EXHIBIT 10.1
Holly Corporation
Change in Control Agreement Policy
February 19, 2008
This Change in Control Agreement
Policy reflects the terms and procedures as approved at the
February 9, 2007, February 13, 2008 and February 19,
2008 meetings of the Board of Directors (“Board”) of
Holly Corporation (“Holly”) based upon the
recommendation of the Compensation Committee of the Board.
1.
Eligibility
Employees
of Holly Corporation and Holly Logistic Services, L.L.C.
(“HLS”) at pay grades 34 and above will receive 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 Holly.
2. Severance
Benefits under CIC Agreements
The CIC
Agreements contain a double trigger, meaning that severance
benefits only become payable if a “Change in Control”
occurs and an executive experiences a “Termination
Event” during the “Protection Period.” The
severance benefits potentially payable under the CIC Agreements
contain three components:
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Accrued but unpaid salary, reimbursement of expenses, and
accrued vacation pay; |
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A lump sum amount equal to the sum of an executive’s base
salary plus annual bonus multiplied by the applicable multiplier
(see chart below); and |
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Continuation of medical and dental benefits for a specified
number of years (see chart below). |
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:
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Years of Medical and
Dental |
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Lump Sum Multiplier |
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Continuation |
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Grades 34 and
35
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1X |
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1 Year |
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Grades 36 and
37
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2X |
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2 Years |
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Grade 38 and
Above
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3X |
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3 Years |
The pay
grade classifications correspond with the following titles:
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Pay Grades |
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Titles |
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| Grades 34 and 35 |
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Numerous titles as
determined by management from time to time
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| Grade 36 |
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Chief Financial
Officer, Chief Accounting Officer, General Counsel, and various
other titles as determined by management from time to time
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| Grade 37 |
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President and other
titles as determined by management from time to time
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| Grade 38 |
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Chairman of the
Board and Chief Executive Officer
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3. Term of CIC
Agreements
The
initial term of each and every CIC Agreement ends on May 15,
2010, regardless of the date on which an executive enters into a
CIC Agreement with Holly. On May 15, 2009 (and on each
subsequent May 15th) the term of the CIC Agreements will be
automatically extended for one additional year, unless Holly 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&nbs
