Document:

exv10w26

Exhibit 10.26

FIRST AMENDMENT TO THE HOLLY

LOGISTIC SERVICES, L.L.C. ANNUAL

INCENTIVE PLAN

     THIS FIRST AMENDMENT is effective January 1, 2005 (the “Effective Date”) and is made by Holly
Logistic Services, L.L.C, a Delaware limited liability company (the “Company”).

WITNESSETH:

     WHEREAS, the board of directors of the Company (the “Board”) previously adopted the Holly
Logistic Services, L.L.C. Annual Incentive Plan (the “Plan”),

     WHEREAS, Section 8 of the Plan provides that the Compensation Committee of the Board (the
“Committee”) may, at its sole discretion, amend the Plan at any time; and

     WHEREAS, the Committee has determined that it is desirable to amend the Plan, in accordance
with the final regulations promulgated under section 409A of the Internal Revenue Code of 1986, as
amended (the “Code”), to ensure that, to the extent subject to Code section 409A, the payments and
other benefits provided under the Plan comply therewith and to avoid the imposition of any adverse
tax consequences under section 409A of the Code.

     NOW, THEREFORE, the Plan shall be amended as of the Effective Date as set forth below:

     1. Section 6 of the Plan shall, as of the Effective Date, be deleted in its entirety and
replaced with the following:

     6. AWARD PAYOUT.

     Awards typically will be determined after the end of the Plan Year or designated
performance period. Awards will be paid in cash annually, unless otherwise determined by the
Compensation Committee; 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 Compensation Committee’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 Compensation
Committee will have the discretion, by Participant and by grant, to reduce (but no 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 Compensation Committee 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.

     2. The following Section 11.10 shall be added to the Plan to read as follows:

     11.10 Compliance with Section 409A of the Code. This Plan is intended to comply and
shall be administered in a manner that is intended to comply with Section 409A of the Code
and

 

 

shall be construed and interpreted in accordance with such intent. Payment under this
Plan shall be made in a manner that will comply with Section 409A of the Code, including
regulations or other guidance issued with respect thereto, except as otherwise determined by
the Committee. The applicable provisions of Section 409A of the Code are hereby incorporated
by reference and shall control over any contrary provisions herein that conflict therewith.

     NOW, THEREFORE, be it further provided that, except as set forth above, the Plan shall
continue to read in its current state.

     IN WITNESS WHEREOF, the Company has caused the execution of this First Amendment by its duly
authorized officer, effective as of the Effective Date.

	 	 	 	 	 
	 	HOLLY LOGISTIC SERVICES, L.L.C.

 	 
	 	By:  	/s/ Mitthew P. Clifton
 	 
	 	 	Mitthew P. Clifton  	 
	 	 	Chief Executive Officer
	 
	 		
 	 
	 	 	
Date: 17/31/08exv10w27

Exhibit 10.27

SECOND AMENDMENT TO THE

HOLLY ENERGY PARTNERS,

L.P. LONG-TERM INCENTIVE PLAN

     THIS SECOND AMENDMENT is effective January 1, 2005 (the “Effective Date”) and is made by Holly
Logistic Services, L.L.C., a Delaware limited liability company (the “Company”).

WITNESSETH:

     WHEREAS, the board of directors of the Company (the “Board”) adopted the Holly Energy
Partners, L.P. Long-Term Incentive Plan, effective August 4, 2004 (the “Plan”);

     WHEREAS, Section 7(a) of the Plan provides that the Plan may be amended by the Board without
approval of any unitholder of the Company or approval of any other person, except as required by
the rules of the securities exchange on which the units are traded, or except as to provide for a
change that materially reduces the benefits of a participant; and

     WHEREAS, the Board has determined that it is desirable to amend the Plan, in accordance with
the final regulations promulgated under section 409A of the Internal Revenue Code of 1986, as
amended (the “Code”), to ensure that, to the extent subject to Code section 409A, the payments and
other benefits provided under the Plan comply therewith and to avoid the imposition of any adverse
tax consequences under section 409A of the Code.

     NOW, THEREFORE, the Plan shall be amended as of the Effective Date as set forth below:

     1. Section 6(d)(vi) shall be deleted in its entirety and shall be replaced with the following:

     (vi) Delivery of Units or other Securities and Payment by Participant of Consideration.
Notwithstanding anything in the Plan or any grant agreement to the contrary, delivery of
Units pursuant to the exercise or vesting of an Award may be deferred for any period during
which, in the good faith determination of the Committee, the Company is not reasonably able
to obtain Units to deliver pursuant to such Award without violating the rules or regulations
of any applicable law or securities exchange. In addition, notwithstanding anything to the
contrary herein or in any applicable Award agreement, no Award that constitutes a “deferral
of compensation” (within the meaning of section 409A of the Code and the regulations and
other authoritative guidance promulgated thereunder (collectively, the “Nonqualified
Deferred Compensation Rules”)), and that is not exempt from Section 409A of the Code
pursuant to an applicable exemption (any such Award, a “409A Award”) shall be exercisable,
be settled or otherwise trigger a payment or distribution upon the occurrence of any event
that does not qualify as a permissible time of distribution in respect of such 409A Award
under the Nonqualified Deferred Compensation Rules; except that, to the extent permitted
under the Nonqualified Deferred Compensation Rules, the time of exercise, payment or
settlement of a 409A Award shall be accelerated, or payment shall be made under the Plan in
respect of such Award, as determined by the Committee in its discretion, to the extent
necessary to pay income, withholding, employment or other taxes imposed on

 

such 409A Award. In the event any 409A Award is designed to be paid or distributed upon
a Participant’s termination of employment, such payment or distribution shall not occur in
the event the Participant holding such 409A Award continues to provide or, in the 12 month
period following such termination of employment, is expected to provide, sufficient services
to the Company that, under the Company’s applicable policies regarding what constitutes a
“separation from service” for purposes of Section 409A of the Code, such Participant does
not incur a separation from service for purposes of Section 409A of the Code on the date of
termination of the employment relationship. To the extent any 409A Award does not become
exercisable or is not settled or otherwise payable upon a Participant’s termination of
employment or upon the occurrence of some other event provided in the Plan or the Award
agreement as a result of the limitations described in the preceding provisions hereof, such
Award shall become exercisable or be settled or payable upon the occurrence of an event that
qualifies as a permissible time of distribution in respect of such 409A Award under the
Nonqualified Deferred Compensation Rules. No Units or other securities shall be delivered
pursuant to any Award until payment in full of any amount required to be paid pursuant to
the Plan or the applicable Award grant agreement (including, without limitation, any
exercise price or tax withholding) is received by the Company. Such payment may be made by
such method or methods and in such form or forms as the Committee shall determine,
including, without limitation, cash, other Awards, withholding of Units, cashless broker
exercises with simultaneous sale, or any combination thereof; provided, however, that the
combined value, as determined by the Committee, of all cash and cash equivalents and the
Fair Market Value of any such Units or other property so tendered to the Company, as of the
date of such tender, is at least equal to the full amount required to be paid to the Company
pursuant to the Plan or the applicable Award agreement.

2. The following sentence shall be added to the end of Section 6(d)(vii):

     Notwithstanding the foregoing or any provision contained in the applicable Award grant
agreement, no 409A Award shall be payable or exerciseable as described above unless the Change in
Control also constitutes a “change in the ownership or effective control” or “in the ownership of a
substantial portion of the assets” within the meaning of the Nonqualified Deferred Compensation
Rules.

3. A new Section 8(m) shall be added to the Plan to read as follows:

     (m) Compliance with Section 409A of the Code. This Plan is intended to comply and shall be
administered in a manner that is intended to comply with

 

Section 409A of the Code and shall be construed and interpreted in accordance with such
intent. Payment under this Plan shall be made in a manner that will comply with Section 409A
of the Code, including regulations or other guidance issued with respect thereto, except as
otherwise determined by the Committee. The applicable provisions of Section 409A of the Code
are hereby incorporated by reference and shall control over any contrary provisions herein
that conflict therewith.

     NOW, THEREFORE, be it further provided that, except as set forth above, the Plan shall
continue to read in its current state.

     IN WITNESS WHEREOF, the Company has caused the execution of this Second Amendment by its duly
authorized officer, effective as of the Effective Date.

	 	 	 	 	 
	 	HOLLY LOGISTIC SERVICES, L.L.C.

 	 
	 	 	 
	 	Matthew P. Clifton 	 
	 	 Chief Executive Officer
 	 
	 
	 	
Date: December 31, 2008

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