LONG-TERM INCENTIVE COMPENSATION
PLAN
As Amended and Restated as of May 24, 2007
(Formerly designated the Holly
Corporation 2000 Stock Option Plan)
1.
Purpose . The purpose of the Holly Corporation Long-Term
Incentive Compensation Plan as amended and restated as of
May 24, 2007 (formerly designated the Holly Corporation 2000
Stock Option Plan) (the “Plan”) is to advance the
interests of Holly Corporation (the “Company”) by
strengthening the ability of the Company and its subsidiaries to
attract, retain and motivate able people of high caliber as
employees, directors and consultants through arrangements that
relate the compensation for such persons to the long-term
performance of the Company. Accordingly, the Plan provides for
granting Incentive Stock Options, Non-Qualified Stock Options,
Restricted Stock Awards, Bonus Stock Awards, Stock Appreciation
Rights, Phantom Stock Awards, Performance Awards or any combination
of the foregoing, as the Committee shall determine.
2.
Definitions . For purposes of the Plan, the following terms
shall be defined as set forth below, in addition to such terms
defined in Section 1 hereof:
(a)
“Amendment Effective Date” means December 12,
2002. The Plan prior to amendment was effective January 1,
2001.
(b)
“Award” means any Option, Restricted Stock Award, Bonus
Stock Award, Stock Appreciation Right, Phantom Stock Award, or
Performance Award, together with any other right or interest
granted to a Participant under the Plan.
(c)
“Beneficiary” means one or more persons, trusts or
other entities that have been designated by a Participant in his or
her most recent written beneficiary designation filed with the
Committee to receive the benefits specified under the Plan upon
such Participant’s death or to which Awards or other rights
are transferred if and to the extent permitted under Section 10(d)
hereof. If, upon a Participant’s death, there is no
designated Beneficiary or surviving designated Beneficiary, then
the term Beneficiary means the persons, trusts or other entities
entitled by will or the laws of descent and distribution to receive
such benefits.
(d)
“Board” means the Company’s board of
directors.
(e)
“Bonus Stock Award” means Shares granted to a
Participant under Section 6(c) hereof.
(f)
“Code” means the Internal Revenue Code of 1986, as
amended from time to time, including regulations thereunder and
successor provisions and regulations thereto.
(g)
“Committee” means a committee of two or more directors
designated by the Board to administer the Plan; provided, however,
that, unless otherwise determined by the Board, the Committee shall
consist solely of two or more directors, each of whom shall be
(i) a “nonemployee director” within the meaning of
Rule 16b-3 under the Exchange Act, and (ii) an
“outside
director” as defined under Section 162(m) of the Code, unless
administration of the Plan by “outside directors” is
not then required in order to qualify for tax deductibility under
Section 162(m) of the Code.
(h)
“Covered Employee” means an Eligible Person who is a
Covered Employee as specified in Section 8(b)(vi) of the
Plan.
(i)
“Disability” means, as determined by the Board in the
sole discretion exercised in good faith of the Board, a physical or
mental impairment of sufficient severity that either the
Participant is unable to continue performing the duties he
performed before such impairment or the Participant’s
condition entitles him to disability benefits under any insurance
or employee benefit plan of the Company or its Subsidiaries and
that impairment or condition is cited by the Company as the reason
for termination of the Participant’s employment or
participation as a member of the Board.
(j)
“Eligible Person” means any current or proposed
officer, director, or key employee or consultant whose services are
deemed to be of potential benefit to the Company or any of its
Subsidiaries. An employee on leave of absence may be considered as
still in the employ of the Company or a Subsidiary for purposes of
eligibility for participation in the Plan.
(k)
“Exchange Act” means the Securities Exchange Act of
1934, as amended from time to time, including rules thereunder and
successor provisions and rules relating thereto.
(l)
“Fair Market Value” means the fair market value as
determined by the Committee. Unless otherwise determined by the
Committee, the Fair Market Value of a Share shall be the closing
price of a Share, on the date on which the determination of Fair
Market Value is being made or if no Shares were traded on such date
then the last trading date prior thereto, as quoted on the
composite transactions table for the American Stock Exchange or, if
the Shares are not then subject to trading on the American Stock
Exchange, then as quoted in a comparable manner on any other
national stock exchange or, if not so quoted, then as reported for
the over-the-counter market on which the largest volume of trading
of Shares has occurred in the 30 trading days prior to the date for
which a determination is made.
(m)
“Incentive Stock Option” means any Option intended to
be and designated as an incentive stock option within the meaning
of Section 422 of the Code or any successor provision
thereto.
(n)
“Non-Qualified Stock Option” means any Option that does
not constitute an Incentive Stock Option.
(o)
“Option” means a right granted to a Participant under
Section 6(a) hereof to purchase Shares or other Awards at a
specified price during specified time periods.
(p)
“Participant” means a person who has been granted an
Award under the Plan which remains outstanding, including a person
who is no longer an Eligible Person.
(q)
“Performance Award” means a right granted to a
Participant under Section 8 hereof to receive cash and/or
other consideration other than Shares based on performance
conditions, as provided in Section 8, measured over a period
of not less than six months nor more than ten years.
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(r)
“Phantom Stock Award” means a right granted to a
Participant under Section 7(b) hereof.
(s)
“Qualified Member” means a member of the Committee who
is a “Non-Employee Director” within the meaning of
Rule 16b-3(b)(3) and an “outside director” within
the meaning of regulation 1.162-27 under Section 162(m) of the
Code.
(t)
“Restricted Stock Award” means Shares granted to a
Participant under Section 6(b) hereof that are subject to certain
restrictions and to a risk of forfeiture.
(u)
“Rule 16b-3” means Rule 16b-3, promulgated by
the Securities and Exchange Commission under Section 16 of the
Exchange Act, as from time to time in effect and applicable to the
Plan and Participants.
(v)
“Securities Act” means the Securities Act of 1933 and
the rules and regulations promulgated thereunder, or any successor
law, as it may be amended from time to time.
(w)
“Shares” means shares of the Company’s common
stock, par value $.01 per share, and such other securities as may
be substituted (or resubstituted) for shares of the Company’s
common stock, par value $.01 per share, pursuant to Section 10
hereof.
(x)
“Stock Appreciation Right” means a right granted to a
Participant under Section 7(a) hereof.
(y)
“Subsidiary” means with respect to the Company, any
corporation or other entity of which at least 50% of the voting
power of the voting equity securities or equity interest is owned,
directly or indirectly, by the Company or any other entity
determined by the Committee to constitute a Subsidiary due to its
relationship to the Company.
(a)
Authority of the Committee . The Plan shall be administered
by the Committee except to the extent the Board elects to
administer all or part of the Plan or except to the extent the
Board appoints a separate committee other than the Committee to
administer all or part of the Plan, in which case references herein
to the “Committee” shall be deemed to include
references to the “Board” and/or such additional
committee, as applicable. To the extent a portion of the Plan is
administered by the Committee, and another portion of the Plan is
administered by the Board and/or a separate committee, references
herein to “Committee” shall be deemed to be references
to the “Board” or such additional committee, as
applicable, but only to the extent the Board or additional
committee administers a portion of the Plan and only with respect
to those portions of the Plan that the Board has elected to
administer or over which the separate committee has been delegated
authority. Subject to the express provisions of the Plan and
Rule 16b-3, the Committee shall have the authority, in its
sole and absolute discretion, to (i) adopt, amend, and rescind
administrative and interpretive rules and regulations relating to
the
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Plan;
(ii) determine the Eligible Persons to whom, and the time or
times at which, Awards shall be granted; (iii) determine the
amount of cash and the number of Options, Restricted Stock Awards,
Bonus Stock Awards, Stock Appreciation Rights, Phantom Stock
Awards, or Performance Awards, or any combination thereof, that
shall be the subject of each Award; (iv) determine the terms
and provisions of each Award agreement (which need not be
identical), including provisions defining or otherwise relating to
(A) the term and the period or periods and extent of
exercisability of Options, (B) the extent to which the
transferability of Shares and Awards is restricted, (C) the
effect of termination of employment of a Participant on the Award,
and (D) the effect of approved leaves of absence (consistent
with any applicable regulations of the Internal Revenue Service);
(v) accelerate the time of exercisability of any Option that has
been granted; (vi) construe the respective Award agreements
and the Plan; (vii) make determinations of the Fair Market
Value of the Shares pursuant to the Plan; (viii) delegate its
duties under the Plan to such agents as it may appoint from time to
time, provided that the Committee may not delegate its duties with
respect to making Awards to, or otherwise with respect to Awards
granted to, Eligible Persons who are subject to Section 16(b) of
the Exchange Act or Section 162(m) of the Code; (ix) subject
to ratification by the Board, terminate, modify, or amend the Plan;
and (x) make all other determinations, perform all other acts,
and exercise all other powers and authority necessary or advisable
for administering the Plan, including the delegation of those
ministerial acts and responsibilities as the Committee deems
appropriate. Subject to Rule 16b-3 and Section 162(m) of the
Code, the Committee may correct any defect, supply any omission, or
reconcile any inconsistency in the Plan, in any Award, or in any
Award agreement in the manner and to the extent it deems necessary
or desirable to carry the Plan into effect, and the Committee shall
be the sole and final judge of that necessity or desirability. The
determinations of the Committee on the matters referred to in this
Section 3(a) shall be final and conclusive.
(b)
Manner of Exercise of Committee Authority . At any time that
a member of the Committee is not a Qualified Member, any action of
the Committee relating to an Award granted or to be granted to a
Participant who is then subject to Section 16 of the Exchange
Act in respect of the Company, or relating to an Award intended by
the Committee to qualify as “performance-based
compensation” within the meaning of Section 162(m) of the
Code and regulations thereunder, may be taken either (i) by a
subcommittee, designated by the Committee, composed solely of two
or more Qualified Members, or (ii) by the Committee but with
each such member who is not a Qualified Member abstaining or
recusing himself or herself from such action; provided, however,
that, upon such abstention or recusal, the Committee remains
composed solely of two or more Qualified Members. Such action,
authorized by such a subcommittee or by the Committee upon the
abstention or recusal of such non-Qualified Member(s), shall be the
action of the Committee for purposes of the Plan. Any action of the
Committee shall be final, conclusive and binding on all persons,
including the Company, its Subsidiaries, stockholders,
Participants, Beneficiaries, and transferees under Section 10(d)
hereof or other persons claiming rights from or through a
Participant. The express grant of any specific power to the
Committee, and the taking of any action by the Committee, shall not
be construed as limiting any power or authority of the Committee.
The Committee may delegate to officers or managers of the Company
or any Subsidiary, or committees thereof, the authority, subject to
such terms as the Committee shall determine, to perform such
functions, including administrative functions, as the Committee may
determine, to the extent that such delegation will not result in
the loss of an exemption under Rule 16b-3(d)(1) for Awards
granted to Participants subject to
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Section 16
of the Exchange Act in respect of the Company and will not cause
Awards intended to qualify as “performance-based
compensation” under Section 162(m) of the Code to fail to so
qualify. The Committee may appoint agents to assist it in
administering the Plan.
(c)
Limitation of Liability . The Committee and each member
thereof shall be entitled to, in good faith, rely or act upon any
report or other information furnished to him or her by any officer
or employee of the Company or a Subsidiary, the Company’s
legal counsel, independent auditors, consultants or any other
agents assisting in the administration of the Plan. Members of the
Committee and any officer or employee of the Company or a
Subsidiary acting at the direction or on behalf of the Committee
shall not be personally liable for any action or determination
taken or made in good faith with respect to the Plan, and shall, to
the fullest extent permitted by law, be indemnified and held
harmless by the Company with respect to any such action or
determination.
4. Shares
Subject to Plan .
(a)
Overall Number of Shares Available for Delivery . Subject to
adjustment in a manner consistent with any adjustment made pursuant
to Section 10 of the Plan, the total number of Shares that may
be delivered in connection with Awards under the Plan shall not
exceed 1,500,000, including all Shares delivered with respect to
Options granted under the Plan prior to the Amendment Effective
Date.
(b)
Application of Limitation to Grants of Awards . No Award may
be granted if (i) the number of Shares to be delivered in
connection with such Award exceeds (ii) the number of Shares
remaining available under the Plan minus the number of Shares
issuable in settlement of or relating to then-outstanding Awards.
The Committee may adopt reasonable counting procedures to ensure
appropriate counting, avoid double counting (as, for example, in
the case of tandem or substitute awards) and make adjustments if
the number of Shares actually delivered differs from the number of
Shares previously counted in connection with an Award.
(c)
Availability of Shares Not Delivered under Awards . Shares
subject to an Award under the Plan that expires or is canceled,
forfeited, settled in cash or otherwise terminated without a
delivery of Shares to the Participant, including (i) the
number of Shares withheld in payment of any exercise price of an
Award or taxes relating to Awards, and (ii) the number of
Shares surrendered in payment of any exercise price of an Award or
taxes relating to any Award, will again be available for Awards
under the Plan, except that if any such Shares could not again be
available for Awards to a particular Participant under any
applicable law or regulation, such Shares shall be available
exclusively for Awards to Participants who are not subject to such
limitation.
(d)
Shares Offered . The Shares to be delivered under the Plan
shall be made available from (i) authorized but unissued
Shares, or (ii) previously issued Shares reacquired by the
Company.
5.
Eligibility; Per Person Award Limitations . Awards may be
granted under the Plan only to Eligible Persons. In each fiscal
year or 12-month period, as applicable, during any part of which
the Plan is in effect, an Eligible Person may not be granted
(a) Awards, provided
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for in
Sections 6 and 7 of the Plan, relating to more than 150,000
Shares, subject to adjustment in a manner consistent with any
adjustment made pursuant to Section 10 of the Plan, or
(b) Awards, provided for in Section 8 of the Plan, with a
value at the time of payment which exceeds the Fair Market Value of
150,000 Shares as of the date of the grant of the Award.
6.
Options, Restricted Stock and Bonus Stock .
(a)
Options . The Committee is authorized to grant Options to
Participants on the following terms and conditions:
(i)
Exercise Price . The exercise price or prices for Shares
under each Option shall be determined by the Committee at the time
the Option is granted, and may be less than, equal to or greater
than, the Fair Market Value of the Shares at the time of the
granting of the Option, provided that the exercise price per Share
for any Option that is intended to be performance-based
compensation under Section 162(m)(4)(C) of the Code or an
Incentive Stock Option under Section 422 of the Code shall not
be less than the Fair Market Value of a Share as of the effective
date of grant of the Option; provided, however, that in the case of
an individual who owns stock possessing more than ten percent of
the total combined voting power of all classes of stock of the
Company or its parent or any Subsidiary, the exercise price per
Share of any Incentive Stock Option under Section 422 of the
Code shall not be less than 110% of the Fair Market Value of a
Share as of the effective date of grant of the Incentive Stock
Option.
(ii)
Time and Method of Exercise . The Committee shall determine
the time or times at which or the circumstances under which an
Option may be exercised in whole or in part (including based on
achievement of performance goals and/or future service
requirements), the methods by which such exercise price may be paid
or deemed to be paid, the form of such payment, including, without
limitation, cash, Shares, other Awards or awards granted under
other plans of the Company or any Subsidiary, or other property
(including notes, to the extent permitted under applicable law, or
other contractual obligations of Participants to make payment on a
deferred basis), and the methods by or forms in which Shares will
be delivered or deemed to be delivered to Participants, including,
but not limited to, the delivery of Restricted Stock Awards subject
to Section 6(b) hereof. In the case of an exercise whereby the
exercise price is paid with Shares, the value of such Shares for
purposes of calculating the exercise price paid shall be the Fair
Market Value. Notwithstanding anything to the contrary herein,
unless otherwise provided in any agreement evidencing an Option, in
the event of the death of a Participant while in the employ of the
Company or one of its Subsidiaries, an Option theretofore granted
to the Participant shall be exercisable within the year succeeding
such death (even if the Option would otherwise expire prior to one
year from the date of death) but only to the extent that the
optionee was entitled to exercise the Option as of the date of
death.
(iii)
Incentive Stock Options . The terms of any Incentive Stock
Option granted under the Plan shall comply in all respects with the
provisions of Section 422 of the Code. Anything in the Plan to
the contrary notwithstanding, no term of the Plan relating to
Incentive Stock Options (including any Stock Appreciation Right in
tandem
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therewith)
shall be interpreted, amended or altered, nor shall any discretion
or authority granted under the Plan be exercised, so as to
disqualify either the Plan or any Incentive Stock Option under
Section 422 of the Code, unless the Participant has first
requested the change that will result in such disqualification.
Incentive Stock Options shall not be granted more than ten years
after the earlier of the adoption of the Plan or the approval of
the Plan by the Company’s stockholders. Notwithstanding the
foregoing, the Fair Market Value of Shares subject to an Incentive
Stock Option and the aggregate Fair Market Value of shares of stock
of any parent or Subsidiary corporation (within the meaning of
Sections 424(e) and (f) of the Code) subject to any other
incentive stock option (within the meaning of Section 422 of
the Code) of the Company or a parent or Subsidiary corporation
(within the meaning of Sections 424(e) and (f) of the Code)
that first becomes purchasable by a Participant in any calendar
year may not (with respect to that Participant) exceed $100,000, or
such other amount as may be prescribed under Section 422 of
the Code or applicable regulations or rulings from time to time. As
used in the previous sentence, Fair Market Value shall be
determined as of the date the Incentive Stock Options are granted.
Failure to comply with this provision shall not impair the
enforceability or exercisability of any Option, but shall cause the
excess amount of Shares to be reclassified in accordance with the
Code. No Incentive Stock Option may be granted after
December 13, 2010.
(b)
Restricted Stock Awards . The Committee is authorized to
grant Restricted Stock Awards to Participants on the following
terms and conditions:
(i)
Grant and Restrictions . Restricted Stock Awards shall be
subject to such restrictions on transferability, risk of forfeiture
and other restrictions, if any, as the Committee may impose, which
restrictions may lapse separately or in combination at such times,
under such circumstances (including based on achievement of
performance goals and/or future service requirements), in such
installments or otherwise, as the Committee may determine at the
date of grant or thereafter. Except to the extent restricted under
the terms of the Plan and any Award agreement relating to the
Restricted Stock Award, a Participant granted a Restricted Stock
Award shall have all of the rights of a stockholder, including the
right to vote the Restricted Stock Award and the right to receive
dividends thereon (subject to any mandatory reinvestment or other
requirement imposed by the Committee). During the restricted period
applicable to the Restricted Stock Award, the Restricted Stock
Award may not be sold, transferred, pledged, hypothecated, margined
or otherwise encumbered by the Participant.
(ii)
Forfeiture . Except as otherwise determined by the
Committee, upon termination of employment during the applicable
restriction period, Restricted Stock Awards that are at that time
subject to restrictions shall be forfeited and reacquired by the
Company; provided that the Committee may provide, by rule or
regulation or in any Award agreement, or may determine in any
individual case, that restrictions or forfeiture co
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