indemnitee and the Third Parties other than
the Settled Parties plus the amounts so paid by the Settled Parties.

               (iii) The guidelines in the foregoing clauses (i) and (ii) are to be applied, and adjusted as
determined in good faith by a Reviewing Party or a court determining the appropriate amount to be
contributed by the Company pursuant to this Section 6, as necessary to result in the Ineligible
Amounts for which Indemnitee ultimately is responsible being proportionate to the relative fault of
Indemnitee.

Notwithstanding the provisions of this Section 6, the total amount of contribution provided to
Indemnitee pursuant to this Section 6 shall not exceed the actual Ineligible Amounts assessed
against or incurred or paid by Indemnitee and Indemnitee shall not be liable for or obligated to
pay to any Third Party any contribution amounts solely as a result of this Section 6.

     7. Burden of Proof. In connection with any determination by the Reviewing Party or
otherwise as to whether Indemnitee is entitled to be indemnified under any provision of this
Agreement or to receive contribution pursuant to Section 6 of this Agreement, to the extent
permitted by law the burden of proof shall be on the Company to establish that Indemnitee is not so
entitled.

     8. No Presumption. For purposes of this Agreement, the termination of any Claim by
judgment, order, settlement (whether with or without court approval), or conviction, or upon a plea
of nolo contendere, or its equivalent, or an entry of an order of probation prior to judgment shall
not create a presumption (other than any presumption arising as a matter of law that the parties
may not contractually agree to disregard) that Indemnitee did not meet any particular standard of
conduct or have any
particular belief or that a court has determined that indemnification is not permitted by
applicable law.

     9. Non-exclusivity. The rights of Indemnitee hereunder shall be in addition to any other
rights Indemnitee may have under the Governing Formation Documents, the Delaware Revised Uniform
Partnership Act or Limited Liability Company Act or otherwise. To the extent that a change in the
Delaware Revised Uniform Partnership Act or Limited Liability Company Act (whether by statute or
judicial decision) permits greater indemnification by agreement than would be afforded currently
under this Agreement, it is the intent of the parties hereto

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that Indemnitee shall enjoy by this
Agreement the greater benefits so afforded by that change. Indemnitee’s rights under this
Agreement shall not be diminished by any amendment to the Governing Formation Documents or of any
other agreement or instrument to which Indemnitee is not a party, and shall not diminish any other
rights that Indemnitee now or in the future has against the Company.

10. Liability Insurance. Except as otherwise agreed to by the Company and Indemnitee in a
written agreement, to the extent the Company or HLS maintains an insurance policy or policies
providing directors’ and officers’ liability insurance and coverage for Indemnitee under that
policy or those policies is available on commercially reasonable terms, Indemnitee shall be covered
by that policy or those policies, in accordance with its or their terms, to the maximum extent of
the coverage available for any Company officer or director of HLS.

     11. Period of Limitations. No action, lawsuit, or proceeding may be brought against
Indemnitee or Indemnitee’s spouse, heirs, executors, or personal or legal representatives, nor may
any cause of action be asserted in any such action, lawsuit, or proceeding, by or on behalf of the
Company, after the expiration of two years after the statute of limitations commences with respect
to Indemnitee’s act or omission that gave rise to the action, lawsuit, proceeding, or cause of
action; provided, however, that, if any shorter period of limitations is otherwise applicable to
any such action, lawsuit, proceeding, or cause of action, the shorter period shall govern.

     12. Amendments. No supplement, modification, or amendment of this Agreement shall be
binding unless executed in writing by both of the parties hereto. No waiver of any provision of
this Agreement shall be effective unless in a writing signed by the party granting the waiver. No
waiver of any of the provisions of this Agreement shall be deemed or shall constitute a waiver of
any other provisions hereof (whether or not similar) nor shall that waiver constitute a continuing
waiver.

     13. Other Sources. Indemnitee shall not be required to exercise any rights that Indemnitee
may have against any other Person (for example, under an insurance policy) before Indemnitee
enforces his rights under this Agreement. However, to the extent the Company actually indemnifies
Indemnitee or
advances him Expenses, the Company shall be subrogated to the rights of Indemnitee and shall be
entitled to enforce any such rights which Indemnitee may have against third parties. Indemnitee
shall assist the Company in enforcing those rights if the Company pays his costs and expenses of
doing so. If Indemnitee is actually indemnified or advanced Expenses by any third party, then, for
so long as Indemnitee is not required to disgorge the amounts so received, to that extent the
Company shall be relieved of its obligation to indemnify Indemnitee or advance Indemnitee Expenses.

     14. Binding Effect. This Agreement shall be binding upon and inure to the benefit of and
be enforceable by the parties hereto and their respective successors, assigns (including any direct
or indirect successor by merger or consolidation), spouses, heirs, and personal and legal
representatives. This Agreement shall continue in effect regardless of whether Indemnitee continues
to serve as a director, officer, employee, agent or fiduciary of the Company or of any trust,
benefit plan or another enterprise or entity at the Company’s request, or as a director HLS.

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     15. Severability. If any provision of this Agreement is held to be illegal, invalid, or
unenforceable under present or future laws effective during the term hereof, that provision shall
be fully severable; this Agreement shall be construed and enforced as if that illegal, invalid, or
unenforceable provision had never comprised a part hereof; and the remaining provisions shall
remain in full force and effect and shall not be affected by the illegal, invalid, or unenforceable
provision or by its severance from this Agreement. Furthermore, in lieu of that illegal, invalid,
or unenforceable provision, there shall be added automatically as a part of this Agreement a
provision as similar in terms to the illegal, invalid, or unenforceable provision as may be
possible and be legal, valid, and enforceable so long as it does not prejudice any other rights of
any party under this Agreement.

     16. Governing Law. This Agreement shall be governed by and construed and enforced in
accordance with the laws of the State of Delaware applicable to contracts made and to be performed
in that state without giving effect to the principles of conflicts of laws.

     17. Headings. The headings contained in this Agreement are for reference purposes only and
shall not affect in any way the meaning or interpretation of this Agreement.

     18. Notices. Whenever this Agreement requires or permits notice to be given by one party
to the other, such notice must be in writing to be effective and shall be deemed delivered and
received by the party to whom it is sent upon actual receipt (by any means) of such notice. Receipt
of a notice by the Secretary of the Company shall be deemed receipt of such notice by the Company.

     19. Complete Agreement. This Agreement constitutes the complete understanding and agreement
among the parties with respect to the subject matter hereof and supersedes all prior agreements and
understandings between the parties with respect to the subject matter hereof, other than any
indemnification and advancement rights that Indemnitee may enjoy under the Governing Formation
Documents, or the Delaware Revised Uniform Partnership Act or Limited Liability Company Act.

     20. Counterparts. This Agreement may be executed in any number of counterparts, each of
which shall be deemed an original, but in making proof hereof it shall not be necessary to produce
or account for more than one such counterpart.

[SIGNATURE PAGE FOLLOWS]

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     EXECUTED as of the date first written above.

	 	 	 	 	 	 	 

	 	 	HOLLY ENERGY PARTNERS, L.P.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	HEP Logistics Holdings, L.P.,	 	 
	 

	 	 	 	Its General Partner	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	Holly Logistics Services, L.L.C.,	 	 
	 

	 	 	 	Its General Partner	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 

Name
	 	 
	 

	 	 	 	Title	 	 
	 
	 	 	 	 	 	 
	 	 	INDEMNITEE:	 	 
	 
	 	 	 	 	 	 
	 	 	[               ]                                    	 	 

11exv10w3

Exhibit 10.3

Holly Energy Partners, L.P.

Change in Control Agreement Policy

     This Change in Control Agreement Policy reflects the terms and procedures as approved at the
February 14, 2011 meetings of the Board of Directors (“Board”) of Holly Logistic Services, L.L.C.
(“HLS”) based upon the recommendation of the Compensation Committee of the Board.

     1. Eligibility

     Employees of HLS at pay grades 34 and above and who are full-time employees will receive
Change in Control Agreements (“CIC Agreements”) either upon hire or promotion to an eligible pay
grade level at the benefit level described in Section 2 below. However, no eligible individual
will be entitled to the benefits described in Section 2 below unless or until the individual timely
executes a CIC Agreement in accordance with the procedures established by the Chief Executive
Officer of HLS.

     2. Severance Benefits under CIC Agreements

     The CIC Agreements shall contain the terms set forth in the form agreement attached hereto as
Exhibit A.

          The applicable multiplier and number of years that medical and dental benefits will be
continued will be determined based on the executive’s pay grade classification in accordance with
the following chart:

	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Years of Medical and
	 	 	Lump Sum Multiplier	 	Dental Continuation
	Grades 34 and 35
	 	 	1 X	 	 	1 Year
	Grades 36 and 37
	 	 	2 X	 	 	2 Years
	Grade 38 and Above
	 	 	3 X	 	 	3 Years

     3. Term of CIC Agreements

     The initial term
of each and every CIC Agreement ends on January 31, 2014, regardless of the
date on which an executive enters into a CIC Agreement with Holly Energy Partners, L.P. (the “Partnership”). On January 31, 2014 (and on each
subsequent January 31) the term of the CIC Agreements will be automatically extended for one
additional year, unless the Partnership gives notice to each
executive 60 days prior to the automatic extension date. For example, if an eligible executive is
hired on and enters into a CIC Agreement on March 1, 2011, the initial term of his CIC Agreement
will last until January 31, 2014, and if the Partnership does not give a notice of non-extension by
December 2, 2013, then the term of the CIC Agreements will be automatically extended to January 31,
2015 on January 31, 2014. The occurrence of a “Change in Control” will extend or reduce the term
of the CIC Agreements through the end of the “Protection Period.”

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