UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D)
OF THE SECURITIES EXCHANGE ACT OF 1934
February 15,
2007 (February 9, 2007)
Date of Report (Date
of earliest event reported)
HOLLY ENERGY PARTNERS, L.P.
(Exact name of registrant as specified in its charter)
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Delaware
(State or other jurisdiction of
incorporation)
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001-32225
(Commission
File Number)
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20-0833098
(IRS Employer
Identification No.) |
100 Crescent Court,
Suite 1600
Dallas, Texas
75201-6927
(Address of principal executive office)
(214) 871-3555
(Registrant’s telephone number, including area code)
Not applicable
(Former name or former address, if changed since last report.)
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions:
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Written communications pursuant to Rule 425 under the Securities Act
(17 CFR 230.425) |
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Soliciting material pursuant to Rule 14a-12 under the Exchange Act
(17 CFR 240.14a-12) |
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Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17 CFR 240.14d-2(b)) |
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Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act (17 CFR 240.13e-4(c)) |
Item 5.02(e). Compensatory Arrangements with Certain Officers.
On
February 9, 2007, the Board of Directors of Holly Corporation (“Holly”), which indirectly owns Holly Logistic
Services, L.L.C. (“HLS”), which is the general partner of the general partner of Holly Energy
Partners, L.P. (the “Partnership”), approved Change
in Control Agreements (the “Agreements”) to be entered into with certain named executive officers
of the Partnership identified in the table below (the “Named Executive Officers”).
The Agreements are subject to an initial three year term, with an automatic one year extension
on the second anniversary of the effective date (and on each anniversary date thereafter) unless a
cancellation notice is given 60 days prior to the second anniversary of the effective date (or any
anniversary date thereafter, as applicable). The Agreements provide that if in connection with or within two years
after a “change in control” of Holly, HLS or the
Partnership (1) the Named Executive Officer is terminated without
“cause,” leaves voluntarily “for good reason,” or
is terminated as a condition of the occurrence of the transaction constituting the
“change in control”, and (2) the Name Executive Officer is not offered employment with Holly or its
related entities on substantially the same terms as his previous employment with HLS within 30 days
after such termination, then the Named Executive Officer will receive the following cash severance
amounts paid by Holly: (i) a cash payment equal to his accrued and unpaid salary, reimbursement of
expenses, and accrued vacation pay, and (ii) a lump sum amount equal to a multiple specified in the
table below for such Named Executive Officer times (A) his annual base salary as of his date of
termination or the date immediately prior to the “change in control,” whichever is greater, and (B)
his annual bonus amount, calculated as the average annual bonus paid to him for the prior three
years. In addition, the Named Executive Officer (and his or her dependents, as applicable) will
receive a continuation of their medical and dental benefits for the number of years indicated in
the table below for such Named Executive Officer. All payments and benefits due under the
Agreement are conditioned on execution and nonrevocation by the Named Executive Officer of a
release for the benefit of Holly, HLS and the Partnership and their related entities and agents.
If amounts payable to a Named Executive Officer under the Agreement (or pursuant to any other
arrangement or agreement with Holly, HLS or the Partnership that are payable as a result of a
change in ownership or control) (collectively, the “Payments”) exceed the amount allowed under
section 280G of the Internal Revenue Code of 1986, as amended (the “Code”), for such Named
Executive Officer by 10% or more, Holly will pay the Named Executive Officer a tax gross up (a
“Gross Up”) in an amount necessary to allow the Named
Executive Officer to retain (after all regular income and Code
Section 280G taxes) a net amount
equal to the total present value of the Payments on the date they are
to be paid (after all regular income taxes but without reduction for
Code Section 280G taxes). Conversely, the
Payments will be cut back if they exceed the Code section 280G limit for a Named Executive Officer
by less than 10%. The determination of whether a Gross Up will be paid will be determined by an
independent public accounting firm selected by Holly and reasonably acceptable to the Named
Executive Officer.
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Years for |
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Continuation of |
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Medical and Dental |
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Cash Severance Multiple |
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Benefits |
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David G. Blair |
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2X |
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2 |
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James G. Townsend |
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1X |
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1 |
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