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EXHIBIT 10
HOLLY CORPORATION
2000 STOCK OPTION PLAN
1. PURPOSE.
The purpose of this 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 and retain key personnel of high
caliber through encouraging a sense of proprietorship by means of stock
ownership. This Plan replaces the Company's Stock Option Plan as amended in 1990
(the "Prior Plan"), which terminates as to the grant of additional options on
December 31, 2000 but continues after December 31, 2000 to govern options
granted under the Prior Plan.
2. SHARES SUBJECT TO THE PLAN.
The aggregate amount of stock for which options may be granted under this
Plan after December 31, 2000 shall not exceed 750,000 shares of Common Stock of
the Company, par value $0.01 per share (the "Common Stock"). The shares issuable
pursuant to stock options may be authorized and previously unissued shares or
previously issued shares that have been reacquired by the Company. Any share
subject to unexercised portions of options granted under this Plan which shall
have been terminated, been cancelled or expired, may again be subject to options
under this Plan. Notwithstanding the foregoing, no more than 75,000 shares may
be subject to options that are intended to be "performance-based compensation,"
as that term is used in Section 162(m)(4)(C) of the Internal Revenue Code of
1986 as amended (the "Code"), granted to any one Participant in any fiscal year;
solely for purposes of this limitation, options that are cancelled continue to
count against the limit, and options that are repriced are treated as if they
had been cancelled and new grants made. Subject to compliance with requirements
of applicable law, regulations and rules, the limitations set forth in this
Section on the aggregate amount of stock for which options may be granted under
the Plan and on the number of shares that may be subject to options intended to
be "performance-based compensation" are subject to adjustment as provided in
Section 9.
3. ELIGIBILITY.
Options hereunder may be granted to any officer, current or proposed
director, or key employee or consultant whose services are deemed to be of
potential benefit to the Company or any of its wholly-owned or partially-owned
subsidiary corporations or partnerships; provided, however, that incentive stock
options may only be granted to employees of the Company or its subsidiary
corporations (as defined in Section 424(f) of the Code). The Board of Directors
of the Company or the Committee (as defined below) shall determine which persons
are to be granted options hereunder, the number of options, the number of shares
subject to each option, the exercise price or prices of each option, the period
of each option, limitations (if any) on exercisability of each option (including
the $100,000 limit on incentive stock options first exercisable by an individual
in any calendar year), limitations (if any) on the transferability of each
option (provided that any incentive stock options shall be non-transferable
other than at death, and during the employee's lifetime may be exercised only by
the employee), whether such option shall be treated as an incentive stock option
under Section 422 of the Code or as a nonqualified option, and such other terms
and conditions of each option, if any, as are not inconsistent with the
provisions of this Plan.
4. ADMINISTRATION.
The Plan shall be administered by the Board of Directors of the Company,
or, if the Board of Directors so chooses, by a Committee. The term "Committee"
refers to the Stock Option Committee or other committee of the Board of
Directors duly appointed to administer the Plan and having such powers as may be
specified by the Board of Directors. Unless the powers of the Committee have
been specifically limited by the Board of Directors, the Committee shall have
all of the powers of the Board of Directors granted herein, including, without
limitation, the power to amend or terminate the Plan at any time, subject to the
terms of the Plan and
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any applicable limitations imposed by law. The Committee may appoint a
subcommittee (the "Outside Directors Committee") of two or more outside
directors as defined for purposes of Section 162(m)(4)(C) of the Internal
Revenue Code of 1986 (the "Code"). The Outside Directors Committee, if
appointed, shall have the exclusive authority to approve grants under the Plan
to the chief executive officer of the Company and to other executive officers
whose compensation may otherwise exceed the deduction limit of Section 162(m) of
the Code. Grants approved by the Outside Directors Committee will be subject to
ratification by the Committee as a whole or by the Board of Directors if the
Board of Directors so provides in authorizing the Committee. Subsequent
references in this Plan to the "Board" shall include the Committee, if one is
appointed. Options under the Plan may be granted only by the Board. Stock Option
Agreements, in form as approved by the Board, and containing such terms and
conditions not inconsistent with the provisions of this Plan as shall have been
determined by the Board, may be executed on behalf of the Company by the
Chairman of the Board and Chief Executive Officer, the President, or any
Executive Vice President of the Company. The Board shall have complete authority
to construe, interpret and administer this Plan; to prescribe, amend and rescind
rules and regulations pertaining to it; and to make all other determinations
necessary or deemed advisable in the administration of the Plan. The
determinations, interpretation and construction made by the Board with respect
to any aspect of the Plan and any option granted pursuant thereto shall be final
and conclusive.
5. OPTION PRICE.
The purchase price or prices for Common Stock under each option shall be
determined by the Board at the time the option is granted, and may be less than,
equal to or greater than the fair market value of the Common Stock 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 be not less than the fair market value of a share of Common Stock as
of the effective date of grant of the option (or such greater amount as may be
required by applicable provisions of the Code). The optionee may pay the
purchase price upon exercise of a stock option in cash, by check or cash
equivalent, or, with the consent of the Board, (i) by tender to the Company, or
attestation to the ownership, of shares of Common Stock owned by the optionee
having a fair market value (based upon the closing price of the Common Stock on
the date immediately preceding the date of exercise as listed in The Wall Street
Journal (Southwest Edition)) not less than the exercise price, (ii) by the
assignment of the proceeds of a sale or loan with respect to some or all of the
shares being acquired upon the exercise of the option (including, without
limitation, through an exercise complying with the provisions of Regulation T as
promulgated from time to time by the Board of Governors of the Federal Reserve
System) (a "Cashless Exercise"), (iii) by the optionee's promissory note in a
form approved by the Board, (iv) by such other consideration to the extent
permitted by applicable law, or (v) by any combination thereof. The Board may at
any time or from time to time, by adoption of or by amendment to the standard
form of Stock Option Agreement, or by other means, grant options that permit
some or all of the foregoing forms of consideration to be used in payment of the
exercise price or that otherwise restrict the use of one or more forms of
consideration specified in this Section 5.
6. TERMS OF OPTION AND LIMITATIONS ON RIGHT TO EXERCISE.
The period during which such option granted pursuant to this Plan may be
exercised in whole or in part shall be determined by the Board with respect to
each option, at the time of grant, provided that no option granted pursuant to
this Plan shall, by its terms, be exercisable more than ten years after the date
of its grant (five years in the case of an incentive stock option granted to a
ten percent stockholder), other than in the event of the death of an optionee as
provided in Section 8. The Company shall not be obligated to issue any
fractional shares (nor shares in lots of less than 100 shares) upon the exercise
of any options granted under this Plan. No optionee nor his legal
representatives, legatees or distributees, as the case may be, will be, or will
be deemed to be, a holder of any shares subject to an option unless and until
said option has been exercised and the purchase price of the shares in respect
of which it has been exercised has been paid.
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7. TERMINATION OF EMPLOYMENT.
The Board shall determine at the time each option is granted what limits
shall apply to the exercise of the option in the event an optionee shall cease
to be employed by the Company or a subsidiary for any reason other than death.
Neither this Plan nor any option granted hereunder is intended to confer upon
any optionee any rights with respect to continuance of employment or other
utilization of his services by the Company or by a subsidiary or affiliate, nor
to interfere in any way with his right or that of his employer to terminate his
employment or other services at any time (subject to the terms of any written
employment contract).
8. DEATH OF OPTIONEE.
Unless otherwise provided as a term of any option granted under this Plan,
in the event of the death of an optionee while in the employ of the Company or
of a subsidiary or affiliate, the option theretofore granted to him shall be
exercisable within the year next 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 at the date of his
death.
9. DILUTION OR OTHER ADJUSTMENTS.
In the event that there is any change in the Common Stock subject to being
optioned under this Plan or subject to options granted hereunder, through
merger, consolidation, reorganization or recapitalization or in the event of any
stock split or dividend to holders of such stock payable in stock of the same
class or the issuance to such holders of rights to subscribe to stock of the
same class, or in the event of any change in the capital structure of the
Company, the Board shall, subject to any requirements of applicable law,
regulations and rules, make such adjustments with respect to any provision or
provisions of the Plan, including but not limited to the limitations on options
that may be granted under the Plan as set forth in Section 2, and with respect
to options theretofore granted under the Plan as the Board deems appropriate to
prevent dilution or enlargement of option rights. The determinations of the
Board pursuant to this Section 9 shall be final, binding and conclusive.
10. EXPIRATION AND TERMINATION OF THE PLAN.
Authority to grant stock options under the Plan will expire on December 31,
2010 (except that no incentive stock options may be granted later than ten years
from the date of stockholder approval of the Plan). Options may be granted prior
to the expiration of the Plan as long as the total number of shares which may be
issued pursuant to options granted and outstanding under this Plan does not
(except as provided in Section 9 above) exceed the limitation of Section 2
above. This Plan may be abandoned or terminated at any time by the Board except
with respect to any options then outstanding under the Plan.
11. RESTRICTION ON ISSUANCE OF SHARES.
The Company shall not be obligated to sell or issue any shares upon the
exercise of any option granted under this Plan unless
(a) the shares with respect to which the option is being exercised
have been registered under applicable federal securities laws or are exempt
from such registration;
(b) the prior approval of such sale or issuance has been obtained from
any State regulatory body having jurisdiction; and
(c) in the event the stock has been listed on any stock exchange, the
shares with respect to which the option is being exercised have been duly
listed on such exchange in accordance with the procedure specified
therefor.
If shares to be issued upon the exercise of any option granted under the Plan
are intended to be issued by the Company in reliance upon exemptions from the
registration requirements of applicable federal securities laws, to enable the
Company to avail itself of such exemptions the optionee, if so requested by the
Company, shall
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furnish to the Company such evidence and representations satisfactory to it as
may be reasonably necessary with respect to such exemptions.
12. PROCEEDS.
The proceeds to be derived by the Company upon exercise of any option
granted under this Plan will be used for general corporate purposes.
13. RIGHT OF COMPANY TO TERMINATE OPTIONS.
In the event of (i) an acquisition of substantially all of the assets of
the Company or of a greater than 80% stock interest in the Company by an entity
in which the Company does not have a 50% or greater interest prior to such
acquisition or (ii) a recapitalization involving a fundamental change in the
capital structure of the Company, the Company shall have the right to terminate
all outstanding options, whether or not currently exercisable, under this Plan
upon payment to each optionee of an amount equal to the current market value of
the shares that could be acquired upon exercise of the optionee's option less
the exercise price with respect to that option. Upon tender of payment by the
Company to an optionee pursuant to this provision, the option held by such
optionee shall automatically terminate. Alternatively, the Company, in its
discretion, may make arrangements in such circumstances for the acquiring or
surviving corporation to assume any or all outstanding options and substitute on
equitable terms options on the stock of such acquiring or surviving corporation.
14. AMENDMENT OF THE PLAN.
The Board may terminate or amend the Plan at any time. Subject to changes
in applicable law, regulations or rules that would permit otherwise, without the
approval of the Company's stockholders, there may be (a) no change in the
material provisions regarding performance-based compensation pursuant to Section
162(m)(4)(C) of the Code, and (b) no other amendment of the Plan that would
require approval of the Company's stockholders under any applicable law,
regulation, rule, or applicable stock exchange listing requirement. No
termination or amendment of the Plan may adversely affect any then outstanding
option, or any unexercised portion thereof, without the consent of the optionee,
unless such termination or amendment is required to comply with any applicable
law, regulation, rule, or applicable stock exchange listing requirement.
15. STOCKHOLDERS' APPROVAL.
The Plan is expressly made subject to approval by the affirmative votes of
the holders of a majority of the outstanding shares of the Common Stock of the
Company present, or represented, and entitled to vote at a meeting of the
stockholders of the Company; if such approval has not been obtained on or before
September 22, 2001, the Plan shall not enter into effect.
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