Exhibit 10.2
EXECUTION
RETENTION AND ASSUMPTION
AGREEMENT
This Retention and Assumption
Agreement (this “Agreement”) is made as of
February 21, 2011, by and among Frontier Oil Corporation, a
Wyoming corporation (“Frontier”), Holly Corporation, a
Delaware corporation (“Holly”), and Doug Aron (the
“Executive”).
1. Preamble . This Agreement
is entered into in contemplation of certain transactions described
in that Agreement and Plan of Merger by and among Holly, North
Acquisition, Inc. and Frontier dated as of February 21, 2011
(the “Merger Agreement”). The undertakings set forth in
Section 2 below shall become effective immediately prior to
the Closing (the “Effective Time”), provided that upon
termination of the Merger Agreement under Article 7 thereof this
Agreement shall terminate and have no effect. Notwithstanding the
above, the parties hereto acknowledge adequate consideration for
the entering into of this Agreement, and this Agreement may not be
terminated or repudiated unilaterally by either party. This
Agreement incorporates a Schedule, attached hereto, and labeled
Schedule A, identifying certain “Restricted Stock
Agreements” as so identified thereon, and certain
“Stock Unit/Restricted Stock Agreements,” also as so
identified thereon, which shall collectively be referred to as the
“Executive Stock Agreements.” Capitalized terms used
and not defined herein have the meanings given such terms in the
Merger Agreement.
2. Waiver . Effective as of
the Effective Time Executive waives the following rights in respect
of any shares of Restricted Stock held under any Executive Stock
Agreement as of the Effective Time (such shares of Restricted
Stock, as held on the date of this Agreement, being listed on
Schedule A):
(a) automatic 100% vesting of the
Restricted Stock under Section 2(c) of any Restricted Stock
Agreement, or under Section 3(c) of any Stock Unit/Restricted
Stock Agreement, upon the occurrence of a “Change in
Control” as such term is defined in the Frontier Oil
Corporation Omnibus Incentive Compensation Plan (the
“Plan”) on account of the filing of the Registration
Statement, the Closing or any other transaction contemplated by the
Merger Agreement,
(b) automatic vesting in full upon a
voluntary termination of employment as described under
Section 7.02(b)(iv) of the Executive’s Change in Control
Severance Agreement dated December 30, 2008 (the
“Severance Agreement”) based solely on a breach by
Holly of the first sentence of Section 3.04 of the Severance
Agreement, and
(c) automatic vesting in full upon a
voluntary termination of employment described under
Section 7.02(c) of the Severance Agreement,
provided that the Executive is not
waiving any other rights, including rights to automatic vesting,
under any other terms of the Executive Stock Agreements or the
Severance Agreement.
1
For clarity, (i) any rights of
the Executive in respect of Frontier Stock Units held under the
Executive Stock Agreements at the Effective Time (including rights
in respect of shares of Frontier Restricted Stock issuable in
exchange for those Frontier Stock Units) shall be unaffected by the
waiver described above, and shall instead be determined under the
terms of the Stock Unit/Restricted Stock Agreements as in effect at
the Effective Time, (ii) any dividends or dividend equivalent
amounts with respect to Frontier Stock Units or Frontier Restricted
Stock under the Executive Stock Agreements accrued but unpaid at
the Effective Time shall be paid out on the Closing, and
(iii) any dividends with respect to Holly Restricted Stock
held pursuant to the Executive Stock Agreements, as assumed by
Holly as provided below, shall be paid as and when such dividends
are paid to holders of unrestricted stock of the same
class.
Effective as of the Effective Time,
the Executive also waives the right to assert that a relocation of
his principal place of employment to Dallas, Texas constitutes a
breach of the Severance Agreement or otherwise constitutes grounds
for a “Termination of Employment” under
Section 7.02(b) of the Severance Agreement.
3. Assumption . At the
Closing, Holly shall assume (a) all of the obligations of
Frontier under the Executive Stock Agreements, which shall then
apply to all of the Holly Restricted Stock issued as contemplated
in Section 2.3(c of the Merger Agreement in respect to
Frontier Restricted Stock h
