At the HEP Special Meeting, the HEP Unitholders will be asked to consider and vote on proposals to
(i) approve the Merger Agreement and the transactions contemplated thereby (the Merger Proposal) and (ii) approve the adjournment of the HEP Special Meeting to a later date or dates, if necessary or appropriate, to solicit
additional proxies in the event there are not sufficient votes at the time of the HEP Special Meeting to approve the Merger Proposal. Pursuant to the Merger Agreement, HF Sinclair has agreed that it will vote, or cause to be voted, all HEP Common
Units then owned beneficially or of record by HF Sinclair or any of its subsidiaries in favor of the Merger Proposal. HF Sinclair currently holds approximately 47% of the issued and outstanding HEP Common Units through its subsidiaries, along with
the non-economic general partner interest and the Special General Partner Interest.
On October 16, 2023, HF
Sinclair filed with the SEC an amended registration statement on Form S-4, which included a notice of meeting and a joint proxy statement/prospectus of HF Sinclair and HEP with respect to (i) the HF Sinclair Stock Issuance Proposal,
(ii) the HF Sinclair Special Meeting, (iii) the Merger Proposal and (iv) the HEP Special Meeting. The registration statement on Form S-4 became effective under the Securities Act of 1933, as amended (the Securities Act), on
October 24, 2023. On October 26, 2023, and in connection with the Merger Agreement and the transactions contemplated thereby, including the HF Sinclair Stock Issuance, the HF Sinclair Special Meeting, the Merger and the HEP Special
Meeting, (i) HF Sinclair filed with the SEC a prospectus pursuant to Rule 424(b)(3) promulgated under the Securities Act (the HF Sinclair Prospectus), and (ii) HEP filed with the SEC a definitive proxy statement on Form DEFM14A
pursuant to Section 14(a) of the Exchange Act (the HEP Proxy Statement). Each of the HF Sinclair Prospectus and the HEP Proxy Statement included a notice of meeting and a proxy statement/prospectus (the Joint Proxy
Statement/Prospectus). HF Sinclair and HEP first mailed the Joint Proxy Statement/Prospectus to HF Sinclair Stockholders and HEP Unitholders on or about October 26, 2023. A copy of the Joint Proxy Statement/Prospectus is attached hereto
as Exhibit (a)(1). A copy of the Merger Agreement is attached as Annex A to the Joint Proxy Statement/Prospectus. All references in this Amended Transaction Statement to Items numbered 1001 to 1016 are references to Items contained in
Regulation M-A under the Exchange Act.
This Amended Transaction Statement is being filed with the SEC to
(i) amend Item 16 of the Schedule 13E-3 to add as exhibit (a)(16) the Current Report on Form 8-K of HF Sinclair, filed with the SEC on October 30, 2023 and incorporated herein by reference and to add as exhibit (a)(17)
the Current Report on Form 8-K of HEP, filed with the SEC on October 30, 2023 and incorporated herein by reference (collectively, the October 30 Form 8-Ks), (ii) provide supplemental disclosure set forth herein, (iii) provide
disclosure regarding amendments to HEPs Credit Agreement (as defined below) and (iv) provide disclosure regarding the Exchange Offers and Consent Solicitations (as defined below).
Supplemental Disclosure
The
October 30 Form 8-Ks disclose the following HEP awards held by directors and executive officers as of October 26, 2023:
HEP Awards Held by
Directors and Executive Officers
The unvested Partnership LTIP Service Awards, Director LTIP Awards, Partnership Performance LTIP Awards and
Partnership Cash Awards outstanding and held by each of the General Partners executive officers and directors as of October 26, 2023 is set forth in the table below.
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Name (1) |
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Partnership Service LTIP Award (#) |
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2020 Partnership Performance LTIP Award (#) (2) |
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2021, 2022 or 2023 Partnership Performance LTIP Award (#) (2) |
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Value of Partnership Cash Award to he Converted to Parent Cash Award ($) |
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Executive Officers |
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Michael C. Jennings(3) |
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John Harrison |
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Robert I. Jamieson |
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28,147 |
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10,488 |
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11,412 |
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$ |
181,123 |
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Vaishali S. Bhatia |
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Non-Employee Directors |
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Larry R. Baldwin |
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11,627 |
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Christine B. LaFollette |
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11,627 |
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James H. Lee |
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11,627 |
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Eric L. Mattson |
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11,627 |
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Mark A. Petersen |
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11,627 |
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(1) |
Additional individuals may have been identified as executive officers or Named Executive
Officers in the most recent HEP Annual Report on Form 10-K, but the following individuals are no longer providing services to HEP as of the date of this joint proxy statement and therefore will
receive no compensation in connection with the Merger: Mr. Mark T. Cunningham (former Senior Vice President, Operations and Engineering) and Mr. Richard L. Voliva (former President). |
(2) |
All Partnership Performance LTIP Awards are reflected at target values. With respect to the 2020 Partnership
Performance LTIP Awards, the awards will be settled using actual performance achievement at the end of the performance period, which may be higher or lower than the target values shown here. |
(3) |
Mr. Jennings is also the Chairperson of the GP Board. |
HEP Credit Agreement
As of
June 30, 2023, HEP had outstanding borrowings of $606 million under its senior secured revolving credit facility pursuant to that certain Third Amended and Restated Credit Agreement dated as of July 27, 2017 by and among HEP, as borrower,
Wells Fargo Bank, National Association, in its capacity as administrative agent, and the lenders party thereto (as amended, restated, supplemented or otherwise modified from time to time, the Credit Agreement). In connection with the
consummation of the Merger, HEP expects to amend the Credit Agreement to, among other things, (a) provide a guaranty from HF Sinclair and terminate all guaranties from subsidiaries of HEP, (b) amend the definition of Investment Grade
Rating in the Credit Agreement to reference the credit rating of HF Sinclairs senior unsecured indebtedness, (c) eliminate the requirement to deliver separate audited and unaudited financial statements for HEP and its subsidiaries
and only provide certain segment-level reporting for HEP with any compliance certificate delivered in accordance with the Credit Agreement and (d) amend certain covenants to eliminate certain restrictions on (i) amendments to intercompany
contracts, (ii) transactions with HF Sinclair and its subsidiaries and (iii) investments in and contributions, dividends, transfers and distributions to HF Sinclair and its subsidiaries. There can be no assurance that the administrative
agent and the lenders party thereto will agree to amend the Credit Agreement in a timely manner, or on acceptable terms, if at all.
Exchange Offers and Consent Solicitations
As of June 30, 2023, HEP had outstanding $400 million aggregate principal amount of 6.375% senior notes due 2027 (the 6.375% Senior
Notes) and $500 million aggregate principal amount of 5.00% senior notes due 2028 (the 5% Senior Notes and, together with the 6.375% Senior Notes, the Senior Notes). On October 30, 2023, HF Sinclair and HEP announced
the commencement of private offers by HF Sinclair to all Eligible Holders (as defined in the Exchange Offer Memorandum) to exchange (the Exchange Offers) any and all outstanding 6.375% Senior Notes and 5% Senior Notes, for new notes to
be issued by HF Sinclair, with registration rights, and cash, pursuant to the terms and subject to the conditions set forth in a confidential exchange offer memorandum and consent solicitation statement, dated October 30, 2023 (the
Exchange Offer Memorandum). Concurrently with the Exchange Offers, HF Sinclair is soliciting consents (the Consent Solicitations) to adopt certain proposed amendments to the indentures governing the existing Senior Notes to,
among other things, eliminate from each HEP indenture, as it relates to each series of Senior Notes (i) substantially all of the restrictive covenants, (ii) certain of the events which may lead to an Event of Default,
(iii) the SEC reporting covenant and (iv) the requirement of HEP to offer to purchase the Senior Notes upon a change of control. The Exchange Offers and the Consent Solicitations will expire at 5:00 p.m., New York City time, on
November 29, 2023, unless extended or terminated. The Exchange Offers and Consent Solicitations are subject to the consummation of the Merger. The Exchange Offers and Consent Solicitations are being made only pursuant to the terms and subject
to conditions set forth in the Exchange Offer Memorandum.
The Exchange Offer Memorandum and other documents relating to the Exchange Offers and Consent
Solicitations will be distributed only to Eligible Holders (as defined in the Exchange Offer Memorandum) of Senior Notes. The Exchange Offers and Consent Solicitations are not being made to holders of Senior Notes in any jurisdiction in which the
making or acceptance thereof would not be in compliance with the securities, blue sky or other laws of such jurisdiction. The new notes to be issued by HF Sinclair have not been approved or disapproved by any regulatory authority, nor has any such
authority passed upon the accuracy or adequacy of the Exchange Offer Memorandum. The complete terms and conditions of the Exchange Offers and Consent Solicitations are described in the Exchange Offer Memorandum.
Pursuant to General Instruction F to Schedule 13E-3, the information contained in the Joint Proxy
Statement/Prospectus, including all annexes thereto, is expressly incorporated herein by reference in its entirety and responses to each item herein are qualified in their entirety by the information contained in the Joint Proxy Statement/Prospectus
and the annexes thereto. The cross-references below are being supplied pursuant to General Instruction G to Schedule 13E-3 and show the location in the Joint Proxy Statement/Prospectus of the information
required to be included in response to the items of Schedule 13E-3. Terms used but not defined in this Amended Transaction Statement have the meanings given to them in the Joint Proxy Statement/Prospectus.
All information concerning HEP contained in, or incorporated by reference into, this Amended Transaction Statement was supplied by HEP. Similarly, all
information concerning any other filing person contained in, or incorporated by reference into, this Amended Transaction Statement was supplied by such filing person.
ITEM 1. |
SUMMARY TERM SHEET |
Regulation M-A Item 1001
The information set forth in the Joint Proxy Statement/Prospectus under the following captions is incorporated herein by reference:
Summary Term Sheet
Questions and Answers
ITEM 2. |
SUBJECT COMPANY INFORMATION |
Regulation M-A Item 1002
(a) |
Name and Address. The information set forth in the Joint Proxy Statement/Prospectus under the following
captions is incorporated herein by reference: |
Summary Term SheetThe Parties
The Parties
(b) |
Securities. The information set forth in the Joint Proxy Statement/Prospectus under the following
captions is incorporated herein by reference: |
Special Meeting of HEP Unitholders
Special FactorsInterests of Certain Persons in the Merger
Special FactorsTreatment of HEP Equity Awards
Comparative Market Prices and Cash Dividend/Distribution Information
(c) |
Trading Market and Price. The information set forth in the Joint Proxy Statement/Prospectus under the
following caption is incorporated herein by reference: |
Comparative Market Prices and Cash
Dividend/Distribution Information
3