Item 5.02. Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
On October 25, 2022, the Board of Directors of Holly Logistics Services, L.L.C. (the “Company”), the general partner of the general partner of Holly Energy Partners, L.P. (the “Partnership”), adopted the Holly Energy Partners, L.P. Severance Pay Plan (“Plan”) pursuant to which members of senior management or other executives whose services are solely dedicated to the Company, as designated by the Company, will be eligible to receive the severance benefits provided for under the Plan, pursuant to the terms and conditions of the Plan and the individual participation agreements which will specify the terms and conditions for each eligible participant and shall govern to the extent such terms vary from the Plan.
Unless otherwise specified in an individual participation agreement, upon a termination without Cause (as defined below) by the Company, the participant will be eligible to receive the following benefits:
•a cash payment, payable in 12 monthly installments, equal to a percentage of such participant’s annual base salary, plus the amount of bonus, if any, that would have been paid under the annual cash incentive plan (paid as if the Company had achieved target level of performance for the year of the participant’s termination); and
•continuation coverage for the individual and his or her eligible dependents under our group health plans pursuant to the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended, for twelve months at active employee rates, unless such coverage is earlier terminated in accordance with the terms of the Plan.
The applicable percentage of annual base salary and bonus (if any) will be determined based on the officer’s pay grade classification in accordance with the following chart:
| | | | | |
| E3 (CEO) | 200% + 100% target bonus |
| E1, E2 | 100% + 100% target bonus |
| M5 | 100% |
Pursuant to the Plan, a termination for “Cause” means (a) an act or acts of dishonesty by a participant constituting a felony or serious misdemeanor and resulting or intended to result directly in gain or personal enrichment at the expense of the Company or any subsidiary; (b) gross or willful and wanton negligence in the performance of a participant’s material and substantial duties of employment with the Company and its subsidiaries; or (c) a participant’s conviction of a felony involving moral turpitude. The existence of Cause shall be determined by the Company, in its sole and absolute discretion.
As noted above, this Plan applies to senior management and executives whose services are solely dedicated to the Company. The compensation of senior management and executives who also provide services to the ultimate parent of the Company, HF Sinclair Corporation (“HF Sinclair”), which we refer to as “Shared Employees” is solely determined by HF Sinclair. As all named executive officers of the Company are presently Shared Employees, this Plan does not currently apply to any named executive officers of the Company.
The foregoing description of the Plan does not purport to be complete and is qualified in its entirety by reference to the Plan, a copy of which is filed herewith as Exhibit 10.1 and is incorporated by reference herein.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits.
104 Cover Page Interactive Data File (embedded within the Inline XBRL document).