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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-Q
(Mark One)
☑QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 2022
or
☐TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from                      to                     
Commission file number 001-38142
DELEK US HOLDINGS, INC.
(Exact name of registrant as specified in its charter)
Delaware
dk-20220331_g1.jpg
35-2581557
(State or other jurisdiction of incorporation or organization)(I.R.S. Employer Identification No.)
7102 Commerce Way
Brentwood
Tennessee
37027
(Address of principal executive offices)
(Zip Code)
(615) 771-6701
(Registrant’s telephone number, including area code)
Not Applicable
(Former name, former address and former fiscal year, if changed since last report)
Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☑ No ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☑ No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company" and "emerging growth company" in Rule 12b-2 of the Exchange Act.
Large accelerated filer ☑Accelerated filer ☐Non-accelerated filer ☐Smaller reporting company ☐Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☑
Securities registered pursuant to Section 12(b) of the Act:
Title of Each ClassTrading SymbolName of Each Exchange on Which Registered
Common Stock, par value $0.01DKNew York Stock Exchange
At April 29, 2022, there were 70,745,085 shares of common stock, $0.01 par value, outstanding (excluding securities held by, or for the account of, the Company or its subsidiaries).

Table of Contents
Delek US Holdings, Inc.
Quarterly Report on Form 10-Q
For the Quarterly Period Ended March 31, 2022
  
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2 |
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Financial Statements
Part I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
Delek US Holdings, Inc.
Condensed Consolidated Balance Sheets (Unaudited)
(In millions, except share and per share data)

March 31, 2022
December 31, 2021 As Adjusted (1)
ASSETS  
Current assets:  
Cash and cash equivalents$854.1 $856.5 
Accounts receivable, net1,405.0 776.6 
Inventories, net of inventory valuation reserves1,624.2 1,260.7 
Other current assets309.1 126.0 
Total current assets4,192.4 3,019.8 
Property, plant and equipment:  
Property, plant and equipment3,675.0 3,645.4 
Less: accumulated depreciation(1,401.0)(1,338.1)
Property, plant and equipment, net2,274.0 2,307.3 
Operating lease right-of-use assets196.0 208.5 
Goodwill729.4 729.7 
Other intangibles, net103.7 102.7 
Equity method investments347.8 344.1 
Other non-current assets103.4 100.5 
Total assets $7,946.7 $6,812.6 
LIABILITIES AND STOCKHOLDERS’ EQUITY  
Current liabilities:  
Accounts payable$2,548.1 $1,695.3 
Current portion of long-term debt82.1 92.2 
Obligation under Supply and Offtake Agreements589.3 487.5 
Current portion of operating lease liabilities52.2 53.9 
Accrued expenses and other current liabilities1,032.3 797.8 
Total current liabilities4,304.0 3,126.7 
Non-current liabilities:  
Long-term debt, net of current portion2,130.7 2,125.8 
Environmental liabilities, net of current portion109.2 109.5 
Asset retirement obligations38.5 38.3 
Deferred tax liabilities218.7 214.5 
Operating lease liabilities, net of current portion141.0 152.0 
Other non-current liabilities29.9 31.8 
Total non-current liabilities2,668.0 2,671.9 
Stockholders’ equity:  
Preferred stock, $0.01 par value, 10,000,000 shares authorized, no shares issued and outstanding
— — 
Common stock, $0.01 par value, 110,000,000 shares authorized, 88,320,612 shares and 91,772,080 shares issued at March 31, 2022 and December 31, 2021, respectively
0.9 0.9 
Additional paid-in capital1,156.0 1,206.5 
Accumulated other comprehensive loss(3.9)(3.8)
Treasury stock, 17,575,527 shares, at cost, as of March 31, 2022 and December 31, 2021
(694.1)(694.1)
Retained earnings391.3 384.7 
Non-controlling interests in subsidiaries124.5 119.8 
Total stockholders’ equity974.7 1,014.0 
Total liabilities and stockholders’ equity$7,946.7 $6,812.6 
(1) Adjusted to reflect the retrospective change in accounting policy from LIFO to FIFO for certain inventories. See Note 6 for further discussion.

See accompanying notes to condensed consolidated financial statements
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Financial Statements
Delek US Holdings, Inc.
Condensed Consolidated Statements of Income (Unaudited)
(In millions, except share and per share data)
Three Months Ended
March 31,
2021
 2022
As Adjusted (1)
Net revenues$4,459.1 $2,392.2 
Cost of sales: 
Cost of materials and other4,152.5 2,172.8 
Operating expenses (excluding depreciation and amortization presented below)139.5 129.9 
Depreciation and amortization62.7 62.3 
Total cost of sales4,354.7 2,365.0 
Operating expenses related to retail and wholesale business (excluding depreciation and amortization presented below)27.4 25.4 
General and administrative expenses53.1 41.1 
Depreciation and amortization5.6 6.2 
Other operating (income) expense, net(28.4)1.9 
Total operating costs and expenses4,412.4 2,439.6 
Operating income (loss)46.7 (47.4)
Interest expense, net38.4 29.4 
Income from equity method investments(10.9)(4.8)
Other expense (income), net1.3 (1.0)
Total non-operating expense, net28.8 23.6 
Income (loss) before income tax expense (benefit)17.9 (71.0)
Income tax expense (benefit)3.1 (8.3)
Net income (loss)14.8 (62.7)
Net income attributed to non-controlling interests8.2 7.3 
Net income (loss) attributable to Delek $6.6 $(70.0)
Basic income (loss) per share$0.09 $(0.95)
Diluted income (loss) per share$0.09 $(0.95)
(1) Adjusted to reflect the retrospective change in accounting policy from LIFO to FIFO for certain inventories. See Note 6 for further discussion.

See accompanying notes to condensed consolidated financial statements
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Financial Statements
Delek US Holdings, Inc.
Condensed Consolidated Statements of Comprehensive Income (Unaudited)
(In millions)
Three Months Ended
March 31,
2021
 2022
As Adjusted (1)
Net income (loss)$14.8 $(62.7)
Other comprehensive income (loss):
Commodity contracts designated as cash flow hedges:
Comprehensive loss on commodity contracts designated as cash flow hedges, net of taxes— (0.2)
Other loss , net of taxes(0.1)— 
Total other comprehensive loss(0.1)(0.2)
Comprehensive income (loss)14.7 (62.9)
Comprehensive income attributable to non-controlling interest8.2 7.3 
Comprehensive income (loss) attributable to Delek$6.5 $(70.2)
(1) Adjusted to reflect the retrospective change in accounting policy from LIFO to FIFO for certain inventories. See Note 6 for further discussion.

See accompanying notes to condensed consolidated financial statements

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Financial Statements
Delek US Holdings, Inc.
Condensed Consolidated Statements of Changes in Stockholders' Equity (Unaudited)
(In millions, except share and per share data)

Three Months Ended March 31, 2022
Common StockAdditional Paid-in CapitalAccumulated Other Comprehensive IncomeRetained EarningsTreasury StockNon-Controlling Interest in SubsidiariesTotal Stockholders' Equity
SharesAmountSharesAmount
Balance at December 31, 2021, As Adjusted (1)
91,772,080$0.9 $1,206.5 $(3.8)$384.7 (17,575,527)$(694.1)$119.8 $1,014.0 
Net income—— — — 6.6 — — 8.2 14.8 
Distributions to non-controlling interests—— — — — — — (8.7)(8.7)
Equity-based compensation expense—— 5.3 — — — — 0.1 5.4 
Sale of Delek Logistic common limited partner units, net— — 8.5 — — — — 5.1 13.6 
Purchase of Delek common stock from IEP Energy Holding LLC(3,497,268)— (64.0)— — — — — (64.0)
Taxes paid due to the net settlement of equity-based compensation—— (0.3)— — — — — (0.3)
Exercise of equity-based awards45,800 — — — — — — — — 
Other— — — (0.1)— — — — (0.1)
Balance at March 31, 2022
88,320,612 $0.9 $1,156.0 $(3.9)$391.3 (17,575,527)$(694.1)$124.5 $974.7 

Three Months Ended March 31, 2021
Common StockAdditional Paid-in CapitalAccumulated Other Comprehensive Income
Retained Earnings As Adjusted (1)
Treasury StockNon-Controlling Interest in Subsidiaries
Total Stockholders' Equity
As Adjusted (1)
SharesAmountSharesAmount
Balance at December 31, 2020
91,356,868 $0.9 $1,185.1 $(7.2)$522.0 (17,575,527)$(694.1)$118.4 $1,125.1 
Cumulative effect of change in accounting method for certain inventory from LIFO to FIFO, net— — — — (8.7)— — — (8.7)
Net (loss) income— — — — (70.0)— — 7.3 (62.7)
Other comprehensive loss related to commodity contracts, net— — — (0.2)— — — — (0.2)
Distribution to non-controlling interest— — — — — — — (8.0)(8.0)
Equity-based compensation expense— — 4.6 — — — — — 4.6 
Taxes paid due to the net settlement of equity-based compensation— — (1.1)— — — — — (1.1)
Exercise of equity-based awards93,856 — — — — — — — — 
Other— — — — (0.2)— — — (0.2)
Balance at March 31, 2021, As Adjusted (1)
91,450,724 $0.9 $1,188.6 $(7.4)$443.1 (17,575,527)$(694.1)$117.7 $1,048.8 
(1) Adjusted to reflect the retrospective change in accounting policy from LIFO to FIFO for certain inventories. See Note 6 for further discussion.

See accompanying notes to condensed consolidated financial statements
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Financial Statements
Delek US Holdings, Inc.
Condensed Consolidated Statements of Cash Flows (Unaudited)
(In millions)
 Three Months Ended March 31,
2021
2022
As Adjusted (1)
Cash flows from operating activities:
Net income (loss)$14.8 $(62.7)
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:  
Depreciation and amortization68.3 68.5 
Non-cash lease expense 13.4 15.3 
Deferred income taxes10.4 8.9 
Income from equity method investments(10.9)(4.8)
Dividends from equity method investments6.6 5.7 
Non-cash lower of cost or market/net realizable value adjustment(8.5)0.8 
Equity-based compensation expense5.4 4.6 
Other 4.7 3.9 
Changes in assets and liabilities:  
Accounts receivable(628.4)(192.3)
Inventories and other current assets(465.2)(343.6)
Fair value of derivatives(68.3)(91.9)
Accounts payable and other current liabilities988.6 510.3 
Obligation under Supply and Offtake Agreements101.8 51.6 
Non-current assets and liabilities, net(5.9)(8.6)
Net cash provided by (used in) operating activities26.8 (34.3)
Cash flows from investing activities:  
Equity method investment contributions— (1.5)
Distributions from equity method investments0.6 4.0 
Purchases of property, plant and equipment(29.5)(48.3)
Purchase of intangible assets(2.4)(0.5)
Proceeds from sale of property, plant and equipment1.0 0.2 
Insurance proceeds0.1 — 
Net cash used in investing activities(30.2)(46.1)
Cash flows from financing activities:  
Proceeds from long-term revolvers415.1 609.0 
Payments on long-term revolvers(409.0)(568.1)
Payments on term debt(13.3)(23.3)
Proceeds from product financing agreements317.9 277.2 
Repayments of product financing agreements(253.1)(199.3)
Taxes paid due to the net settlement of equity-based compensation(0.3)(1.1)
Distribution to non-controlling interest(8.7)(8.0)
Proceeds from sale of Delek Logistics LP common limited partner units16.4 — 
Purchase of Delek common stock from IEP Energy Holding LLC(64.0)— 
Net cash provided by financing activities1.0 86.4 
Net (decrease) increase in cash and cash equivalents(2.4)6.0 
Cash and cash equivalents at the beginning of the period856.5 787.5 
Cash and cash equivalents at the end of the period$854.1 $793.5 

Delek US Holdings, Inc.
Condensed Consolidated Statements of Cash Flows (Unaudited) (continued)
(In millions)


Three Months Ended March 31,
2021
2022
As Adjusted (1)
Supplemental disclosures of cash flow information:  
Cash paid during the period for:  
Interest, net of capitalized interest of $0.4 million in both the 2022 and 2021 periods
$24.4 $142.1 
Income taxes$1.0 $0.1 
Non-cash investing activities: 
Increase in accrued capital expenditures$3.4 $18.8 
Non-cash financing activities:
Non-cash lease liability arising from obtaining right of use assets during the period$1.5 $19.6 
(1) Adjusted to reflect the retrospective change in accounting policy from LIFO to FIFO for certain inventories. See Note 6 for further discussion.


See accompanying notes to condensed consolidated financial statements
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Notes to Condensed Consolidated Financial Statements (Unaudited)

Note 1 - Organization and Basis of Presentation
Delek US Holdings, Inc. operates through its consolidated subsidiaries, which include Delek US Energy, Inc. ("Delek Energy") (and its subsidiaries) and Alon USA Energy, Inc. ("Alon") (and its subsidiaries). The terms "we," "our," "us," "Delek" and the "Company" are used in this report to refer to Delek and its consolidated subsidiaries. Delek's common stock is listed on the New York Stock Exchange ("NYSE") under the symbol "DK."
Our condensed consolidated financial statements include the accounts of Delek and its subsidiaries. Certain information and footnote disclosures normally included in annual financial statements prepared in accordance with United States ("U.S.") Generally Accepted Accounting Principles ("GAAP") have been condensed or omitted, although management believes that the disclosures herein are adequate to make the financial information presented not misleading. Our unaudited condensed consolidated financial statements have been prepared in conformity with GAAP applied on a consistent basis with those of the annual audited consolidated financial statements included in our Annual Report on Form 10-K filed with the Securities and Exchange Commission ("SEC") on February 25, 2022 (the "Annual Report on Form 10-K") and in accordance with the rules and regulations of the SEC. These unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and the notes thereto for the year ended December 31, 2021 included in our Annual Report on Form 10-K.
Our condensed consolidated financial statements include Delek Logistics Partners, LP ("Delek Logistics", NYSE:DKL), which is a variable interest entity ("VIE"). As the indirect owner of the general partner of Delek Logistics, we have the ability to direct the activities of this entity that most significantly impact its economic performance. We are also considered to be the primary beneficiary for accounting purposes for this entity and are Delek Logistics' primary customer. As Delek Logistics does not derive an amount of gross margin material to us from third parties, there is limited risk to Delek associated with Delek Logistics' operations. However, in the event that Delek Logistics incurs a loss, our operating results will reflect such loss, net of intercompany eliminations, to the extent of our ownership interest in this entity.
In the opinion of management, all adjustments necessary for a fair presentation of the financial condition and the results of operations for the interim periods have been included. All significant intercompany transactions and account balances have been eliminated in consolidation. All adjustments are of a normal, recurring nature. Operating results for the interim period should not be viewed as representative of results that may be expected for any future interim period or for the full year.
Accounting Policies
With the exception of the policy updates below, there have been no new or material changes to the significant accounting policies discussed in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2021.
Risks and Uncertainties Related to the COVID-19 Pandemic
During the quarter ended March 31, 2022, the economic environment in which we operate continued to improve as a result of the widespread availability of vaccines and testing in the U.S. over recent months which, in turn, has contributed to return to work, return to schools, and increased travel, with a corresponding increase in the demand for vehicle motor fuel and jet fuel. While we continue to face uncertainties around the COVID-19 Pandemic in terms of new variants, these stabilization trends as well as other factors impacting demand for our products, such as the global supply constraints caused by the military conflict between Russia and the Ukraine have mitigated the risks that remaining Pandemic-related uncertainties could have a material adverse impact on our financial position or results of operations. While these remaining uncertainties did not have a material impact on the preparation of our unaudited financial statements as of and for the three months ended March 31, 2022, to the extent these uncertainties were identified and were believed to have had a material impact on our prior year period results of operations or financial position based on the requirements for assessing such financial statement impact under GAAP, we have considered them in the preparation of our unaudited financial statements as of and for the three months ended March 31, 2022. The application of accounting policies impacted by such considerations include (but are not necessarily limited to) the following:
•The interim evaluation of indefinite-lived intangibles and goodwill for potential impairment, where indicators exist, as defined by GAAP;
•The interim evaluation of long-lived assets for potential impairment, where indicators exist, as defined by GAAP;
•The interim evaluation of joint ventures for potential impairment, where indicators exist, as defined by GAAP;
•The evaluation of derivatives and hedge accounting for counterparty risk and changes in forecasted transactions, as provided for under GAAP;
•The evaluation of inventory valuation allowances that may be warranted under the lower of cost or net realizable value analysis, for first-in, first-out (“FIFO”) costing method, pursuant to GAAP;
•The consideration of debt modifications and/or covenant requirements, as applicable;
•The evaluation of commitments and contingencies, including changes in concentrations, as applicable;
•The interim evaluation of the impact of changing forecasts on our assessment of deferred tax asset valuation allowances and annual effective tax rates; and
•The interim evaluation of our ability to continue as a going concern.
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Notes to Condensed Consolidated Financial Statements (Unaudited)
Change in Accounting Principle
As of January 1, 2022, we changed our method for accounting for inventory held at the Tyler Refinery to the FIFO costing method from the last-in, first-out ("LIFO") costing method, which will conform the Company’s refining inventory to a single method of accounting. Total inventories accounted for using LIFO, prior to the accounting method change, comprised 28.0% of the Company’s total inventories as of December 31, 2021. This change in accounting method is preferable because it provides better consistency across our refineries and improves transparency, and results in recognition that better reflects the physical flow of inventory and more accurately reflects the current value of inventory. The effects of this change have been retrospectively applied to all periods presented with a cumulative effect adjustment reflected in the January 1, 2021 beginning retained earnings. See Note 6 - Inventory for additional information.
Reclassifications
Certain prior period amounts have been reclassified in order to conform to the current period presentation.
New Accounting Pronouncements Adopted During 2022
ASU 2020-06, Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity's Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity
In August 2020, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2020-06, which is intended to simplify the accounting for certain financial instruments with characteristics of liabilities and equity, including convertible instruments and contracts in an entity's own equity. The pronouncement is effective for fiscal years and interim periods within those fiscal years beginning after December 15, 2021. We adopted this guidance on January 1, 2022 and the adoption did not have a material impact on our business, financial condition or results of operations.
Accounting Pronouncements Not Yet Adopted
ASU 2020-04, Facilitation of the Effects of Reference Rate Reform on Financial Reporting (Topic 848)
In March 2020, the FASB issued an amendment which is intended to provide temporary optional expedients and exceptions to GAAP guidance on contracts, hedge accounting and other transactions affected by the expected market transition from the London Interbank Offered Rate ("LIBOR") and other interbank rates. This guidance is effective for all entities at any time beginning on March 12, 2020 through December 31, 2022 and may be applied from the beginning of an interim period that includes the issuance date of the ASU. The Company is currently evaluating the impact this guidance may have on its condensed consolidated financial statements and related disclosures.

Note 2 - Segment Data
We aggregate our operating units into three reportable segments: Refining, Logistics, and Retail. Operations that are not specifically included in the reportable segments are included in Corporate, Other and Eliminations, which consist of the following:
•our corporate activities;
•results of certain immaterial operating segments, including our Canadian crude trading operations (as discussed in Note 9);
•wholesale crude operations;
•Alon's asphalt terminal operations; and
•intercompany eliminations.
Decisions concerning the allocation of resources and assessment of operating performance are made based on this segmentation. Management measures the operating performance of each of the reportable segments based on the segment contribution margin. Segment contribution margin is defined as net revenues less cost of materials and other and operating expenses, excluding depreciation and amortization.
Refining Segment
The refining segment processes crude oil and other feedstocks for the manufacture of transportation motor fuels, including various grades of gasoline, diesel fuel and aviation fuel, asphalt and other petroleum-based products that are distributed through owned and third-party product terminals. The refining segment has a combined nameplate capacity of 302,000 barrels per day ("bpd") as of March 31, 2022, including the following:
•75,000 bpd Tyler, Texas refinery (the "Tyler refinery");
•80,000 bpd El Dorado, Arkansas refinery (the "El Dorado refinery");
•73,000 bpd Big Spring, Texas refinery (the "Big Spring refinery"); and
•74,000 bpd Krotz Springs, Louisiana refinery (the "Krotz Springs refinery").
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Notes to Condensed Consolidated Financial Statements (Unaudited)
The refining segment also owns and operates three biodiesel facilities involved in the production of biodiesel fuels and related activities, located in Crossett, Arkansas, Cleburne, Texas and New Albany, Mississippi. The biodiesel industry has historically been substantially aided by federal and state tax incentives. One tax incentive program that has been significant to our renewable fuels facilities is the federal blender's tax credit (also known as the biodiesel tax credit or "BTC"). The BTC provides a $1.00 refundable tax credit per gallon of pure biodiesel to the first blender of biodiesel with petroleum-based diesel fuel. The blender's tax credit was re-enacted in December 2019 for the years 2020 through 2022.
On May 7, 2020, we sold our equity interests in Alon Bakersfield Property, Inc., an indirect wholly-owned subsidiary that owned our non-operating refinery located in Bakersfield, California, to a subsidiary of Global Clean Energy Holdings, Inc. (“GCE”). As part of the transaction, GCE granted a call option to Delek to acquire up to a 33 1/3% limited member interest in the acquiring subsidiary of GCE for up to $13.3 million, subject to certain adjustments. Such option is exercisable by Delek through the 90th day after GCE demonstrates commercial operations, as contractually defined, which has not yet occurred as of March 31, 2022.
The refining segment's petroleum-based products are marketed primarily in the south central, southwestern and western regions of the United States. This segment also ships and sells gasoline into wholesale markets in the southern and eastern United States. Motor fuels are sold under the Alon or Delek brand through various terminals to supply Alon or Delek branded retail sites. In addition, Alon sells motor fuels through its wholesale distribution network on an unbranded basis.
Logistics Segment
Our logistics segment owns and operates crude oil and refined products logistics and marketing assets. The logistics segment generates revenue by charging fees for gathering, transporting and storing crude oil and for marketing, distributing, transporting and storing intermediate and refined products in select regions of the southeastern United States and West Texas for our refining segment and third parties, and sales of wholesale products in the West Texas market.
Retail Segment
Our retail segment consists of 248 owned and leased convenience store sites as of March 31, 2022, located primarily in West Texas and New Mexico. These convenience stores typically offer various grades of gasoline and diesel primarily under the Alon or Delek brand name and food products, food service, tobacco products, non-alcoholic and alcoholic beverages, general merchandise as well as money grams to the public, primarily under the 7-Eleven and DK or Alon brand names. Substantially all of the motor fuel sold through our retail segment is supplied by our Big Spring refinery, which is transferred to the retail segment at prices substantially determined by reference to published commodity pricing information. In November 2018, we terminated the license agreement with 7-Eleven, Inc. The terms of such agreement and subsequent amendments require the removal of all 7-Eleven branding on a store-by-store basis by December 31, 2023.
Significant Inter-segment Transactions
All inter-segment transactions have been eliminated in consolidation and consist primarily of the following:
•refining segment refined product sales to the retail segment to be sold through the store locations;
•refining segment sales of asphalt and refined product to entities included in corporate, other and eliminations;
•logistics segment service fee revenue under service agreements with the refining segment based on the number of gallons sold and to share a portion of the margin achieved in return for providing marketing, sales and customer services;
•logistics segment sales of wholesale finished product to our refining segment; and
•logistics segment crude transportation, terminalling and storage fee revenue from our refining segment for the utilization of pipeline, terminal and storage assets.

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Notes to Condensed Consolidated Financial Statements (Unaudited)
Business Segment Operating Performance
The following is a summary of business segment operating performance as measured by contribution margin for the period indicated (in millions):

 Three Months Ended March 31, 2022
Refining LogisticsRetailCorporate,
Other and Eliminations		Consolidated
Net revenues (excluding inter-segment fees and revenues)
$3,267.9 $82.8 $209.5 $898.9 $4,459.1 
Inter-segment fees and revenues 225.8 123.8 — (349.6)— 
Operating costs and expenses:     
Cost of materials and other3,276.9 126.2 173.0 576.4 4,152.5 
Operating expenses (excluding depreciation and amortization presented below)119.9 18.1 22.7 6.2 166.9 
Segment contribution margin$96.9 $62.3 $13.8 $(33.3)139.7 
Income from equity method investments0.2 7.0 — 3.7 
Segment contribution margin and income (loss) from equity method investments$97.1 $69.3 $13.8 $(29.6)
Depreciation and amortization$52.8 $10.4 $3.5 $1.6 68.3 
General and administrative expenses
   53.1 
Other operating income, net   (28.4)
Operating income   $46.7 
Capital spending (excluding business combinations)$14.3 $9.1 $3.0 $6.5 $32.9 
 Three Months Ended March 31, 2021
Refining (1)
LogisticsRetailCorporate,
Other and Eliminations
Consolidated (1)
Net revenues (excluding inter-segment fees and revenues)
$1,584.5 $56.7 $174.8 $576.2 $2,392.2 
Inter-segment fees and revenues
155.6 96.2 — (251.8)— 
Operating costs and expenses:     
Cost of materials and other1,615.0 81.1 136.5 340.2 2,172.8 
Operating expenses (excluding depreciation and amortization presented below)114.7 14.9 21.6 4.1 155.3 
Segment contribution margin$10.4 $56.9 $16.7 $(19.9)64.1 
Income from equity method investments0.2 4.0 — 0.6 
Segment contribution margin and income (loss) from equity method investments$10.6 $60.9 $16.7 $(19.3)
Depreciation and amortization$52.1 $10.7 $3.2 $2.5 68.5 
General and administrative expenses
    41.1 
Other operating expense, net    1.9 
Operating loss    $(47.4)
Capital spending (excluding business combinations)$57.8 $7.8 $0.8 $0.6 $67.0 
(1) Adjusted to reflect the retrospective change in accounting policy from LIFO to FIFO for certain inventories. See Note 6 for further discussion.
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Notes to Condensed Consolidated Financial Statements (Unaudited)
Other Segment Information
Total assets by segment were as follows as of March 31, 2022 (in millions):
RefiningLogisticsRetailCorporate,
Other and Eliminations		Consolidated
Total assets$7,842.9 $935.3 $255.4 $(1,086.9)$7,946.7 
Less:
Inter-segment notes receivable(1,026.8)— — 1,026.8 — 
Inter-segment right of use lease assets(245.2)— — 245.2 — 
Total assets, excluding inter-segment notes receivable and right of use assets$6,570.9 $935.3 $255.4 $185.1 $7,946.7 
Property, plant and equipment and accumulated depreciation as of March 31, 2022 and depreciation expense by reporting segment for the three months ended March 31, 2022 are as follows (in millions):
RefiningLogisticsRetailCorporate,
Other and Eliminations		Consolidated
Property, plant and equipment$2,677.7 $724.9 $170.0 $102.4 $3,675.0 
Less: Accumulated depreciation(995.0)(276.6)(62.0)(67.4)(1,401.0)
Property, plant and equipment, net$1,682.7 $448.3 $108.0 $35.0 $2,274.0 
Depreciation expense for the three months ended March 31, 2022$51.1 $10.4 $3.3 $1.6 $66.4 
In accordance with Accounting Standards Codification ("ASC") 360, Property, Plant and Equipment ("ASC 360"), Delek evaluates the realizability of property, plant and equipment as events occur that might indicate potential impairment. There were no indicators of impairment related to our property, plant and equipment as of March 31, 2022 (see Note 1 for further discussion on the impact of the COVID-19 Pandemic).

Note 3 - Earnings (Loss) Per Share
Basic earnings per share (or "EPS") is computed by dividing net income (loss) by the weighted average common shares outstanding. Diluted earnings per share is computed by dividing net income (loss), as adjusted for changes to income that would result from the assumed settlement of the dilutive equity instruments included in diluted weighted average common shares outstanding, by the diluted weighted average common shares outstanding. For all periods presented, we have outstanding various equity-based compensation awards that are considered in our diluted EPS calculation (when to do so would be dilutive), and is inclusive of awards disclosed in Note 15 to these condensed consolidated financial statements. For those instruments that are indexed to our common stock, they are generally dilutive when the market price of the underlying indexed share of common stock is in excess of the exercise price.
The following table sets forth the computation of basic and diluted earnings per share.
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Notes to Condensed Consolidated Financial Statements (Unaudited)
Three Months Ended
March 31,
 2022
2021 (1)
Numerator:
Numerator for EPS
Net income (loss)$14.8 $(62.7)
Less: Income attributed to non-controlling interest8.2 7.3 
Numerator for basic and diluted EPS attributable to Delek $6.6 $(70.0)
Denominator:
Weighted average common shares outstanding (denominator for basic EPS)73,236,274 73,803,772 
Dilutive effect of stock-based awards412,992 — 
Weighted average common shares outstanding, assuming dilution (denominator for diluted EPS)73,649,266 73,803,772 
EPS:
Basic income (loss) per share$0.09 $(0.95)
Diluted income (loss) per share$0.09 $(0.95)
The following equity instruments were excluded from the diluted weighted average common shares outstanding because their effect would be antidilutive:
Antidilutive stock-based compensation (because average share price is less than exercise price)3,088,678 2,733,056 
Antidilutive due to loss— 634,006 
Total antidilutive stock-based compensation3,088,678 3,367,062 

(1) Adjusted to reflect the retrospective change in accounting policy from LIFO to FIFO for certain inventories. See Note 6 for further discussion.


Note 4 - Delek Logistics
Delek Logistics is a publicly traded limited partnership that was formed by Delek in 2012 to own, operate, acquire and construct crude oil and refined products logistics and marketing assets. A substantial majority of Delek Logistics' assets are integral to Delek’s refining and marketing operations. As of March 31, 2022, we owned a 78.9% interest in Delek Logistics, consisting of 34,311,278 common limited partner units and the non-economic general partner interest. The limited partner interests in Delek Logistics not owned by us are reflected in net income attributable to non-controlling interest in the accompanying condensed consolidated statements of income and in non-controlling interest in subsidiaries in the accompanying condensed consolidated balance sheets.
On April 14, 2022, Delek Logistics filed a shelf registration statement with the SEC registering for the potential sale, from time to time by Delek Logistics, of up to $200.0 million of common limited partner units of Delek Logistics.
On December 20, 2021, Delek commenced a program to sell up to 434,590 common limited partner units representing limited partner interests in Delek Logistics over the next three months in open market transactions conducted pursuant to Rule 144 under the Securities Act of 1933, as amended, and a Rule 10b5-1 trading plan all of which were sold as of March 18, 2022. For the three months ended March 31, 2022, we sold 385,522 units for gross proceeds of $16.4 million; $13.6 million net of taxes.
In August 2020, Delek Logistics filed a shelf registration statement, which subsequently became effective, with the SEC for the proposed re-sale or other disposition from time to time by Delek of up to 14.0 million common limited partner units representing our limited partner interests in Delek Logistics. No units were sold as of March 31, 2022.
We have agreements with Delek Logistics that, among other things, establish fees for certain administrative and operational services provided by us and our subsidiaries to Delek Logistics, provide certain indemnification obligations and establish terms for fee-based commercial logistics and marketing services provided by Delek Logistics and its subsidiaries to us. The revenues and expenses associated with these agreements are eliminated in consolidation.
Delek Logistics is a VIE, as defined under GAAP, and is consolidated into our condensed consolidated financial statements, representing our logistics segment. The assets of Delek Logistics can only be used to settle its own obligations and its creditors have no recourse to our assets. Exclusive of intercompany balances and the marketing agreement intangible asset between Delek Logistics and Delek which are
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Notes to Condensed Consolidated Financial Statements (Unaudited)
eliminated in consolidation, the Delek Logistics condensed consolidated balance sheets as presented below are included in the condensed consolidated balance sheets of Delek (unaudited, in millions).
March 31, 2022December 31, 2021
ASSETS  
Cash and cash equivalents$2.7 $4.3 
Accounts receivable20.4 15.4 
Accounts receivable from related parties— — 
Inventory1.8 2.4 
Other current assets1.5 1.0 
Property, plant and equipment, net448.3 449.4 
Equity method investments 249.9 250.0 
Operating lease right-of-use assets19.1 20.9 
Goodwill12.2 12.2 
Intangible assets, net154.5 153.9 
Other non-current assets24.9 25.6 
Total assets$935.3 $935.1 
LIABILITIES AND DEFICIT
Accounts payable$12.6 $8.2 
Accounts payable to related parties50.3 64.4 
Current portion of operating lease liabilities6.7 6.8 
Accrued expenses and other current liabilities26.7 17.4 
Long-term debt905.5 899.0 
Asset retirement obligations6.6 6.5 
Operating lease liabilities, net of current portion12.4 14.1 
Other non-current liabilities21.0 22.7 
Deficit(106.5)(104.0)
Total liabilities and deficit$935.3 $935.1 
Note 5 - Equity Method Investments
Wink to Webster Pipeline
On February 21, 2020, we, through our wholly-owned direct subsidiary Delek Energy, entered into the W2W Holdings LLC Agreement with MPLX Operations LLC ("MPLX") (collectively, with its wholly-owned subsidiaries, the "WWP Project Financing Joint Venture" or the "WWP Project Financing JV"). The WWP Project Financing JV was created for the specific purpose of obtaining financing to fund our combined capital calls resulting from and occurring during the construction period of the pipeline system under the Wink to Webster Pipeline LLC ("WWP") Joint Venture, and to service that debt. In connection with the arrangement, both Delek Energy and MPLX contributed their respective 15% ownership interests in WWP to the WWP Project Financing JV as collateral for and in service of the related project financing. Accordingly, distributions received from WWP through the WWP Project Financing JV will first be applied in service of the related project financing debt, with excess distributions being made to the members of the WWP Project Financing JV as provided for in the W2W Holdings LLC Agreement and as allowed under the project financing debt. The obligations of the members under the W2W Holdings LLC Agreement are guaranteed by the parents of the members of the WWP Project Financing JV.
The Company evaluated Delek Energy's investment in W2W Holdings LLC ("HoldCo") and determined that HoldCo is a VIE. The Company determined it is not the primary beneficiary since it does not have the power to direct activities that most significantly impact HoldCo. The Company does not hold a controlling financial interest in HoldCo because no single party has the power to direct the activities that most significantly impact HoldCo’s economic performance since power to make the decisions about the significant activities is shared equally with MPLX and all significant decisions require unanimous consent of the board of directors of HoldCo. The Company accounts for its investment in HoldCo using the equity method of accounting due to its significant influence with its 50% membership interest.
The Company's maximum exposure to any losses incurred by HoldCo is limited to its investment. As of March 31, 2022, except for the guarantee of member obligations under the W2W Holdings LLC Agreement, the Company does not have other existing guarantees with or to HoldCo, or any third-party for work contracted with it.
As of March 31, 2022 and December 31, 2021, Delek's investment balance in WWP Project Financing Joint Venture totaled $51.4 million and $49.3 million, respectively, and is included as part of total assets in corporate, other and eliminations in our segment disclosure. In
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Notes to Condensed Consolidated Financial Statements (Unaudited)
addition on the investment, we recognized an income (loss) of $2.1 million and $(0.3) million for the three months ended March 31, 2022 and 2021, respectively.
Delek Logistics Investments
Delek Logistics has a 33% membership interest in Red River Pipeline Company LLC (“Red River”), which owns a 16-inch crude oil pipeline running from Cushing, Oklahoma to Longview, Texas. As of March 31, 2022 and December 31, 2021, Delek's investment balance in Red River totaled $144.6 million and $144.0 million, respectively. During the three months ended March 31, 2022 and 2021, respectively, we made no capital contributions and $1.4 million in capital contributions based on capital calls received. We recognized income on the investment totaling $5.2 million and $2.2 million for the three months ended March 31, 2022 and 2021, respectively. This investment is accounted for using the equity method and is included as part of total assets in our logistics segment.
In addition to Red River, Delek Logistics has two joint ventures that own and operate logistics assets, and which serve third parties and subsidiaries of Delek. We own a 50% membership interest in the entity formed with an affiliate of Plains All American Pipeline, L.P. to operate one of these pipeline systems (the "Caddo Pipeline") and a 33% membership interest in Andeavor Logistics Rio Pipeline LLC which operates the other pipeline system (the "Rio Pipeline"). As of March 31, 2022 and December 31, 2021, Delek Logistics' investment balances in these joint ventures totaled $105.3 million and $106.0 million, respectively, and were accounted for using the equity method. We recognized income on these investments totaling $1.8 million for both the three months ended March 31, 2022 and 2021.
Other Investments
We have a 50% interest in a joint venture that owns an asphalt terminal located in Brownwood, Texas. As of March 31, 2022 and December 31, 2021, Delek's investment balance in this joint venture was $43.2 million and $41.6 million, respectively. We recognized income on this investment totaling $1.6 million and $0.9 million for the three months ended March 31, 2022 and 2021, respectively. This investment is accounted for using the equity method and is included as part of total assets in corporate, other and eliminations in our segment disclosure.
Delek Renewables, LLC, a wholly-owned subsidiary of Delek, has a joint venture that owns, operates and maintains a terminal consisting of an ethanol unit train facility with an ethanol tank in North Little Rock, Arkansas. As of March 31, 2022 and December 31, 2021, Delek Renewables, LLC's investment balance in this joint venture was $3.3 million and $3.2 million, respectively, and was accounted for using the equity method. We recognized income on this investment totaling $0.2 million and $0.2 million for the three months ended March 31, 2022 and 2021, respectively. The investment in this joint venture is reflected in the refining segment.

Note 6 - Inventory
Crude oil, work in process, refined products, blendstocks and asphalt inventory for all of our operations, excluding merchandise inventory in our retail segment, are stated at the lower of cost determined using FIFO basis or net realizable value. Retail merchandise inventory consists of cigarettes, beer, convenience merchandise and food service merchandise and is stated at estimated cost as determined by the retail inventory method.
Effective January 1, 2022, we changed our method for valuing the inventory held at the Tyler Refinery to the FIFO inventory valuation method from the LIFO inventory valuation method. Total inventories accounted for using LIFO, prior to the accounting method change, comprised 28.0% of the Company’s total inventories as of December 31, 2021. This change in accounting method is preferable because it provides better consistency across our refineries and improved transparency, and results in recognition that better reflects the physical flow of inventory and more accurately reflects the current value of inventory. After this change, we no longer utilize the LIFO valuation method and the majority of our inventories are now valued using the FIFO cost method, with the remainder valued using the Retail method for the retail segment inventory. The effects of this change have been retrospectively applied to all periods presented. This change resulted in a decrease to retained earnings of $8.7 million as of January 1, 2021 in accordance with ASC 250, Accounting Changes and Error Corrections.

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Notes to Condensed Consolidated Financial Statements (Unaudited)
The following table presents the components of inventory for each period presented reflecting the accounting method change discussed above:
(In millions):
December 31, 2021
March 31, 2022
As Adjusted (1)
Refinery raw materials and supplies$774.1 $516.0 
Refinery work in process186.3 156.2 
Refinery finished goods622.8 550.6 
Retail fuel11.0 9.3 
Retail merchandise28.2 26.2 
Logistics refined products1.8 2.4 
Total inventories$1,624.2 $1,260.7 

(1) Adjusted to reflect the retrospective change in accounting policy from LIFO to FIFO for certain inventories, as described above.
In addition, certain financial statement line items in our Condensed Consolidated Statement of Income and our Condensed Consolidated Statement of Cash Flows for the three months ended March 31, 2021 and our Consolidated Condensed Balance Sheet as of December 31, 2021, were retrospectively adjusted as follows:
Three Months Ended March 31, 2021
(In millions)As Reported (using LIFO)AdjustmentAs Adjusted (using FIFO)
Condensed Consolidated Statements of Income
Cost of materials and other$2,205.5 $(32.7)$2,172.8 
Total cost of sales2,397.7 (32.7)2,365.0 
Loss before income tax benefit(103.7)32.7 (71.0)
Income tax benefit(12.4)4.1(8.3)
Net loss(91.3)28.6(62.7)
Net loss attributable to Delek(98.6)28.6(70.0)
Net loss per share attributable to Delek
Basic$(1.34)$0.39 $(0.95)
Diluted$(1.34)$0.39 $(0.95)
December 31, 2021
(In millions)As Reported (using LIFO)AdjustmentAs Adjusted (using FIFO)
Condensed Consolidated Balance Sheet
Inventories, net of inventory valuation reserves$1,176.1 $84.6 $1,260.7 
Total Assets6,728.0 84.6 6,812.6 
Deferred tax liabilities
196.418.1214.5 
Retained Earnings318.266.5384.7 
Total liabilities and stockholders' equity6,728.0 84.6 6,812.6 
Three Months Ended March 31, 2021
(In millions)As Reported (using LIFO)AdjustmentAs Adjusted (using FIFO)
Condensed Consolidated Statements of Cash Flows
Net loss
$(91.3)$28.6 $(62.7)
Non-cash lower of cost or market/net realizable value adjustment
(20.4)21.20.8 
Deferred income taxes5.13.88.9 
Inventories and other current assets
(304.2)(39.4)(343.6)
Accounts payable and other current liabilities524.5(14.2)510.3 
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Notes to Condensed Consolidated Financial Statements (Unaudited)
The following tables reflect the effect of the change in the accounting principle on the current period Condensed Consolidated Financial Statements:
Three Months Ended March 31, 2022
(In millions)As Computed (using LIFO)As Reported (using FIFO)Effect of Change
Condensed Consolidated Statements of Income
Cost of materials and other$4,273.6 $4,152.5 $121.1 
Total cost of sales4,475.84,354.7121.1
(Loss) income before income tax (benefit) expense(103.2)17.9(121.1)
Income tax (benefit) expense(21.2)3.1(24.3)
Net (loss) income attributable to Delek(90.2)6.6(96.8)
Net (loss) income per share attributable to Delek
Basic$(1.23)$0.09 $(1.32)
Diluted$(1.23)$0.09 $(1.32)
March 31, 2022
(In millions)As Computed (using LIFO)As Reported (using FIFO)Effect of Change
Condensed Consolidated Balance Sheet
Inventories, net inventory valuation reserves$1,449.2 $1,624.2 $(175.0)
Total Assets7,771.77,946.7(175.0)
Accrued expenses and other current
1,057.01,032.324.7
Deferred tax liabilities
182.3218.7(36.4)
Retained Earnings228.0391.3(163.3)
Total liabilities and stockholders' equity7,771.77,946.7(175.0)
Three Months Ended March 31, 2022
(In millions)As Computed (using LIFO)As Reported (using FIFO)Effect of Change
Condensed Consolidated Statements of Cash Flows
Net (loss) income
(82.0)$14.8 $(96.8)
Non-cash lower of cost or market/net realizable value adjustment
(8.0)(8.5)0.5
Deferred income taxes(7.9)10.4(18.3)
Inventories and other current assets
(375.3)(465.2)89.9
Accounts payable and other current liabilities1,013.3988.624.7
At March 31, 2022, we recorded a pre-tax inventory valuation reserve of $0.8 million due to a market price decline below our cost of certain inventory products. At December 31, 2021, we recorded a pre-tax inventory valuation reserve of $9.3 million. We recognized a net reduction (increase) in cost of materials and other in the accompanying condensed consolidated statements of income related to the change in pre-tax inventory valuation of $8.5 million and $(0.9) million for the three months ended March 31, 2022 and 2021, respectively.

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Note 7 - Crude Oil Supply and Inventory Purchase Agreement
Delek has Supply and Offtake Agreements with J. Aron & Company ("J. Aron") in connection with its El Dorado, Big Spring and Krotz Springs refineries (collectively, the "Supply and Offtake Agreements"). Pursuant to the Supply and Offtake Agreements, (i) J. Aron agrees to sell to us, and we agree to buy from J. Aron, at market prices, crude oil for processing at these refineries and (ii) we agree to sell, and J. Aron agrees to buy, at market prices, certain refined products produced at these refineries. The Supply and Offtake Agreements also provide for the lease to J. Aron of crude oil and refined product storage facilities, and the identification of prospective purchasers of refined products on J. Aron’s behalf. At the inception of the Supply and Offtake Agreements, we transferred title to a certain number of barrels of crude and other inventories to J. Aron (the "Step-In"), and the Supply and Offtake Agreements require the repurchase of remaining inventory (including certain "Baseline Volumes") at the termination of those Agreements (the "Step-Out"). The Supply and Offtake Agreements are accounted for as inventory financing arrangements under the fair value election provided by ASC 815 Derivatives and Hedging ("ASC 815") and ASC 825, Financial Instruments ("ASC 825").
Barrels subject to the Supply and Offtake Agreements are as follows (in millions):
El DoradoBig SpringKrotz Springs
Baseline Volumes pursuant to the respective Supply and Offtake Agreements2.0 0.8 1.3 
Barrels of inventory consigned under the respective Supply and Offtake Agreements as of March 31, 2022 (1)
3.0 1.1 1.0 
Barrels of inventory consigned under the respective Supply and Offtake Agreements as of December 31, 2021 (1)
3.5 1.3 1.2 
(1) Includes Baseline Volumes plus/minus over/short quantities.
The Supply and Offtake Agreements have certain termination provisions, which may include requirements to negotiate with third parties for the assignment to us of certain contracts, commitments and arrangements, including procurement contracts, commitments for the sale of product, and pipeline, terminalling, storage and shipping arrangements.
In April 2020, we amended and restated our three Supply and Offtake Agreements to renew and extend the terms to December 30, 2022, with J. Aron having the sole discretion to further extend to May 30, 2025 by giving at least 6 months prior notice to the current maturity date. As part of this amendment, there were changes to the underlying market index, annual fee, the crude purchase fee, crude roll fees and timing of cash settlements related to periodic price adjustments (the "Periodic Price Adjustments"). The repurchase of Baseline Volumes at the end of the Supply and Offtake Agreement term (representing the "Baseline Step-Out Liability" or, collectively, the "Baseline Step-Out Liabilities") continue to be recorded at fair value under the fair value election included under ASC 815 and ASC 825. The Baseline Step-Out Liabilities have a floating component whose fair value reflects changes to commodity price risk with changes in fair value recorded in cost of materials and other and a fixed component whose fair value reflects changes to interest rate risk with changes in fair value recorded in interest expense. There was no amendment date change in fair value resulting from the modification. The Baseline Step-Out Liabilities are reflected as non-current liabilities on our condensed consolidated balance sheet to the extent that they are not contractually due within twelve months. Monthly activity resulting in over and short volumes are be valued using market-indexed pricing, and are included in current liabilities (or receivables) on our condensed consolidated balance sheet.
Pursuant to the Periodic Price Adjustments provision in the Supply and Offtake Agreements, the Company may be required to pay down all or a portion of the fixed component of the Baseline Step-Out Liabilities or may receive additional proceeds depending on the change in fair value of the inventory collateral subject to a threshold at certain specified periodic pricing dates (the "Periodic Pricing Dates"), which occur on October 1st and May 1st, annually, not to extend beyond expiration of the Supply and Offtake Agreements. Additionally, at the Periodic Pricing Dates, if a Periodic Price Adjustment is triggered, the prospective pricing underlying the fixed component of the Baseline Step-Out Liabilities will be adjusted to reflect either the pay-down or the incremental proceeds, accordingly. As of March 31, 2022, the fixed component of the Baseline Step-Out Liabilities subject to the Periodic Price Adjustments amounted to approximately $39.2 million. Some portion of that amount may become due or payable if Periodic Price Adjustments are triggered on the Periodic Pricing Dates.
Gains (losses) related to changes in fair value due to commodity-index price are recorded as a component of cost of materials and other in the consolidated statements of income. With respect to the Baseline Step-Out liabilities, we recognized gains (losses) in cost of materials and other attributable to changes in fair value due to commodity-index price totaling $148.8 million and $62.3 million for the three months ended March 31, 2022 and 2021, respectively.
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Net balances payable (receivable) under the Supply and Offtake Agreements were as follows as of the balance sheet dates (in millions):
El DoradoBig SpringKrotz SpringsTotal
Balances as of March 31, 2022:
Baseline Step-Out Liability$232.4 $97.8 $149.1 $479.3 
Revolving over/short inventory financing liability101.9 32.8 (24.7)110.0 
Total Obligations Under Supply and Offtake Agreements - Current portion$334.3 $130.6 $124.4 $589.3 
Other payable for monthly activity true-up$20.5 $3.7 $3.3 $27.5 
El DoradoBig SpringKrotz SpringsTotal
Balances as of December 31, 2021:
Baseline Step-Out Liability$159.6 $68.4 $102.4 $330.4 
Revolving over/short inventory financing liability (receivable)120.9 41.1 (4.9)157.1 
Total Obligations Under Supply and Offtake Agreements - Current portion$280.5 $109.5 $97.5 $487.5 
Other (receivable) payable for monthly activity true-up$(2.7)$1.0 $7.0 $5.3 
The Supply and Offtake Agreements require payments of fixed annual fees which are factored into the interest rate yield under the fair value accounting model and recorded in interest expense. Recurring cash fees paid during the periods presented were as follows (in millions):
El DoradoBig SpringKrotz SpringsTotal
Recurring cash fees paid during the three months ended March 31, 2022
$2.9 $1.0 $1.1 $5.0 
Recurring cash fees paid during the three months ended March 31, 2021
$2.4 $0.7 $1.1 $4.2 
We maintained letters of credit under the Supply and Offtake Agreements as follows (in millions):
El Dorado
Letters of credit outstanding as of March 31, 2022
$145.0 
Letters of credit outstanding as of December 31, 2021
$195.0 

Note 8 - Long-Term Obligations and Notes Payable
Outstanding borrowings, net of unamortized debt discounts and certain deferred financing costs, under Delek’s existing debt instruments are as follows (in millions):
March 31, 2022December 31, 2021
Revolving Credit Facility$— $— 
Term Loan Credit Facility (1)
1,238.3 1,240.0 
Hapoalim Term Loan (2)
18.9 29.0 
Delek Logistics Credit Facility264.1 258.0 
Delek Logistics 2025 Notes (3)
247.0 246.7 
Delek Logistics 2028 Notes (4)
394.5 394.3 
Reliant Bank Revolver50.0 50.0 
 2,212.8 2,218.0 
Less: Current portion of long-term debt and notes payable82.1 92.2 
 $2,130.7 $2,125.8 
(1)Net of deferred financing costs of $2.0 million and $2.2 million and debt discount of $16.5 million and $17.8 million at March 31, 2022 and December 31, 2021, respectively.
(2)Net of deferred financing costs of $0.1 million and $0.1 million and debt discount of $0.1 million and $0.1 million at March 31, 2022 and December 31, 2021, respectively.
(3)Net of deferred financing costs of $2.3 million and $2.5 million and debt discount of $0.7 million and $0.8 million at March 31, 2022 and December 31, 2021, respectively.
(4)Net of deferred financing costs of $5.5 million and $5.7 million at March 31, 2022 and December 31, 2021, respectively.
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Notes to Condensed Consolidated Financial Statements (Unaudited)
Delek Revolver and Term Loan
On March 30, 2018 (the "Closing Date"), Delek entered into (i) a new term loan credit agreement with Wells Fargo Bank, National Association, as administrative agent (the "Term Administrative Agent"), Delek, as borrower, certain subsidiaries of Delek, as guarantors, and the lenders from time to time party thereto, providing for a senior secured term loan facility in an amount of $700.0 million (the "Term Loan Credit Facility") and (ii) a second amended and restated credit agreement with Wells Fargo Bank, National Association, as administrative agent (the "Revolver Administrative Agent"), Delek, as borrower, certain subsidiaries of Delek, as guarantors, and the other lenders party thereto, providing for a senior secured asset-based revolving credit facility with commitments of $1.0 billion (the "Revolving Credit Facility" and, together with the Term Loan Credit Facility, the "New Credit Facilities").
The Revolving Credit Facility permits borrowings in Canadian dollars of up to $50.0 million. Effective March 21, 2022, the limits for the issuance of letters of credit for the Revolving Credit Facility increased from of up to $400.0 million to up to $500.0 million, including letters of credit denominated in Canadian dollars of up to $10.0 million. Delek may designate restricted subsidiaries as additional borrowers under the Revolving Credit Facility.
The Term Loan Credit Facility was drawn in full for $700.0 million on the Closing Date at an original issue discount of 0.50%. Proceeds under the Term Loan Credit Facility, as well as proceeds of approximately $300.0 million in borrowings under the Revolving Credit Facility on the Closing Date, were used to repay certain indebtedness of Delek and its subsidiaries (the “Refinancing”), as well as certain fees, costs and expenses in connection with the closing of the New Credit Facilities, with any remaining proceeds held in cash. Proceeds of future borrowings under the Revolving Credit Facility may be used for working capital and general corporate purposes of Delek and its subsidiaries.
On May 22, 2019 (the "First Incremental Effective Date"), we amended the Term Loan Credit Facility agreement pursuant to the terms of the First Incremental Amendment to Term Loan Credit Agreement (the "Incremental Amendment"). Pursuant to the Incremental Amendment, the Company borrowed $250.0 million in aggregate principal amount of incremental term loans (the “Incremental Term Loans”) at an original issue discount of 0.75%. On November 12, 2019 (the "Second Incremental Effective Date"), we amended the Term Loan Credit facility agreement pursuant to the terms of the Second Incremental Amendment to the Term Loan Credit Agreement (the "Second Incremental Amendment") and borrowed $150.0 million in aggregate principal amount of incremental term loans (the "Incremental Loans") at an original issue discount of 1.21%. The terms of the Incremental Term Loans and Incremental Loans are substantially identical to the terms applicable to the initial term loans under the Term Loan Credit Facility borrowed in March 2018. There are no restrictions on the Company's use of the proceeds of the Incremental Term Loans and Incremental Loans. The proceeds may be used for (i) reducing utilizations under the Revolving Credit Facility, (ii) general corporate purposes and (iii) paying transaction fees and expenses associated with the incremental amendments.
On May 19, 2020, we amended the Term Loan Credit Facility agreement and borrowed $200.0 million in aggregate principal amount of incremental term loans (the “Third Incremental Term Loan”) at an original issue discount of 7.00%. The Third Incremental Term Loan constitutes a separate class of term loans (the "Class B Loans") under the Term Loan Credit Facility from those initially borrowed in March 2018 and the incremental term loans borrowed in May 2019 and November 2019 (collectively, the "Class A Loans"). Delek may voluntarily prepay the outstanding Third Incremental Term Loan at any time subject to customary breakage costs with respect to LIBOR loans and subject to a prepayment premium of 1.00% in connection with certain customary repricing events that may occur during the period from the day after the first anniversary of the Third Incremental Term Loan through the second anniversary of the Third Incremental Term Loan. The other terms of the Third Incremental Term Loan are substantially identical to the terms applicable to the Class A Loans. The proceeds of the Third Incremental Term Loan may be used (i) for general corporate purposes and (ii) to pay transaction fees and expenses associated with the Third Incremental Term Loan.
Interest and Unused Line Fees
The interest rates applicable to borrowings under the Term Loan Credit Facility and the Revolving Credit Facility are based on a fluctuating rate of interest measured by reference to either, at Delek’s option, (i) a base rate, plus an applicable margin, or (ii) a reserve-adjusted LIBOR, plus an applicable margin (or, in the case of Revolving Credit Facility borrowings denominated in Canadian dollars, the Canadian dollar bankers' acceptances rate ("CDOR")). On October 26, 2018, Delek entered into an amendment to the Term Loan Credit Facility (the “First Amendment”) to reduce the margin on certain borrowings under the Term Loan Credit Facility and incorporate certain other changes. The First Amendment decreased the applicable margins for Class A Loans under (i) Base Rate Loans by 0.25% to 1.25% and (ii) LIBOR Rate Loans by 0.25% to 2.25%, as such terms are defined in the Term Loan Credit Facility. Class B Loans incurred under the Third Incremental Term Loan bear interest at a rate that is determined, at the Company’s election, at LIBOR or at base rate, in each case, plus an applicable margin of 5.50% with respect to LIBOR borrowings and 4.50% with respect to base rate borrowings. Additionally, Class B loans that are LIBOR borrowings are subject to a minimum LIBOR rate floor of 1.00%.
The applicable margin for Revolving Credit Facility borrowings is based on Delek’s excess availability as determined by reference to a borrowing base, ranging from 0.25% to 0.75% per annum with respect to base rate borrowings and from 1.25% to 1.75% per annum with respect to LIBOR and CDOR borrowings.
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Notes to Condensed Consolidated Financial Statements (Unaudited)
In addition, the Revolving Credit Facility requires Delek to pay an unused line fee on the average amount of unused commitments thereunder in each quarter, which fee is at a rate of 0.25% or 0.375% per annum, depending on average commitment usage for such quarter. As of March 31, 2022, the unused line fee was 0.375% per annum.
Maturity and Repayments
The Revolving Credit Facility will mature and the commitments thereunder will terminate on March 30, 2023. The Term Loan Credit Facility matures on March 30, 2025 and requires scheduled quarterly principal payments on the last business day of the applicable quarter. Pursuant to the Second Incremental Amendment, the quarterly payments increased to $2.75 million commencing with December 31, 2019 on the Class A Loans. Additionally, the Term Loan Credit Facility requires prepayments by Delek with the net cash proceeds from certain debt incurrences, asset dispositions and insurance or condemnation events with respect to Delek’s assets, subject to certain exceptions, thresholds and reinvestment rights. The Term Loan Credit Facility also requires annual prepayments with a variable percentage of Delek’s excess cash flow, ranging from 50.0% to 0% depending on Delek’s consolidated fiscal year end secured net leverage ratio. The Third Incremental Term Loan requires quarterly payments on the Class B Loans of $0.5 million commencing June 30, 2020.
Guarantee and Security
The obligations of the borrowers under the New Credit Facilities are guaranteed by Delek and each of its direct and indirect, existing and future, wholly-owned domestic subsidiaries, subject to customary exceptions and limitations, and excluding Delek Logistics Partners, LP, Delek Logistics GP, LLC, and each subsidiary of the foregoing (collectively, the "MLP Subsidiaries"). Borrowings under the New Credit Facilities are also guaranteed by DK Canada Energy ULC, a British Columbia unlimited liability company and a wholly-owned restricted subsidiary of Delek.
The Revolving Credit Facility is secured by a first priority lien over substantially all of Delek’s and each guarantor's receivables, inventory, renewable identification numbers ("RINs"), instruments, intercompany loan receivables, deposit and securities accounts and related books and records and certain other personal property, subject to certain customary exceptions (the "Revolving Priority Collateral"), and a second priority lien over substantially all of Delek's and each guarantor's other assets, including all of the equity interests of any subsidiary held by Delek or any guarantor (other than equity interests in certain MLP Subsidiaries) subject to certain customary exceptions, but excluding real property (such real property and equity interests, the "Term Priority Collateral").
The Term Loan Credit Facility is secured by a first priority lien on the Term Priority Collateral and a second priority lien on the Revolving Priority Collateral, all in accordance with an intercreditor agreement between the Term Administrative Agent and the Revolver Administrative Agent and acknowledged by Delek and the subsidiary guarantors. Certain excluded assets are not included in the Term Priority Collateral and the Revolving Priority Collateral.
Additional Information
At March 31, 2022, the borrowing rate for base rate loans under the Revolving Credit Facility was 3.75% and there were no principal amounts outstanding thereunder. Additionally, there were letters of credit issued of approximately $362.5 million as of March 31, 2022 under the Revolving Credit Facility. Unused credit commitments under the Revolving Credit Facility, as of March 31, 2022, were approximately $637.5 million.
At March 31, 2022, the weighted average borrowing rate under the Term Loan Credit Facility was approximately 3.00% comprised entirely of LIBOR borrowings, and the principal amount outstanding thereunder was $1,256.8 million. As of March 31, 2022, the effective interest rate related to the Term Loan Credit Facility was 3.52%.
Delek Hapoalim Term Loan
On December 31, 2019, Delek entered into an unsecured term loan credit and guaranty agreement (the "Agreement") with Bank Hapoalim B.M. ("BHI") as the administrative agent. Pursuant to the Agreement, on December 31, 2019, Delek borrowed $40.0 million (the "BHI Term Loan"). The interest rate under the Agreement is equal to LIBOR plus a margin of 3.00%. The Agreement has a current maturity of December 31, 2022 and requires quarterly loan amortization payments of $0.1 million, commencing March 31, 2020. Proceeds may be used for general corporate purposes. On December 30, 2020 and June 28, 2021, we amended the BHI Term Loan to modify one of the required quarterly financial covenant metrics; there were no other changes as a result of these amendments.
At March 31, 2022, the weighted average borrowing rate under the term loan was approximately 3.46% comprised entirely of a LIBOR borrowing and the principal amount outstanding thereunder was $19.1 million. On July 30, 2021 and January 31, 2022, we elected to voluntarily prepay $10.0 million each period in principal of the term loan. As of March 31, 2022, the effective interest rate related to the BHI Term Loan was 4.33%.
Delek Logistics Credit Facility
On September 28, 2018, Delek Logistics and all of its subsidiaries entered into a third amended and restated senior secured revolving credit agreement with Fifth Third Bank ("Fifth Third") as administrative agent and a syndicate of lenders (hereafter, the "Delek Logistics Credit Facility") with lender commitments of $850.0 million. The Delek Logistics Credit Facility also contains an accordion feature whereby
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Notes to Condensed Consolidated Financial Statements (Unaudited)
Delek Logistics can increase the size of the credit facility to an aggregate of $1.0 billion, subject to receiving increased or new commitments from lenders and the satisfaction of certain other conditions precedent.
The obligations under the Delek Logistics Credit Facility remain secured by first priority liens on substantially all of Delek Logistics' tangible and intangible assets.
The Delek Logistics Credit Facility has a maturity date of September 28, 2023. Borrowings under the Delek Logistics Credit Facility bear interest at either a U.S. dollar prime rate, Canadian dollar prime rate, LIBOR, or a CDOR rate, in each case plus applicable margins, at the election of the borrowers and as a function of draw down currency. The applicable margin in each case and the fee payable for the unused revolving commitments vary based upon Delek Logistics' most recent total leverage ratio calculation delivered to the lenders, as called for and defined under the terms of the Delek Logistics Credit Facility. At March 31, 2022, the weighted average borrowing rate was approximately 2.67%. Additionally, the Delek Logistics Credit Facility requires Delek Logistics to pay a leverage ratio dependent quarterly fee on the average unused revolving commitment. As of March 31, 2022, this fee was 0.30% on an annualized basis.
In August 2020, Delek Logistics entered into a First Amendment to the Delek Logistics Credit Facility which, among other things, permitted the transfer of cash and equity consideration for the elimination of incentive distribution rights held by Delek Logistics GP, LLC, the general partner. It also modified the total leverage ratio and the senior leverage ratio (each as defined in the Delek Logistics Credit Facility) calculations to reduce the total funded debt (as defined in the Delek Logistics Credit Facility) component thereof by the total amount of unrestricted consolidated cash and cash equivalents on the balance sheet of the Delek Logistics and its subsidiaries up to $20.0 million.
As of March 31, 2022, Delek Logistics had $264.1 million of outstanding borrowings under the Delek Logistics Credit Facility, with no letters of credit in place. Unused credit commitments under the Delek Logistics Credit Facility, as of March 31, 2022, were $585.9 million.
Delek Logistics 2025 Notes
On May 23, 2017, Delek Logistics and its wholly owned subsidiary Delek Logistics Finance Corp. (“Finance Corp.” and together with Delek Logistics, the “Issuers”) issued $250.0 million in aggregate principal amount of 6.75% senior notes due 2025 (the “Delek Logistics 2025 Notes”) at a discount. The Delek Logistics 2025 Notes are general unsecured senior obligations of the Issuers. The Delek Logistics 2025 Notes are unconditionally guaranteed jointly and severally on a senior unsecured basis by Delek Logistics' existing subsidiaries (other than Finance Corp.) and will be unconditionally guaranteed on the same basis by certain of Delek Logistics' future subsidiaries. The Delek Logistics 2025 Notes rank equal in right of payment with all existing and future senior indebtedness of the Issuers, and senior in right of payment to any future subordinated indebtedness of the Issuers. Interest on the Delek Logistics 2025 Notes is payable semi-annually in arrears on each May 15 and November 15.
In May 2018, the Delek Logistics 2025 Notes were exchanged for new notes with terms substantially identical in all material respects with the Delek Logistic 2025 Notes except the new notes do not contain terms with respect to transfer restrictions.
All or part of the Delek Logistics 2025 Notes are currently redeemable, subject to certain conditions and limitations, at a redemption price of 103.375% of the redeemed principal, plus accrued and unpaid interest, if any. Beginning on May 15, 2022, the Issuers may, subject to certain conditions and limitations, redeem all or part of the Delek Logistics 2025 Notes, at a redemption price of 101.688% of the redeemed principal for the twelve-month period beginning on May 15, 2022, and 100.00% beginning on May 15, 2023 and thereafter, plus accrued and unpaid interest, if any.
In the event of a change of control, accompanied or followed by a ratings downgrade within a certain period of time, subject to certain conditions and limitations, the Issuers will be obligated to make an offer for the purchase of the Delek Logistics 2025 Notes from holders at a price equal to 101% of the principal amount thereof, plus accrued and unpaid interest.
As of March 31, 2022, we had $250.0 million in outstanding principal amount under the Delek Logistics 2025 Notes, and the effective interest rate was 7.20%.
Delek Logistics 2028 Notes
On May 24, 2021, Delek Logistics and Finance Corp. (collectively, the “Co-issuers”), issued $400.0 million in aggregate principal amount of the Co-issuers 7.125% Senior Notes due 2028 (the “Delek Logistics 2028 Notes”), at par, pursuant to an indenture with U.S. Bank, National Association as trustee. The Delek Logistics 2028 Notes are general unsecured senior obligations of the Co-issuers and are unconditionally guaranteed jointly and severally on a senior unsecured basis by Delek Logistics’ subsidiaries other than Finance Corp. and will be unconditionally guaranteed on the same basis by certain of Delek Logistics’ future subsidiaries. The Delek Logistics 2028 Notes rank equal in right of payment with all existing and future senior indebtedness of the Co-issuers, and senior in right of payment to any future subordinated indebtedness of the Co-issuers. The Delek Logistics 2028 Notes will mature on June 1, 2028, and interest is payable semi-annually in arrears on each June 1 and December 1, commencing December 1, 2021.
At any time prior to June 1, 2024, the Co-issuers may redeem up to 35% of the aggregate principal amount of the Delek Logistics 2028 Notes with the net cash proceeds of one or more equity offerings by Delek Logistics at a redemption price of 107.125% of the redeemed principal amount, plus accrued and unpaid interest, if any, subject to certain conditions and limitations. Prior to June 1, 2024, the Co-issuers may also redeem all or part of the Delek Logistics 2028 Notes at a redemption price of the principal amount plus accrued and
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Notes to Condensed Consolidated Financial Statements (Unaudited)
unpaid interest, if any, plus a "make whole" premium, subject to certain conditions and limitations. In addition, beginning on June 1, 2024, the Co-issuers may, subject to certain conditions and limitations, redeem all or part of the Delek Logistics 2028 Notes, at a redemption price of 103.563% of the redeemed principal for the twelve-month period beginning on June 1, 2024, 101.781% for the twelve-month period beginning on June 1, 2025, and 100.00% beginning on June 1, 2026 and thereafter, plus accrued and unpaid interest, if any.
In the event of a change of control, accompanied or followed by a ratings downgrade within a certain period of time, subject to certain conditions and limitations, the Co-issuers will be obligated to make an offer for the purchase of the Delek Logistics 2028 Notes from holders at a price equal to 101% of the principal amount thereof, plus accrued and unpaid interest.
As of March 31, 2022, we had $400.0 million in outstanding principal amount under the Delek Logistics 2028 Notes, and the effective interest rate was 7.05%.
Reliant Bank Revolver
Delek has an unsecured revolving credit agreement with Reliant Bank (the "Reliant Bank Revolver"). On December 16, 2019, we amended the Reliant Bank Revolver to extend the maturity date to June 30, 2022, reduce the fixed interest rate to 4.50% per annum and increase the revolver commitment amount to $50.0 million. There were no other significant changes to the agreement in connection with this amendment. On December 9, 2020 and June 17, 2021, we amended the Reliant Bank Revolver to modify a required quarterly financial covenant metric; there were no other changes as a result of these amendments. The revolving credit agreement requires us to pay a quarterly fee of 0.50% on an annualized basis on the average unused revolving commitment. As of March 31, 2022, we had $50.0 million outstanding and had no unused credit commitments under the Reliant Bank Revolver.
Restrictive Covenants
Under the terms of our Revolving Credit Facility, Term Loan Credit Facility, Delek Logistics Credit Facility, Delek Logistics 2025 Notes, Delek Logistics 2028 Notes, Reliant Bank Revolver and BHI Agreement, we are required to comply with certain usual and customary financial and non-financial covenants. The terms and conditions of the Revolving Credit Facility include periodic compliance with a springing minimum fixed charge coverage ratio financial covenant if excess availability under the revolver borrowing base is below certain thresholds, as defined in the credit agreement. The Term Loan Credit Facility does not have any financial maintenance covenants. We believe we were in compliance with all covenant requirements under each of our credit facilities as of March 31, 2022.
Certain of our debt facilities contain limitations on the incurrence of additional indebtedness, making of investments, creation of liens, dispositions and acquisitions of assets, and making of restricted payments and transactions with affiliates. These covenants may also limit the payment, in the form of cash or other assets, of dividends or other distributions, or the repurchase of shares with respect to our equity. Additionally, some of our debt facilities limit our ability to make investments, including extensions of loans or advances to, or acquisitions of equity interests in, or guarantees of obligations of, certain other entities.

Note 9 - Derivative Instruments
We use the majority of our derivatives to reduce normal operating and market risks with the primary objective of reducing the impact of market price volatility on our results of operations. As such, our use of derivative contracts is aimed at:
•limiting our exposure to commodity price fluctuations on inventory above or below target levels (where appropriate) within each of our segments;
•managing our exposure to commodity price risk associated with the purchase or sale of crude oil, feedstocks/intermediates and finished grade fuel within each of our segments;
•managing our exposure to market crack spread fluctuations;
•managing the cost of our credits required by the U.S. Environmental Protection Agency ("EPA") to blend biofuels into fuel products ("RINs Obligation") using future commitments to purchase or sell RINs at fixed prices and quantities; and
•limiting the exposure to interest rate fluctuations on our floating rate borrowings.
We primarily utilize commodity swaps, futures, forward contracts and options contracts, generally with maturity dates of three years or less, and from time to time interest rate swaps or caps to achieve these objectives. Futures contracts are standardized agreements, traded on a futures exchange, to buy or sell a commodity at a predetermined price and location at a specified future date. Options provide the right, but not the obligation to buy or sell the commodity at a specified price in the future. Commodity swaps and futures contracts require cash settlement for the commodity based on the difference between a fixed or floating price and the market price on the settlement date, and options require payment/receipt of an upfront premium. Because these derivatives are entered into to achieve objectives specifically related to our inventory and production risks, such gains and losses (to the extent not designated as accounting hedges and recognized on an unrealized basis in other comprehensive income) are recognized in cost of materials and other.
Forward contracts are agreements to buy or sell a commodity at a predetermined price at a specified future date, and for our transactions,
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Notes to Condensed Consolidated Financial Statements (Unaudited)
generally require physical delivery. Forward contracts where the underlying commodity will be used or sold in the normal course of business qualify as normal purchases and normal sales ("NPNS") pursuant to ASC 815. If we elect the NPNS exception, such forward contracts are not accounted for as derivative instruments but rather are accounted for under other applicable GAAP. Commodity forward contracts accounted for as derivative instruments are recorded at fair value with changes in fair value recognized in earnings in the period of change. Our Canadian crude trading operations are accounted for as derivative instruments, and the related unrealized and realized gains and losses are recognized in other operating income, net on the condensed consolidated statements of income. Additionally, as of and for the three months ended March 31, 2022, other forward contracts accounted for as derivatives that are specific to managing crude costs rather than for trading purposes are recognized in cost of materials and other on the accompanying condensed consolidated statements of income in our refining segment, and are included in our disclosures of commodity derivatives in the tables below.
Futures, swaps or other commodity related derivative instruments that are utilized to specifically provide economic hedges on our Canadian forward contract or investment positions are recognized in other operating income, net because that is where the related underlying transactions are reflected.
From time to time, we also enter into future commitments to purchase or sell RINs at fixed prices and quantities, which are used to manage the costs associated with our RINs Obligation. These future RINs commitment contracts meet the definition of derivative instruments under ASC 815, and are recorded at estimated fair value in accordance with the provisions of ASC 815. Changes in the fair value of these future RINs commitment contracts are recorded in cost of materials and other on the condensed consolidated statements of income.
As of March 31, 2022, we do not believe there is any material credit risk with respect to the counterparties to any of our derivative contracts.
In accordance with ASC 815, certain of our commodity swap contracts have been designated as cash flow hedges and the change in fair value between the execution date and the end of period has been recorded in other comprehensive income. The fair value of these contracts is recognized in income in the same financial statement line item as hedged transaction at the time the positions are closed and the hedged transactions are recognized in income.
The following table presents the fair value of our derivative instruments as of March 31, 2022 and December 31, 2021. The fair value amounts below are presented on a gross basis and do not reflect the netting of asset and liability positions permitted under our master netting arrangements, including cash collateral on deposit with our counterparties. We have elected to offset the recognized fair value amounts for multiple derivative instruments executed with the same counterparty in our financial statements. As a result, the asset and liability amounts below differ from the amounts presented in our condensed consolidated balance sheets. See Note 10 for further information regarding the fair value of derivative instruments (in millions).
March 31, 2022December 31, 2021
Derivative TypeBalance Sheet LocationAssetsLiabilitiesAssetsLiabilities
Derivatives not designated as hedging instruments:
Commodity derivatives(1)
Other current assets$188.9 $(237.4)$21.5 $— 
Commodity derivatives(1)
Other current liabilities238.4 (261.9)101.5 (102.3)
Commodity derivatives(1)
Other long-term liabilities2.2 (3.6)6.1 (6.1)
RIN commitment contracts(2)
Other current assets2.7 — 1.6 — 
RIN commitment contracts(2)
Other current liabilities— (7.0)— (0.7)
Total gross fair value of derivatives$432.2 $(509.9)$130.7 $(109.1)
Less: Counterparty netting and cash collateral(3)
335.2 (478.1)107.1 (82.4)
Total net fair value of derivatives$97.0 $(31.8)$23.6 $(26.7)
(1)As of March 31, 2022 and December 31, 2021, we had open derivative positions representing 200,455,511 and 182,525,893 barrels, respectively, of crude oil and refined petroleum products. There were no open positions designated as cash flow hedging instruments as of March 31, 2022 and December 31, 2021. Additionally, as of December 31, 2021, we had open derivative positions representing and 1,320,000 MMBTU of natural gas products.
(2)As of March 31, 2022 and December 31, 2021, we had open RINs commitment contracts representing 108,950,000 and 16,325,000 RINs, respectively.
(3)As of March 31, 2022 and December 31, 2021, $142.8 million and $(24.7) million, respectively, of cash collateral (obligation) held by counterparties has been netted with the derivatives with each counterparty.
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Notes to Condensed Consolidated Financial Statements (Unaudited)
Total gains (losses) on our non-trading commodity derivatives and RINs commitment contracts recorded in the condensed consolidated statements of income are as follows (in millions):
Three Months Ended March 31,
20222021
(Losses) gains on hedging derivatives not designated as hedging instruments recognized in cost of materials and other (1)
$(71.4)$57.2 
Losses on non-trading physical forward contract commodity derivatives in cost of materials and other(3.4)(1.1)
Realized gains reclassified out of accumulated other comprehensive income and into cost of materials and other on commodity derivatives designated as cash flow hedging instruments— 0.2 
 Total (losses) gains$(74.8)$56.3 
(1)     Gains (losses) on commodity derivatives that are economic hedges but not designated as hedging instruments include unrealized gains (losses) of $(70.7) million and $11.2 million for the three months ended March 31, 2022 and 2021.
(2)    See separate table below for disclosures about "trading derivatives."
The effect of cash flow hedge accounting on the condensed consolidated statements of income is as follows (in millions):
Three Months Ended March 31,
20222021
Gain (loss) on cash flow hedging relationships recognized in cost of materials and other:
Commodity contracts:
Hedged items$— $(0.2)
Derivative designated as hedging instruments— 0.2 
Total $— $— 
For cash flow hedges, no component of the derivative instruments’ gains or losses was excluded from the assessment of hedge effectiveness for the three months ended March 31, 2022 or 2021. There were no gains (losses), net of tax, on settled commodity contracts during the three months ended March 31, 2022, and $0.2 million during the three months ended March 31, 2021, respectively, which were reclassified into cost of materials and other in the condensed consolidated statements of income. As of March 31, 2022, we estimate that no amount of deferred gains related to commodity cash flow hedges will be reclassified into cost of materials and other over the next 12 months as a result of hedged transactions that are forecasted to occur.
Total (losses) gains on our trading derivatives (none of which were designated as hedging instruments) recorded in other operating income, net on the condensed consolidated statements of income are as follows (in millions):
Three Months Ended March 31,
20222021
Trading Physical Forward Contract Commodity Derivatives
Realized gains (losses)$18.0 $(0.4)
Unrealized losses(0.4)(0.4)
Total$17.6 $(0.8)
Trading Hedging Commodity Derivatives
Realized gains (losses)$15.0 $(0.4)
Unrealized losses (17.2)(0.6)
 Total$(2.2)$(1.0)

Note 10 - Fair Value Measurements
Our assets and liabilities that are measured at fair value include commodity derivatives, investment commodities, environmental credits obligations and Supply and Offtake Agreements. Delek applies the provisions of ASC 820, Fair Value Measurements ("ASC 820"), which defines fair value, establishes a framework for its measurement and expands disclosures about fair value measurements. ASC 820 requires disclosures that categorize assets and liabilities measured at fair value into one of three different levels depending on the observability of the inputs employed in the measurement. Level 1 inputs are quoted prices in active markets for identical assets or
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Notes to Condensed Consolidated Financial Statements (Unaudited)
liabilities. Level 2 inputs are observable inputs other than quoted prices included within Level 1 for the asset or liability, either directly or indirectly through market-corroborated inputs. Level 3 inputs are unobservable inputs for the asset or liability reflecting our assumptions about pricing by market participants.
Our commodity derivative contracts, which consist of commodity swaps, exchange-traded futures, options and physical commodity forward purchase and sale contracts (that do not qualify for the NPNS exception under ASC 815), are valued based on exchange pricing and/or price index developers such as Platts or Argus and are, therefore, classified as Level 2.
Our RINs commitment contracts are future commitments to purchase or sell RINs at fixed prices and quantities, which are used to manage the costs associated with our Consolidated Net RINs Obligation (as defined in our accounting policies in Note 2 to the audited consolidated financial statements included in Item. 8 Financial Statements and Supplementary Data, of our December 31, 2021 Annual Report on Form 10-K). These RINs commitment contracts (which are forward contracts accounted for as derivatives – see Note 9) are categorized as Level 2, and are measured at fair value based on quoted prices from an independent pricing service.
Our environmental credits obligation surplus or deficit includes the Consolidated Net RINs Obligation surplus or deficit, as well as other environmental credit obligation surplus or deficit positions subject to fair value accounting pursuant to our accounting policy (see Note 14). The environmental credits obligation surplus or deficit is categorized as Level 2 if measured at fair value either directly through observable inputs or indirectly through market-corroborated inputs.
As of and for the three months ended March 31, 2022 and 2021, we elected to account for our J. Aron step-out liability at fair value in accordance with ASC 825, as it pertains to the fair value option. This standard permits the election to carry financial instruments and certain other items similar to financial instruments at fair value on the balance sheet, with all changes in fair value reported in earnings. With respect to the amended and restated Supply and Offtake Agreements, such amendments being effective April 2020 for all the agreements, we apply fair value measurement as follows: (1) we determine fair value for our amended variable step-out liability based on changes in fair value related to market volatility based on a floating commodity-index price, and for our amended fixed step-out liability based on changes to interest rates and the timing and amount of expected future cash settlements where such obligation is categorized as Level 2 Gains (losses) related to changes in fair value due to commodity-index price are recorded as a component of cost of materials and other, and changes in fair value due to interest rate risk are recorded as a component of interest expense in the condensed consolidated statements of income; and (2) we determine fair value of the commodity-indexed revolving over/short inventory financing liability based on the market prices for the consigned crude oil and refined products collateralizing the financing/funding where such obligation is categorized as Level 2 and is presented in the current portion of the Obligation under Supply and Offtake Agreements on our condensed consolidated balance sheets. Gains (losses) related to the change in fair value are recorded as a component of cost of materials and other in the condensed consolidated statements of income.
For all other financial instruments, the fair value approximates the historical or amortized cost basis comprising our carrying value and therefore are not included in the table below. The fair value hierarchy for our financial assets and liabilities accounted for at fair value on a recurring basis was as follows (in millions):
 March 31, 2022
 Level 1Level 2Level 3Total
Assets    
Commodity derivatives$— $429.5 $— $429.5 
Commodity investments19.7 — — 19.7 
RINs commitment contracts— 2.7 — 2.7 
Total assets
19.7 432.2 — 451.9 
Liabilities 
Commodity derivatives— (502.9)— (502.9)
RINs commitment contracts— (7.0)— (7.0)
Environmental credits obligation deficit— (177.5)— (177.5)
J. Aron supply and offtake obligations— (589.3)— (589.3)
Total liabilities— (1,276.7)— (1,276.7)
Net liabilities$19.7 $(844.5)$— $(824.8)
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Notes to Condensed Consolidated Financial Statements (Unaudited)
 December 31, 2021
 Level 1Level 2Level 3Total
Assets    
Commodity derivatives$— $129.1 $— $129.1 
RINs commitment contracts— 1.6 — 1.6 
Total assets— 130.7 — 130.7 
Liabilities    
Commodity derivatives— (108.4)— (108.4)
RINs commitment contracts— (0.7)— (0.7)
Environmental credits obligation deficit— (172.2)— (172.2)
J. Aron supply and offtake obligations— (487.5)— (487.5)
Total liabilities— (768.8)— (768.8)
Net liabilities$— $(638.1)$— $(638.1)
The derivative values above are based on analysis of each contract as the fundamental unit of account as required by ASC 820. In the table above, derivative assets and liabilities with the same counterparty are not netted where the legal right of offset exists. This differs from the presentation in the financial statements which reflects our policy, wherein we have elected to offset the fair value amounts recognized for multiple derivative instruments executed with the same counterparty and where the legal right of offset exists. As of March 31, 2022 and December 31, 2021, $142.8 million and $(24.7) million, respectively, of cash collateral (obligation) was held by counterparty brokerage firms and has been netted with the net derivative positions with each counterparty. See Note 9 for further information regarding derivative instruments.

Note 11 - Commitments and Contingencies
Litigation
In the ordinary conduct of our business, we are from time to time subject to lawsuits, investigations and claims, including environmental claims and employee-related matters. Although we cannot predict with certainty the ultimate resolution of lawsuits, investigations and claims asserted against us, including civil penalties or other enforcement actions, we do not believe that any currently pending legal proceeding or proceedings to which we are a party will have a material adverse effect on our financial statements. Certain environmental matters that have or may result in penalties or assessments are discussed below in the "Environmental, Health and Safety" section of this note.
One of our Alon subsidiaries was the defendant in a legal action related to an easement dispute arising from a purchase of property that occurred in October 2013. In June 2019, the court found in favor of the plaintiffs and assessed damages against such subsidiary, which were reduced in the fourth quarter of 2019 to $6.4 million. Such amount is included as of March 31, 2022 and December 31, 2021 in accrued expenses and other current liabilities on the accompanying condensed consolidated balance sheet. The matter was appealed and has been remanded to the district court regarding jurisdictional issues.
On June 19, 2017, the Arkansas Teacher Retirement System filed a lawsuit in the Delaware Court of Chancery (Arkansas Teacher Retirement System v. Alon USA Energy, Inc., et al., Case No. 2017-0453), asserting claims for breach of fiduciary duty in connection with the business combination of Delek US Holdings, Inc. and Alon USA Energy, Inc. Following a mediation, the parties to the litigation agreed to a settlement and release of all claims of the plaintiff class in exchange for the defendants' agreement to pay $44.8 million into a settlement fund, of which our insurance carriers agreed to fund approximately $42.5 million under the applicable insurance policies and pursuant to varying limits and limitations. The settlement, in which the Company and other defendants expressly deny all assertions of wrongdoing or fault, was approved by the Court on October 29, 2021. In addition to the $2.3 million of the settlement that was not covered by insurance, we accrued $4.2 million of estimated unpaid and remaining legal fees. As of March 31, 2022 the remaining unpaid balance is $0.7 million, and is included in accrued expenses and other current liabilities on the accompanying condensed consolidated balance sheet.
Self-insurance
With respect to workers’ compensation claims, we are subject to claims losses up to a $4.0 million deductible on a per accident basis, general liability claims up to $4.0 million on a per occurrence basis and medical claims for eligible full-time employees up to $0.3 million per covered individual per calendar year. We are also subject to auto liability claims losses up to a $4.0 million deductible on a per accident basis.
We have umbrella liability insurance available to each of our segments in an amount determined reasonable by management.
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Notes to Condensed Consolidated Financial Statements (Unaudited)
Environmental, Health and Safety
We are subject to extensive federal, state and local environmental and safety laws and regulations enforced by various agencies, including the EPA, the United States Department of Transportation, the Occupational Safety and Health Administration, as well as numerous state, regional and local environmental, safety and pipeline agencies. These laws and regulations govern the discharge of materials into the environment, waste management practices, pollution prevention measures and the composition of the fuels we produce, as well as the safe operation of our plants and pipelines and the safety of our workers and the public. Numerous permits or other authorizations are required under these laws and regulations for the operation of our refineries, renewable fuels facilities, terminals, pipelines, underground storage tanks, trucks, rail cars and related operations, and may be subject to revocation, modification and renewal.
These laws and permits raise potential exposure to future claims and lawsuits involving environmental and safety matters which could include soil and water contamination, air pollution, personal injury and property damage allegedly caused by substances which we manufactured, handled, used, released or disposed of, transported, or that relate to pre-existing conditions for which we have assumed responsibility. We believe that our current operations are in substantial compliance with existing environmental and safety requirements. However, there have been and will continue to be ongoing discussions about environmental and safety matters between us and federal and state authorities, including notices of violations, citations and other enforcement actions, some of which have resulted or may result in changes to operating procedures and in capital expenditures. While it is often difficult to quantify future environmental or safety related expenditures, we anticipate that continuing capital investments and changes in operating procedures will be required for the foreseeable future to comply with existing and new requirements, as well as evolving interpretations and more strict enforcement of existing laws and regulations.
As of March 31, 2022, we have recorded an environmental liability of approximately $111.9 million, primarily related to the estimated probable costs of remediating or otherwise addressing certain environmental issues of a non-capital nature at our refineries, as well as terminals, some of which we no longer own. This liability includes estimated costs for ongoing investigation and remediation efforts for known contamination of soil and groundwater. Approximately $2.7 million of the total liability is expected to be expended over the next 12 months, with most of the balance expended by 2032, although some costs may extend up to 30 years. In the future, we could be required to extend the expected remediation period or undertake additional investigations of our refineries, pipelines and terminal facilities, which could result in the recognition of additional remediation liabilities.
Included in our environmental liabilities as of both March 31, 2022 and December 31, 2021 is a liability totaling $78.5 million related to a property that we have historically operated as an asphalt and marine fuel terminal both as an owner and, subsequently, as a lessee under an in-substance lease agreement (the “License Agreement”). The License Agreement, which provided us the license to continue operating our asphalt and marine fuel terminal operations on the property for a term of ten years (expiring in June 2020), also ascribed a contractual noncontingent indemnification guarantee to certain of our wholly-owned subsidiaries related to certain incremental environmental remediation activities, predicated on the completion of certain property development activities ascribed to the lessor. Our combined liability, comprised of our environmental liability plus the estimated fair value of the noncontingent guarantee liability, was recorded when Delek acquired the outstanding common stock of Alon, effective July 1, 2017 ("Delek/Alon Merger"). While the License Agreement expired in June 2020, it is currently being disputed in litigation where we have determined that no loss accrual is necessary and that the amount of incremental loss that is reasonably possible is immaterial as of March 31, 2022. Such ongoing dispute causes sufficient uncertainty around the release of risk and the appropriate joint and several liability allocations thereunder that we cannot currently determine a more reasonable estimate of the potential total contingent liability that is probable, nor do we have sufficient information to better estimate the fair value of any remaining noncontingent guarantee liability. As such, as of March 31, 2022 and December 31, 2021, except for accretion and expenditures, our combined environmental liability related to the terminal and property remained unchanged.
We are also subject to various regulatory requirements related to carbon emissions and the compliance requirements to remit environmental credit obligations due to the EPA or other regulatory agencies, the most significant of which relates to the RINs Obligation subject to the EPA’s RFS-2 regulations (as defined in our accounting policies in Note 2 to the audited consolidated financial statements included in Item. 8 Financial Statements and Supplementary Data, of our December 31, 2021 Annual Report on Form 10-K). The RFS-2 regulations are highly complex and evolving, requiring us to periodically update our compliance systems. As part of our on-going monitoring and compliance efforts, on an annual basis we engage a third party to perform procedures to review our RINs inventory, processes and compliance. The results of such procedures may include procedural findings but may also include findings regarding the usage of RINs to meet past obligations, the treatment of exported RINs, and the propriety of RINs on-hand and related adjustments to our RINs inventory, which (to the extent they are valued) offset our RINs Obligation. Such adjustments may also require communication with the EPA if they involve reportable non-compliance which could lead to the assessment of penalties. Based on management’s review which was completed during the second quarter 2021, we recorded a RINs inventory true-up adjustment totaling $(12.3) million which increased our recorded RINs Obligation. We have also self-reported our related instances of non-compliance to the EPA, and while we cannot yet estimate the extent of penalties that may be assessed, it is not expected to be material in relation to our total RINs Obligation.
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Notes to Condensed Consolidated Financial Statements (Unaudited)
Other Losses and Contingencies
Delek maintains property damage insurance policies which have varying deductibles. Delek also maintains business interruption insurance policies, with varying coverage limits and waiting periods. Covered losses in excess of the deductible and outside of the waiting period will be recoverable under the property and business interruption insurance policies.
El Dorado Refinery Fire
On February 27, 2021, our El Dorado refinery experienced a fire in its Penex unit. Six employees were injured in the fire. Contrary to initial assessments, and despite occurring during the early stages of turnaround activity, the facility did suffer operational disruptions as a result of the fire. During the three months ended March 31, 2021, we incurred workers' compensation losses of $3.8 million associated with the fire, which is included in operating expenses in the accompanying condensed consolidated statements of income. Additionally, we recognized accelerated depreciation of $1.0 million in the three months ended March 31, 2021 due to property damaged in the fire, which was recovered during 2021. No expense was recorded related to the El Dorado refinery fire during the three months ended March 31, 2022. We continue to incur repair costs that may be recoverable under property and casualty insurance policies. In addtion, during the three months ended March 31, 2022, we recognized a gain of $4.3 million related to business interruption claims. Such gain is included in other operating income in the consolidated statements of income. If applicable, we accrue receivables for probable insurance or other third-party recoveries. Work to determine the full extent of covered business interruption and property and casualty losses and potential insurance claims is ongoing and may result in the future recognition of insurance recoveries.
Winter Storm Uri
During February 2021, the Company experienced a severe weather event ("Winter Storm Uri") which temporarily impacted operations at all of our refineries. Due to the extreme freezing conditions, we experienced reduced throughputs at our refineries as there was a disruption in the crude supply, as well as damages to various units at our refineries requiring additional operating and capital expenditures. We recognized additional operating expenses in the amount of $9.8 million in the three months ended March 31, 2021 due to property damaged in the freeze, which was recovered during 2021. No expense was recorded related to the Winter Storm Uri during the three months ended March 31, 2022. An additional $0.1 million was recognized as a gain, in excess of losses during the three months ended March 31, 2022. We continue to incur repair costs that may be recoverable under property and casualty insurance policies. In addtion, during the three months ended March 31, 2022, we recognized a gain of $5.7 million related to business interruption claims. If applicable, we accrue receivables for probable insurance or other third-party recoveries. Work to determine the full extent of covered business interruption and property and casualty losses and potential insurance claims is ongoing and is expected to result in additional future recognition of insurance recoveries.
Crude Oil and Other Releases
We have experienced several crude oil and other releases involving our assets. There were no material releases that occurred during the three months ended March 31, 2022. For other releases that occurred in prior years, we have received regulatory closure or a majority of the cleanup and remediation efforts are substantially complete. We expect regulatory closure in 2022 for the release sites that have not yet received it and do not anticipate material costs associated with any fines or penalties or to complete activities that may be needed to achieve regulatory closure. Expenses incurred for the remediation of these crude oil and other releases are included in operating expenses in our condensed consolidated statements of income.
Letters of Credit
As of March 31, 2022, we had in place letters of credit totaling approximately $362.5 million with various financial institutions securing obligations primarily with respect to our commodity transactions for the refining segment and certain of our insurance programs. There were no amounts drawn by beneficiaries of these letters of credit at March 31, 2022.

Note 12 - Income Taxes
Under ASC 740 we used an estimated annual tax rate to record income taxes for the three months ended March 31, 2022 and March 31, 2021. Our effective tax rate was 17.3% and 11.7% for the three months ended March 31, 2022 and 2021, respectively. The difference between the effective tax rate and the statutory rate is generally attributable to permanent differences and discrete items. The change in our effective tax rate for the three months ended March 31, 2022 as compared to the three months ended March 31, 2021 was primarily due to net increase in valuation allowance on certain state tax attributes in 2021 and increased 2022 projected pre-tax earnings.
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Notes to Condensed Consolidated Financial Statements (Unaudited)
Note 13 - Related Party Transactions
Our related party transactions consist primarily of transactions with our equity method investees (See Note 5). Transactions with our related parties were as follows for the periods presented (in millions):
Three Months Ended March 31,
20222021
Revenues (1)
$16.7 $10.4 
Cost of materials and other (2)
$23.4 $15.1 
(1)Consists primarily of asphalt sales which are recorded in corporate, other and eliminations segment.
(2)Consists primarily of pipeline throughput fees paid by the refining segment and asphalt purchases.
Note 14 - Other Current Assets and Liabilities
The detail of other current assets is as follows (in millions):
Other Current AssetsMarch 31, 2022December 31, 2021
Prepaid expenses$181.3 $44.9 
Short-term derivative assets (see Note 9)97.0 23.6 
Investment commodities19.7 45.0 
Income and other tax receivables1.5 3.6 
Other9.6 8.9 
Total$309.1 $126.0 
The detail of accrued expenses and other current liabilities is as follows (in millions):
Accrued Expenses and Other Current LiabilitiesMarch 31, 2022December 31, 2021
Product financing agreements$319.7 $249.6 
Crude purchase liabilities227.6 107.4 
Consolidated Net RINs Obligation deficit (see Note 10)177.5 172.2 
Income and other taxes payable129.1 124.8 
Deferred revenue53.7 44.6 
Employee costs44.8 44.4 
Short-term derivative liabilities (see Note 9)30.5 26.8 
Other49.4 28.0 
Total$1,032.3 $797.8 

Note 15 - Equity-Based Compensation
Delek US Holdings, Inc. 2006 and 2016 and Alon USA Energy, Inc. 2005 Long-Term Incentive Plans (collectively, the "Incentive Plans")
The Delek US Holdings, Inc. 2016 Long-Term Incentive Plan has 14,235,000 shares of common stock authorized for issuance; no awards will be made under this plan after May 5, 2026. Compensation expense related to equity-based awards granted under the Incentive Plans amounted to $5.1 million and $4.5 million for the three months ended March 31, 2022 and 2021, respectively. These amounts are included in general and administrative expenses and operating expenses in the accompanying condensed consolidated statements of income. As of March 31, 2022, there was $39.2 million of total unrecognized compensation cost related to non-vested share-based compensation arrangements, which is expected to be recognized over a weighted-average period of 1.3 years.
We issued net shares of common stock of 45,800 and 93,856 as a result of exercised or vested equity-based awards during the three months ended March 31, 2022 and 2021, respectively. These amounts are net of 17,829 and 58,851 shares withheld to satisfy employee tax obligations related to the exercises and vesting during the three months ended March 31, 2022 and 2021, respectively.
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Notes to Condensed Consolidated Financial Statements (Unaudited)
Delek Logistics GP, LLC 2012 Long-Term Incentive Plan
The Delek Logistics GP, LLC 2012 Long-Term Incentive Plan (the "LTIP") was adopted by the Delek Logistics GP, LLC board of directors in connection with the completion of Delek Logistics' initial public offering in November 2012. The LTIP is administered by the Conflicts Committee of the board of directors of Delek Logistics' general partner. The LTIP has 912,207 common units representing limited partner interests in Delek Logistics authorized for issuance and expires June 9, 2031.
Delek US Holdings, Inc. Employee Stock Purchase Plan
On June 2, 2021, the Company's board of directors adopted the Delek US Holdings, Inc. Employee Stock Purchase Plan (the "ESPP"). The ESPP is structured as a qualified employee stock purchase plan under Section 423 of the U.S. Internal Revenue Code of 1986. The Company authorized the issuance of 2,000,000 shares of common stock under the ESPP. On each purchase date, eligible employees (as defined in the ESPP) can purchase the Company's stock at a price per share equal to 85.0% of the closing price of the Company's common stock on the exercise date, but no less than par value. There are four offering periods of three months during each fiscal year, beginning each January 1st, April 1st, July 1st, and October 1st. No shares of common stock were issued under the ESPP as of March 31, 2022. Implementation of the plan will be effective during the second quarter of 2022.
Note 16 - Shareholders' Equity
Dividends Suspension
We elected to suspend dividends beginning in the fourth quarter of 2020 in order to conserve capital.
Stock Repurchase Program
On November 6, 2018, our Board of Directors authorized a share repurchase program for up to $500.0 million of Delek common stock. Any share repurchases under the repurchase program may be implemented through open market transactions or in privately negotiated transactions, in accordance with applicable securities laws. The timing, price and size of repurchases are made at the discretion of management and will depend on prevailing market prices, general economic and market conditions and other considerations. The repurchase program does not obligate us to acquire any particular amount of stock and does not expire. In the second quarter of 2020, we elected to suspend the share repurchase program. No repurchases of our common stock were made in the three months ended March 31, 2022 or 2021. As of March 31, 2022, there was $229.7 million of authorization remaining under Delek's aggregate stock repurchase program.
Stock Purchase and Cooperation Agreement
On March 7, 2022, Delek entered into a stock purchase and cooperation agreement (the “Icahn Group Agreement”) with IEP Energy Holding LLC, a Delaware limited liability company, American Entertainment Properties Corp., a Delaware corporation, Icahn Enterprises Holdings L.P., a Delaware limited partnership, Icahn Enterprises G.P. Inc., a Delaware corporation, Beckton Corp., a Delaware corporation, and Carl C. Icahn (collectively, the “Icahn Group”), pursuant to which the Company purchased an aggregate of 3,497,268 shares of common stock of the Company, at a price per share of $18.30, the closing price of a share of Company common stock on the New York Stock Exchange on March 4, 2022, the last trading day prior to the execution of the Icahn Group Agreement, which equals an aggregate purchase price of $64.0 million. The Company funded the transaction from cash on hand. The 3,497,268 shares were cancelled at the time of the transaction.
In addition to the foregoing, under the terms of the Icahn Group Agreement, the Icahn Group withdrew its nomination notice for the nomination of nominees for election to the Company’s board of directors for the Company’s 2022 annual meeting of stockholders. Under the terms of the Icahn Group Agreement, the Icahn Group agreed to standstill restrictions, which requires, among other things, that until the completion of the Company’s 2023 annual meeting of stockholders, the Icahn Group will refrain from acquiring additional shares of the Company Common Stock.

Note 17 - Leases
We lease certain retail stores, land, building and various equipment from others. Leases with an initial term of 12 months or less are not recorded on the balance sheet; we recognize lease expense for these leases on a straight-line basis over the lease term. Most leases include one or more options to renew, with renewal terms that can extend the lease term from one to 15 years or more. The exercise of existing lease renewal options is at our sole discretion. Certain leases also include options to purchase the leased property. The depreciable life of assets and leasehold improvements are limited by the expected lease term, unless there is a transfer of title or purchase option reasonably certain of exercise.
Some of our lease agreements include a rate based on equipment usage and others include a rate with fixed increases or inflationary indices based increase. Our lease agreements do not contain any material residual value guarantees or material restrictive covenants. We
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Notes to Condensed Consolidated Financial Statements (Unaudited)
rent or sublease certain real estate and equipment to third parties. Our sublease portfolio consists primarily of operating leases within our retail stores and crude storage equipment.
As of March 31, 2022, $24.1 million of our net property, plant, and equipment balance is subject to an operating lease. This agreement does not include options for the lessee to purchase our leasing equipment, nor does it include any material residual value guarantees or material restrictive covenants. The agreement includes a one-year renewal option and certain variable payment based on usage.
The following table presents additional information related to our operating leases in accordance ASC 842, Leases ("ASC 842"):
Three Months Ended March 31,
(in millions)20222021
Lease Cost
Operating lease costs (1)
$17.4 $17.7 
Short-term lease costs (2)
8.7 9.5 
Sublease income(0.1)(1.9)
Net lease costs$26.0 $25.3 
Other Information
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases (1)
$(17.4)$(18.3)
Leased assets obtained in exchange for new operating lease liabilities$1.5 $7.4 
Leased assets obtained in exchange for new financing lease liabilities$— $12.2 
March 31, 2022March 31, 2021
Weighted-average remaining lease term (years) operating leases4.55.1
Weighted-average remaining lease term (years) financing leases6.57.7
Weighted-average discount rate operating leases (3)
6.0 %6.4 %
Weighted-average discount rate financing leases (3)
3.3 %3.3 %
(1) Includes an immaterial amount of financing lease cost.
(2) Includes an immaterial amount of variable lease cost.
(3) Our discount rate is primarily based on our incremental borrowing rate in accordance with ASC 842.
Note 18 - Subsequent Events
Planned 3 Bear Energy - New Mexico, LLC Acquisition
On April 8, 2022, DKL Delaware Gathering, LLC (the “Purchaser”), a subsidiary of Delek Logistics, entered into a Membership Interest Purchase Agreement with 3 Bear Energy – New Mexico LLC (the “Seller”) to purchase 100% of the limited liability company interests in 3 Bear Delaware Holding – NM, LLC (the “Purchased Interests”), related to Seller’s crude oil and gas gathering, processing and transportation businesses, as well as water disposal and recycling operations, in the Delaware Basin in New Mexico (the “Purchase Agreement”). Delek Logistics also entered into a guaranty agreement with the Seller in order to guaranty the payment obligations of the Purchaser under the Purchase Agreement.
The purchase price for the Purchased Interests is $624.7 million, subject to customary adjustments under the Purchase Agreement for net working capital and indebtedness. The Purchaser paid a deposit under the Purchase Agreement of approximately $31.2 million. The deposit may be retained by the Seller upon certain termination events described in the Purchase Agreement. At closing, the deposit will be applied to the purchase price to be paid under the Purchase Agreement.
The transactions contemplated by the Purchase Agreement are expected to close around mid-year 2022. The closing is subject to customary closing conditions set forth in the Purchase Agreement, including regulatory approvals. The Purchase Agreement also contains representations and warranties of the parties, indemnification obligations, termination rights, and other covenants and agreements.

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Management's Discussion and Analysis

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Management’s Discussion and Analysis of Financial Condition and Results of Operations ("MD&A") is management’s analysis of our financial performance and of significant trends that may affect our future performance. The MD&A should be read in conjunction with our condensed consolidated financial statements and related notes included elsewhere in this Quarterly Report on Form 10-Q and in the Annual Report on Form 10-K filed with the Securities and Exchange Commission ("SEC") on February 25, 2022 (the "Annual Report on Form 10-K"). Those statements in the MD&A that are not historical in nature should be deemed forward-looking statements that are inherently uncertain.
Delek US Holdings, Inc. is a registrant pursuant to the Securities Act of 1933, as amended ("Securities Act") and is listed on the New York Stock Exchange ("NYSE") under the ticker symbol "DK". Unless otherwise noted or the context requires otherwise, the terms "we," "our," "us," "Delek" and the "Company" are used in this report to refer to Delek US Holdings, Inc. and its consolidated subsidiaries for all periods presented. You should read the following discussion of our financial condition and results of operations in conjunction with our historical condensed consolidated financial statements and notes thereto.
The Company announces material information to the public about the Company, its products and services and other matters through a variety of means, including filings with the SEC, press releases, public conference calls, the Company’s website (www.delekus.com), the investor relations section of its website (ir.delekus.com), the news section of its website (www.delekus.com/news), and/or social media, including its Twitter account (@DelekUSHoldings). The Company encourages investors and others to review the information it makes public in these locations, as such information could be deemed to be material information. Please note that this list may be updated from time to time.
Forward-Looking Statements
This Quarterly Report on Form 10-Q contains "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934 ("Exchange Act"). These forward-looking statements reflect our current estimates, expectations and projections about our future results, performance, prospects and opportunities. Forward-looking statements include, among other things, statements that refer to the previously announced proposed acquisition of 3 Bear Delaware Holding – NM, LLC (the “3 Bear Acquisition”), including any statements regarding the expected timing, benefits, synergies, growth opportunities, impact on liquidity and prospects, and other financial and operating benefits thereof, and the timing or satisfaction of regulatory and other closing conditions and the closing of the 3 Bear Acquisition, statements regarding the effect, impact, potential duration or other implications of, or expectations expressed with respect to, the outbreak of COVID-19 and its development into a pandemic in early 2020 (the "COVID-19 Pandemic" or the "Pandemic") and its impact on oil production and pricing, and statements regarding our efforts and plans in response to such events, the information concerning possible future results of operations, business and growth strategies, including as the same may be impacted by the attack on Ukraine by Russia in February 2022 (the "Russia-Ukraine War"), financing plans, expectations that regulatory developments or other matters will or will not have a material adverse effect on our business or financial condition, our competitive position and the effects of competition, the projected growth of the industry in which we operate, and the benefits and synergies to be obtained from our completed and any future acquisitions, statements of management’s goals and objectives, and other similar expressions concerning matters that are not historical facts. Words such as "may," "will," "should," "could," "would," "predicts," "potential," "continue," "expects," "anticipates," "future," "intends," "plans," "believes," "estimates," "appears," "projects" and similar expressions, as well as statements in future tense, identify forward-looking statements.
Forward-looking statements should not be read as a guarantee of future performance or results, and will not necessarily be accurate indications of the times at, or by, which such performance or results will be achieved. Forward-looking information is based on information available at the time and/or management’s good faith belief with respect to future events, and is subject to risks and uncertainties that could cause actual performance or results to differ materially from those expressed in the statements. Important factors that, individually or in the aggregate, could cause such differences include, but are not limited to:
•volatility in our refining margins or fuel gross profit as a result of changes in the prices of crude oil, other feedstocks and refined petroleum products and the impact of the COVID-19 Pandemic on such demand;
•reliability of our operating assets;
•actions of our competitors and customers;
•changes in, or the failure to comply with, the extensive government regulations applicable to our industry segments, including current and future restrictions on commercial and economic activities in response to the COVID-19 Pandemic or future pandemics;
•our ability to execute our strategy of growth through acquisitions, such as the 3 Bear Acquisition, and capital projects and changes in the expected value of and benefits derived therefrom, including any ability to successfully integrate acquisitions, realize expected synergies or achieve operational efficiency and effectiveness;
•diminishment in value of long-lived assets may result in an impairment in the carrying value of the assets on our balance sheet and a resultant loss recognized in the statement of operations;
•the unprecedented market environment and economic effects of the COVID-19 Pandemic, including uncertainty regarding the
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Management's Discussion and Analysis

timing, pace and extent of economic recovery in the United States ("U.S.") due to the COVID-19 Pandemic;
•general economic and business conditions affecting the southern, southwestern and western U.S., particularly levels of spending related to travel and tourism and the ongoing and future impacts of the COVID-19 Pandemic;
•volatility under our derivative instruments;
•deterioration of creditworthiness or overall financial condition of a material counterparty (or counterparties);
•unanticipated increases in cost or scope of, or significant delays in the completion of, our capital improvement and periodic turnaround projects;
•risks and uncertainties with respect to the quantities and costs of refined petroleum products supplied to our pipelines and/or held in our terminals;
•operating hazards, natural disasters, weather related disruptions, casualty losses and other matters beyond our control;
•increases in our debt levels or costs;
•possibility of accelerated repayment on a portion of the J. Aron supply and offtake liability if the purchase price adjustment feature triggers a change on the re-pricing dates;
•changes in our ability to continue to access the credit markets;
•compliance, or failure to comply, with restrictive and financial covenants in our various debt agreements;
•the suspension of our quarterly dividend;
•seasonality;
•increased costs of compliance with, or liability for violation of, existing or future laws, regulations and other requirements;
•legislative and regulatory measures to address climate change and greenhouse gases emissions;
•acts of terrorism (including cyber-terrorism) aimed at either our facilities or other facilities;
•impacts of global conflicts;
•future decisions by the Organization of Petroleum Exporting Countries ("OPEC") and the members of other leading oil producing countries (together with OPEC, “OPEC+”) regarding production and pricing and disputes between OPEC+ members regarding the same;
•disruption, failure, or cybersecurity breaches affecting or targeting our IT systems and controls, our infrastructure, or the infrastructure of our cloud-based IT service providers;
•changes in the cost or availability of transportation for feedstocks and refined products; and
•other factors discussed under the headings "Management’s Discussion and Analysis of Financial Condition and Results of Operations" and "Risk Factors" and in our other filings with the SEC.
In light of these risks, uncertainties and assumptions, our actual results of operations and execution of our business strategy could differ materially from those expressed in, or implied by, the forward-looking statements, and you should not place undue reliance upon them. In addition, past financial and/or operating performance is not necessarily a reliable indicator of future performance, and you should not use our historical performance to anticipate future results or period trends. We can give no assurances that any of the events anticipated by any forward-looking statements will occur or, if any of them do, what impact they will have on our results of operations and financial condition. All forward-looking statements included in this report are based on information available to us on the date of this report. We undertake no obligation to revise or update any forward-looking statements as a result of new information, future events or otherwise.
Executive Summary
Business Overview
We are an integrated downstream energy business focused on petroleum refining, the transportation, storage and wholesale distribution of crude oil, intermediate and refined products and convenience store retailing. Our operating segments consist of refining, logistics, and retail, and are discussed in the sections that follow.
Business and Economic Environment Overview
During the first quarter 2022, the economy has continued to recover from the impact of the COVID-19 Pandemic (the "Pandemic"), both globally and domestically. The widespread availability of vaccines and testing in the U.S. has contributed to stabilization in cases of COVID-19 and decreasing mortality rates across much of the country during recent months, and likewise has led to return to work, return to schools, and increased travel. These conditions have, in turn, contributed to improvements in domestic demand and refining margins heading into 2022 and during the first quarter. Additionally, while the recent and on-going Russia-Ukraine War has caused uncertainty in the geopolitical landscape and across global markets, constraints on crude oil supply resulting from sanctions on Russia have contributed to significant increases in both crude oil prices and crack spreads. These conditions contributed to a significant improvement in our refining operating results in the first quarter of 2022 compared to the prior year period. Further impacting the favorability of our current quarter results were significant improvements in our refining utilization rates, where last year we had outages related to turnaround activities, a fire at our El Dorado refinery and the effects of Winter Storm Uri. Supported by strong performance in both our logistics and retail segments as well, and despite the continued impact of RINs costs on our crack spread capture rates, our operating results were significantly improved during the quarter ended March 31, 2022 compared to the quarter ended March 31, 2021.
We continue to monitor both the Pandemic and the geopolitical environment and the related uncertainties so that we may quickly implement measures to mitigate resultant risk, as needed. Such efforts may include (but are not limited to) the following:
•Reviewing planned production throughputs at our refineries and planning for optimization of operations;
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Management's Discussion and Analysis

•Coordinating planned maintenance activities with possible downtime as a result of possible reductions in throughputs;
•Searching for additional storage capacity if needed to store potential builds in crude oil or refined product inventories;
•Finding additional suppliers for key or specialty items or securing inventory or priority status with existing vendors;
•Continued monitoring of capital expenditures;
•Continuing to evaluate the suspension of the share repurchase program and dividend distributions until our internal parameters are met for resuming such activities;
•Adopting modified remote working where possible and when immediate exposure risk warrants, and where on-site operations are required, taking appropriate safety precautions;
•Identifying alternative financing solutions as needed to enhance our access to sources of liquidity; and
•Enacting cost reduction measures across the organization, including reducing contract services, reducing overtime and other employee related costs, and reducing or eliminating non-critical travel.
As evidenced by our successful implementation of these risk mitigation activities during 2020 and 2021, we believe these strategies continue to be appropriately risk-responsive to mitigate the uncertainties related to the Pandemic and the Russia-Urkaine War and their potential impact on our cash flows and results of operations in the near term, including with respect to our liquidity positioning, operational flexibility and ability to respond to a reasonable degree of economic volatility. See the "Liquidity and Capital Resources" section of Item 2. MD&A for further information.
Refining Overview
The refining segment (or "Refining") processes crude oil and other feedstocks for the manufacture of transportation motor fuels, including various grades of gasoline, diesel fuel and aviation fuel, asphalt and other petroleum-based products that are distributed through owned and third-party product terminals. The refining segment has a combined nameplate capacity of 302,000 barrels per day as of March 31, 2022. A high-level summary of the refinery activities is presented below:
Tyler, Texas refinery (the "Tyler refinery")El Dorado, Arkansas refinery (the "El Dorado refinery")Big Spring, Texas refinery (the "Big Spring refinery")Krotz Springs, Louisiana refinery (the "Krotz Springs refinery")
Total Nameplate Capacity (barrels per day ("bpd"))75,000
80,000 (1)
73,00074,000
Primary ProductsGasoline, jet fuel, ultra-low-sulfur diesel, liquefied petroleum gases, propylene, petroleum coke and sulfurGasoline, ultra-low-sulfur diesel, liquefied petroleum gases, propylene, asphalt and sulfurGasoline, jet fuel, ultra-low-sulfur diesel, liquefied petroleum gases, propylene, aromatics and sulfurGasoline, jet fuel, high-sulfur diesel, light cycle oil, liquefied petroleum gases, propylene and ammonium thiosulfate
Relevant Crack Spread Benchmark
Gulf Coast 5-3-2
Gulf Coast 5-3-2 (2)
Gulf Coast 3-2-1 (3)
Gulf Coast 2-1-1 (4)
Marketing and Distribution
The refining segment's petroleum-based products are marketed primarily in the south central and southwestern regions of the United States, and the refining segment also ships and sells gasoline into wholesale markets in the southern and eastern United States. Motor fuels are sold under the Alon or Delek brand through various terminals to supply Alon or Delek branded retail sites. In addition, we sell motor fuels through our wholesale distribution network on an unbranded basis.
(1)     While the El Dorado refinery has a total nameplate capacity of 80,000 bpd, in order to qualify for the small refinery exemption under the Environmental Protection Agency's ("EPA") Renewable Fuel Standards regulations total output cannot exceed 75,000 bpd. El Dorado refinery’s output generally does not exceed 75,000.
(2)     While there is variability in the crude slate and the product output at the El Dorado refinery, we compare our per barrel refined product margin to the U.S. Gulf Coast ("Gulf Coast") 5-3-2 crack spread because we believe it to be the most closely aligned benchmark.
(3)     Our Big Spring refinery is capable of processing substantial volumes of sour crude oil, which has historically cost less than intermediate, and/or substantial volumes of sweet crude oil, and therefore the West Texas Intermediate ("WTI") Cushing/ West Texas Sour ("WTS") price differential, taking into account differences in production yield, is an important measure for helping us make strategic, market-respondent production decisions.
(4)     The Krotz Springs refinery has the capability to process substantial volumes of light sweet crude oil to produce a high percentage of refined light products.
Our refining segment also owns and operates three biodiesel facilities involved in the production of biodiesel fuels and related activities, located in Crossett, Arkansas, Cleburne, Texas, and New Albany, Mississippi.

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Management's Discussion and Analysis

Logistics Overview
Our logistics segment (or "Logistics") gathers, transports and stores crude oil and markets, distributes, transports and stores refined products in select regions of the southeastern United States and West Texas for our refining segment and third parties. It is comprised of the consolidated balance sheet and results of operations of Delek Logistics Partners, LP ("Delek Logistics", NYSE:DKL), where we owned an 78.9% interest in Delek Logistics at March 31, 2022. Delek Logistics was formed by Delek in 2012 to own, operate, acquire and construct crude oil and refined products logistics and marketing assets. A substantial majority of Delek Logistics' assets are currently integral to our refining and marketing operations. The logistics segment's pipelines and transportation business owns or leases capacity on approximately 400 miles of crude oil transportation pipelines, approximately 450 miles of refined product pipelines, and an approximately 900-mile crude oil gathering system and associated crude oil storage tanks with an aggregate of approximately 10.2 million barrels of active shell capacity. It also owns and operates ten light product terminals and markets light products using third-party terminals. Logistics has strategic investments in pipeline joint ventures that provide access to pipeline capacity as well as the potential for earnings from joint venture operations. The logistics segment owns or leases approximately 264 tractors and 353 trailers used to haul primarily crude oil and other products for related and third parties.
Retail Overview
Our retail segment (or "Retail") at March 31, 2022 includes the operations of 248 owned and leased convenience store sites located primarily in West Texas and New Mexico. Our convenience stores typically offer various grades of gasoline and diesel under the DK or Alon brand name and food products, food service, tobacco products, non-alcoholic and alcoholic beverages, general merchandise as well as money grams to the public, primarily under the 7-Eleven and DK or Alon brand names pursuant to a license agreement with 7-Eleven, Inc. In November 2018, we terminated the license agreement with 7-Eleven, Inc. and the terms of such termination and subsequent amendments require the removal of all 7-Eleven branding on a store-by-store basis by December 31, 2023. Merchandise sales at our convenience store sites will continue to be sold under the 7-Eleven brand name until 7-Eleven branding is removed pursuant to the termination. As of March 31, 2022, we have removed the 7-Eleven brand name at 55 of our store locations. Substantially all of the motor fuel sold through our retail segment is supplied by our Big Spring refinery, which is transferred to the retail segment at prices substantially determined by reference to published commodity pricing information.
The cost to acquire the refined fuel products we sell to our wholesale customers in our logistics segment and at our convenience stores in our retail segment depends on numerous factors beyond our control, including the supply of, and demand for, crude oil, gasoline and other refined petroleum products which, in turn, depend on, among other factors, changes in domestic and foreign economies, weather conditions, domestic and foreign political affairs, production levels, the availability of imports, the marketing of competitive fuels and government regulation. Our retail merchandise sales are driven by convenience, customer service, competitive pricing and branding. Motor fuel margin is sales less the delivered cost of fuel and motor fuel taxes, measured on a cents per gallon basis. Our motor fuel margins are impacted by local supply, demand, weather, competitor pricing and product brand.
Corporate and Other Overview
Our corporate activities, results of certain immaterial operating segments, our asphalt terminal operations, our wholesale crude operations, and intercompany eliminations are reported in corporate, other and eliminations in our segment disclosures. Additionally, our corporate activities include certain of our commodity and other hedging activities.

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Management's Discussion and Analysis

Strategic Update
A New Framework: Long-Term Sustainability
The emphasis on environmental responsibility and long-term economic and environmental sustainability is accelerating, with increased demand for transparency evolving out of the ESG movement. As we evaluate our current ESG positioning in the market, we also must integrate a broader sustainability view to all of our activities, both operational and strategic. For these reasons, we have developed a Long-Term Sustainability Framework, which will help us to formulate our strategic objectives and initiatives.
Long-Term Sustainability Framework: Overarching Objectives
Certain fundamental principles are foundational to our Long-Term Sustainability Framework, and direct us as we develop our guiding objectives. With that in mind, we have initially identified the following overarching objectives:
I.    Redirect Corporate Culture towards Innovation, Excellence, and Operating Discipline.
II.    Focus on Operational Optimization and Improved Margin Capture.
III.    Implement Digital Transformation Strategy.
IV.    Identify ESG-Conscious Investments with Clear Value Propositions and Sustainable Returns.
V.     Evaluate Strategic Priorities and Redefine Long-term Sustainable Business Model.
Long-Term Sustainability Framework: Key Initiatives
Additionally, integral to our Long-Term Sustainability Framework and the achievement of the initial overarching objectives are the following key initiatives:
•Transform our corporate and operating culture into "One Delek" through unification of purpose, vision and strategy with an emphasis on cultural sustainability.
•Transform our refining operations into the "Refinery of the Future" founded on digitization and automation, innovation and synergistic discipline.
•Develop a "New Energy" mentality focused on understanding the future of energy on a global scale and how Delek can be a leader and facilitator of positive, sustainable change in the energy industry.
Long-Term Sustainability Strategy: A Snapshot
The Overarching Objectives and Key Initiatives are integrated and interdependent, representative of the synergistic approach we are employing, and together comprise our Long-term Sustainability Strategy, as illustrated below (see further discussion in our 2021 Annual Report on Form 10-K):
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Management's Discussion and Analysis

2022 Strategic Developments
In our 2021 Annual Report on Form 10-K, we further defined our 2022 strategy by identifying certain key Focused Objectives and Priorities, as they relate to our Key Initiatives. The following table presents some of our most significant 2022 developments to date towards the achievement of our Focused Objectives:
Key Initiative: Implementing One Delek Culture TransformationKey Initiative: Planning for Refinery of the Future Operational Transformation
Focused Objective: Improving Efficiency in Systems and Processes
We are committed to becoming even more efficient by focusing on our systems and processes. We know there is always room for improvement, and those improvements can make every employee more effective and valued.
Improving Consistency and Transparency by Conforming Refining Inventory Accounting Methodology:
As of January 1, 2022, we changed our method for accounting for inventory held at the Tyler Refinery to the first-in, first-out ("FIFO") cost method from the last-in, first-out ("LIFO") cost method. This change in accounting method will conform the Company’s refining inventory to a single method of accounting, and will eliminate the inherent volatility in the LIFO valuation of inventory attributable to increments and decrements in historical LIFO layers, which can impact comparability between periods as well as to market conditions and crack spreads. For these reasons, we expect that the newly adopted accounting principle will improve financial reporting by providing better consistency, better transparency, and recognition that better reflects the physical flow of inventory and more accurately reflects the current value of inventory. The effects of this change have been retrospectively applied to all periods presented with a cumulative effect adjustment reflected in the January 1, 2021 beginning retained earnings. (See further discussion in Note 6 to our Condensed Consolidated Financial Statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q).
Focused Objective: Balancing Risk and Reward
As we continue to grow, we want to cultivate a healthy appetite for risk. That means, when we make decisions, we plan to identify those risks that come with the greatest potential for success, and pursue them with care.
Increasing Shareholder Value and Reducing Outsider Risk through Stock Purchase and Cooperation Agreement:
On March 7, 2022, Delek entered into a stock purchase and cooperation agreement (the “Icahn Group Agreement”) with IEP Energy Holding LLC, a Delaware limited liability company, American Entertainment Properties Corp., a Delaware corporation, Icahn Enterprises Holdings L.P., a Delaware limited partnership, Icahn Enterprises G.P. Inc., a Delaware corporation, Beckton Corp., a Delaware corporation, and Carl C. Icahn (collectively, the “Icahn Group”), pursuant to which the Company agreed to purchase an aggregate of 3,497,268 shares of common stock of the Company, at a price per share of $18.30, the closing price of a share of Company common stock on the New York Stock Exchange on March 4, 2022, the last trading day prior to the execution of the Ichan Group Agreement, which equals an aggregate purchase price of $64.0 million. (See further discussion in Note 16 to our Condensed Consolidated Financial Statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q).
Focus on Leadership Succession Planning:
On March 28, 2022, Delek announced a Chief Executive Officer ("CEO") succession plan under which Ezra Uzi Yemin, the Company’s current President and CEO, will become Executive Chairman of the Board of Directors (the “Board”). Under the succession plan, the Board has approved the appointment of Avigal Soreq as the next President and CEO of the Company, to be effective in June 2022. Mr. Soreq has been the Chief Executive Officer of El Al Israel Airlines, the national airline of Israel, since January 2021. Prior to that, he served as a member of the Company’s executive management team, including as the Chief Operating Officer from March 2020 until January 2021, its Chief Commercial Officer from November 2016 until March 2020, an Executive Vice President from August 2015 until January 2021, and a Vice President from 2012 until 2015. In addition, Mr. Soreq served as an Executive Vice President of Delek Logistics GP, LLC from 2015 until 2021, and as its Vice President from 2012 until 2015. In addition, effective March 27, 2022, the Board named Todd O’Malley the Chief Operating Officer of the Company. Mr. O’Malley has served as an Executive Vice President and the Chief Commercial Officer of the Company since March 2021. The Company also announced that it has named Nithia Thaver an Executive Vice President and the Company’s President of Refining. Mr. Thaver has served as the Company’s Senior Vice President, Refining, since December 2018. Delek also announced on March 27, 2022, that Leonardo Moreno, a highly experienced executive in the global renewable energy and technology sector, has been appointed director to the Board. Mr. Moreno will stand for election at the Company’s 2022 annual meeting of stockholders. With this appointment, the Board has been expanded to comprise eight directors, seven of whom are independent and three of whom are diverse, fulfilling the Company’s objective of at least 30% of the Board comprising diverse members by 2022.
Focused Objective: Balancing Risk and Reward / Driving EBITDA Improvements
As we continue to grow, we want to cultivate a healthy appetite for risk. That means, when we make decisions, we plan to identify those risks that come with the greatest potential for success, and pursue them with care.
Planned Strategic Midstream Acquisition:
On April 8, 2022, DKL Delaware Gathering, LLC (the “Purchaser”), a subsidiary of Delek Logistics, entered into a Membership Interest Purchase Agreement with 3 Bear Energy – New Mexico LLC (the “Seller”) to purchase 100% of the limited liability company interests in 3 Bear Delaware Holding – NM, LLC (the “Purchased Interests”), related to Seller’s crude oil and gas gathering, processing and transportation businesses, as well as water disposal and recycling operations, in the Delaware Basin in New Mexico (the “Purchase Agreement”). The purchase price for the Purchased Interests is $624.7 million, subject to customary adjustments under the Purchase Agreement for net working capital and indebtedness. The Purchaser paid a deposit under the Purchase Agreement of approximately $31.2 million. The transactions contemplated by the Purchase Agreement are expected to close around mid-year 2022. (See further discussion in Note 18 to our Condensed Consolidated Financial Statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q). This planned acquisition provides us the opportunity to significantly expand our third-party midstream EBITDA and contribution margin within our logistics segment.
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Management's Discussion and Analysis

Market Trends
Our results of operations are significantly affected by fluctuations in the prices of certain commodities, including, but not limited to, crude oil, gasoline, distillate fuel, biofuels, natural gas and electricity, among others. Historically, the impact of commodity price volatility on our refining margins (as defined under the heading "Non-GAAP Measures" in MD&A Item 2.), specifically as it relates to the price of crude oil as compared to the price of refined products and timing differences in the movements of those prices (subject to our inventory costing methodology), as well as location differentials, may be favorable or unfavorable compared to peers. Additionally, our refining margin profitability is impacted by regulatory factors, including the cost of Renewable Identification Numbers ("RINs").
During the first quarter 2022, the economy has continued to recover from the impact of the COVID-19 Pandemic, both globally and domestically. The widespread availability of vaccines and testing in the U.S. has contributed to stabilization in cases of COVID-19 and decreasing mortality rates across much of the country during recent months, and likewise has led to return to work, return to schools, and increased travel. These conditions have, in turn, contributed to improvements in domestic demand for refined products and refining margins, which were further impacted by the Pandemic-related reduction in crude oil production and the closure of various domestic refining operations. Additionally, the Russia-Ukraine War has caused significant consternation among NATO countries and across the global landscape, resulting in sanctions on Russia and disrupting the global markets in ways that could not and cannot be fully anticipated. The reduced dependence on the Russian oil supply is impacting demand for domestic crude and refined product, as well as natural gas exports. The uncertainties surrounding future oil supply are compounded by conflicts in the Middle East, which resulted in damaged fuel storage facilities in Abu Dhabi and increases in oil production in countries such as Libya and Kazakhstan in response to blockades and other disruptions. All of these contributing factors, combined with upward price pressures on natural gas, liquified natural gas ("LNG"), and coal energy are causing an increase in the demand for hydrocarbon-based energy.
Because of the increasing post-Pandemic demand combined with the Russia-Ukraine War putting pressure on global supply of both crude oil and petroleum-based products, there were continued marked improvements in refined product pricing and crack spreads during the first quarter 2022. Average gasoline (CBOB) prices increased to $2.71 from $1.71 in the first quarter 2022 compared to the first quarter 2021, or a 58.2% increase, while the average 5-3-2 ULSD crack spread has increased to $23.68 from $13.57 in the first quarter 2022 compared to the first quarter 2021, or a 74.5% increase. Subsequent to March 31, 2022, we continue to see strong market conditions in downstream refining, with distillate crack spreads reaching record highs. The domestic WTI differentials compared to Brent continued to be favorable during the first quarter of 2022, while the WTI Midland differential to Cushing remained relatively flat coming off the fourth quarter 2021, though it was favorable to our operations compared to the premium environment that existed in the first quarter of 2021.
During the Pandemic, when demand was constrained and crack spreads did not always support running at high utilization levels, we intentionally focused our efforts on targeted operational improvements and turnaround activities that would position us well for post-Pandemic economic recoveries. As a result of those efforts, including several targeted turnaround activities performed during 2021, and despite normal seasonality pressures, we were poised to take advantage of the current highly favorable market conditions and optimize our market share capture. Our operating results demonstrate the success of these efforts, reflecting a crude throughput utilization rate of 95% in the first quarter 2022 compared to 64% in the first quarter of 2021. As we look to the second quarter, we plan to continue to capitalize on our Pandemic strategic activities and expect to run our refineries at or near our nameplate capacity. Furthermore, looking beyond the second quarter, with no planned major turnaround activity for the remainder of the year and barring unforeseen disruptions, we are well-positioned to run our refineries at optimum utilization rates for the duration of 2022 for as long as these favorable crack spread conditions persist.
Market Outlook for the Remainder of 2022
As we finished the first quarter, we saw increasing pressure on crude oil and refined product supply, cemented with the March 8, 2022 formal announcement of a ban on US imports of Russian oil. Looking forward to the second quarter, the pressure is only continuing to build as more countries sanction Russia and supply chain disruptions mount across the War-affected regions. Furthermore, as the Russia-Ukraine War continues, industry forecasts predict that Russian oil exports (crude oil, products, and feedstocks) will remain significantly lower than pre-War volumes in the near term, and that such conditions may extend through the remainder of 2022. These conditions support a bullish outlook for continued strong demand for crude oil and refined product which, barring unforeseen circumstances or significant government intervention, are widely expected to translate into continued strong crack spreads in the coming months. Pressure in the U.S. to curb soaring fuel prices at the pump have already resulted in some government measures, including the March 31, 2022 announcement of a 180 million barrel, six-month release of crude oil from the Strategic Petroleum Reserve (“SPR”). Additional government measures are possible, which could result in incremental backwardation, though the nature and effect of such measures are currently unknown.
From a geographic positioning perspective, absent government intervention, industry analysts expect the Brent, a global benchmark crude, to WTI differential to continue to be favorable for domestic exports throughout 2022, including the U.S. Gulf Coast region. Furthermore, while the likelihood of a favorable Midland-Cushing differential is constrained by overbuilt pipeline capacity, significant export developments and other factors could quickly shift differentials to be more favorable to our Permian-heavy positioning. We currently employ commercial strategies to minimize differential risk associated with our concentrated gathering activities in the Permian Basin, but
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Management's Discussion and Analysis

we are well-positioned to capitalize on a favorable shift in Midland WTI pricing compared to other benchmark crudes, including Cushing WTI.
Despite the tremendous market environment during the first quarter 2022, the costs of RINs regulatory compliance continues to negatively impact our ability to capture crack spreads compared to other, larger refiners. In December 2021, the EPA proposed a rule to revise 2021 Renewable Volume Requirements and to suggest rates for 2022 and 2023, including proposed views that such changes may be sufficient to render the granting of small refinery exemptions unnecessary, based on the arguably inaccurate presumption that small refineries are not unduly burdened by the cost of RINs. Additionally, in April 2022, the EPA overturned the previously granted 2018 SREs, of which we received three such exemptions (for all our refineries except Big Spring), though it further announced that compliance will not be required. Many consider this move to be indicative of the EPA's unfavorable sentiment around 2019 and 2020 pending SRE applications which, if this view persists, could result in significant increases in RINs prices over the coming months. Accordingly, while our Net RINs Obligation will not be directly impacted by the EPA's 2018 SRE reversal decision, our Net RINs Obligation in future periods may be negatively impacted by volatility in prices, likewise disproportionately impacting our ability to capture crack spread, particularly compared to our larger refinery competitors. For these reasons, we are continuing to pursue the small refinery exemptions through legal and regulatory means available to us.
Finally, while the global economic environment continues to support growth, both growth and stability continue to be impacted by building inflationary pressures, including with respect to essentials like housing, food, transportation and heat. The U.S. Federal Reserve and fellow central banks have made and are considering further rate changes to combat the rising inflation. Successful efforts along these lines could cause the cost of capital to rise and could negatively impact construction and other growth efforts that drive demand for our products, but could also reduce the burden on consumers which could lead to increases in discretionary travel and other activities requiring refined fuel products. Because of this uncertainty, there continues to be risk around inflation as well as the potential impact of regulatory efforts to curb inflation which cannot currently be determined.
See the following pages for further discussion on how certain key market trends impact our refining margins.
Crude Prices
WTI crude oil represents the largest component of our crude slate at all of our refineries, and can be sourced through our gathering channels or optimization efforts from Midland, Texas or Cushing, Oklahoma or other locations. We manage our supply chain risk to ensure that we have the barrels to meet our crude slate consumption plan for each month through gathering supply contracts and throughput agreements on various strategic pipelines, some of which include those where we hold equity method investments. We manage market price risk on crude oil through financial derivative hedges, in accordance with our risk management strategies.The table below reflects the quarterly average prices of WTI Midland and WTI Cushing crude oil for each of the quarterly periods in 2021 and for the first quarterly period in 2022.
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Management's Discussion and Analysis

Crude Pricing Differentials
As U.S. crude oil production has increased over recent years, domestic refiners have benefited from the discount for WTI Cushing compared to Brent. This generally leads to higher margins in our refineries, as refined product prices are influenced by Brent crude prices and the majority of our crude supply is WTI-linked. Because of our positioning in the Permian basin, including our access to significant sources of WTI Midland crude through our gathering system, we are even further benefited by discounts for WTI Midland/WTI Cushing differentials. When these discounts shrink or become premiums, our reliance on WTI-linked crude pricing, and specifically WTI Midland crude, can negatively impact our refining margins. Conversely, as these price discounts widen, so does our competitive advantage, created specifically by our access to WTI Midland crude sourced through our gathering systems.
The chart below illustrates the key differentials impacting our refining operations, including WTI Cushing to Brent, WTI Midland to WTI Cushing, and Louisiana Light Sweet crude oil ("LLS") to WTI Cushing for each of the quarterly periods in 2021 and for the first quarterly period in 2022.
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Refined Product Prices
Our refineries produce the following products:
Tyler RefineryEl Dorado RefineryBig Spring RefineryKrotz Springs Refinery
Primary ProductsGasoline, jet fuel, ultra-low-sulfur diesel, liquefied petroleum gases, propylene, petroleum coke and sulfurGasoline, ultra-low-sulfur diesel, liquefied petroleum gases, propylene, asphalt and sulfurGasoline, jet fuel, ultra-low-sulfur diesel, liquefied petroleum gases, propylene, aromatics and sulfurGasoline, jet fuel, high-sulfur diesel, light cycle oil, liquefied petroleum gases, propylene and ammonium thiosulfate
The charts below illustrate the quarterly average prices of Gulf Coast Gasoline ("CBOB"), U.S. High Sulfur Diesel ("HSD") and U.S. Ultra Low Sulfur Diesel ("ULSD") for each of the quarterly periods in 2021 and for the first quarterly period in 2022.
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Management's Discussion and Analysis

Crack Spreads
Crack spreads are used as benchmarks for predicting and evaluating a refinery's product margins by measuring the difference between the market price of feedstocks/crude oil and the resultant refined products. Generally, a crack spread represents the approximate refining margin resulting from processing one barrel of crude oil into its outputs, generally gasoline and diesel fuel.
The table below reflects the quarterly average Gulf Coast 5-3-2 ULSD, 3-2-1 ULSD and 2-1-1 HSD/LLS crack spreads for each of the quarterly periods in 2021 and for the first quarterly period in 2022. As the chart illustrates, the 3-2-1 crack spread has consistently outperformed the 5-3-2 and the 2-1-1 crack spreads. When market conditions consist of near-capacity throughputs and no significant outages, our Big Spring refinery, whose benchmark is the 3-2-1 crack spread, should outperform our other refineries in terms of refining margin, which are benchmarked against either the 5-3-2 or the 2-1-1 crack spreads.
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RIN Volatility
Environmental regulations and the political environment continue to affect our refining margins in the form of volatility in the price of RINs. We enter into future commitments to purchase or sell RINs at fixed prices and quantities, which are used to manage the costs of our credits for commitments required by the EPA to blend biofuels into fuel products ("RINs Obligation"). On a consolidated basis, we work to balance our RINs Obligation in order to minimize the effect of RINs on our results. While we obtain RINs in our refining and logistics segments through our ethanol and biodiesel production and blending, and generate RINs through biodiesel production, our refining segment still must purchase additional RINs to satisfy its obligations. Additionally, our ability to obtain RINs through blending is limited by our refined product slate, blending capabilities and market constraints.The cost to purchase these additional RINs is a significant cash outflow for our business. Increases in the market prices of RINs generally adversely affect our results of operations through changes in fair value to our existing RINs Obligation, to the extent we do not have offsetting RINs inventory on hand or effective economic hedges through net forward purchase commitments. RINs prices are highly sensitive to regulatory and political influence and conditions, and therefore often do not correlate to movements in crude oil prices, refined product prices or crack spreads. Furthermore, RIN prices are impacted by market expectations regarding whether the EPA may grant certain Small Refinery Exemptions ("SREs"). Because of the volatility in RINs prices, it is not possible to predict future RINs cost with certainty, and movements in RIN prices can have significant and unanticipated adverse effects on our refining margins that are outside of our control.
The chart below illustrates the volatility in RINs beginning with the first quarter of 2021 through the first quarter of 2022.
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Management's Discussion and Analysis

Energy Costs
Energy costs are a significant element of our Refining contribution margin and can significantly impact our ability to capture crack spreads, with natural gas representing the largest component. Natural gas prices are driven by supply-side factors such as amount of natural gas production, level of natural gas in storage and import and export activity, while demand-side factors include variability of weather, economic growth and the availability and price of other fuels. Refiners and other large-volume fuel consumers may be more or less susceptible to volatility in natural gas prices depending on their consumption levels as well as their capabilities to switch to more economical sources of fuel/energy. Additionally, geographic location of facilities make consumers vulnerable to price differentials of natural gas available at different supply hubs. Within Delek’s geographic footprint, we source the majority of our natural gas from the Gulf Coast, and secondarily from the Permian, coinciding with the physical locations of our refineries. We manage our risk around natural gas prices by entering into variable and fixed-price supply contracts in both the Gulf and Permian Basin or by entering into derivative hedges based on forecasted consumption and forward curve prices, as appropriate, in accordance with our risk policy.
The chart below illustrates the quarterly average prices of Waha (Permian Basin) and Henry Hub (Gulf Coast) beginning with the first quarter of 2021 through the first quarter of 2022.
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Management's Discussion and Analysis

Critical Accounting Estimates
The preparation of our condensed consolidated financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses and related disclosure of contingent assets and liabilities. The SEC has defined critical accounting policies as those that are both most important to the portrayal of our financial condition and results of operations, and require our most difficult, subjective or complex judgments or estimates. Based on this definition and as further described in our 2021 Annual Report on Form 10-K, we believe our critical accounting policies include the following: (i) evaluating impairment for property, plant and equipment and definite life intangibles, (ii) evaluating potential impairment of goodwill, (iii) estimating environmental expenditures, and (iv) estimating asset retirement obligations. Additionally, we have identified the following critical accounting policy that impacts the three months ended March 31, 2022:
Under Accounting Standards Codification ("ASC") 740, Income Taxes (“ASC 740”), we use an estimated annual effective tax rate ("AETR") to record income taxes. The development of the estimated AETR involves significant judgment, particularly early in the year and in times of economic uncertainty. As of and during the three months ended March 31, 2022, our estimates of the expected AETR reflected inputs which are subject to judgment including (but not necessarily limited to) the following:
•Forecasted pre-tax U.S. generally accepted accounting principles ("GAAP") income or loss for the year
•Estimates of expected permanent differences in GAAP income or loss and taxable income or loss for the year
•Forecasted capital expenditures for the year and future years (where such activities can be impacted by unanticipated events)
•Expected applicable jurisdictional tax rates
•Estimated impact of possible deduction and tax credit limitations
•Estimates regarding net operating losses, carryback and carryforward provisions (and limitations) and valuation allowances
All of these inputs are subject to significant judgment and assumptions about future events impacting 2022, some of which are based on historical trends and results, operational plans, and projections regarding future pricing and profitability (where we utilize third party forward curves and pricing sources, where possible, but where expectations regarding capture rates and other factors involve judgment). We also note that, while economic conditions affecting our industry and industry outlooks related to COVID-19 are stabilizing and improving, there remains a level of uncertainty related to COVID-19 and the expectations for recovery that increases the level of judgment involved with some of these assumptions. Accordingly, where appropriate, we may consider the probability of certain components in determining what we believe to be a reasonable estimate based on conditions and events that were in existence as of our reporting date, which may also involve the use of significant management judgment. Furthermore, many of our assumptions are inter-relational, where changing one assumption can impact other assumptions (e.g., in terms of the applicability of or limitations under various tax code provisions).
The nature of the AETR estimation approach for recording income taxes requires continuous review and adjustment during the year based on actual results, and as better information regarding forecasted results and assumptions becomes available. Significant changes in any of these assumptions or in actual results compared to our forecasts and assumptions could cause material changes in our AETR, which could result in cumulative adjustments to reflect the new estimates in future periods.
We have developed and utilized methodologies and rationales for the development of our assumptions, subject to internal controls and sensitivity or probability assessments, as appropriate, and we believe our process provides a reasonable basis for our estimated AETR as well as the income taxes as of and for the three months ended March 31, 2022.

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Management's Discussion and Analysis

Non-GAAP Measures
Our management uses certain “non-GAAP” operational measures to evaluate our operating segment performance and non-GAAP financial measures to evaluate past performance and prospects for the future to supplement our GAAP financial information presented in accordance with U.S. GAAP. These financial and operational non-GAAP measures are important factors in assessing our operating results and profitability and include:
•Refining margin - calculated as the difference between net refining revenues and total cost of materials and other;
•Refined product margin - calculated as the difference between net revenues attributable to refined products (produced and purchased) and related cost of materials and other (which is applicable to both the refining segment and the West Texas wholesale marketing activities within our logistics segment); and
•Refining margin per barrels sold - calculated as refining margin divided by our average refining sales in barrels per day (excluding purchased barrels) multiplied by 1,000 and multiplied by the number of days in the period.
We believe these non-GAAP operational and financial measures are useful to investors, lenders, ratings agencies and analysts to assess our ongoing performance because, when reconciled to their most comparable GAAP financial measure, they provide improved comparability between periods through the exclusion of certain items that we believe are not indicative of our core operating performance and that may obscure our underlying results and trends.
Non-GAAP measures have important limitations as analytical tools, because they exclude some, but not all, items that affect net earnings and operating income. These measures should not be considered substitutes for their most directly comparable U.S. GAAP financial measures.
Non-GAAP Reconciliations
The following table provides a reconciliation of refining margin to the most directly comparable U.S. GAAP measure, gross margin:
Reconciliation of refining margin to gross margin (in millions)
Refining Segment
Three Months Ended March 31,
2022
 2021
As Adjusted (1)
Net revenues
$3,493.7 $1,740.1 
Cost of sales
3,449.6 1,781.8 
Gross margin
44.1 (41.7)
Add back (items included in cost of sales):
Operating expenses (excluding depreciation and amortization)(1)(2)
119.9 114.7 
Depreciation and amortization
52.8 52.1 
Refining margin
$216.8 $125.1 
(1) Adjusted to reflect the retrospective change in accounting policy from LIFO to FIFO for certain inventories. For further discussion, see Note 6 to our Condensed Consolidated Financial Statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q.
(2)    Reflects the prior period conforming reclassification adjustment between operating expenses and general and administrative expenses.

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Management's Discussion and Analysis

Summary Financial and Other Information
The following table provides summary financial data for Delek:
Consolidated Summary Statement of Operations Data
Three Months Ended
(in millions)(1)
March 31,
2022
 2021
As Adjusted (1)
Net revenues$4,459.1 $2,392.2 
Total operating costs and expenses(2)
4,412.4 2,439.6 
Operating income (loss)(2)
46.7 (47.4)
Total non-operating expense, net28.8 23.6 
Income (loss) before income tax expense (benefit)17.9 (71.0)
Income tax expense (benefit)3.1 (8.3)
Net income (loss)14.8 (62.7)
Net income attributed to non-controlling interests8.2 7.3 
Net loss attributable to Delek $6.6 $(70.0)
(1) This information is presented at a summary level for your reference. See the Consolidated Condensed Statements of Income included in Item 1. to this Quarterly Report on Form 10-Q for more detail regarding our results of operations and net loss per share.
(2) Adjusted to reflect the retrospective change in accounting policy from LIFO to FIFO for certain inventories. For further discussion, see Note 6 to our Condensed Consolidated Financial Statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q.
We report operating results in three reportable segments:
•Refining
•Logistics
•Retail
Decisions concerning the allocation of resources and assessment of operating performance are made based on this segmentation. Management measures the operating performance of each of its reportable segments based on the segment contribution margin which is defined as net revenues less costs of materials and other and operating expenses, excluding depreciation and amortization.        

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Management's Discussion and Analysis

Results of Operations
Consolidated Results of Operations — Comparison of the Three Months Ended March 31, 2022 versus the Three Months Ended March 31, 2021
Net Loss
Consolidated net income for the first quarter of 2022 was $14.8 million compared to net loss of $62.7 million for the first quarter of 2021. Consolidated net income attributable to Delek for the first quarter of March 31, 2022 was $6.6 million, or $0.09 per basic share, compared to net loss of $70.0 million, or $(0.95) per basic share, for the first quarter 2021. Explanations for significant drivers impacting net income as compared to the comparable period of the prior year are discussed in the sections below.
Net Revenues
In the first quarters of 2022 and 2021, we generated net revenues of $4,459.1 million and $2,392.2 million, respectively, an increase of $2,066.9 million, or 86.4%. The increase in net revenues was primarily driven by the following factors:
•in our refining segment, increases in the average price of U.S. Gulf Coast gasoline of 58.17%, ULSD of 76.81%, and HSD of 79.29%;
•in our logistics segment, increases in the average volumes of diesel sold and in the average sales price per gallon of diesel and gasoline sold in our West Texas marketing operations; and
•in our retail segment, increases in fuel sales primarily attributable to a 40.6% increase in average price charged per gallon sold.
Total Operating Costs and Expenses
Cost of Materials and Other
Cost of materials and other was $4,152.5 million for the first quarter of 2022 compared to $2,172.8 million for the first quarter of 2021, an increase of $1,979.7 million, or 91.1%. The net increase in cost of materials and other was primarily driven by the following:
•increases in cost of crude oil feedstocks at the refineries, including a 64.0% increase in the average cost of WTI Cushing crude oil and a 61.3% increase in the average cost of WTI Midland crude oil;
•increases in average RINs costs during the first quarter of 2022 compared to the first quarter of 2021;
•an increase in hedging losses compared to the first quarter of the prior year;
•increases in the average volumes sold and average cost per gallon of gasoline and diesel sold in our logistics segment; and
•an increase in retail cost of materials and other due to 48.8% increase in average cost per gallon sold applied to higher fuel sales volumes.
Operating Expenses
Operating expenses were $166.9 million for the first quarter of 2022 compared to $155.3 million for the first quarter of 2021, an increase of $11.6 million, or 7.5%. The increase in operating expenses was primarily driven by the following:
•an increase in variable costs and utilities associated with higher throughput during current period;
•higher natural gas prices in the first quarter of 2022; and
•increases in employee cost primarily related to increased salaries, wages and other benefits.
Such increases were partially offset by a decrease in outside services, maintenance and lease costs.
General and Administrative Expenses
General and administrative expenses were $53.1 million for the first quarter of 2022 compared to $41.1 million for the first quarter of 2021, an increase of $12.0 million, or 29.2%. The increases were primarily driven by an increase in headcount and increases in salaries, wages and other benefits.
Depreciation and Amortization
Depreciation and amortization (included in both cost of sales and other operating expenses) was $68.3 million for the first quarter of 2022 compared to $68.5 million for the first quarter of 2021, a decrease of $0.2 million, or 0.3%.
Other Operating Income, Net
Other operating income, net increased by $30.3 million in the first quarter of 2022 to $28.4 million compared to a loss of $1.9 million in the first quarter of 2021. The increases were primarily driven by an increase due to realized hedge gains during Q1 2022.
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Management's Discussion and Analysis

Non-operating Expenses, Net
Interest Expense, Net
Interest expense,net increased by $9.0 million, or 30.6%, to $38.4 million in the first quarter of 2022 compared to $29.4 million in the first quarter of 2021, primarily driven by the following:
•an increase in the average effective interest rate of 1.27% in the first quarter of 2022 compared to the first quarter of 2021 (where effective interest rate is calculated as interest expense divided by the net average borrowings/obligations outstanding); and
•an increase in net average borrowings outstanding (including the obligations under the supply and offtake agreements which have an associated interest charge) of approximately $12.6 million in the first quarter of 2022 (calculated as a simple average of beginning borrowings/obligations and ending borrowings/obligations for the period) compared to the first quarter of 2021.
Results from Equity Method Investments
We recognized income of $10.9 million from equity method investments during the first quarter of 2022, compared to $4.8 million for the first quarter of 2021, an increase of $6.1 million. This increase was primarily driven by the following:
•increase in income from our Red River and Caddo equity method investment due to higher throughput volumes and resulting revenue increases; and
•an increase in income from our investment in W2W Holdings LLC to income of $2.1 million in the first quarter of 2022 from a loss of $0.3 million in the first quarter of 2021.
Income Taxes
Income tax expense increased by $11.4 million in the first quarter of 2022 compared to the first quarter of 2021, primarily driven by the following:
•pre-tax income of $17.9 million in the first quarter of 2022, as compared to loss of $71.0 million for the first quarter of 2021; and
•an increase in our effective tax rate which was 17.3% for the first quarter of 2022, compared to 11.7% for the first quarter of 2021 primarily due to the following:
◦the impact of credits and permanent differences on the tax rate due to changes in pre-tax book income; and
◦changes in the deferred tax asset for equity-based compensation and valuation allowance for state tax attributes.
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Management's Discussion and Analysis

Refining Segment
The tables and charts below set forth certain information concerning our refining segment operations ($ in millions, except per barrel amounts):
Refining Segment Margins
Three Months Ended
March 31,
2022
Adjusted 2021 (1)
Net revenues
$3,493.7 $1,740.1 
Cost of materials and other3,276.9 1,615.0 
Refining margin
216.8 125.1 
Operating expenses (excluding depreciation and amortization)(1) (2)
119.9 114.7 
Contribution margin(1)
$96.9 $10.4 
(1) Adjusted to reflect the retrospective change in accounting policy from LIFO to FIFO for certain inventories. For further discussion, see Note 6 to our Condensed Consolidated Financial Statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q.
(2)    Reflects the prior period conforming reclassification adjustment between operating expenses and general and administrative expenses.
Factors Impacting Refining Profitability
Our profitability in the refining segment is substantially determined by the difference between the cost of the crude oil feedstocks we purchase and the price of the refined products we sell, referred to as the "crack spread", "refining margin" or "refined product margin". Refining margin is used as a metric to assess a refinery's product margins against market crack spread trends, where "crack spread" is a measure of the difference between market prices for crude oil and refined products and is a commonly used proxy within the industry to estimate or identify trends in refining margins.
The cost to acquire feedstocks and the price of the refined petroleum products we ultimately sell from our refineries depend on numerous factors beyond our control, including the supply of, and demand for, crude oil, gasoline and other refined petroleum products which, in turn, depend on, among other factors, changes in domestic and foreign economies, weather conditions such as hurricanes or tornadoes, local, domestic and foreign political affairs, global conflict, production levels, the availability of imports, the marketing of competitive fuels and government regulation. Other significant factors that influence our results in the refining segment include operating costs (particularly the cost of natural gas used for fuel and the cost of electricity), seasonal factors, refinery utilization rates and planned or unplanned maintenance activities or turnarounds. Moreover, while the fluctuations in the cost of crude oil are typically reflected in the prices of light refined products, such as gasoline and diesel fuel, the price of other residual products, such as asphalt, coke, carbon black oil and liquefied petroleum gas ("LPG") are less likely to move in parallel with crude cost. This could cause additional pressure on our realized margin during periods of rising or falling crude oil prices.
Additionally, our margins are impacted by the pricing differentials of the various types and sources of crude oil we use at our refineries and their relation to product pricing. Our crude slate is predominantly comprised of WTI crude oil. Therefore, favorable differentials of WTI compared to other crude will favorably impact our operating results, and vice versa. Additionally, because of our gathering system presence in the Midland area and the significant source of crude specifically from that region into our network, a widening of the WTI Cushing less WTI Midland spread will favorably influence the operating margin for our refineries. Alternatively, a narrowing of this differential will have an adverse effect on our operating margins. Global product prices are influenced by the price of Brent crude which is a global benchmark crude. Global product prices influence product prices in the U.S. As a result, our refineries are influenced by the spread between Brent crude and WTI Midland. The Brent less WTI Midland spread represents the differential between the average per barrel price of Brent crude oil and the average per barrel price of WTI Midland crude oil. A widening of the spread between Brent and WTI Midland will favorably influence our refineries' operating margins. Also, the Krotz Springs refinery is influenced by the spread between Brent crude and LLS. The Brent less LLS spread represents the differential between the average per barrel price of Brent crude oil and the average per barrel price of LLS crude oil. A discount in LLS relative to Brent will favorably influence the Krotz Springs refinery operating margin.
Refining contribution margin is impacted by regulatory costs associated with the cost of RINs as well as energy costs, including the cost of natural gas. In periods of unfavorable regulatory sentiment or uncertainty regarding the possibility of SREs, RINs prices can increase at higher rates than crack spreads, or even when crack spreads are declining. This can be particularly impactful on smaller refineries, where the operating cost structure does not have as much scalability as larger refineries. Additionally, volatility in energy costs, which are captured in our operating expenses and impact our Refining contribution margin, can significantly impact our ability to capture crack spreads, with natural gas representing the most significant component. Within Delek’s geographic footprint, we source the majority of our natural gas from the Gulf Coast, and secondarily from the Permian, and we do not currently have the capability at our refineries to switch our energy consumption to utilize alternative sources of fuel. For this reason, unfavorable Gulf Coast (Henry Hub) differentials can impact
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Management's Discussion and Analysis

our crack spread capture. The cost to acquire the refined fuel products we sell to our wholesale customers in our logistics segment and at our convenience stores in our retail segment largely depends on numerous factors beyond our control, including the supply of, and demand for, crude oil, gasoline and other refined petroleum products which, in turn, depend on, among other factors, changes in domestic and foreign economies, weather conditions, domestic and foreign political affairs, production levels, the availability of imports, the marketing of competitive fuels and government regulation.
In addition to the above, it continues to be a strategic and operational objective to manage price and supply risk related to crude oil that is used in refinery production, and to develop strategic sourcing relationships. For that purpose, from a pricing perspective, we enter into commodity derivative contracts to manage our price exposure to our inventory positions, future purchases of crude oil and ethanol, future sales of refined products or to fix margins on future production. We also enter into future commitments to purchase or sell RINs at fixed prices and quantities, which are used to manage our RINs Obligation. Additionally, from a sourcing perspective, we often enter into purchase and sale contracts with vendors and customers or take physical or financial commodity positions for crude oil that may not be used immediately in production, but that may be used to manage the overall supply and availability of crude expected to ultimately be needed for production and/or to meet minimum requirements under strategic pipeline arrangements, and also to optimize and hedge availability risks associated with crude that we ultimately expect to use in production. Such transactions are inherently based on certain assumptions and judgments made about the current and possible future availability of crude. Therefore, when we take physical or financial positions for optimization purposes, our intent is generally to take offsetting positions in quantities and at prices that will advance these objectives while minimizing our positional and financial statement risk. However, because of the volatility of the market in terms of pricing and availability, it is possible that we may have material positions with timing differences or, more rarely, that we are unable to cover a position with an offsetting position as intended. Such differences could have a material impact on the classification of resulting gains/losses, assets or liabilities, and could also significantly impact refining contribution margin.
Finally, as part of our overall business strategy, we regularly evaluate opportunities to expand our portfolio of businesses and may at any time be discussing or negotiating a transaction that, if consummated, could have a material effect on our business, financial condition, liquidity or results of operations.
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Management's Discussion and Analysis

Refinery Statistics
Three Months Ended
March 31,
20222021
(Unaudited)
Tyler, TX Refinery
Days in period90 90 
Total sales volume - refined product (average barrels per day)(1)
73,569 73,224 
Products manufactured (average barrels per day):
Gasoline37,228 39,560 
Diesel/Jet29,010 27,741 
Petrochemicals, LPG, natural gas liquids ("NGLs")2,251 1,724 
Other1,670 1,471 
Total production70,159 70,496 
Throughput (average barrels per day):  
   Crude Oil66,436 64,753 
Other feedstocks3,720 5,978 
Total throughput70,156 70,731 
Total refining revenue ($ in millions)$769.9 $490.0 
Cost of materials and other ($ in millions) (2)
689.6 408.5 
Total refining margin ($ in millions) (2)
$80.3 $81.5 
Per barrel of refined product sales:  
Tyler refining margin (2)
12.13 $12.37 
Direct operating expenses (3)
4.30 $3.59 
Crude Slate: (% based on amount received in period)
WTI crude oil86.8 %92.6 %
East Texas crude oil13.2 %6.8 %
Other— %0.6 %
El Dorado, AR Refinery
Days in period
90 90 
Total sales volume - refined product (average barrels per day)(1)
81,334 49,711 
Products manufactured (average barrels per day):
Gasoline36,875 17,553 
Diesel29,178 13,973 
Petrochemicals, LPG, NGLs1,019 751 
Asphalt7,123 3,670 
Other785 438 
Total production74,980 36,385 
Throughput (average barrels per day):  
Crude Oil72,091 34,766 
Other feedstocks3,947 1,666 
Total throughput76,038 36,432 
Total refining revenue ($ in millions)$812.2 $436.8 
Cost of materials and other ($ in millions)772.6 450.9 
Total refining margin ($ in millions)$39.6 $(14.1)
Per barrel of refined product sales:  
El Dorado refining margin$5.41 $(3.16)
Direct operating expenses (3)
$3.78 $6.42 
Crude Slate: (% based on amount received in period)
WTI crude oil31.4 %44.0 %
Local Arkansas crude oil17.4 %32.2 %
Other51.2 %23.8 %

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Management's Discussion and Analysis

Refinery Statistics (continued)
Three Months Ended
March 31,
20222021
(Unaudited)
Big Spring, TX Refinery
Days in period90 90 
Total sales volume - refined product (average barrels per day) (1)
69,129 68,699 
Products manufactured (average barrels per day):
Gasoline32,894 32,812 
Diesel/Jet22,688 20,935 
Petrochemicals, LPG, NGLs3,333 3,148 
Asphalt1,881 1,793 
Other1,280 1,404 
Total production62,076 60,092 
Throughput (average barrels per day):  
Crude oil60,633 59,758 
Other feedstocks1,739 929 
Total throughput62,372 60,686 
Total refining revenue ($ in millions)$825.4 $502.0 
Cost of materials and other ($ in millions)727.6 461.2 
Total refining margin ($ in millions)$97.8 $40.8 
Per barrel of refined product sales:  
Big Spring refining margin$15.72 $6.60 
Direct operating expenses (3)
$5.36 $6.50 
Crude Slate: (% based on amount received in period)
WTI crude oil66.7 %62.8 %
WTS crude oil33.3 %37.2 %
Krotz Springs, LA Refinery
Days in period
90 90 
Total sales volume - refined product (average barrels per day) (1)
79,832 24,964 
Products manufactured (average barrels per day):
Gasoline32,667 6,118 
Diesel/Jet30,994 4,003 
Heavy Oils1,021 182 
Petrochemicals, LPG, NGLs6,927 1,265 
Other7,234 11,216 
Total production78,843 22,784 
Throughput (average barrels per day):  
Crude Oil72,997 13,554 
Other feedstocks5,464 11,381 
Total throughput78,461 24,935 
Total refining revenue ($ in millions)$1,090.1 $319.7 
Cost of materials and other ($ in millions)1,047.9 305.6 
Total refining margin ($ in millions)$42.2 $14.1 
Per barrel of refined product sales:  
Krotz Springs refining margin$5.88 $6.25 
Direct operating expenses (3)
$4.09 $9.20 
Crude Slate: (% based on amount received in period)
WTI Crude64.3 %81.2 %
Gulf Coast Sweet Crude35.7 %18.8 %
(1)     Includes inter-refinery sales and sales to other segments which are eliminated in consolidation. See tables below.
(2)     Adjusted to reflect the retrospective change in accounting policy from LIFO to FIFO for certain inventories. For further discussion, see Note 6 to our Condensed Consolidated Financial Statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q.
(3)    Reflects the prior period conforming reclassification adjustment between operating expenses and general and administrative expenses.
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Management's Discussion and Analysis

Included in the refinery statistics above are the following inter-refinery and sales to other segments:
Inter-refinery Sales
Three Months Ended
March 31,
(in barrels per day)20222021
(Unaudited)
Tyler refined product sales to other Delek refineries1,1072,095 
El Dorado refined product sales to other Delek refineries866445 
Big Spring refined product sales to other Delek refineries639728 
Krotz Springs refined product sales to other Delek refineries501— 
Refinery Sales to Other Segments
Three Months Ended
March 31,
(in barrels per day)20222021
(Unaudited)
Tyler refined product sales to other Delek segments—922 
El Dorado refined product sales to other Delek segments77 
Big Spring refined product sales to other Delek segments21,76622,110 
Krotz Springs refined product sales to other Delek segments— 2,007 
Pricing Statistics (average for the period presented)
Three Months Ended
March 31,
20222021
(Unaudited)
WTI — Cushing crude oil (per barrel)$95.18 $58.03 
WTI — Midland crude oil (per barrel)$95.01 $58.90 
WTS -- Midland crude oil (per barrel) $94.90 $58.77 
LLS (per barrel)$97.49 $60.18 
Brent crude oil (per barrel)$97.92 $61.17 
U.S. Gulf Coast 5-3-2 crack spread (per barrel) - utilizing HSD$18.20 $10.13 
U.S. Gulf Coast 5-3-2 crack spread (per barrel) (1)
$23.68 $13.57 
U.S. Gulf Coast 3-2-1 crack spread (per barrel) (1)
$24.65 $14.33 
U.S. Gulf Coast 2-1-1 crack spread (per barrel) (1)
$17.14 $7.65 
U.S. Gulf Coast Unleaded Gasoline (per gallon)$2.71 $1.71 
Gulf Coast Ultra low sulfur diesel (per gallon)$3.02 $1.71 
U.S. Gulf Coast high sulfur diesel (per gallon)$2.69 $1.50 
Natural gas (per MMBTU) (2)
$4.59 $2.72 
(1)     For our Tyler and El Dorado refineries, we compare our per barrel refining product margin to the Gulf Coast 5-3-2 crack spread consisting of WTI Cushing crude, U.S. Gulf Coast (CBOB) and U.S. Gulf Coast Pipeline No. 2 heating oil (ultra low sulfur diesel). For our Big Spring refinery, we compare our refined product margin to the Gulf Coast 3-2-1 crack spread consisting of WTI Cushing crude, Gulf Coast 87 Conventional gasoline and Gulf Coast ultra low sulfur diesel, and for our Krotz Springs refinery, we compare our per barrel refined product margin to the Gulf Coast 2-1-1 crack spread consisting of LLS crude oil, Gulf Coast 87 Conventional gasoline and U.S. Gulf Coast Pipeline No. 2 heating oil (high sulfur diesel). The Tyler refinery's crude oil input is primarily WTI Midland and East Texas, while the El Dorado refinery's crude input is primarily a combination of WTI Midland, local Arkansas and other domestic inland crude oil. The Big Spring refinery’s crude oil input is primarily comprised of WTS and WTI Midland. The Krotz Springs refinery’s crude oil input is primarily comprised of LLS and WTI Midland.
(2)    One Million British Thermal Units ("MMBTU").
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Management's Discussion and Analysis

Refining Segment Operational Comparison of the Three Months Ended March 31, 2022 versus the Three Months Ended March 31, 2021
Net Revenues
Net revenues for the refining segment increased by $1,753.6 million, or 100.8%, in the first quarter of 2022 compared to the first quarter of 2021, primarily driven by the following:
•increases in the average price of U.S. Gulf Coast gasoline of 58.2% ULSD of 76.8%, and HSD of 79.3% and
•an increase in sales volumes of refined and purchased product of 7.9 million barrels and 1.7 million barrels, respectively, where sales volumes were lower in the first quarter 2021 due to severe weather impacting our refineries and turnaround activities at our El Dorado refinery .
Net revenues included sales to our retail segment of $111.7 million and $69.7 million, sales to our logistics segment of $105.9 million and $65.8 million, and sales to our other segment of $8.1 million and $20.1 million for the three months ended March 31, 2022 and March 31, 2021, respectively. We eliminate this intercompany revenue in consolidation.
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Cost of Materials and Other
Cost of materials and other increased by $1,661.9 million, or 102.9%, in the first quarter of 2022 compared to the first quarter of 2021, primarily driven by the following:
•increases in the cost of WTI Cushing crude oil, from an average of $58.03 per barrel to an average of $95.18, or 64.0%, and increases in the cost of WTI Midland crude oil, from an average of $58.90 per barrel to an average of $95.01, or 61.3%;
•increase in RINs costs from an average cost per RIN of $1.07 and $1.17 for ethanol and biodiesel RINs, respectively during the first quarter of 2021 to an average of $1.14 and $1.43 during the first quarter of 2022; and
•an increase in sales volumes.
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Our refining segment has multiple service agreements with our logistics segment which, among other things, require the refining segment to pay terminalling and storage fees based on the throughput volume of crude and finished product in the logistics segment pipelines and the volume of crude and finished product stored in the logistics segment storage tanks, subject to minimum volume commitments. These costs and fees were $123.4 million and $95.8 million during the first quarters of 2022 and 2021, respectively, which are eliminated in consolidation.
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Management's Discussion and Analysis

Refining Margin
Refining margin increased by $91.7 million, or 73.3%, in the first quarter of 2022 compared to the first quarter of 2021, primarily driven by the following:
•a 79.7% improvement in the 5-3-2 crack spread (the primary measure for the Tyler refinery and El Dorado refinery), a 72.0% improvement in the average Gulf Coast 3-2-1 crack spread (the primary measure for the Big Spring refinery), and a 124.1% improvement in the average Gulf Coast 2-1-1 crack spread (the primary measure for the Krotz Springs refinery).
•an increase in sales volumes.
Such increase was partially offset by increases in average RINs costs in the first quarter of 2022 compared to the first quarter of 2021, and an increase in hedge losses compared to prior period.
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(1) Adjusted to reflect the retrospective change in accounting policy from LIFO to FIFO for certain inventories. For further discussion, see Note 6 to our Condensed Consolidated Financial Statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q.
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Operating Expenses
Operating expenses increased by $5.2 million, or 4.5%, in the first quarter of 2022 compared to the first quarter of 2021, primarily driven by the following:
•increase in variable costs and utilities associated with higher throughput during the current period; and
•higher natural gas prices in the first quarter of 2022.
Such increases were offset by a decrease in outside services, maintenance and lease costs incurred.
Contribution Margin
Contribution margin increased by $86.5 million, or a 2.2% improvement in contribution margin percentage, in the first quarter of 2022 compared to the first quarter of 2021, primarily driven by an increase in refining margin primarily driven by improved crack spreads, increased sales volumes, offset by hedge losses and higher average RINs costs.
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Management's Discussion and Analysis

Logistics Segment
The table below sets forth certain information concerning our logistics segment operations ($ in millions, except per barrel amounts):
Logistics Contribution Margin and Operating Information
Three Months Ended
March 31,
20222021
Net revenues$206.6 $152.9 
Cost of materials and other126.2 81.1 
Operating expenses (excluding depreciation and amortization)18.1 14.9 
Contribution margin
$62.3 $56.9 
Operating Information:
East Texas - Tyler Refinery sales volumes (average bpd) (1)
70,578 71,963 
Big Spring wholesale marketing throughputs (average bpd)
75,549 72,927 
West Texas wholesale marketing throughputs (average bpd)
9,913 10,138 
West Texas wholesale marketing margin per barrel
$3.04 $3.42 
Terminalling throughputs (average bpd) (2)
137,622 144,539 
Throughputs (average bpd):
Lion Pipeline System:
Crude pipelines (non-gathered)
72,872 44,118 
Refined products pipelines to Enterprise Systems
59,522 26,349 
SALA Gathering System
16,156 11,880
East Texas Crude Logistics System
16,056 26,075
Big Spring Gathering Assets (3)
100,325 73,724 
Plains Connection System162,007 108,361 
(1)Excludes jet fuel and petroleum coke.
(2)Consists of terminalling throughputs at our Tyler, Big Spring, Big Sandy and Mount Pleasant, Texas terminals, El Dorado and North Little Rock, Arkansas terminals and Memphis and Nashville, Tennessee terminals.
(3)Excludes volumes that are being temporarily transported via trucks while connectors are under construction.
Logistics Segment Operational Comparison of the Three Months Ended March 31, 2022 versus the Three Months Ended March 31, 2021
Net Revenues
Net revenues increased by $53.7 million, or 35.1%, in the first quarter of 2022 compared to the first quarter of 2021, primarily driven by:
•improvements in the West Texas wholesale marketing business which experienced increases in the average sales prices per gallon of gasoline and diesel sold and average volume of diesel sold, partially offset by decrease in the average volume of gasoline sold; and
•increases in pipeline throughputs, where the first quarter of 2021 were negatively impacted by severe weather events.
Net revenues included sales to our refining segment of $123.4 million and $95.8 million for the three months ended March 31, 2022 and March 31, 2021, respectively. We eliminate this intercompany revenue in consolidation.
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Management's Discussion and Analysis

Cost of Materials and Other
Cost of materials and other for the logistics segment increased $45.1 million, or 55.6%, in the first quarter of 2022 compared to the first quarter of 2021 primarily driven by the following:
•increases in the average cost per gallon of gasoline and diesel sold, and increases in the volume of gasoline sold in our West Texas marketing operations:
◦the average cost per gallon of gasoline and diesel sold increased $0.97 per gallon and $1.25 per gallon, respectively; and
◦the average volumes of gasoline increased by 3.4 million gallons, while diesel volumes sold decreased by 2.5 million gallons.
Our logistics segment purchased product from our refining segment of $105.9 million and $65.8 million for the three months ended March 31, 2022 and March 31, 2021, respectively. We eliminate these intercompany costs in consolidation.
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Operating Expenses
Operating expenses increased by $3.2 million, or 21.5%, in the first quarter of 2022 compared to the first quarter of 2021, driven by the following:
•increases in employee and outside service costs; and
•increases in variable expenses such as maintenance and materials costs due to higher throughput.
Contribution Margin
Contribution margin increased by $5.4 million in the first quarter of 2022 compared to the first quarter of 2021 primarily driven by the following:
•increases in revenue due to higher throughput volumes; and
•partially offset by increases in operating expense.
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Management's Discussion and Analysis

Retail Segment
The table below sets forth certain information concerning our retail segment operations (gross sales $ in millions):
Retail Contribution Margins
Three Months Ended
March 31,
 20222021
Net revenues$209.5 $174.8 
Cost of materials and other
173.0 136.5 
Operating expenses (excluding depreciation and amortization)
22.7 21.6 
Contribution margin
$13.8 $16.7 
Operating Information
Number of stores (end of period)
248 253 
Average number of stores
248 253 
Average number of fuel stores
243 248 
Retail fuel sales
$139.9 $100.1 
Retail fuel sales (thousands of gallons)
39,505 39,765 
Average retail gallons sold per average number of fuel stores (in thousands)
163 161 
Average retail sales price per gallon sold
$3.54 $2.52 
Retail fuel margin ($ per gallon) (1)
$0.314 $0.350 
Merchandise sales (in millions)
$69.7 $74.6 
Merchandise sales per average number of stores (in millions)
$0.3 $0.3 
Merchandise margin %
34.6 %32.7 %
Same-Store Comparison (2)
Three Months Ended
March 31,
20222021
Change in same-store fuel gallons sold
0.8 %(17.0)%
Change in same-store merchandise sales
(5.2)%4.2 %
(1)Retail fuel margin represents gross margin on fuel sales in the retail segment, and is calculated as retail fuel sales revenue less retail fuel cost of sales. The retail fuel margin per gallon calculation is derived by dividing retail fuel margin by the total retail fuel gallons sold for the period.
(2)Same-store comparisons include period-over-period changes in specified metrics for stores that were in service at both the beginning of the earliest period and the end of the most recent period used in the comparison.
Retail Segment Operational Comparison of the Three Months Ended March 31, 2022 versus the Three Months Ended March 31, 2021
Net Revenue
Net revenues for the retail segment increased by $34.7 million, or 19.9%, in the first quarter of 2022 compared to the first quarter of 2021, primarily driven by the following:
•an increase in total fuel sales which were $139.9 million in the first quarter of 2022 compared to $100.1 million in the first quarter of 2021, primarily attributable to an increase of $1.02 in average price charged per gallon sold; and
•slightly offset by a decrease in merchandise sales to $69.7 million in the first quarter of 2022 compared to $74.6 million in the first quarter of 2021 attributable to a same-store sales decrease of 5.2%.
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Management's Discussion and Analysis

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Cost of Materials and Other
Cost of materials and other for the retail segment increased by $36.5 million, or 26.7%, in the first quarter of 2022 compared to the first quarter of 2021, primarily driven by an increase in average cost per gallon of $1.06 or 48.8% applied to fuel sales volumes that decreased period over period. Our retail segment purchased finished product from our refining segment of $111.7 million and $69.7 million for the three months ended March 31, 2022 and March 31, 2021, respectively, which is eliminated in consolidation.
Operating Expenses
Retail segment operating expenses increased by $1.1 million, or 5.1%, in the first quarter of 2022 compared to the first quarter of 2021.
Contribution Margin
Contribution margin for the retail segment decreased by $2.9 million, or 17.4%, in the first quarter of 2022 compared to the first quarter of 2021, primarily driven by the following:
•a 6.7% decrease in merchandise sales, offset by an improvement in merchandise margin percentage of 1.9%; and
•a decrease in fuel sales volume and average fuel margin of $0.036 per gallon.
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Management's Discussion and Analysis

Liquidity and Capital Resources
Our primary sources of liquidity and capital resources are
•cash generated from our operating activities;
•borrowings under our debt facilities; and
•potential issuances of additional equity and debt securities.
At March 31, 2022 our total liquidity amounted to $2.1 billion comprised primarily of $637.5 million in unused credit commitments under the Delek Revolving Credit Facility (as defined in Note 8 of the condensed consolidated financial statements in Item 1. Financial Statements), $585.9 million in unused credit commitments under the Delek Logistics Credit Facility (as defined in Note 8 of the condensed consolidated financial statements in Item 1. Financial Statements) and $854.1 million in cash and cash equivalents. Historically, we have generated adequate cash from operations to fund ongoing working capital requirements and pay quarterly cash dividends and operational capital expenditures. In response to the COVID-19 Pandemic and the decline in oil prices, on November 5, 2020, we announced that we have elected to suspend dividends in order to conserve capital. Other funding sources including borrowings under existing credit agreements and issuance of equity and debt securities have been utilized to meet our funding requirements and support our growth capital projects and acquisitions. In addition, we have historically been able to source funding at terms that reflect market conditions, our financial position and our credit ratings. We continue to monitor market conditions, our financial position and our credit ratings and expect future funding sources to be at terms that are sustainable and profitable for the Company. However, there can be no assurances regarding the availability of any future debt or equity financings or whether such financings can be made available on terms that are acceptable to us; any execution of such financing activities will be dependent on the contemporaneous availability of functioning debt or equity markets. Additionally, new debt financing activities will be subject to the satisfaction of any debt incurrence limitation covenants in our existing financing agreements. Our debt limitation covenants in our existing financing documents are usual and customary for credit agreements of our type and reflective of market conditions at the time of their execution. Additionally, our ability to satisfy working capital requirements, to service our debt obligations, to fund planned capital expenditures, or to pay dividends will depend upon future operating performance, which will be affected by prevailing economic conditions in the oil industry and other financial and business factors, including the current COVID-19 Pandemic and oil prices, some of which are beyond our control.
If market conditions were to change, for instance due to the uncertainty created by the COVID-19 Pandemic or the Russia - Ukraine War, and our revenue was reduced significantly or operating costs were to increase significantly, our cash flows and liquidity could be unfavorably impacted.
As of March 31, 2022, we believe we were in compliance with all of our debt maintenance covenants, where the most significant long-term obligation subject to such covenants was the Delek Logistics Credit Facility (see Note 8 of the condensed consolidated financial statements in Item 1. Financial Statements). We currently expect to remain in compliance with our existing debt maintenance covenants, though we can provide no assurances, particularly if conditions significantly worsen beyond our ability to predict. Additionally, we were in compliance with incurrence covenants during the quarter ended March 31, 2022 to the extent that any of our activities triggered these covenants. However, given the uncertainty around economic conditions, it is at least reasonably possible that conditions could change significantly, and that such changes could adversely impact our ability to meet some of these incurrence covenants. Inability to meet the incurrence covenants could impose certain incremental restrictions on our ability to incur new debt and also may limit whether and the extent to which we may resume paying dividends, as well as impose additional restrictions on our ability to repurchase our stock, make new investments and incur new liens (among others). Such restrictions would generally remain in place until such quarter that we are able to satisfy the applicable incurrence based covenants. In the event that we are subject to these incremental restrictions, we believe that we have sufficient current and alternative sources of liquidity, including (but not limited to) the following: available borrowings under our existing Wells Fargo Revolving Credit Facility, and for Delek Logistics, under its Delek Logistics Credit Facility (each as defined in Note 8 of the condensed consolidated financial statements in Item 1. Financial Statements); the allowance to incur additional secured debt under the Term Loan Credit Facility (as defined in Note 8 of the condensed consolidated financial statements in Item 1. Financial Statements); as well as the possibility of obtaining other secured and unsecured debt, raising capital through equity issuance, or taking advantage of transactional financing opportunities such as sale-leasebacks, each as otherwise contemplated and allowed under our incurrence covenants.
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Cash Flows
The following table sets forth a summary of our consolidated cash flows (in millions):
Consolidated
 Three Months Ended March 31,
 20222021
Cash Flow Data:  
Operating activities$26.8 $(34.3)
Investing activities(30.2)(46.1)
Financing activities1.0 86.4 
Net (decrease) increase$(2.4)$6.0 
Cash Flows from Operating Activities
Net cash provided by operating activities was $26.8 million for the three months ended March 31, 2022, compared to net cash used of $34.3 million for the comparable period of 2021. Cash paid for debt interest decreased by $117.7 million. Partially offsetting this increase in cash provided was an increase in cash receipts from customers and cash payments to suppliers and for salaries resulting in a net $56.6 million decrease in cash provided by operating activities. Additionally, income taxes paid increased $0.9 million and dividends received decreased $0.9 million.
Cash Flows from Investing Activities
Net cash used in investing activities was $30.2 million for the first three months of 2022, compared to $46.1 million in the comparable period of 2021. The decrease in cash flows used in investing activities was primarily due to a decrease in cash purchases of property, plant and equipment which decreased from $48.3 million in 2021, to $29.5 million in 2022, partially attributable to delaying non-essential projects in light of the COVID-19 Pandemic.
Cash Flows from Financing Activities
Net cash used in financing activities was $1.0 million for the three months ended March 31, 2022, compared to cash provided of $86.4 million in the comparable 2021 period. This decrease in cash provided was predominantly due to the purchase of Delek common stock from IEP Energy Holding, LLC for $64.0 million in the current period. Additionally, there were net payments on long-term revolvers and term debt of $7.2 million during the three months ended March 31, 2022, compared to net proceeds of $17.6 million in the comparable 2021 period. Net proceeds from inventory financing arrangements decreased $13.1 million to $64.8 million for the three months ended March 31, 2022 compared to $77.9 million in the comparable 2021 period.
Partially offsetting the decrease was $16.4 million in proceeds from the sale of Delek Logistics limited partner units in the current period.
Cash Position, Indebtedness and Other Financing Arrangements
As of March 31, 2022, our total cash and cash equivalents were $854.1 million and we had total long-term indebtedness of approximately $2,212.8 million. The total long-term indebtedness is net of deferred financing costs and debt discount of $9.9 million and $17.3 million, respectively. Additionally, we had letters of credit issued of approximately $362.5 million. Total unused credit commitments or borrowing base availability, as applicable, under our revolving credit facilities was approximately $1,223.4 million. Our total long-term indebtedness consisted of the following:
•an aggregate principal amount of $1,256.8 million under the Term Loan Credit Facility, due on March 30, 2025, with effective interest rate of 3.52%;
•an aggregate principal amount of $19.1 million in outstanding borrowings under the Delek Hapoalim Term Loan, due on December 31, 2022, with effective interest rate of 4.33%;
•an aggregate principal amount of $264.1 million under the Delek Logistics Credit Facility, due on September 28, 2023, with average borrowing rate of 2.67%;
•an aggregate principal amount of $250.0 million under the Delek Logistics 2025 Notes, due in 2025, with effective interest rate of 7.20%;
•an aggregate principal amount of $400.0 million under the Delek Logistics 2028 Notes, due in 2028, with effective interest rate of 7.05%;
•an aggregate principal amount of $50.0 million under the Reliant Bank Revolver, due on June 30, 2022, with fixed interest rate of 4.50%; and
•the Revolving Credit Facility, due on March 30, 2023, with borrowing rate of 3.75% for base rate loans, and no principal amount outstanding.
See Note 8 of the condensed consolidated financial statements in Item 1. Financial Statements, for additional information about our separate credit facilities included in long-term indebtedness.
Additionally, we also utilize other financing arrangements to finance operating assets and/or, from time to time, to monetize other assets that may not be needed in the near term, when internal cost of capital and other criteria are met. Such arrangements include our supply and offtake arrangements, which finance a significant portion of our first-in, first-out inventory at the refineries and, from time to time, RINs
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or other non-inventory product financing liabilities. Our supply and offtake obligation with J. Aron amounted to $589.3 million at March 31, 2022, $479.3 million of which is due on December 30, 2022. (See Note 7 of the condensed consolidated financial statements in Item 1. Financial Statements, for additional information about our supply and offtake facilities). Our product financing liabilities consisted primarily of RIN financings as of March 31, 2022, and totaled $319.7 million, all of which is due by December 31, 2022. See further description of these types of arrangements in the Environmental Credits and Related Regulatory Obligations accounting policy disclosed in Note 2 to our audited consolidated financial statements included Item 8. Financial Statements and Supplementary Data, of our December 31, 2021 Annual Report on Form 10-K. For both arrangements and the related commitments, see also our "Contractual Obligations" section included in Item 2. Management's Discussion and Analysis.
Capital Spending
A key component of our long-term strategy is our capital expenditure program. Our capital expenditures for the three months ended March 31, 2022 were $32.9 million, of which approximately $14.3 million was spent in our refining segment, $9.1 million in our logistics segment, $3.0 million in our retail segment and $6.5 million primarily at the holding company level. The following table summarizes our actual capital expenditures for the three months ended March 31, 2022 and planned capital expenditures for the full year 2022 by operating segment and major category (in millions):
Full Year
2022 Forecast		Three Months Ended March 31, 2022
Refining
Sustaining maintenance, including turnaround activities (1)
$71.7 $13.0 
Regulatory12.9 0.6 
Discretionary projects3.1 0.7 
Refining segment total87.7 14.3 
Logistics
Regulatory7.6 2.1 
Sustaining maintenance6.0 — 
Discretionary projects59.0 7.0 
Logistics segment total72.6 9.1 
Retail
Regulatory— — 
Sustaining maintenance3.9 0.8 
Discretionary projects31.0 2.2 
Retail segment total34.9 3.0 
Other
Regulatory3.1 0.8 
Sustaining maintenance28.2 5.1 
Discretionary projects25.8 0.6 
Other total57.1 6.5 
Total capital spending$252.3 $32.9 
The amount of our capital expenditure budget is subject to change due to unanticipated increases in the cost, scope and completion time for our capital projects and subject to the changes and uncertainties discussed under the 'Forward-Looking Statements' section of Item 2, of this Quarterly Report on Form 10-Q.
We have no material off-balance sheet arrangements through the date of the filing of this Quarterly Report on Form 10-Q.

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Management's Discussion and Analysis

Cash Requirements
Long-Term Cash Requirements Under Contractual Obligations
Information regarding our known cash requirements under contractual obligations of the types described below as of March 31, 2022, is set forth in the following table (in millions):
Payments Due by Period
<1 Year1-3 Years3-5 Years>5 YearsTotal
Long term debt and notes payable obligations
$82.1 $1,507.9 $250.0 $400.0 $2,240.0 
Interest(1)
91.7 169.4 65.3 42.8 369.2 
Operating lease commitments(2)(7)
216.4 289.8 147.3 73.4 726.9 
Finance lease commitments(3)
4.2 3.3 2.8 4.5 14.8 
Purchase commitments(4)
1,060.5 3.5 — — 1,064.0 
Product financing commitments(5)
319.7 — — — 319.7 
Transportation agreements(6)
167.2 269.0 261.3 272.6 970.1 
J. Aron supply and offtake obligations (7)
494.8 — — — 494.8 
Total$2,436.6 $2,242.9 $726.7 $793.3 $6,199.5 
(1) Expected interest payments on debt outstanding at March 31, 2022. Floating interest rate debt is calculated using March 31, 2022 rates. For additional information, see Note 8 of our condensed consolidated financial statements included in Item 1. Financial Statements, of this Quarterly Report on Form 10-Q.
(2) Amounts reflect future estimated lease payments under operating leases having remaining non-cancelable terms in excess of one year as of March 31, 2022.
(3) Amounts reflect future estimated lease payments under financing leases having remaining non-cancelable terms in excess of one year as of March 31, 2022.
(4) We have purchase commitments to secure certain quantities of crude oil, finished product and other resources used in production at both fixed and market prices. We have estimated future payments under the market-based agreements using current market rates. Excludes purchase commitments in buy-sell transactions which have matching notional amounts with the same counterparty and are generally net settled in exchanges.
(5) Balances consist of obligations under RINs product financing arrangements. For additional information, see Note 10 of our condensed consolidated financial statements included in Item 1. Financial Statements, of this Quarterly Report on Form 10-Q.
(6) Balances consist of contractual obligations under agreements with third parties (not including Delek Logistics) for the transportation of crude oil to our refineries.
(7) Balances consists of contractual obligations under the J. Aron Supply and Offtake Agreements, including annual fees and principal obligation for the Baseline Volume Step-Out Liability. For additional information, see Note 7 of our condensed consolidated financial statements included in Item 1. Financial Statements, of this Quarterly Report on Form 10-Q.
Other Cash Requirements
Our material short-term cash requirements under contractual obligations are presented above, and we expect to fund the majority of those requirements with cash flows from operations, with the exception of the supply and offtake obligations, which are expected to be refinanced. Our other cash requirements consisted of operating activities and capital expenditures. Operating activities include cash outflows related to payments to suppliers for crude and other inventories (which are largely reflected in our contractual purchase commitments in the table above) and payments for salaries and other employee related costs. In line with our Long-term Sustainable strategy, future cash requirements will include initiatives to build on our long term sustainable business model, ESG initiatives and digital transformation.



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Management's Discussion and Analysis

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
These disclosures should be read in conjunction with the condensed consolidated financial statements, "Management's Discussion and Analysis of Financial Condition and Results of Operations," and other information presented herein, as well as in the "Quantitative and Qualitative Disclosures About Market Risk" section contained in our Annual Report on Form 10-K, filed on February 25, 2022.
Price Risk Management Activities
At times, we enter into the following instruments/transactions in order to manage our market-indexed pricing risk: commodity derivative contracts which we use to manage our price exposure to our inventory positions, future purchases of crude oil and ethanol, future sales of refined products or to fix margins on future production; and future commitments to purchase or sell RINs at fixed prices and quantities, which are used to manage the costs associated with our RINs obligations and meet the definition of derivative instruments under ASC 815, Derivatives and Hedging ("ASC 815"). In accordance with ASC 815, all of these commodity contracts and future purchase commitments are recorded at fair value, and any change in fair value between periods has historically been recorded in the profit and loss section of our condensed consolidated financial statements. Occasionally, at inception, the Company will elect to designate the commodity derivative contracts as cash flow hedges under ASC 815. Gains or losses on commodity derivative contracts accounted for as cash flow hedges are recognized in other comprehensive income on the condensed consolidated balance sheets and, ultimately, when the forecasted transactions are completed, in net revenues or cost of materials and other in the condensed consolidated statements of income.
The following table sets forth information relating to our open commodity derivative contracts, excluding our trading derivative contracts (which are presented separately below), as of March 31, 2022 ($ in millions):
Total OutstandingNotional Contract Volume by Year of Maturity
Contract DescriptionFair ValueNotional Contract Volume 202220232024
Contracts not designated as hedging instruments:
Crude oil price swaps - long(1)
$(15.9)41,484,000 39,204,000 2,280,000 — 
Crude oil price swaps - short(1)
(34.1)41,834,000 41,834,000 — — 
Inventory, refined product and crack spread swaps - long(1)
65.3 55,879,000 41,079,000 14,800,000 — 
Inventory, refined product and crack spread swaps - short(1)
(88.2)56,023,000 41,223,000 14,800,000 — 
RIN commitment contracts - long(2)
(4.4)106,950,000 106,950,000 — — 
RIN commitment contracts - short(2)
— 2,000,000 2,000,000 — — 
Total$(77.3)304,170,000 272,290,000 31,880,000 — 
(1)     Volume in barrels
(2)     Volume in RINs
Interest Risk Management Activities
We have market exposure to changes in interest rates relating to our outstanding floating rate borrowings, which totaled approximately $1,540.0 million as of March 31, 2022. The annualized impact of a hypothetical one percent change in interest rates on our floating rate debt as of March 31, 2022 would be to change interest expense by approximately $15.4 million.
Inflation
Inflationary factors, such as increases in the costs of our inputs, operating expenses, and interest rates may adversely affect our operating results. Although we do not believe that inflation has had a material impact on our financial position or results of operations to date, a high rate of inflation in the future may have an adverse effect on our ability to maintain current levels of gross margin and operating expenses as a percentage of sales if the prices at which we are able to sell our products and services does not increase in line with increases in costs.
LIBOR Transition
LIBOR is a commonly used indicative measure of the average interest rate at which major global banks could borrow from one another. The United Kingdom’s Financial Conduct Authority, which regulates LIBOR discontinued the reporting of certain LIBOR rates on December 31, 2021, and has publically announced that it intends to discontinue all USD LIBOR rates after June 2023. Certain of our agreements use LIBOR as a “benchmark” or “reference rate” for various terms. Some agreements contain an existing LIBOR alternative. Where there is not an alternative, we expect to replace the LIBOR benchmark with an alternative reference rate. While we do not expect the transition to an alternative rate to have a significant impact on our business or operations, it is possible that the move away from LIBOR could materially impact our borrowing costs on our variable rate indebtedness.
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Management's Discussion and Analysis

Commodity Derivatives Trading Activities
We enter into active trading positions in a variety of commodity derivatives, which include forward physical contracts, swap contracts, and futures contracts. These trading activities are undertaken by using a range of contract types in combination to create incremental gains by capitalizing on crude oil supply and pricing seasonality. These contracts are classified as held for trading and are recognized at fair value with changes in fair value recognized in the income statement.
The following table sets forth information relating to trading commodity derivative contracts as of March 31, 2022:
Total OutstandingNotional Contract Volume by Year of Maturity
Contract DescriptionFair ValueNotional Contract Volume20222023202420252026
Crude forward contracts- long(1)
135.7 1,516,141 1,516,141 — — — — 
Crude forward contracts- short(1)
(142.4)1,579,048 1,579,048 — — — — 
Total$(6.7)3,095,189 3,095,189 — — — — 
(1)     Volume in barrels

ITEM 4. CONTROLS AND PROCEDURES
Our disclosure controls and procedures are designed to provide reasonable assurance that the information that we are required to disclose in reports we file under the Exchange Act is accumulated and appropriately communicated to management. We carried out an evaluation required by Rule 13a-15(b) of the Exchange Act, under the supervision and with the participation of our management, including the Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures at the end of the reporting period. Based on that evaluation, the Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were effective as of the end of the reporting period.
There have been no changes in our internal control over financial reporting identified in connection with the evaluation required by paragraph (d) of Exchange Act Rules 13a-15 or 15d-15 that occurred during the first quarter of 2022 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.


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Legal Proceedings, Risk Factors, Unregistered Sales of Equity Securities and Other Information

Part II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
In the ordinary conduct of our business, we are from time to time subject to lawsuits, investigations and claims, including, environmental claims and employee-related matters. Although we cannot predict with certainty the ultimate resolution of lawsuits, investigations and claims asserted against us, including civil penalties or other enforcement actions, we do not believe that any currently pending legal proceeding or proceedings to which we are a party will have a material adverse effect on our business, financial condition or results of operations. See Note 11 to our accompanying condensed consolidated financial statements, which is incorporated by reference in this Item 1, for additional information. Aside from the disclosure updated in Note 11, there have been no material developments to the proceedings previously reported in our Annual Report on Form 10-K filed on February 25, 2022.

ITEM 1A. RISK FACTORS
There were no material changes during the three months ended March 31, 2022 to the risk factors identified in the Company’s fiscal 2021 Annual Report on Form 10-K, except as described below.
We may be unsuccessful in integrating the operations of the assets we have acquired or may acquire with our operations, and in realizing all or any part of the anticipated benefits of any such acquisitions.
From time to time, we evaluate and acquire assets and businesses that we believe complement our existing assets and businesses. Acquisitions may require substantial capital or the incurrence of substantial indebtedness. Our capitalization and results of operations may change significantly as a result of completed or future acquisitions. Acquisitions and business expansions involve numerous risks, including difficulties in the assimilation of the assets and operations of the acquired businesses, inefficiencies and difficulties that arise because of unfamiliarity with new assets and the businesses associated with them, and new geographic areas and the diversion of management's attention from other business concerns. Further, unexpected costs and challenges may arise whenever businesses with different operations or management are combined, and we may experience unanticipated delays in realizing the benefits of an acquisition. Also, following an acquisition, we may discover previously unknown liabilities associated with the acquired business or assets for which we have no recourse under applicable indemnification provisions.
On April 11, 2022, a subsidiary of Delek Logistics entered into a definitive purchase agreement for the acquisition of 100% of the equity interests of 3Bear Delaware Holding – NM, LLC (the “3Bear Transaction”), an indirect subsidiary of 3Bear Energy, LLC (“3Bear”). The 3Bear Transaction is expected to close around mid-year 2022, subject to closing conditions. If these conditions are not satisfied or waived, the 3Bear Transaction will not be consummated. If the closing of the 3Bear Transaction is substantially delayed or does not occur at all, or if the terms of the acquisition are required to be modified substantially, Delek Logistics may not realize the anticipated benefits of the acquisition fully or at all, or they may take longer to realize than expected.
In order to complete the 3Bear Transaction, Delek Logistics and 3Bear must obtain certain governmental approvals, and if such approvals are not granted or are granted with conditions that become applicable to the parties, completion of the transactions may be jeopardized or prevented or the anticipated of the transactions could be reduced.
The 3Bear Transaction will require the management of Delek Logistics, which includes certain members of our management who provide management services to Delek Logistics, to devote significant attention and resources to integrating the 3Bear business with its business. Potential difficulties that may be encountered in the integration process include, among others:
•    the inability to successfully integrate the 3Bear business into its business in a manner that permits Delek Logistics to achieve the revenue and cost savings that it announced as anticipated from the acquisition;
•    complexities associated with managing the larger, integrated business;
•    potential unknown liabilities and unforeseen expenses, delays or regulatory conditions associated with the acquisition;
•    integrating personnel from the two companies while maintaining focus on providing consistent, high-quality products and services;
•    loss of key employees;
•    integrating relationships with customers, vendors and business partners;
•    performance shortfalls at one or both of the companies as a result of the diversion of management’s attention caused by completing the acquisition and the integration of operations; and
•    the disruption or loss in momentum in, each company’s ongoing business or inconsistencies in standards, controls, procedures and policies.
Delays or difficulties in the integration process could adversely affect our business, financial condition, and results of operations. There can be no assurance that the acquisition will result in the realization of the full benefits of the synergies, cost savings, innovation and operational efficiencies that are currently expected from this integration or the have been communicated with respect to this acquisition or that these benefits will be achieved within the anticipated timeframe.
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The Russia-Ukraine War, and events occurring in response thereto, including sanctions brought by the United States and other countries against Russia and any expansion of hostilities, may have an adverse impact on our business, our future results of operations, and our overall financial performance.
The effects of the military conflict that began with the Russian invasion of Ukraine in February 2022 on our business, financial condition, and results of operations are impossible to predict. Sanctions brought by the United States and other countries against Russia, any escalation of the conflict, including the regional or global expansion of hostilities, and other future developments could significantly affect the global economy, lead to market volatility and supply chain disruptions, have an adverse impact on energy prices, including prices for crude oil, other feedstocks, and refined petroleum products, have an adverse impact on the margins from our petroleum product marketing operations, and have a material adverse effect on our business, financial condition, and results of operations.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
The following table sets forth information with respect to the purchase of shares of our common stock made during the three months ended March 31, 2022 by or on behalf of us or any “affiliated purchaser,” as defined by Rule 10b-18 of the Exchange Act (inclusive of all purchases that have settled as of Mach 31, 2022).
(a) (b)(c)(d)
PeriodTotal Number of Shares PurchasedAverage Price Paid per ShareTotal Number of Shares Purchased as Part of Publicly Announced Plans or ProgramsApproximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs
January 1 - January 31, 2022 (1)
— $— — $229,724,248 
February 1 - February 28, 2022 (1)
— — — 229,724,248 
March 1 - March 31 , 2022 (2)
3,497,268 18.30— 229,724,248 
Total3,497,268 $18.30 — N/A
(1)     In 2020, we elected to suspend the Company’s share repurchase program. (See further discussion in Note 16 to our Condensed Consolidated Financial Statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q).

(2)     On March 7, 2022, we entered into the Icahn Group Agreement with the Icahn Group, pursuant to which the Company purchased 3,497,268 shares of common stock of the Company from the Icahn Group, at a price per share of $18.30. This transaction was separately authorized and not effectuated through the Company’s suspended share repurchase program. (See further discussion in Note 16 to our Condensed Consolidated Financial Statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q).


ITEM 5. OTHER INFORMATION
As previously reported on March 28, 2022, the Board of Directors appointed Avigal Soreq to serve as the Company’s President and Chief Executive Officer, succeeding Ezra Uzi Yemin in these positions as he transitions to the role of Executive Chairman of the Board of Directors. This transition will take place on June 9, 2022.
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Exhibits
ITEM 6. EXHIBITS
Exhibit No.Description
*#
*#
*#
*#
*#
*#
*#
*#
*#
#
#
#
##
##
101
The following materials from Delek US Holdings, Inc.’s Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2022, formatted in Inline XBRL (eXtensible Business Reporting Language): (i) Condensed Consolidated Balance Sheets as of March 31, 2022 and December 31, 2021 (Unaudited), (ii) Condensed Consolidated Statements of Income for the three months ended March 31, 2022 and 2021 (Unaudited), (iii) Condensed Consolidated Statements of Comprehensive Income for the three months ended March 31, 2022 and 2021 (Unaudited), (iv) Condensed Consolidated Statements of Changes in Stockholders' Equity for the three months ended March 31, 2022 and 2021 (Unaudited), (v) Condensed Consolidated Statements of Cash Flows for the three months ended March 31, 2022 and 2021 (Unaudited), and (vi) Notes to Condensed Consolidated Financial Statements (Unaudited).
104
The cover page from Delek US Holdings, Inc.'s Quarterly Report on Form 10-Q for the quarter ended March 31, 2022, has been formatted in Inline XBRL.
*
Management contract or compensatory plan or arrangement.
#Filed herewith
##Furnished herewith

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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
Delek US Holdings, Inc.
By:  /s/ Ezra Uzi Yemin  
 Ezra Uzi Yemin 
 Director (Chairman), President and Chief Executive Officer
(Principal Executive Officer) 
By:  /s/ Reuven Spiegel
 Reuven Spiegel
 Executive Vice President and Chief Financial Officer
(Principal Financial Officer) 
By:/s/ Robert Wright
Robert Wright
Senior Vice President and Chief Accounting Officer
(Principal Accounting Officer)
Dated: May 5, 2022
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Exhibit 10.2
FIRST AMENDMENT TO
AMENDED AND RESTATED EXECUTIVE EMPLOYMENT AGREEMENT
This First Amendment (this “Amendment”) to the Amended and Restated Executive Employment Agreement by and between Ezra Uzi Yemin (“Executive”) and DELEK US HOLDINGS, INC. (the “Company”), effective May 8, 2020 (the “Employment Agreement”), is hereby entered into by the Company and Executive on to be effective upon the commencement of Avigal Soreq’s term as Chief Executive Officer or at such earlier time as requested by the Board (the “Effective Date”). This Amendment supersedes and replaces in all respects the Employment Agreement and, except as otherwise provided herein, the Employment Agreement is hereby canceled. Capitalized terms used but not defined herein shall have the meanings assigned to such terms in the Employment Agreement.
WHEREAS, Executive wishes to resign from his role as President and Chief Executive Officer of the Company but Executive desires to continue to serve as the Chairman of the Company’s Board of Directors (the “Board”) and the Company wishes to accept such resignation and have Executive continue in this capacity as Executive Chairman of the Board and/or in such other executive capacities and positions as may be established by the Board (the “Transition”);
WHEREAS, the Parties acknowledge and agree that the Transition will not constitute a termination of employment for purposes of the Employment Agreement, the Employment Agreement will terminate on the Effective Date and Executive will not be entitled to any compensation and benefits under the Employment Agreement after the Transition Date except as provided below; and
WHEREAS, the Parties wish to enter into this Amendment in order to modify the terms of Executive’s continued service with the Company.
NOW, THEREFORE, in consideration of the foregoing, effective as of the Effective Date, the Employment Agreement is hereby amended as follows:
1.As of the Effective Date the Employment Agreement is terminated and cancelled and no further benefits will be provided thereunder except with respect to the following provisions: 19 (Mediation/Arbitration); and 21 (Indemnification and Arbitration) (and those additional provisions necessary to interpret or apply the preceding sections. In addition, all provisions in the Employment Agreement that provide for the accelerated vesting of outstanding equity awards in the Context of a Change in Control (including accelerated vesting associated with a termination of employment in the Context of a Change in Control) will continue to apply to Executive’s equity awards (and those additional provisions necessary to interpret the applicable provisions). For purposes of clarity, the preservation of Section 11(a) is not intended to preserve Executive’s Separation Payment, Post-Employment Annual Bonus, COBRA continuation rights or other payments or benefits other than the accelerated vesting of equity upon an Acceleration Event as provided for in Section 11(a). Upon the termination of the Employment Agreement none of the benefits contemplated by Section 10 of the Employment Agreement (other than Accelerated Vesting) will be payable to Executive.
2.By executing this Amendment, Executive acknowledges and agrees as follows:
This Amendment constitutes notice of my decision to resign as President and Chief Executive Officer of the Company and from all other positions and offices held at the Company or any subsidiary or affiliate of the Company, other than as Executive Chairman of the Board and Chairman of the Board of Directors of Delek Logistic Partners, LP, in each case effective upon the Effective Date.
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Exhibit 10.2
I hereby acknowledge and agree that neither my resignation nor any changes to my responsibilities, duties or compensation that are made in connection with my resignation will constitute “Good Reason” as defined in my Employment Agreement, or otherwise allow me to voluntarily terminate my employment and receive any severance payments or other similar payments or benefits from the Company or any of its affiliates.
3.The parties intend this Amendment to constitute Executive’s notice of and agreement to resign as provided in this Amendment.
4.This Amendment is entered into under, and shall be governed for all purposes by, the laws of the State of Tennessee, without regard to conflicts of laws principles thereof.
5.This Amendment may be executed in any number of counterparts, including by electronic mail or facsimile, each of which when so executed and delivered shall be an original, but all such counterparts shall together constitute one and the same instrument. Each counterpart may consist of a copy hereof containing multiple signature pages, each signed by one party, but together signed by both parties hereto.
[Remainder of Page Intentionally Blank;
Signature Page Follows]

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Exhibit 10.2
IN WITNESS WHEREOF, Executive and the Company each have caused this Amendment to be executed and effective as of the Effective Date.

COMPANY:
DELEK US HOLDINGS, INC.

/s/ Shlomo Zohar    
By: Shlomo Zohar
Title: Lead Independent Director


/s/ William J. Finnerty    
By: William J. Finnerty
Title: Chair of the Compensation Committee



EXECUTIVE:
Ezra Uzi Yemin

/s/ Ezra Uzi Yemin                

Signature Page to First Amendment to Amended and Restated Executive Employment Agreement
Exhibit 10.3
EXECUTIVE CHAIRMAN EMPLOYMENT AGREEMENT
This Executive Chairman Employment Agreement (the “Agreement”) is entered into by and between Ezra Uzi Yemin (the “Executive”) and DELEK US HOLDINGS, INC. (the “Company”), effective as of the date the Executive begins rendering services to the Company as its Executive Chairman (the “Effective Date”), which date will occur in June 2022. The Executive and the Company, in return for the mutual promises set forth herein, agree as follows:
1.Term.
(a)Term. The term of this Agreement shall commence upon the Effective Date. Executive shall be an employee of the Company through the earlier to occur of (i) the date of an annual meeting of stockholders prior to January 1, 2024 at which the Company’s stockholders fail to elect the Executive as a director of the Company or (ii) December 31, 2023 (the “Executive Chairman Term”), and following the Executive Chairman Term Executive will continue to perform services as a non-employee director of the Board of Directors of the Company (the “Board”), or to the extent the Company’s stockholders fail to elect the Executive as a director of the Board, as an advisor to the Chief Executive Officer of the Company and the Board on mutually agreeable terms to be determined in good faith through December 31, 2025, unless terminated earlier as provided for herein (the “Term” and such period during which Executive performs services to the Company in any capacity the “Period of Service”).
2.Scope of Employment. During the Executive Chairman Term, the Company shall employ Executive and Executive shall render services to the Company as its Executive Chairman of Delek US Holdings and/or in such other executive capacities and positions as may be established by the Board from time to time. During the Executive Chairman Term, Executive shall also serve as the Chairman of Delek Logistic Partners, LP. During the Executive Chairman Term, Executive shall devote Executive’s full business time and best efforts to the successful functioning of the Company’s business and shall faithfully and industriously perform all duties pertaining to Executive’s position, including the duties set forth on Exhibit B and such additional duties as may be assigned from time to time, to the best of Executive’s ability, experience and talent; provided, however, that Executive may engage in passive personal investments subject to the Company’s investment policies, Executive may pursue charitable or civic activities, participate in industry association and trade groups, and serve as an executor, trustee or in other similar fiduciary capacities; provided that any such activities do not interfere with the performance of his responsibilities and obligations pursuant to this Agreement as determined in the discretion of the Board and subject to Executive’s reporting of such activities to the Board in the manner determined by the Company. During the Executive Chairman Term, in the event Executive desires to serve on the board of directors of any entity or otherwise serve in a fiduciary capacity with respect to any person, prior written approval of such service must be obtained from the Nominating and Corporate Governance Committee of the Company’s Board and such service may continue in the discretion of the Company’s Nominating and Corporate Governance Committee. Executive shall be subject at all times, during the period in which he provides services to the Company, to the direction and control of the Board in respect of the work to be done. Following the Executive Chairman Term, to the extent Executive is not serving as a non-employee member of the Board at any time during the remainder of the Term, Executive will serve as an advisor to the Chief Executive Officer of the Company and the Board on mutually agreeable terms to be determined in good faith by both parties.
3.Compensation.


(a)Base Compensation. During the Executive Chairman Term and effective as of the Effective Date, Executive’s annualized base salary (the “Base Compensation”) shall be (i) the Base Salary specified in the “Terms of Employment” (attached hereto as “Exhibit A”), (ii) subject to all appropriate federal and state withholding taxes and (iii) payable at the same times and under the same conditions as salaries are paid to the Company’s other employees in accordance with the normal payroll practices of the Company. Following the Executive Chairman Term and during the remainder of the Term, Executive will no longer be entitled to receive the Base Compensation but (i) to the extent Executive does not serve as a non-employee member of the Board, will be paid at a competitive market rate for the consulting services provided from time to time during any period of the Term in which he is not receiving Separation Payments and (ii) to the extent Executive serves as a non-employee member of the Board he will be entitled to receive the Board and applicable committee compensation payable to non-employee members of the Board for such service.
(b)Annual Bonus. During the Executive Chairman Term, Executive will be eligible to participate in the Company’s annual cash incentive plan with a target annual incentive bonus for service during each fiscal year that will be equal to a stated percentage of Executive’s Base Compensation as specified in the Terms of Employment (the “Target Bonus”) and that will be subject to the achievement of performance measures and objectives as established by the Board (or any applicable committee thereof) in its sole and reasonable discretion from time to time (the “Annual Bonus”). The Annual Bonus is typically paid in the first fiscal quarter of the year following the applicable bonus year. For purposes of calculating the Annual Bonus payable with respect to service in 2022, the Annual Bonus will be weighted to reflect the portion of 2022 preceding the Effective Date at the higher base salary in effect during that period and to reflect the remainder of the year on and after the Effective Date during which Executive was eligible to receive the Base Compensation pursuant to this Agreement. Following the Executive Chairman Term and during the remainder of the Term, Executive will no longer be entitled to receive an annual bonus.
4.Fringe Benefits / Reimbursement of Business Expenses.
(a)General Employee Benefits. During the Executive Chairman Term, the Company shall make available to Executive, or cause to be made available to Executive, throughout the period of Executive’s employment hereunder, such benefits as may be put into effect from time to time by the Company generally for other senior executives of the Company. The Company expressly reserves the right to modify such benefits available to Executive at any time provided that such modifications apply to other similarly situated employees. Following the Executive Chairman Term and during the remainder of the Term, Executive will only be eligible to receive the benefits made available to, as applicable to Executive’s service to the Company, directors, advisors and former employees in accordance with the terms of those arrangements.
(b)Business Expenses. Executive will be reimbursed for all reasonable out-of-pocket business, business entertainment and travel expenses paid by Executive in connection with the performance of Executive’s duties for the Company, in accordance with and subject to Section 22(c) and all applicable Company expense incurrence and reimbursement policies.
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(c)Other Benefits. During the Executive Chairman Term, the Company will pay Executive’s reasonable costs of professional tax and financial counseling, provided that, the cost of each such benefit does not exceed $25,000 in any calendar year (the “Tax and Financial Counseling Payment”). Perquisites and other personal benefits that are not integrally and directly related to the performance of Executive’s duties and confer a direct or indirect benefit upon Executive that has a personal aspect may, in the Company’s sole discretion, be recorded as taxable compensation to Executive and disclosed in public filings according to SEC regulations. Following the Executive Chairman Term, Executive will no longer be entitled to receive the Tax and Financial Counseling Payment.
5.Vacation Time / Sick Leave. During the Executive Chairman Term, Executive will be granted 25 business days of vacation per calendar year, less any vacation days taken in 2022 prior to the Effective Date. Unused vacation outstanding immediately prior to the Effective Date will carry over with Executive’s continued employment under the Agreement. Unused vacation will accrue and carry over into a new calendar year during the Executive Chairman Term and the amount attributed to accrued and unused vacation will be paid to Executive upon the termination of employment and the expiration of the Executive Chairman Term and Executive will cease to accrue vacation thereafter. Executive will be provided with sick leave according to the Company’s standard policies.
6.Compliance with Company Policies. Executive shall comply with and abide by all applicable policies and directives of the Company and its subsidiaries including, without limitation, the Codes of Business Conduct & Ethics for the Company and its subsidiaries, the Supplemental Insider Trading Policies for the Company and its subsidiaries and any applicable employee handbooks or manuals. The Company and its subsidiaries may, in their sole discretion, change, modify or adopt new policies and directives affecting Executive’s employment or service relationship which shall be provided to Executive in writing and shall not be on a basis more burdensome than applicable to other officers or, to the extent Executive is no longer an officer, directors, advisors and other service providers, as applicable, or otherwise require any additional financial commitment from Executive. Executive acknowledges that the Company and its subsidiary, DKL, are currently subject to SEC reporting requirements pursuant to the Securities Exchange Act of 1934, as amended (the “Exchange Act”), the continued listing requirements of the New York Stock Exchange or any other securities exchange on which the securities of the Company may be listed from time to time for public trading (collectively, a “Securities Market”), and other federal securities laws and regulations applicable to publicly traded companies in the United States. As an employee, officer or director of the Company or as an officer or director of DKL, Executive will, in such capacities, be required to comply with applicable federal securities laws and regulations (including, without limitation, the reporting requirements under Exchange Act Section 16(a) and related SEC rules and regulations), Securities Market listing requirements as well as certain policies of the Company and its subsidiaries designed to comply with such laws and regulations.
7.Confidentiality. Executive recognizes that during the course of Executive’s service relationship, Executive will be exposed to information or ideas of a confidential or proprietary nature that pertain to Company’s business, financial, legal, marketing, administrative, personnel, technical or other functions or which constitute trade secrets (including, without limitation, business strategy, strategic plans, investment and growth plans and opportunities, client and customer needs and strategies, the identity of sources and markets, marketing information and strategies, business and financial plans and strategies, methods of doing business, data processing and technical systems, specifications, designs, plans, drawings, software, data, prototypes, programs and practices, sales history, financial health or material non-public information as defined under federal securities law) (collectively “Confidential Information”). Confidential
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Information also includes such information of third parties that has been provided to Company in confidence, and Confidential Information includes such information provided to Executive both before and after the date he enters into this Agreement. All such information is deemed “confidential” or “proprietary” whether or not it is so marked. Information will not be considered Confidential Information to the extent that it is or becomes generally available to the public other than through any breach of this Agreement by or at the discretion of Executive. Nothing in this Section will prohibit the use or disclosure by Executive of knowledge that is in general use in the industry or general business knowledge that was known to Executive prior to Executive’s service to the Company or which enters the public domain other than through any breach of this Agreement by or at the discretion of Executive. Executive may also disclose such information if required by court order or applicable law provided that Executive (a) uses Executive’s reasonable best efforts to give the Company written notice as far in advance as is practicable to allow the Company to seek a protective order or other appropriate remedy (except to the extent that Executive’s compliance with the foregoing would cause Executive to violate a court order or other legal requirement), (b) discloses only such information as is required by law, and (c) uses Executive’s reasonable best efforts to obtain confidential treatment for any Confidential Information so disclosed. During Executive’s Period of Service and for so long as the Confidential Information remains confidential or proprietary thereafter, Executive shall hold Confidential Information in strict confidence, shall use it only in connection with the performance of Executive’s duties on behalf of the Company, shall restrict its disclosure to those directors, employees or independent contractors of the Company with a need to know such Confidential Information, and shall not disclose, copy or use Confidential Information for the benefit of anyone other than the Company without the Company’s prior written consent. However, nothing in this Agreement shall prohibit Executive from reporting possible violations of law to any governmental agency or entity in accordance with applicable whistleblower protection provisions including, without limitation, the rules promulgated under Section 21F of the Exchange Act or Section 806 of the Sarbanes-Oxley Act of 2002, or require Executive to notify the Company (or obtain its prior approval) of any such reporting. Executive shall, at any time, upon Company’s request and at Company’s sole discretion or immediately upon Executive’s separation from employment, return to the Company and certify in a form satisfactory to the Company, the destruction of any and all written or electronic documents or data containing Confidential Information in Executive’s possession, custody or control. Further, pursuant to the federal Defend Trade Secrets Act of 2016, an individual shall not be held criminally or civilly liable under any federal or state trade secret law for the disclosure of a trade secret that: (A) is made (1) in confidence to a federal, state or local government official, either directly or indirectly, or to an attorney and (2) solely for the purpose of reporting or investigating a suspected violation of law; (B) is made to the individual’s attorney in relation to a lawsuit for retaliation against the individual for reporting a suspected violation of law; or (C) is made in a complaint or other document filed in a lawsuit or proceeding, if such filing is made under seal. For the avoidance of doubt, Executive shall not retain any copy, in any form of any Confidential Information following such request or separation.
8.Restrictive Covenants.
(a)Non-Competition.
(i)In consideration of the Confidential Information provided to Executive and the other benefits provided to him pursuant to this Agreement, Executive agrees that, if his service relationship ends, then, during the Restricted Period (as defined below), he will not, without the prior written consent of the Company, conduct any business in or provide services with respect to or provide services with respect to the Territory (as defined below) by becoming an employee, officer, director, independent contractor, consultant, shareholder or partner of, or assist in any other
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capacity, a Competitor (as defined below). The terms of this Section 8(a) shall not apply to the passive ownership by Executive of less than 5% of a class of equity securities of an entity, which securities are publicly traded on any national securities exchange.
(ii)For any termination except for a termination by the Company for Cause, the “Restricted Period” shall commence upon the date that notice of termination of service is delivered or deemed delivered under the notice provisions of this Agreement, and continue until the earlier to occur of (i) first anniversary of such date and (ii) December 31, 2025, it being acknowledged and agreed that the Restricted Period may commence to run, or even completely run, during a period of time during which Executive remains a service provider to the Company (assuming that he continues to be a service provider after the delivery of such notice of termination). In the event of a termination by the Company of Executive’s service for Cause, the Restricted Period shall commence upon the date that Executive’s employment with the Company ends.
(iii)For purposes of this Section 8(a), a “Competitor” means a member of the peer group of companies set forth in the most recently filed Annual Reports on Form 10-K of the Company or Delek Logistics Partners, LP.
(iv)For purposes of Section 8(a), the “Territory” shall mean the following geographic areas as of the commencement of the Restricted Period (A) any state (or, in the case of Louisiana, any parishes set forth on Exhibit C), province or foreign analogue in which petroleum and biodiesel refining facilities of the Company are located, (B) any state (or, in the case of Louisiana, any parishes set forth on Exhibit C), province or foreign analogue in which owned wholesale refined products distribution facilities of the Company are located and (C) a 50 mile radius from any of the Company’s retail fuel and/or convenience merchandise facilities.
(b)Non-Interference with Commercial Relationships. During Executive’s Period of Service with the Company, and during the Restricted Period, Executive will not, directly or indirectly, either as an individual or as an employee, officer, director, shareholder, partner, equity participant, sole proprietor, independent contractor, consultant or in any other capacity whatsoever approach or solicit any customer or vendor of Company for the purpose of causing, directly or indirectly, any such customer or vendor to cease doing business with the Company or its affiliates, nor will Executive engage in any other activity that interferes or could reasonably be expected to interfere in any material way with the commercial relationships between the Company and its affiliates and such customers or vendors. The foregoing covenant shall be in addition to any other covenants or agreements to which Executive may be subject.
(c)Non-Interference with Employment Relationships. During Executive’s Period of Service, and during the Restricted Period, Executive shall not, without the Company’s prior written consent, directly or indirectly: (i) induce or attempt to induce any Company employee to terminate his/her employment with the Company; or (ii) interfere with or disrupt the Company’s relationship with any of its employees or independent contractors. The foregoing does not prohibit Executive (personally or as an employee, officer, director, shareholder, partner, equity participant, sole proprietor, independent contractor, consultant or in any other capacity) from hiring or employing an individual that contacts Executive on
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his/her own initiative without any direct or indirect solicitation by Executive other than customary forms of general solicitation such as newspaper advertisements or internet postings.
(d)It is understood and agreed that the scope of each of the covenants contained in this Section 8 is reasonable as to time, area, and persons and is necessary to protect the legitimate business interests of the Company. It is further agreed that such covenants will be regarded as divisible and will be operative as to time, area and persons to the extent that they may be so operative.
9.Copyright, Inventions, Patents. The Company shall have all right, title and interest to all intellectual property (including, without limitation, graphic designs, copyrights, trademarks and patents) created by Executive during the course of Executive’s service with the Company. Executive hereby assigns to Company all copyright ownership and rights to any work product developed by Executive or at Executive’s discretion and reduced to practice for or on behalf of the Company or which relate to the Company’s business during the course of the employment relationship. At the Company’s expense and for a period beginning on the Effective Date and continuing for three years following the termination of Executive’s service, Executive shall use Executive’s reasonable best efforts to assist or support the Company to obtain, maintain, and assert its rights in such intellectual property and work product including, without limitation, the giving of evidence in suits and proceedings, and the furnishing and/or assigning of all documentation and other materials relative to the Company’s intellectual property rights.
10.Termination of Service.
(a)Termination by Company for Cause. The Company may immediately terminate this Agreement and/or Executive’s employment at any time during the Term for Cause (as defined below). Upon any such termination, except for the Accrued Benefits (as defined below), the Company shall be under no further obligation to Executive hereunder except as otherwise required by law, and the Company will reserve all further rights and remedies available to it at law or in equity. For purposes hereof, “Accrued Benefits” shall mean: (i) earned but unpaid Base Compensation through the date of termination, (ii) payment for any accrued, but unused vacation time, (iii) reimbursement for business expenses incurred prior to the date of termination and, (iv) continued rights to indemnification and directors and officers insurance.
(b)Termination by Executive for Good Reason. Within 60 calendar days after Executive becomes (or should have become) aware of the occurrence of a Good Reason (as defined below) during the Executive Chairman Term, Executive may terminate this Agreement (and Executive’s employment hereunder) by providing 30 calendar days’ advance written notice of termination and provided that the condition remains uncured through the end of such 30-day period. After such 30-day period, Executive shall either resign Executive’s employment immediately or, if Executive continues in employment beyond such 30-day period, Executive shall have irrevocably waived and released any right to resign for Good Reason based upon the circumstances identified in Executive’s advance notice of termination. In the event of any such termination, in addition to the Accrued Benefits and Prior Year Bonus, if Executive timely executes and does not revoke the Separation Release (as that term is defined in Section 10(f) of this Agreement), Executive shall be entitled to the following: (i) the Separation Payment; and (ii) COBRA Continuation. This provision shall not apply if Executive is terminated by reason of death or Disability (as defined below) and this provision shall cease to apply after the Executive Chairman Term. The parties agree that the transition of
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Executive’s position as Executive Chairman of the Board to that of consultant at the end of the Executive Chairman Term will not constitute Good Reason. No amounts will be payable pursuant to this Section 10(b) for any termination of service on or after January 1, 2024.
(c)Termination At-Will by Company. The Company may terminate this Agreement (and Executive’s employment hereunder) at any time and for any reason. If the termination occurs prior to January 1, 2024, and is other than for Cause, in addition to the Accrued Benefits and the Prior Year Bonus, if Executive timely executes and does not revoke the Separation Release (as that term is defined in Section 10(f) of this Agreement), Executive shall be entitled to the following: (i) the Separation Payment, and (ii) COBRA Continuation. This provision shall not apply if Executive is terminated by reason of death or Disability. For purposes of this Section 10(c) (y) a determination by the Nominating and Corporate Governance Committee of the Board not to nominate the Executive as a director of the Company without the consent of Executive with respect to the 2023 annual meeting of stockholders or (z) the failure by the Company’s stockholders to elect the Executive as a director of the Company at the Company’s 2022 or 2023 annual meeting of stockholders will, in either case and provided such determination or failure occurred without the consent of the Executive, constitute a termination pursuant to this Section 10(c). No amounts will be payable pursuant to this Section 10(c) for any termination of service on or after January 1, 2024; provided, however, if, (a) the Company does not engage the Executive as an advisor to the Chief Executive Officer of the Company and the Board on mutually agreeable terms to be determined in good faith by both parties, or (b) such advisory relationship is terminated by the Company without Cause, the Executive will be entitled to the Accelerated Vesting.
(d)Termination At-Will by Executive. Executive may terminate this Agreement (and Executive’s employment hereunder) at any time and for any reason and, in addition to the Accrued Benefits, will also be entitled to the Prior Year Bonus, if any. If Executive terminates this Agreement and Executive’s employment hereunder during the Executive Chairman Term (other than due to Executive’s death or Disability), Executive must provide the Company with advance written notice of termination. Following the Executive Chairman Term Executive may terminate this Agreement upon written notice.
(e)Accelerated Termination After Notice. Nothing herein shall limit the Company’s right to terminate this Agreement and/or Executive’s employment after the Company receives notice of termination from Executive during the Executive Chairman Term, which termination shall not be deemed a termination without Cause under Section 10(c).
(f)Separation Release. Notwithstanding anything to the contrary, but subject to Executive’s compliance with the ongoing obligations of Section 8 (above), and any applicable six-month delay required by Section 22 hereof and Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”), and the applicable Treasury regulations and administrative guidance issued thereunder (collectively, “Section 409A”), (i) the Separation Payment shall be payable in substantially equal installments over the period of the time from the termination date through December 31, 2023, in accordance with the Company’s regular payroll practices; provided, however, in the event any such Separation Payment would constitute nonqualified deferred compensation subject to Section 409A, such amount shall be paid no later than March 15 of the year following the year of
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termination; provided, further, that the first payment shall be made on the first regularly scheduled payroll date following the 60th day following Executive’s termination of employment and shall include payment of any amounts that would otherwise be due prior thereto, and (ii) the Enhanced Separation Payment shall be payable in a cash lump sum pursuant to Executive on the first payroll date following the 60th day following Executive’s termination date. However, Executive’s right to receive the Separation Payment or Enhanced Separation Payment, as applicable, or COBRA Continuation or Accelerated Vesting or Enhanced Accelerated Vesting, as applicable, shall be conditioned upon (i) Executive’s execution and delivery to the Company of a Separation Release, which shall be provided to Executive within five (5) days of the date of termination, and any revocation period applicable to such Separation Release must have expired no later than the 60th day following Executive’s termination of employment and (ii) Executive’s continued compliance with this Agreement, including Sections 7 and 8, and any other restrictive covenants to which Executive is bound. If Executive fails to timely execute and deliver the Separation Release or if Executive timely revokes Executive’s acceptance of the Separation Release thereafter (if such revocation is permitted), Executive shall not be entitled to the Separation Payment or Enhanced Separation Payment, as applicable, or COBRA Continuation or Accelerated Vesting or Enhanced Accelerated Vesting, as applicable, and shall repay any such amounts received with respect thereto.
(g)Termination upon Disability or Death. In the event that Executive’s employment ceases during the Executive Chairman Term due to Executive’s death or Disability, in addition to the Accrued Benefits and Prior Year Bonus, Executive shall be entitled to the following: (i) COBRA Continuation, (ii) the Post-Employment Annual Bonus and (iii) Accelerated Vesting upon termination. In the event that Executive’s service ceases during the Term due to Executive’s death or Disability, Executive shall be entitled to the Accelerated Vesting upon such termination.
(h)Definitions. The following terms shall have the following meanings as used in this Agreement:
(i)“Accelerated Vesting” means the vesting of all unvested equity awards granted to Executive under the Company’s long-term equity incentive plans that may be in effect from time to time for the Company and its subsidiaries including, without limitation, the Company’s Long-Term Incentive Plan (the “Plans”), such that (A) performance awards will become vested without proration, in each case, based on actual results evaluated after the close of the applicable performance period and payable in a lump sum at the same time as performance awards are paid to executives of the Company generally and (B) full value equity awards (e.g., restricted stock, restricted stock units and phantom units) and appreciation equity awards (e.g., non-qualified stock options and stock appreciation rights) will become fully vested.
(ii)“Cause” means Executive’s: (A) fraud, gross negligence, willful misconduct involving the Company or its affiliates, willful breach of a fiduciary duty, including, without limitation, Section 7 hereof, owed to the Company or its affiliates, or any intentional and willful violation of the Company’s material and written policies against discrimination or harassment which causes both material and demonstrable economic harm t to the Company; (B) conviction of, or plea of nolo contendere to, a felony
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or serious crime involving moral turpitude (other than a traffic offense); or (C) deliberate and continual refusal to perform Executive’s duties in any material respect or to act in accordance with any specific and lawful instruction of the Board which are consistent with his duties and position provided that Executive has been given written notice of such conduct and such conduct is not cured within 30 days thereafter.
(iii)“COBRA Continuation” means the costs of continuing family health insurance coverage under the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended (“COBRA”), for 18 months following termination of employment, provided, that the Company may, in its sole discretion, (A) pay such amounts directly to the applicable provider or (B) pay an equivalent amount, which will be payable on the first regularly scheduled payroll date of each month following the date of Executive’s termination of employment, directly to Executive.
(iv)“Disability” means the inability of Executive, with or without reasonable accommodation, to perform the customary duties of Executive’s employment or other service with the Company or its affiliates by reason of a physical or mental incapacity or illness that is expected to result in death or to be of indefinite duration, as determined by a duly licensed physician selected by the Company.
(v)“Enhanced Accelerated Vesting” means the vesting of all unvested equity awards granted to Executive under the Plans such that (A) performance awards will become vested without proration, in each case, based on the greater of (x) actual results evaluated after the close of the applicable performance period, and (y) target performance, and payable in a lump sum at the same time as performance awards are paid to executives of the Company generally and (B) full value equity awards (e.g., restricted stock, restricted stock units and phantom units) and appreciation equity awards (e.g., non-qualified stock options and stock appreciation rights) will become fully vested.
(vi)“Enhanced Separation Pay” shall mean an amount equal to two and half (2.5) times the sum of (x) Executive’s Base Compensation (without regard to any reduction therein which otherwise breached this Agreement), and (y) Target Bonus, which shall be payable pursuant to Section 10(f). Executive shall have no responsibility for mitigating the amount of any payment provided for herein by seeking other employment or otherwise, and any such payment will not be reduced in the event such other employment is obtained.
(vii)“Good Reason” means (A) the Company materially breaches this Agreement (it being acknowledged that any failure to pay any significant compensation or benefits at the times due under this Agreement shall be deemed a material breach), (B) the Company significantly reduces the scope of Executive’s duties under Section 2, (C) the Company reduces Executive’s Base Compensation under Section 3 other than as part of a base compensation reduction plan generally applicable to other similar senior executive employees, or (D) the Company requires Executive to relocate to any location that increases his commuting distance by more than 50 miles. Executive acknowledges and agrees that the change in Executive’s role, title and compensation at the end of the Executive
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Chairman Term will not constitute Good Reason and Executive will not be entitled to terminate his service relationship for Good Reason following the end of the Executive Chairman Term.
(viii)“Post-Employment Annual Bonus” shall mean the Annual Bonus to which Executive would have otherwise been entitled if Executive’s employment had continued through the end of the bonus year based upon the actual performance of the Company, prorated for the period of actual employment during the bonus year, and paid at the same time annual bonuses are paid to senior executives of the Company pursuant to the Company’s annual bonus programs, but not later than March 15 of the year following the year in which Executive’s termination of employment occurs.
(ix)“Prior Year Bonus” shall mean the Annual Bonus earned but unpaid with respect to the year prior to the year in which the date of termination occurs, if any, which shall be payable in full in a lump sum cash payment on the date such bonus would be paid if Executive had remained an employee of the Company.
(x)“Separation Payment” shall mean an amount equal to the sum of (x) Executive’s Base Compensation (without regard to any reduction therein which otherwise breached this Agreement) for the remaining period ending December 31, 2023, and (y) (i) two (2) times Target Bonus if the termination date occurs in 2022 or (ii) one (1) times Target Bonus if the termination date occurs in 2023, which shall be payable pursuant to Section 10(f). Executive shall have no responsibility for mitigating the amount of any payment provided for herein by seeking other employment or otherwise, and any such payment will not be reduced in the event such other employment is obtained.
(xi)“Separation Release” means a general release of claims against the Company (and its subsidiaries and affiliates) on such terms and conditions and subject to such provisions as consistent with Company practice that pertains to all claims related to Executive’s service and the termination of Executive’s service and that contains an appropriate mutual non-disparagement covenant but does not require Executive to be bound by any other restrictive covenants not in effect as of the date of the termination of Executive’s employment.
11.Change in Control.
(a)If, during the Executive Chairman Term, Executive’s employment is terminated by the Company without Cause or by Executive for Good Reason and (i) a Change in Control has occurred on or prior to the date of such termination or (ii) a Change in Control occurs prior to December 31, 2023 and within six months following such termination, in each case, in addition to the Accrued Benefits and Prior Year Bonus, Executive shall be entitled to (i) the Enhanced Separation Payment less the amount of any Separation Payment previously paid, if any, (ii) the COBRA Continuation, and (iii) Enhanced Acceleration Benefits; provided, that Executive must timely execute and not revoke the Separation Release (in accordance with Section 10(f) of this Agreement); provided, that, in no event shall Executive be required to sign more than one Separation Release. Executive acknowledges and agrees that a termination of service following the Executive
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Chairman Term will not constitute a termination in the Context of a Change in Control.
(b)Anything in this Agreement to the contrary notwithstanding, if it shall be determined that any payment or distribution by the Company or its affiliates to or for the benefit of the Executive (whether paid or payable or distributed or distributable pursuant to the terms of this Agreement or otherwise, all such payments and benefits being hereinafter referred to as the “Total Payments”) would be subject to the excise tax imposed by Section 4999 of the Code or any interest or penalties are incurred by the Executive with respect to such excise tax (such excise tax, together with any such interest and penalties, collectively the “Excise Tax”), then, after taking into account any reduction in the Total Payments provided by reason of Section 280G of the Code in any other plan, arrangement or agreement providing for a payment or benefit, the payments under this Agreement shall be reduced in the order specified below, to the extent necessary so that no portion of the Total Payments is subject to the Excise Tax but only if (a) the net amount of such Total Payments, as so reduced (and after subtracting the net amount of federal, state and local income taxes on such reduced Total Payments and after taking into account the phase out of itemized deductions and personal exemptions attributable to such reduced Total Payments) is greater than or equal to (b) the net amount of such Total Payments without such reduction (but after subtracting the net amount of federal. state and local income taxes on such Total Payments and the amount of Excise Tax to which the Executive would be subject in respect of such unreduced Total Payments and after taking into account the phase out of itemized deductions and personal exemptions attributable to such unreduced Total Payments). The payments and benefits under this Agreement shall be reduced in the following order: (i) reduction of any cash severance payments otherwise payable to the Executive that are exempt from Section 409A of the Code; (ii) reduction of any other cash payments or benefits otherwise payable to the Executive that are exempt from Section 409A of the Code, but excluding any payments attributable to any acceleration of vesting or payments with respect to any equity award that are exempt from Section 409A of the Code; (iii) reduction of any other payments or benefits otherwise payable to the Executive on a pro-rata basis or such other manner that complies with Section 409A of the Code. but excluding any payments attributable to any acceleration of vesting and payments with respect to any equity award that are exempt from Section 409A of the Code; and (iv) reduction of any payments attributable to any acceleration of vesting or payments with respect to any equity award that are exempt from Section 409A of the Code, in each case beginning with payments that would otherwise be made last in time.
(c)For purposes of this Agreement, a “Change in Control” of the Company shall mean any of the following:
(i)Any “person” (as defined in Section 13(h)(8)(E) of the Exchange Act), other than the Company or any of its subsidiaries or any employee benefit plan of the Company or any of its subsidiaries, becomes the “beneficial owner” (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of the Company (or any successor to all or substantially all of the Company’s assets) representing more than 30% of the combined voting power of the Company’s (or such successor’s) then outstanding voting securities that may be cast for the election of directors of the Company (other than as a result of an issuance of securities initiated by the Company (or such successor) in the ordinary course of business);
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(ii)As the result of, or in connection with, any cash tender or exchange offer, merger or other business combination or contested election, or any combination of the foregoing transactions, less than 51% of the combined voting power of the then outstanding securities of the Company or any successor company or entity entitled to vote generally in the election of the directors of the Company or such other corporation or entity after such transaction are held in the aggregate by the holders of the Company’s securities entitled to vote generally in the election of directors of the Company immediately prior to such transaction;
(iii)All or substantially all of the assets of the Company are sold, exchanged or otherwise transferred;
(iv)The Company’s stockholders approve a plan of liquidation or dissolution of the Company; or
(v)During any 12-month period within the Term, Continuing Directors cease for any reason to constitute at least a majority of the Board. For this purpose, a “Continuing Director” is any person who at the beginning of the Term was a member of the Board, or any person first elected to the Board during the Term whose election, or the nomination for election by the Company’s shareholders, was approved by a vote of at least two-thirds of the Continuing Directors then in office, but excluding any person (A) initially appointed or elected to office as result of either an actual or threatened election and/or proxy contest by or on behalf of any “person” or “group” (within the meaning of Section 13(d) of the Exchange Act) other than the Board, or (B) designated by any “person” or “group” (within the meaning of Section 13(d) of the Exchange Act) ) who has entered into an agreement with the Company to effect a transaction described in Section 11(c)(i) through (iv).
For the avoidance of doubt, to the extent any payment or benefit which constitutes nonqualified deferred compensation under Section 409A is accelerated upon a Change in Control, then a Change in Control shall not be deemed to have occurred under subparagraphs (i)-(v) above unless such event also constitutes a “change in control event” as such term is defined in Section 409A; provided, that, any such acceleration and/or payment shall then be deemed to occur at the next permissible event of any nature which would not result in a violation of Section 409A.
12.Survival of Terms. The provisions of Sections 7, 8(b), 8(c), 9, 10 and 11 shall survive the termination or expiration of this Agreement and will continue in effect following the termination of Executive’s employment for the periods described therein. The provisions of Section 8(a) shall survive the termination (but not the expiration) of this Agreement.
13.Assignment. This Agreement shall not be assignable by either party without the written consent of the other party except that the Company may assign this Agreement to a subsidiary, affiliate or, subject to the terms of this Section 13, a third-party successor of the Company.
14.No Inducement / Agreement Voluntary. Executive represents that (a) Executive has not been pressured, misled, or induced to enter into this Agreement based upon any representation by Company or its agents not contained herein, (b) Executive has entered into this Agreement voluntarily, after having the opportunity to consult with legal counsel and other advisors of Executive’s own choosing, and (c) Executive’s assent is freely given.
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15.Interpretation. Any Section, phrase or other provision of this Agreement that is determined by a court, arbitrator or arbitration panel of competent jurisdiction to be unreasonable or in conflict with any applicable statute or rule, shall be deemed, if possible, to be modified or altered so that it is not unreasonable or in conflict or, if that is not possible, then it shall be deemed omitted from this Agreement. The invalidity of any portion of this Agreement shall not affect the validity of the remaining portions. Unless expressly stated to the contrary, all references to “days” in this Agreement shall mean calendar days.
16.Prior Agreements / Amendments. This Agreement and the First Amendment to the Amended and Restated Executive Employment Agreement by and between Executive and the Company (a) represents the entire agreement between the parties in relation to the employment of Executive by the Company on, and subsequent to, the Effective Date and (b) revokes and supersedes all prior agreements pertaining to the subject matter herein, whether written and oral. In entering into this Agreement, Executive expressly acknowledges and agrees that Executive has received all sums and compensation that Executive has been owed, is owed or ever could be owed for services provided to the Company through the date that Executive signs this Agreement except for the payment of any unpaid base salary earned in the Company’s pay period that includes the Effective Date. Notwithstanding anything else herein, Executive acknowledges that any other agreements between Employee and the Company and any of its Affiliates that create obligations for Executive with respect to confidentiality, non-disclosure, non-competition or non-solicitation shall remain in full force and effect. This Agreement shall not be subject to modification or amendment by any oral representation, or any written statement by either party, except for a dated writing signed by Executive and the Company.
17.Notices. All notices of any kind to be delivered in connection with this Agreement shall be in writing and shall be deemed to have been duly given if personally delivered or if sent by nationally-recognized overnight courier (e.g., FedEx, UPS, DHL, etc.) or by registered or certified mail, return receipt requested and postage prepaid, addressed to the Company at 7102 Commerce Way, Brentwood, Tennessee 37027, Attn: General Counsel, to Executive at Executive’s then-existing payroll address, or to such other address as the party to whom notice is to be given may have furnished to the other in writing in accordance with the provisions of this Section. Any such notice or communication shall be deemed to have been received: (a) if by personal delivery or nationally-recognized overnight courier, on the date of such delivery; and (b) if by registered or certified mail, on the third postal service day following the date postmarked.
18.Applicable Law. This Agreement shall be governed by and construed in accordance with the laws of the State of Tennessee without giving effect to its principles of conflicts of law. The state and federal courts for Davidson County, Tennessee shall be the exclusive venue for any litigation based in significant part upon this Agreement.
19.Mediation / Arbitration.
(a)Any dispute concerning a legally cognizable claim arising out of this Agreement or in connection with the employment of Executive by Company, including, without limitation, claims of breach of contract, fraud, unlawful termination, discrimination, harassment, retaliation, defamation, tortious infliction of emotional distress, unfair competition, arbitrability and conversion (collectively a “Legal Dispute”) shall be resolved according to the following protocol:
(i)The parties shall first submit the Legal Dispute to mediation under the auspices of the American Arbitration Association (“AAA”) and pursuant to the mediation rules and procedures promulgated by the AAA. The Company shall pay the expenses associated with the mediation.
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(ii)In the event mediation is unsuccessful in fully resolving the Legal Dispute, binding arbitration shall be the method of final resolution. The parties expressly waive their rights to bring action against one another in a court of law except as expressly provided herein. In addition to remedies at law, the parties acknowledge that failure to comply with this provision shall entitle the non-breaching party to injunctive relief to enjoin the actions of the breaching party. Any Legal Dispute submitted to Arbitration shall be under the auspices of the AAA and pursuant to the “National Rules for the Resolution of Employment Disputes,” or any similar identified rules promulgated at such time the Legal Dispute is submitted for resolution. All mediation and arbitration hearings shall take place in either Davidson or Williamson County, Tennessee. The Company shall pay the filing expenses associated with the arbitration. All other expenses and fees associated with the arbitration shall be determined in accordance with the AAA rules.
(b)Notice of submission of any Legal Dispute to mediation shall be provided no later than one year following the date the submitting party became aware, or should have become aware of, the conduct constituting the alleged claims. Failure to do so shall result in the irrevocable waiver of the claim made in the Legal Dispute.
(c)Notwithstanding that mediation and arbitration are established as the exclusive procedures for resolution of any Legal Dispute, (i) either party may apply to an appropriate judicial or administrative forum for injunctive relief and (ii) claims by Company arising in connection with Sections 7, 8 and/or 9 may be brought in any court of competent jurisdiction.
(d)With respect to any breach or attempted breach of Sections 7, 8 and/or 9 of this Agreement, each party acknowledges that a remedy at law will be inadequate, agrees that the Company will be entitled to specific performance and injunctive and other equitable relief and agrees not to use as a defense that any party has an adequate remedy at law. This Agreement shall be enforceable in a court of equity, or other tribunal with jurisdiction, by a decree of specific performance, and appropriate injunctive relief may be applied for and granted in connection herewith. Such remedy shall not be exclusive and shall be in addition to any other remedies now or hereafter existing at law or in equity, by statute or otherwise. No delay or omission in exercising any right or remedy set forth in this Agreement shall operate as a waiver thereof or of any other right or remedy and no single or partial exercise thereof shall preclude any other or further exercise thereof or the exercise of any other right or remedy.
20.Independent Contractor. In the performance of services hereunder following the end of the Executive Chairman Term, Executive shall be and act as an independent contractor.
Nothing in this Agreement, or in the relationship between Executive and the Company, shall be deemed to constitute a partnership, joint venture or other similar relationship, and Executive agrees not to make any contrary assertion, claim or counterclaim in any action, suit or other legal proceeding involving Executive and the Company. None of the Company or its affiliates will withhold federal, state or local income or employment taxes from amounts payable to Executive following the end of the Executive Chairman Term (other than with respect to any Separation Payments, Enhanced Separation Payments, Accelerated Vesting or Enhanced Accelerated Vesting, if any) and Executive will be individually liable for payment of such amounts.
21.Section 409A.
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(a)It is intended that each installment of the payments provided under this Agreement, if any, is a separate “payment” for purposes of Section 409A and the payments satisfy, to the greatest extent possible, the exemptions from the application of Section 409A provided under Treasury Regulations 1.409A-1(b)(4), 1.409A-1(b)(9)(iii) and 1.409A-1(b)(9)(v). Notwithstanding any other provision to the contrary, a termination of employment with the Company shall not be deemed to have occurred for purposes of any provision of this Agreement providing for the payment of “deferred compensation” (as such term is defined in Section 409A and the Treasury Regulations promulgated thereunder) upon or following a termination of employment unless such termination is also a “separation from service” from the Company within the meaning of Section 409A and Section 1.409A-1(h) of the Treasury Regulations and, for purposes of any such provision of this Agreement, references to a “separation,” “termination,” “termination of employment” or like terms shall mean “separation from service.”
(b)Notwithstanding anything to the contrary in this Agreement, if the Company determines (i) that on the date Executive’s employment with the Company terminates or at such other time that the Company determines to be relevant, Executive is a “specified employee” (as such term is defined under Treasury Regulation 1.409A-1(i)(1)) of the Company and (ii) that any payments to be provided to Executive pursuant to this Agreement are or may become subject to the additional tax under Section 409A(a)(1)(B) or any other taxes or penalties imposed under Section 409A if provided at the time otherwise required under this Agreement, then such payments shall be delayed until the date that is six months after the date of Executive’s “separation from service” (as such term is defined under Treasury Regulation 1.409A-1(h)) with the Company, or, if earlier, the date of Executive’s death. Any payments delayed pursuant to this Section shall be made in a lump sum on the first business day of the seventh month following Executive’s “separation from service” (as such term is defined under Treasury Regulation 1.409A-1(h)), or, if earlier, the date of Executive’s death.
(c)In addition, to the extent that any reimbursement, fringe benefit or other, similar plan or arrangement in which Executive participates during the term of Executive’s employment under this Agreement or thereafter provides for a “deferral of compensation” within the meaning of Section 409A, then such amount shall be reimbursed in accordance with Section 1.409A-3(i)(1)(iv) of the Treasury Regulations, including (i) the amount eligible for reimbursement or payment under such plan or arrangement in one calendar year may not affect the amount eligible for reimbursement or payment in any other calendar year (except that a plan providing medical or health benefits may impose a generally applicable limit on the amount that may be reimbursed or paid), (ii) subject to any shorter time periods provided herein or the applicable plans or arrangements, any reimbursement or payment of an expense under such plan or arrangement must be made on or before the last day of the calendar year following the calendar year in which the expense was incurred, and (iii) the right to any reimbursement or in-kind benefit is not subject to liquidation or exchange for another benefit.
(d)For the avoidance of doubt, any payment due under this Agreement within a period following Executive’s termination of employment or other event, shall be made on a date during such period as determined by the Company in its sole discretion.
(e)Notwithstanding any other provision to the contrary, in no event shall any payment under this Agreement that constitutes “deferred compensation” for
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purposes of Section 409A be subject to offset by any other amount unless otherwise permitted by Section 409A.
(f)This Agreement is intended to comply with the applicable requirements under Section 409A, as modified from time to time, including exceptions and exemptions provided for therein (the “409A Requirements”). Accordingly, this Agreement shall be administered, construed and interpreted in a manner to comply with the 409A Requirements. Specifically, and without limiting the foregoing, if any terms set forth in this Agreement are considered to be ambiguous, such terms shall be administered, construed and interpreted in a manner to comply with the 409A Requirements.
22.Indemnification and D&O. During the Period of Service and thereafter, the Company agrees, to the maximum extent permitted by law, to indemnify and hold Executive harmless (including providing for advancement of expenses on a basis no less favorable than any other officer or director of the Company) from and against any and all losses, claims, suits or actions to which Executive becomes subject arising from his performance of his duties to the Company and its affiliates and subsidiaries. In addition, during the Period of Service and for at least 1-day following the applicable end of the statute of limitations, Executive will be eligible for coverage under the Company’s Director’s and Officer’s liability insurance policy on terms which are no less favorable than provided to any other employee, officer or director of the Company.
[Remainder of Page Intentionally Blank;
Signature Page Follows]
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In witness whereof, the parties have executed this Agreement as of the date set forth above.
COMPANY: DELEK US HOLDINGS, INC.



/s/ Shlomo Zohar
EXECUTIVE:


/s/ Ezra Uzi Yemin
By:    Shlomo Zohar
Title:     Lead Independent Director, on    behalf of the Board




 /s/ Jared Serff
Ezra Uzi Yemin
By:    Jared Serff
Title:     Executive Vice President



/s/ Denise McWatters
By:    Denise McWatters
Title:     EVP, General Counsel
Signature Page

Uzi Yemin
Terms of Employment
Exhibit A
Ex. A

TitleExecutive Chairman
Base Salary$800,000 annually to be paid bi-weekly through the period beginning the Effective Date and ending 12 months later, and $500,000 annually to be paid bi-weekly for the period beginning on the one year anniversary of the Effective Date and ending December 31, 2023.
Annual Bonus
Executive will be eligible for an annual bonus at target of 140% of Executive’s Base Salary. The annual bonus percent may range from 0x to 2x based on company performance.
The annual bonus will be based on 60% Company’s financial (EPS) and 40% non-financial metrics (HSE & Refinery Utilization and Availability)
Long-Term
Incentive
(Equity Plan)
Executive will be eligible for the company’s long-term incentive plan, which would consist of annual grants, which at target would be equal to $7,400,000 split 50% time based, DKL Units, DK cash settled Restricted Stock Units and 50% cash settled Performance Based Restricted Stock Units
Time Based RSU Award Vesting: Quarterly over 3 years
•Grant Date: 3/10/2022 ($3,700,000)
◦DK RSU $2,466,667
◦DKL RSU $1,233,333
Performance Based RSU Performance Period and Vesting Schedule:
•Performance Metric: Relative Total Shareholder Return (rTSR)
•Grant Date: 3/10/2022
•Performance Period: January 1, 2022 — December 31, 2024 ($3,700,000)
◦0% - 200% Attainment
Vacation5 weeks accrued vacation
Effective DateThe date in June 2022 the Executive begins rendering services to the Company as its Executive Chairman
Ex. A

Exhibit B
[Executive Board Chair Job Description]
image_4.jpg

Executive Board Chair

EXECUTIVE BOARD CHAIR POSITION DESCRIPTION:

The Executive Board Chair (“Executive Chair”) manages the business of the Board of Directors (the “Board”) of Delek US Holdings (the “Corporation”) and ensures that the functions identified in the Board of Directors Charter are being effectively carried out by the Board and its committees. The Executive Chair role allows the incumbent to devote, in collaboration with the President and Chief Executive Officer, part of his or her time to the development and implementation of strategic initiatives, including strengthening the Company’s partnerships with existing clients and fostering key relationships that lead to new business, including strategic acquisitions and the development and investment in new technology. In addition to the responsibilities and specific duties set out in the Board of Directors Charter, the individual director mandate and any other applicable mandate or position description, the Executive Chair has the responsibility and specific duties described below and such other powers and duties as the Board may specify. The nature of the Executive Chair responsibilities is such that he or she is a senior executive officer of the Corporation and is not deemed an independent director of the Board. The Executive Chair ultimately reports to the full Board.
Responsibility
The Executive Chair will foster and promote the integrity of the Board and a culture where the Board works harmoniously for the long-term benefit of the Corporation and its shareholders. The Executive Chair is responsible for the management, the development and the effective performance of the Board, and provides leadership to the Board for all aspects of the Board’s work, other than those items delegated to Board committees consisting solely of independent Directors.
The Executive Chair will collaborate with the President and Chief Executive Officer (the “CEO”) in matters concerning the interest and management of the Corporation including but not limited to business strategy, mergers and acquisitions and DK Innovation.




It is the responsibility of the Executive Chair to:
Board and Committee related:
Governance:
Oversee all aspects of Board direction and administration, ensuring that the Board works as a cohesive team and builds a healthy governance culture.
Ex. B


Ensure that the mechanisms for effective governance are in place and that the Board is alert to its obligations to the Corporation, the shareholders and the management under the law and applicable regulations.
Ensure that the appropriate committee structure is in place and that the activities of the Board committees are duly integrated with the work of the Board.
Foster ethical and responsible decision making by the Board.
image_1a.jpgimage_2a.jpgimage_3a.jpgWork with the CEO to monitor progress on strategic planning, policy implementation and succession planning.
Take all reasonable steps to provide that the responsibilities of the Board, Board committees and individual directors, as set out in the mandates, charters or position descriptions, are well understood by the Board and individual directors and are executed as effectively as possible.
With the Corporate Governance Committee and the Board, respond to potential conflict of interest situations. (Excluding situations in which the Executive Chair has a conflict of interest).
Ensure, in consultation with the Compensation Committee and the Board, that succession plans are in place at senior levels.
Foster strong relationships between the Corporation and key stakeholders including investors, shareholders, the industry in general and the community.
Oversee the Board’s’ performance of its mandate.
Board Meetings:
1.In accordance with By-laws of the Corporation, act as chair of all Board meetings.
Ensure that the Board meets at least quarterly and as many additional times as necessary to carry out its duties effectively, and determine the dates, locations, and agendas of meetings of the Board in conjunction with the CEO and the Lead Director.
Ensure that all business required to go before the Board is brought to directors in a timely manner.
In conjunction with the Lead Director, ensure the quality, quantity and timeliness of the information that goes to the Board and ensure that all directors receive the information required for the proper performance of their duties.
Take all reasonable steps to provide that all business set out in the agendas of Board meetings is discussed and brought to resolution, as required, and that sufficient time is allowed during Board meetings to fully discuss agenda items.

Ex. B


image_4.jpg
Encourage full participation and discussion by all Board members and facilitate discussion and debate while seeking consensus.
Support the Lead Director, to take all reasonable steps to provide that the independent directors meet in separate executive sessions, without the presence of management, as often as required.
Be responsible for the ongoing formal and informal communication with and among Board members.
Support the board committee chairs in bringing important issues forward to the Board for consideration and resolution.
In conjunction with the Committee chairs ensure that the Board committees provide regular reports to the Board.
Ensure the development of the Board, including participating in Board members recruitment and directing the orientation and education program of Board members.
Ensure the integration of any new director into the Board.
To the extent requested by the Corporate Governance Committee, participate in the annual evaluation of performance and effectiveness of the Board, Board committees and individual directors.
Provide overall leadership to foster the effectiveness of the Board.
Provide advice, counsel and mentorship to the CEO, committee chairs and directors.
With the Lead Director, act as principal liaison between the independent directors and the CEO on sensitive issues.
Ensure that directors work as a team, efficiently and productively.
To the extent requested by the Corporate Governance Committee, meet with potential nominees to explore their interest and aptitude to sit on the Board.
At the invitation of Board Committees, attend the meetings of Board committees and advise members of these committees, as needed.
Shareholder Meetings:
1.Ensure that the shareholders meet at least once annually and as many additional times as required by law.
Take all reasonable steps to provide that all business set out in the agenda of each shareholder meeting is discussed and brought to resolution, as required.
Support the CEO in leading the annual general meeting of shareholders.
Business Activities:
Collaborate with the CEO in all matters concerning the interests of the Board.
Advise and support the CEO in the development and implementation of strategic initiatives, including strengthening the Company’s partnerships with existing clients and fostering key relationships that lead
Ex. B


image_4.jpg
to new business, including strategic acquisitions and Delek Innovation and technology. Provide leadership on various Company initiatives as mutually agreed upon with the CEO.
Provide the Compensation Committee with his evaluation of the CEO’s performance on an annual basis. In conjunction with the Compensation Committee chair, conduct a performance discussion with the CEO.
Assist the Compensation and Governance Committees in establishing a list of performance objectives for the CEO for the ensuing year.
Report to the Board, in conjunction with the Compensation Committee chair, on the performance review discussion conducted with the CEO.
Ex. B


Exhibit C
St. Landry Parish
Ex. C
Exhibit 10.4
Delek US Holdings, Inc.
7102 Commerce Way
Brentwood, TN 37027

March 17, 2022
TO:    Avigal Soreq
RE:    Offer Letter
Dear Avigal:
We are pleased to extend the following offer of employment with Delek US Holdings, Inc. and/or its subsidiary companies (collectively the “Company”). The terms of your employment are set forth in the attached Executive Employment Agreement with the Company (the “Employment Agreement”). The purpose of this letter is to provide for certain payments to you in the event that this offer is rescinded by the Company prior to the Effective Date (as defined in the Employment Agreement) of the Employment Agreement without Cause (the “Revocation Payment”).
Revocation Payment:
In the event the Company rescinds its offer of employment to you prior to the Effective Date (as defined in the Employment Agreement), other than for Cause, the Company will pay to you in a lump sum payment within 60 days of such revocation, less applicable withholding and subject to your execution (and non-revocation) of the Revocation Release described below, $3,840,000. For purposes of clarity if the Employment Agreement becomes effective this Revocation Payment is null and void. In no event are you entitled to receive the Revocation Payment and any payment or benefit (including severance) under the Employment Agreement or any other plan, program, arrangement of or agreement with the Company.1

For purpose of this letter, “Cause” means (i) your fraud, gross negligence or willful misconduct involving the Company or its affiliates, (ii) your conviction of, or plea of nolo contendere to, a felony or crime involving moral turpitude, (iii) violation of the confidentiality provisions contained in this letter or (iv) deliberate actions on your behalf that result in material harm, including reputational harm, to the Company. The Revocation Payment shall be provided to you after, and only if, (i) you execute a mutual release of claims in a form reasonably satisfactory to the Company that pertains to all known claims and that contains appropriate anti-disparagement and continuing confidentiality covenants (the “Revocation Release”), (ii) the Revocation Release is executed on or prior to the date of the expiration of any and all waiting and revocation periods in the Revocation Release (the “Release Expiration Date”), (iii) any revocation periods contained in the Revocation Release have expired and (iv) you have continued to comply with this letter
1 2x [base salary of $800,000 plus a target bonus of 140% of base salary]
1

Exhibit 10.4
and any other restrictive covenants to which you are bound. If you fail to execute the Revocation Release on or prior to the Release Expiration Date or timely revoke your acceptance of the Revocation Release thereafter (if such revocation is permitted), you shall not be entitled to the Revocation Payment and shall repay any such funds paid to you.
Confidentiality: The terms of your offer of employment are confidential until such time that public disclosure of the offer and the terms of the Employment Agreement have been made.
Again, we are pleased to extend this offer to you and we look forward to the contributions we know you will make to the Company.

Sincerely,

Delek US Holdings, Inc.

/s/ Denise McWatters        /s/ Jared Serff    
Denise McWatters         Jared Serff
EVP, General Counsel        EVP, Chief Human Resources Officer

I agree to the terms of the offer of employment with the Company. I understand that this does not constitute an employment contract for any specific term, and does not alter the at-will nature of my employment with the Company.

I have read and accept this offer.


/s/ Avigal Soreq        March 28, 2022    
Avigal Soreq        Date
cc: Human Resources


2
Exhibit 10.5
EXECUTIVE EMPLOYMENT AGREEMENT
This Executive Employment Agreement (the “Agreement”) is entered into by and between Avigal Soreq (the “Executive”) and DELEK US HOLDINGS, INC. (the “Company”), effective as of the date the Executive begins employment with the Company (the “Effective Date”), which date will occur in June 2022. The Executive and the Company, in return for the mutual promises set forth herein, agree as follows:
1.Term.
(a)Term. The term of this Agreement (the “Term”) shall commence upon the Effective Date and expire on June 12, 2026 unless terminated earlier as provided for herein.
2.Scope of Employment. During the Term, the Company shall employ Executive and Executive shall render services to the Company as its President and Chief Executive Officer, Delek US Holdings and in such other capacities and positions as may be established by the Company from time to time. Executive will report to the Company’s Board of Directors (the “Board”). In addition, to the extent appointed by the board of directors of Delek Logistics GP, LLC, Executive will render services to Delek Logistics Partners, LP (“DKL”) as its President. During the Term, Executive may also serve as Chief Executive Officer of any subsidiary of the Company. Executive shall devote Executive’s full business time and best efforts to the successful functioning of the Company’s business and shall faithfully and industriously perform all duties pertaining to Executive’s position, including such additional duties as may be assigned from time to time, to the best of Executive’s ability, experience and talent; provided, however, that Executive may engage in passive personal investments subject to the Company’s investment policies, Executive may pursue charitable or civic activities, participate in industry association and trade groups, and serve as an executor, trustee or in other similar fiduciary capacities; provided that any such activities do not interfere with the performance of his responsibilities and obligations pursuant to this Agreement as determined in the discretion of the Board and subject to Executive’s reporting of such activities to the Board in the manner determined by the Company. In the event Executive desires to serve on the board of directors of any entity or otherwise serve in a fiduciary capacity with respect to any person, prior written approval of such service must be obtained from the Nominating and Corporate Governance Committee of the Company’s Board and such service may continue in the discretion of the Company’s Nominating and Corporate Governance Committee. Executive shall be subject at all times during the Term hereof to the direction and control of the Board in respect of the work to be done in his capacity as President and Chief Executive Officer.
3.Compensation.
(a)Base Compensation. During the Term and effective as of the Effective Date, Executive’s annualized base salary (the “Base Compensation”) shall be (i) the Base Salary specified in the “Terms of Employment” (attached hereto as “Exhibit A”), (ii) subject to all appropriate federal and state withholding taxes and (iii) payable at the same times and under the same conditions as salaries are paid to the Company’s other employees in accordance with the normal payroll practices of the Company. The Base Compensation shall be reviewed and may be adjusted from time to time following the Effective Date by the Company’s Board (or any applicable committee thereof) in its sole discretion applied consistent with this Section 3(a). If the Base Compensation is adjusted after the Effective Date, the
1

Exhibit 10.5
Base Compensation defined above shall also be adjusted for all purposes of this Agreement.
(b)Annual Bonus. Executive will be eligible to participate in the Company’s annual cash incentive plan with a target annual incentive bonus for service during each fiscal year that will be equal to a stated percentage of Executive’s Base Compensation as specified in the Terms of Employment (the “Target Bonus”) and that will be subject to the achievement of performance measures and objectives as established by the Board (or any applicable committee thereof) in its sole and reasonable discretion from time to time and payable in cash (the “Annual Bonus”). The Annual Bonus is typically paid in the first fiscal quarter of the year following the applicable bonus year.
(c)Long-Term Incentive Compensation. Executive shall be eligible to participate in the Company’s long-term incentive plans that may be in effect from time to time for the Company and its subsidiaries (collectively the “Plans”). Program design, including, without limitation, performance measures and weighting, is at the sole discretion of the Board or other applicable committee (or, if applicable, the Board or applicable committee of Delek Logistics Partners, LP (“DKL”). Executive acknowledges that Executive may be granted awards under Plans that are not subject to the control of the Board (or any applicable committee thereof) including, without limitation, equity plans of DKL. If so, the obligations of the Board (or any applicable committee thereof) hereunder including, without limitation, any obligation to accelerate the vesting of any such award, shall be fully discharged so long as the Board (or any applicable committee thereof) uses reasonable efforts to ensure that such obligations are met by the applicable board of directors or committee thereof.
4.Fringe Benefits / Reimbursement of Business Expenses.
(a)General Employee Benefits. The Company shall make available to Executive, or cause to be made available to Executive, throughout the period of Executive’s employment hereunder, such benefits as may be put into effect from time to time by the Company generally for other senior executives of the Company. The Company expressly reserves the right to modify such benefits available to Executive at any time provided that such modifications apply to other similarly situated employees.
(b)Business Expenses. Executive will be reimbursed for all reasonable out-of-pocket business, business entertainment and travel expenses paid by Executive in connection with the performance of Executive’s duties for the Company, in accordance with and subject to Section 20(c) and all applicable Company expense incurrence and reimbursement policies.
(c)Other Benefits. During the Term, the Company will pay Executive’s reasonable costs of professional tax and financial counseling, provided that, the cost of each such benefit does not exceed $25,000 in any calendar year. Perquisites and other personal benefits that are not integrally and directly related to the performance of Executive’s duties and confer a direct or indirect benefit upon Executive that has a personal aspect may, in the Company’s sole discretion, be recorded as taxable compensation to Executive and disclosed in public filings according to SEC regulations.
2

Exhibit 10.5
5.Vacation Time / Sick Leave. Executive will be granted 25 business days of vacation per calendar year. Unused vacation will accrue and carry over into a new calendar year during the Term and the amount attributed to accrued and unused vacation will be paid to Executive upon the termination of employment. Executive will be provided with sick leave according to the Company’s standard policies.
6.Compliance with Company Policies. Executive shall comply with and abide by all applicable policies and directives of the Company and its subsidiaries including, without limitation, the Codes of Business Conduct & Ethics for the Company and its subsidiaries, the Supplemental Insider Trading Policies for the Company and its subsidiaries and any applicable employee handbooks or manuals. The Company and its subsidiaries may, in their sole discretion, change, modify or adopt new policies and directives affecting Executive’s employment which shall be provided to Executive in writing and shall not be on a basis more burdensome than applicable to other officers or otherwise require any additional financial commitment from Executive. Executive acknowledges that the Company and its subsidiary, DKL, are currently subject to SEC reporting requirements pursuant to the Securities Exchange Act of 1934, as amended (the “Exchange Act”), the continued listing requirements of the New York Stock Exchange or any other securities exchange on which the securities of the Company may be listed from time to time for public trading (collectively, a “Securities Market”), and other federal securities laws and regulations applicable to publicly traded companies in the United States. As an employee, officer or director of the Company or as an officer or director of DKL, Executive will, in such capacities, be required to comply with applicable federal securities laws and regulations (including, without limitation, the reporting requirements under Exchange Act Section 16(a) and related SEC rules and regulations), Securities Market listing requirements as well as certain policies of the Company and its subsidiaries designed to comply with such laws and regulations.
7.Confidentiality. Executive recognizes that during the course of Executive’s employment, Executive will be exposed to information or ideas of a confidential or proprietary nature that pertain to Company’s business, financial, legal, marketing, administrative, personnel, technical or other functions or which constitute trade secrets (including, without limitation, business strategy, strategic plans, investment and growth plans and opportunities, client and customer needs and strategies, the identity of sources and markets, marketing information and strategies, business and financial plans and strategies, methods of doing business, data processing and technical systems, specifications, designs, plans, drawings, software, data, prototypes, programs and practices, sales history, financial health or material non-public information as defined under federal securities law) (collectively “Confidential Information”). Confidential Information also includes such information of third parties that has been provided to Company in confidence, and Confidential Information includes such information provided to Executive both before and after the date he enters into this Agreement. All such information is deemed “confidential” or “proprietary” whether or not it is so marked. Information will not be considered Confidential Information to the extent that it is or becomes generally available to the public other than through any breach of this Agreement by or at the discretion of Executive. Nothing in this Section will prohibit the use or disclosure by Executive of knowledge that is in general use in the industry or general business knowledge that was known to Executive prior to Executive’s service to the Company or which enters the public domain other than through any breach of this Agreement by or at the discretion of Executive. Executive may also disclose such information if required by court order or applicable law provided that Executive (a) uses Executive’s reasonable best efforts to give the Company written notice as far in advance as is practicable to allow the Company to seek a protective order or other appropriate remedy (except to the extent that Executive’s compliance with the foregoing would cause Executive to violate a court order or other
3

Exhibit 10.5
legal requirement), (b) discloses only such information as is required by law, and (c) uses Executive’s reasonable best efforts to obtain confidential treatment for any Confidential Information so disclosed. During Executive’s employment and for so long as the Confidential Information remains confidential or proprietary thereafter, Executive shall hold Confidential Information in strict confidence, shall use it only in connection with the performance of Executive’s duties on behalf of the Company, shall restrict its disclosure to those directors, employees or independent contractors of the Company with a need to know such Confidential Information, and shall not disclose, copy or use Confidential Information for the benefit of anyone other than the Company without the Company’s prior written consent. However, nothing in this Agreement shall prohibit Executive from reporting possible violations of law to any governmental agency or entity in accordance with applicable whistleblower protection provisions including, without limitation, the rules promulgated under Section 21F of the Exchange Act or Section 806 of the Sarbanes-Oxley Act of 2002, or require Executive to notify the Company (or obtain its prior approval) of any such reporting. Executive shall, at any time, upon Company’s request and at Company’s sole discretion or immediately upon Executive’s separation from employment, return to the Company and certify in a form satisfactory to the Company, the destruction of any and all written or electronic documents or data containing Confidential Information in Executive’s possession, custody or control. Further, pursuant to the federal Defend Trade Secrets Act of 2016, an individual shall not be held criminally or civilly liable under any federal or state trade secret law for the disclosure of a trade secret that: (A) is made (1) in confidence to a federal, state or local government official, either directly or indirectly, or to an attorney and (2) solely for the purpose of reporting or investigating a suspected violation of law; (B) is made to the individual’s attorney in relation to a lawsuit for retaliation against the individual for reporting a suspected violation of law; or (C) is made in a complaint or other document filed in a lawsuit or proceeding, if such filing is made under seal. For the avoidance of doubt, Executive shall not retain any copy, in any form of any Confidential Information following such request or separation.
8.Restrictive Covenants.
(a)Non-Competition.
(i)In consideration of the Confidential Information provided to Executive and the other benefits provided to him pursuant to this Agreement, Executive agrees that, if his employment ends during the Term, then, during the Non-Compete Period (as defined below), he will not, without the prior written consent of the Company, conduct any business in or provide services with respect to or provide services with respect to the Territory (as defined below) by becoming an employee, officer, director, independent contractor, consultant, shareholder or partner of, or assist in any other capacity, a Competitor (as defined below). The terms of this Section 8(a) shall not apply to the passive ownership by Executive of less than 5% of a class of equity securities of an entity, which securities are publicly traded on any national securities exchange.
(ii)For any termination except for a termination by the Company for Cause, the “Non-Compete Period” shall commence upon the date that notice of termination of employment is delivered or deemed delivered under the notice provisions of this Agreement, and continue until the first anniversary of such date, it being acknowledged and agreed that the Non-Compete Period may commence to run, or even completely run, during a period of time during which Executive remains employed by the Company
4

Exhibit 10.5
(assuming that he continues to be so employed after the delivery of such notice of termination). In the event of a termination by the Company for Cause, the Non-Compete Period shall commence upon the date that Executive’s employment with the Company ends.
(iii)For purposes of this Section 8(a), a “Competitor” means a member of the peer group of companies set forth in the most recently filed Annual Reports on Form 10-K of the Company or Delek Logistics Partners, LP.
(iv)For purposes of Section 8(a), the “Territory” shall mean the following geographic areas as of the commencement of the Non-Compete Period (A) any state (or, in the case of Louisiana, any parishes set forth on Exhibit B), province or foreign analogue in which petroleum and biodiesel refining facilities of the Company are located, (B) any state (or, in the case of Louisiana, any parishes set forth on Exhibit B), province or foreign analogue in which owned wholesale refined products distribution facilities of the Company are located and (C) a 50 mile radius from any of the Company’s retail fuel and/or convenience merchandise facilities.
(b)Non-Interference with Commercial Relationships. During Executive’s employment with the Company, and for a period of one year thereafter, Executive will not, directly or indirectly, either as an individual or as an employee, officer, director, shareholder, partner, equity participant, sole proprietor, independent contractor, consultant or in any other capacity whatsoever approach or solicit any customer or vendor of Company for the purpose of causing, directly or indirectly, any such customer or vendor to cease doing business with the Company or its affiliates, nor will Executive engage in any other activity that interferes or could reasonably be expected to interfere in any material way with the commercial relationships between the Company and its affiliates and such customers or vendors. The foregoing covenant shall be in addition to any other covenants or agreements to which Executive may be subject.
(c)Non-Interference with Employment Relationships. During Executive’s employment with the Company, and for a period of one year thereafter, Executive shall not, without the Company’s prior written consent, directly or indirectly: (i) induce or attempt to induce any Company employee to terminate his/her employment with the Company; or (ii) interfere with or disrupt the Company’s relationship with any of its employees or independent contractors. The foregoing does not prohibit Executive (personally or as an employee, officer, director, shareholder, partner, equity participant, sole proprietor, independent contractor, consultant or in any other capacity) from hiring or employing an individual that contacts Executive on his/her own initiative without any direct or indirect solicitation by Executive other than customary forms of general solicitation such as newspaper advertisements or internet postings.
(d)It is understood and agreed that the scope of each of the covenants contained in this Section 8 is reasonable as to time, area, and persons and is necessary to protect the legitimate business interests of the Company. It is further agreed that such covenants will be regarded as divisible and will be operative as to time, area and persons to the extent that they may be so operative.
9.Copyright, Inventions, Patents. The Company shall have all right, title and interest to all intellectual property (including, without limitation, graphic designs, copyrights, trademarks and patents) created by Executive during the course of Executive’s
5

Exhibit 10.5
employment with the Company. Executive hereby assigns to Company all copyright ownership and rights to any work product developed by Executive or at Executive’s discretion and reduced to practice for or on behalf of the Company or which relate to the Company’s business during the course of the employment relationship. At the Company’s expense and for a period beginning on the Effective Date and continuing for three years following the termination of Executive’s employment, Executive shall use Executive’s reasonable best efforts to assist or support the Company to obtain, maintain, and assert its rights in such intellectual property and work product including, without limitation, the giving of evidence in suits and proceedings, and the furnishing and/or assigning of all documentation and other materials relative to the Company’s intellectual property rights.
10.Termination of Employment.
(a)Termination by Company for Cause. The Company may immediately terminate this Agreement and/or Executive’s employment at any time for Cause (as defined below). Upon any such termination, the Company shall be under no further obligation to Executive hereunder except as otherwise required by law, and the Company will reserve all further rights and remedies available to it at law or in equity.
(b)Termination by Executive for Good Reason. Within 30 calendar days after Executive becomes (or should have become) aware of the occurrence of a Good Reason (as defined below) during the Term, Executive may terminate this Agreement (and Executive’s employment hereunder) by providing 30 calendar days’ advance written notice of termination and provided that the condition remains uncured through the end of such 30-day period. After such 30-day period, Executive shall either resign Executive’s employment immediately or, if Executive continues in employment beyond such 30-day period, Executive shall have irrevocably waived and released any right to resign for Good Reason based upon the circumstances identified in Executive’s advance notice of termination. In the event of any such termination, if Executive timely executes and does not revoke the Separation Release (as that term is defined in Section 10(f) of this Agreement), Executive shall be entitled to the separation benefits under Section 10(c) as if the Company had terminated Executive’s employment without Cause. This provision shall not apply if Executive is terminated by reason of death or Disability (as defined below).
(c)Termination At-Will by Company. The Company may terminate this Agreement (and Executive’s employment hereunder) at any time and for any reason. If the termination occurs during the Term and is other than for Cause and if Executive timely executes and does not revoke the Separation Release (as that term is defined in Section 10(f) of this Agreement) provided to Executive at the time of Executive’s separation, Executive shall be entitled to the following (in addition to all accrued compensation and benefits, including payment of accrued and unused vacation, through the date of termination): (i) the Separation Payment, (ii) the costs of continuing family health insurance coverage under the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended (“COBRA”), for 18 months following termination of employment, provided, that the Company may, in its sole discretion, (A) pay such amounts directly to the applicable provider or (B) pay an equivalent amount directly to Executive, (iii) the Post-Employment Annual Bonus and (iv) Accelerated Vesting upon termination. This provision shall not apply if Executive is terminated by reason of death or Disability.
6

Exhibit 10.5
(d)Termination At-Will by Executive. Executive may terminate this Agreement (and Executive’s employment hereunder) at any time and for any reason. If Executive terminates this Agreement and Executive’s employment hereunder during the Term (other than due to Executive’s death or Disability), Executive must provide the Company with advance written notice of termination of no less than three months (the “Required Notice”).
(i)If Executive terminates Executive’s employment during the Term other than for a Good Reason and provides at least three months’ advance written notice of termination (even if the Required Notice is less than three months), If Executive timely executes and does not revoke the Separation Release, in a form to be determined by the Company and provided to Executive at the time of Executive’s separation and Executive fully complies with the ongoing obligations of Section 8 (above), Executive shall be entitled to receive (in addition to all accrued compensation and benefits, including payment of accrued and unused vacation, through the date of termination) a single lump sum payment equal to fifty percent (50%) of Executive’s annualized Base Compensation at the time the notice of termination is delivered, subject to all appropriate federal and state withholding taxes, and the costs of continuing family health insurance coverage under COBRA for 12 months following termination of employment, provided, that the Company may, in its sole discretion, (A) pay such amounts directly to the applicable provider or (B) pay an equivalent amount directly to Executive. This Section 10(d)(i) shall not apply if Executive is terminated by reason of death or Disability.
(ii)If Executive (A) terminates Executive’s employment during the Term other than for a Good Reason without providing the Required Notice or (B) fails to render services to the Company in a diligent and good faith manner after the delivery of the Required Notice and continues or repeats such failure after receiving written notice of such failure, Executive shall receive compensation only in the manner stated in Section 10(a) and the Company may immediately terminate Executive’s employment, which termination shall not be deemed a termination without Cause under Section 10(c). This Section 10(d)(ii) shall not apply if Executive is terminated by reason of death or Disability.
(e)Accelerated Termination After Notice. Nothing herein shall limit the Company’s right to terminate this Agreement and/or Executive’s employment after the Company receives notice of termination from Executive, which termination shall not be deemed a termination without Cause under Section 10(c). However, if the Company receives the Required Notice from Executive and then terminates this Agreement and/or Executive’s employment for any reason other than for Cause or under Section 10(d)(ii), Executive’s employment shall terminate on (and post-employment provisions of Sections 7, 8(b), 8(c) and 9 shall be effective from) the date on which the Company terminates Executive’s employment, but Executive shall be entitled to a single lump sum payment of the amount of such compensation, bonuses, vesting and other benefits as if Executive’s termination had been effective on the earlier of (i) the termination date specified in Executive’s notice of termination or (ii) three months following Executive’s notice of termination.
(f)Separation Release. Notwithstanding anything to the contrary, but subject to Executive’s compliance with the ongoing obligations of Section 8 (above), and
7

Exhibit 10.5
any applicable six-month delay required by Section 18 hereof and Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”), and the applicable Treasury regulations and administrative guidance issued thereunder (collectively, “Section 409A”), if a payment is otherwise payable to Executive hereunder upon Executive’s termination of employment, such payment shall be payable in cash to Executive on the Company’s first payroll date that is on or after the 60th day following Executive’s “separation from service” (within the meaning of Section 409A) (or such later date as may be required by law). However, Executive’s right to receive the Separation Payment, and any other separation benefits provided by Section 10(c) or Section 10(d) shall be conditioned upon (i) Executive’s execution and delivery to the Company of a Separation Release (and the expiration of any statutorily mandated revocation period without Executive revoking the Separation Release) within the time provided by the Company to do so and (ii) Executive’s continued compliance with this Agreement, including Sections 7 and 8, and any other restrictive covenants to which Executive is bound. If Executive fails to timely execute and deliver the Separation Release or if Executive timely revokes Executive’s acceptance of the Separation Release thereafter (if such revocation is permitted), Executive shall not be entitled to the Separation Payment or any other separation benefits and shall repay any Separation Payment or other separation benefits received. If the foregoing consideration and revocation periods begin in one taxable year and end in a second taxable year, payment will be made in the second taxable year.
(g)Termination upon Disability or Death. In the event that Executive’s employment ceases due to Executive’s death or Disability, Executive shall be entitled to the following (in addition to all accrued compensation and benefits through the date of termination): (i) the costs of continuing family health insurance coverage under COBRA for 12 months following termination of employment, provided, that the Company may, in its sole discretion, (A) pay such amounts directly to the applicable provider or (B) pay an equivalent amount directly to Executive, (ii) the Post-Employment Annual Bonus and (iii) Accelerated Vesting upon termination.
(h)Definitions. The following terms shall have the following meanings as used in this Agreement:
(i)“Accelerated Vesting” means the vesting of all unvested equity awards granted to Executive under the Plans such that (A) performance awards will become vested on a prorated basis through the termination of employment, based on actual results evaluated after the close of the applicable performance period and payable in a lump sum at the same time as performance awards are paid to executives of the Company generally and (B) full value equity awards (e.g., restricted stock, restricted stock units and phantom units) and appreciation equity awards (e.g., non-qualified stock options and stock appreciation rights) will vest only to the extent that such awards that would have vested if Executive’s employment had continued during a period equal to the lesser of six months following termination of employment or the balance of the Term.
(ii)“Cause” means Executive’s: (A) fraud, gross negligence, willful misconduct involving the Company or its affiliates, willful breach of a fiduciary duty, including, without limitation, Section 7 hereof, owed to the Company or its affiliates, or any violation of the Company’s policies against discrimination or harassment; (B) conviction of, or plea of nolo contendere to, a felony or crime involving moral turpitude; or (C)
8

Exhibit 10.5
deliberate and continual refusal to perform Executive’s duties in any material respect on substantially a full-time basis or to act in accordance with any specific and lawful instruction of the Board provided that Executive has been given written notice of such conduct and such conduct is not cured within 30 days thereafter.
(iii)“Good Reason” means (A) the Company materially breaches this Agreement (it being acknowledged that any failure to pay any significant compensation or benefits at the times due under this Agreement shall be deemed a material breach), (B) the Company significantly reduces the scope of Executive’s duties under Section 2; provided, however, that any change to Executive’s duties with respect to DKL will not constitute Good Reason, (C) the Company reduces Executive’s target total compensation opportunity (including Base Compensation, Target Bonus opportunity, and target annual long-term incentive opportunity) from the level in effect for fiscal year 2022 under Section 3 and Exhibit A other than as part of a compensation reduction plan generally applicable to other similar senior executive employees, or (D) the Company requires Executive to relocate to any location that increases his commuting distance by more than 50 miles.
(iv)“Release Expiration Date” shall mean the date of the expiration of any and all waiting and revocation periods in the Separation Release.
(v)“Disability” means the inability of Executive to perform the customary duties of Executive’s employment or other service with the Company or its affiliates by reason of a physical or mental incapacity or illness that is expected to result in death or to be of indefinite duration, as determined by a duly licensed physician selected by the Company.
(vi)“Post-Employment Annual Bonus” shall mean the Annual Bonus to which Executive would have otherwise been entitled if Executive’s employment had continued through the end of the bonus year based upon the actual performance of the Company, prorated for the period of actual employment during the bonus year, and paid at the same time annual bonuses are paid to senior executives of the Company pursuant to the Company’s annual bonus programs, but not later than March 15 of the year following the year in which Executive’s termination of employment occurs.
(vii)“Separation Release” means a general release of claims against the Company (and its subsidiaries and affiliates) in a form reasonably satisfactory to the Company that pertains to all claims related to Executive’s employment and the termination of Executive’s employment and that contains appropriate anti-disparagement and continuing confidentiality covenants.
(viii)“Separation Payment” shall mean an amount equal to (A) two multiplied by (B) the sum of (1) Executive’s then current Base Compensation and (2) Executive’s Target Bonus as in effect immediately before any notice of termination. The Separation Payment shall be payable in a cash lump sum pursuant to Section 10(f). Executive shall have no responsibility for mitigating the amount of any payment provided for herein by seeking
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Exhibit 10.5
other employment or otherwise, and any such payment will not be reduced in the event such other employment is obtained.
11.Change in Control.
(a)In the event of a change in control of the Company pursuant to which the Executive is paid and receives benefits pursuant to the Change in Control Severance Agreement between Executive and the Company (or any of its affiliates), any severance payments and benefits payable or made available to the Executive will be paid or made available pursuant to the Change in Control Severance Agreement and not this Agreement. In no event is the Executive entitled to duplicative payments or benefits under the Change in Control Severance Agreement and this Agreement.
(b)Anything in this Agreement to the contrary notwithstanding, if it shall be determined that any payment or distribution by the Company or its affiliates to or for the benefit of the Executive (whether paid or payable or distributed or distributable pursuant to the terms of this Agreement or otherwise, all such payments and benefits being hereinafter referred to as the “Total Payments”) would be subject to the excise tax imposed by Section 4999 of the Code or any interest or penalties are incurred by the Executive with respect to such excise tax (such excise tax, together with any such interest and penalties, collectively the “Excise Tax”), then, after taking into account any reduction in the Total Payments provided by reason of Section 280G of the Code in any other plan, arrangement or agreement providing for a payment or benefit, the payments under this Agreement shall be reduced in the order specified below. to the extent necessary so that no portion of the Total Payments is subject to the Excise Tax but only if (a) the net amount of such Total Payments, as so reduced (and after subtracting the net amount of federal, state and local income taxes on such reduced Total Payments and after taking into account the phase out of itemized deductions and personal exemptions attributable to such reduced Total Payments) is greater than or equal to (b) the net amount of such Total Payments without such reduction (but after subtracting the net amount of federal, state and local income taxes on such Total Payments and the amount of Excise Tax to which the Executive would be subject in respect of such unreduced Total Payments and after taking into account the phase out of itemized deductions and personal exemptions attributable to such unreduced Total Payments). The payments and benefits under this Agreement shall be reduced in the following order: (i) reduction of any cash severance payments otherwise payable to the Executive that are exempt from Section 409A of the Code; (ii) reduction of any other cash payments or benefits otherwise payable to the Executive that are exempt from Section 409A of the Code, but excluding any payments attributable to any acceleration of vesting or payments with respect to any equity award that are exempt from Section 409A of the Code; (iii) reduction of any other payments or benefits otherwise payable to the Executive on a pro-rata basis or such other manner that complies with Section 409A of the Code, but excluding any payments attributable to any acceleration of vesting and payments with respect to any equity award that are exempt from Section 409A of the Code; and (iv) reduction of any payments attributable to any acceleration of vesting or payments with respect to any equity award that are exempt from Section 409A of the Code, in each case beginning with payments that would otherwise be made last in time.
12.Survival of Terms. The provisions of Sections 7, 8(b), 8(c), 9, 10 and 11 shall survive the termination or expiration of this Agreement and will continue in effect following the
10

Exhibit 10.5
termination of Executive’s employment for the periods described therein. The provisions of Section 8(a) shall survive the termination (but not the expiration) of this Agreement.
13.Assignment. This Agreement shall not be assignable by either party without the written consent of the other party (which will not be unreasonably withheld) except that the Company may assign this Agreement to a subsidiary, affiliate or, subject to the terms of this Section 13, a third-party successor of the Company.
14.No Inducement / Agreement Voluntary. Executive represents that (a) Executive has not been pressured, misled, or induced to enter into this Agreement based upon any representation by Company or its agents not contained herein, (b) Executive has entered into this Agreement voluntarily, after having the opportunity to consult with legal counsel and other advisors of Executive’s own choosing, and (c) Executive’s assent is freely given.
15.Interpretation. Any Section, phrase or other provision of this Agreement that is determined by a court, arbitrator or arbitration panel of competent jurisdiction to be unreasonable or in conflict with any applicable statute or rule, shall be deemed, if possible, to be modified or altered so that it is not unreasonable or in conflict or, if that is not possible, then it shall be deemed omitted from this Agreement. The invalidity of any portion of this Agreement shall not affect the validity of the remaining portions. Unless expressly stated to the contrary, all references to “days” in this Agreement shall mean calendar days.
16.Prior Agreements / Amendments. This Agreement (a) represents the entire agreement between the parties in relation to the employment of Executive by the Company on, and subsequent to, the Effective Date and (b) revokes and supersedes all prior agreements pertaining to the subject matter herein, whether written and oral. In entering into this Agreement, Executive expressly acknowledges and agrees that Executive has received all sums and compensation that Executive has been owed, is owed or ever could be owed for services provided to the Company through the date that Executive signs this Agreement except for the payment of any unpaid base salary earned in the Company’s pay period that includes the Effective Date. Notwithstanding anything else herein, Executive acknowledges that any other agreements between Employee and the Company and any of its Affiliates that create obligations for Employee with respect to confidentiality, nondisclosure, non-competition or non-solicitation shall remain in full force and effect. This Agreement shall not be subject to modification or amendment by any oral representation, or any written statement by either party, except for a dated writing signed by Executive and the Company.
17.Notices. All notices of any kind to be delivered in connection with this Agreement shall be in writing and shall be deemed to have been duly given if personally delivered or if sent by nationally-recognized overnight courier (e.g., FedEx, UPS, DHL, etc.) or by registered or certified mail, return receipt requested and postage prepaid, addressed to the Company at 7102 Commerce Way, Brentwood, Tennessee 37027, Attn: General Counsel, to Executive at Executive’s then-existing payroll address, or to such other address as the party to whom notice is to be given may have furnished to the other in writing in accordance with the provisions of this Section. Any such notice or communication shall be deemed to have been received: (a) if by personal delivery or nationally-recognized overnight courier, on the date of such delivery; and (b) if by registered or certified mail, on the third postal service day following the date postmarked.
18.Applicable Law. This Agreement shall be governed by and construed in accordance with the laws of the State of Tennessee without giving effect to its principles of conflicts of
11

Exhibit 10.5
law. The state and federal courts for Davidson County, Tennessee shall be the exclusive venue for any litigation based in significant part upon this Agreement.
19.Mediation / Arbitration.
(a)Any dispute concerning a legally cognizable claim arising out of this Agreement or in connection with the employment of Executive by Company, including, without limitation, claims of breach of contract, fraud, unlawful termination, discrimination, harassment, retaliation, defamation, tortious infliction of emotional distress, unfair competition, arbitrability and conversion (collectively a “Legal Dispute”) shall be resolved according to the following protocol:
(i)The parties shall first submit the Legal Dispute to mediation under the auspices of the American Arbitration Association (“AAA”) and pursuant to the mediation rules and procedures promulgated by the AAA. The Company shall pay the expenses associated with the mediation.
(ii)In the event mediation is unsuccessful in fully resolving the Legal Dispute, binding arbitration shall be the method of final resolution. The parties expressly waive their rights to bring action against one another in a court of law except as expressly provided herein. In addition to remedies at law, the parties acknowledge that failure to comply with this provision shall entitle the non-breaching party to injunctive relief to enjoin the actions of the breaching party. Any Legal Dispute submitted to Arbitration shall be under the auspices of the AAA and pursuant to the “National Rules for the Resolution of Employment Disputes,” or any similar identified rules promulgated at such time the Legal Dispute is submitted for resolution. All mediation and arbitration hearings shall take place in either Davidson or Williamson County, Tennessee. The Company shall pay the filing expenses associated with the arbitration. All other expenses and fees associated with the arbitration shall be determined in accordance with the AAA rules.
(b)Notice of submission of any Legal Dispute to mediation shall be provided no later than one year following the date the submitting party became aware, or should have become aware of, the conduct constituting the alleged claims. Failure to do so shall result in the irrevocable waiver of the claim made in the Legal Dispute.
(c)Notwithstanding that mediation and arbitration are established as the exclusive procedures for resolution of any Legal Dispute, (i) either party may apply to an appropriate judicial or administrative forum for injunctive relief and (ii) claims by Company arising in connection with Sections 7, 8 and/or 9 may be brought in any court of competent jurisdiction.
(d)With respect to any breach or attempted breach of Sections 7, 8 and/or 9 of this Agreement, each party acknowledges that a remedy at law will be inadequate, agrees that the Company will be entitled to specific performance and injunctive and other equitable relief and agrees not to use as a defense that any party has an adequate remedy at law. This Agreement shall be enforceable in a court of equity, or other tribunal with jurisdiction, by a decree of specific performance, and appropriate injunctive relief may be applied for and granted in connection herewith. Such remedy shall not be exclusive and shall be in addition to any other remedies now or hereafter existing at law or in equity, by statute or otherwise. No delay or omission in exercising any right or remedy set forth in this Agreement
12

Exhibit 10.5
shall operate as a waiver thereof or of any other right or remedy and no single or partial exercise thereof shall preclude any other or further exercise thereof or the exercise of any other right or remedy.
20.Section 409A.
(a)It is intended that each installment of the payments provided under this Agreement, if any, is a separate “payment” for purposes of Section 409A and the payments satisfy, to the greatest extent possible, the exemptions from the application of Section 409A provided under Treasury Regulations 1.409A-1(b)(4), 1.409A-1(b)(9)(iii) and 1.409A-1(b)(9)(v). Notwithstanding any other provision to the contrary, a termination of employment with the Company shall not be deemed to have occurred for purposes of any provision of this Agreement providing for the payment of “deferred compensation” (as such term is defined in Section 409A and the Treasury Regulations promulgated thereunder) upon or following a termination of employment unless such termination is also a “separation from service” from the Company within the meaning of Section 409A and Section 1.409A-1(h) of the Treasury Regulations and, for purposes of any such provision of this Agreement, references to a “separation,” “termination,” “termination of employment” or like terms shall mean “separation from service.”
(b)Notwithstanding anything to the contrary in this Agreement, if the Company determines (i) that on the date Executive’s employment with the Company terminates or at such other time that the Company determines to be relevant, Executive is a “specified employee” (as such term is defined under Treasury Regulation 1.409A-1(i)(1)) of the Company and (ii) that any payments to be provided to Executive pursuant to this Agreement are or may become subject to the additional tax under Section 409A(a)(1)(B) or any other taxes or penalties imposed under Section 409A if provided at the time otherwise required under this Agreement, then such payments shall be delayed until the date that is six months after the date of Executive’s “separation from service” (as such term is defined under Treasury Regulation 1.409A-1(h)) with the Company, or, if earlier, the date of Executive’s death. Any payments delayed pursuant to this Section shall be made in a lump sum on the first business day of the seventh month following Executive’s “separation from service” (as such term is defined under Treasury Regulation 1.409A-1(h)), or, if earlier, the date of Executive’s death.
(c)In addition, to the extent that any reimbursement, fringe benefit or other, similar plan or arrangement in which Executive participates during the term of Executive’s employment under this Agreement or thereafter provides for a “deferral of compensation” within the meaning of Section 409A, then such amount shall be reimbursed in accordance with Section 1.409A-3(i)(1)(iv) of the Treasury Regulations, including (i) the amount eligible for reimbursement or payment under such plan or arrangement in one calendar year may not affect the amount eligible for reimbursement or payment in any other calendar year (except that a plan providing medical or health benefits may impose a generally applicable limit on the amount that may be reimbursed or paid), (ii) subject to any shorter time periods provided herein or the applicable plans or arrangements, any reimbursement or payment of an expense under such plan or arrangement must be made on or before the last day of the calendar year following the calendar year in which the expense was incurred, and (iii) the right to any reimbursement or in-kind benefit is not subject to liquidation or exchange for another benefit.
13

Exhibit 10.5
(d)For the avoidance of doubt, any payment due under this Agreement within a period following Executive’s termination of employment or other event, shall be made on a date during such period as determined by the Company in its sole discretion.
(e)Notwithstanding any other provision to the contrary, in no event shall any payment under this Agreement that constitutes “deferred compensation” for purposes of Section 409A be subject to offset by any other amount unless otherwise permitted by Section 409A.
(f)This Agreement is intended to comply with the applicable requirements under Section 409A, as modified from time to time, including exceptions and exemptions provided for therein (the “409A Requirements”). Accordingly, this Agreement shall be administered, construed and interpreted in a manner to comply with the 409A Requirements. Specifically, and without limiting the foregoing, if any terms set forth in this Agreement are considered to be ambiguous, such terms shall be administered, construed and interpreted in a manner to comply with the 409A Requirements.
[Remainder of Page Intentionally Blank;
Signature Page Follows]

14

Exhibit 10.5
In witness whereof, the parties have executed this Agreement as of the date set forth above.

COMPANY: DELEK US HOLDINGS, INC.    EXECUTIVE:

/s/ Jared Serff        /s/ Avigal Soreq    
By: Jared Serff        Avigal Soreq
Title: Executive Vice President


/s/ Denise McWatters    
By: Denise McWatters
Title: EVP, General Counsel



15

Exhibit 10.5
EXHIBIT A
Avigal Soreq
Terms of Employment,
Exhibit A to Executive Employment Agreement
Title:
President and Chief Executive Officer, Delek US Holdings, LLC; President, Delek Logistics Partners, LP, if and following appointment to such position

Base Salary:
$800,000 annually to be paid out (bi-weekly)
Annual Bonus:
Executive will be eligible for an annual bonus at target of 140% of your Base Salary. The annual bonus percent may range from 0x to 2x based off of company performance.

The annual bonus will be based on 60% Company’s financial (EPS) and 40% non-financial metrics (HSE & Refinery Utilization and Availability)

Executive will be eligible for a full year bonus (AIP for 2022 based on actual attainment of above metrics.
Long-Term Incentive (Equity Plan):
Executive will be eligible for the company’s long-term incentive plan, which would consist of annual grants, which at target would be equal to $3,000,000 split 50% time based Restricted Stock Units and 50% Performance Based Restricted Stock Units.

Time Based RSU Award Vesting: Quarterly over 3 years
•Grant Date: 3/10/2022 - ($1,500,000)
    o    $1,000,000 DK RSU
    o    $500,000 DKL RSU

PRSUs Performance Period and Vesting Schedule:
•Performance Metric: Relative TSR (Total Shareholder Return)
•Performance Period: Per Below Schedule
•Grant Date: TBD
    o    Performance Period: 1/1/2022 - 12/31/2022 ($375,000)
•0-200% Attainment
•Grant Date: TBD
    o    Performance Period: 1/1/2022 - 12/31/2023 ($375,000)
•0-200% Attainment
•Grant Date: TBD
    o    Performance Period: 1/1/2022 - 12/31/2024 ($750,000)
•0-200% Attainment
Relocation Allowance:
See Attached International Executive Relocation Policy
Vacation:
5 weeks of accrued vacation (Unused vacation carryover) (Prorated for 2022))
Medical, Dental, 401K and Other Benefits:
See attached benefits guide
Covenants:
Customary non-compete, non-solicit and confidentiality as applicable.
Severance:
Refer to Executive Employment Agreement terms for details
Location: Contract Term:
Brentwood, TN
as specified in Executive Employment Agreement
Effective Date:
Executive will be provided with company car. All applicable taxes will be applied.
Start Date:
The date in June 2022 on which Executive begins employment with the Company


16

Exhibit 10.5
EXHIBIT B
St. Landry Parish

17
Exhibit 10.6
EXECUTIVE EMPLOYMENT AGREEMENT
This Executive Employment Agreement (the “Agreement”) is entered into effective March 28, 2022 (the “Effective Date”), by and between Todd O’Malley (the “Executive”) and DELEK US HOLDINGS, INC. (the “Company”), who, in return for the mutual promises set forth herein, agree as follows:
1.Term.
(a)Term. The term of this Agreement (the “Term”) shall commence upon the Effective Date and expire on March 27, 2026 unless terminated earlier as provided for herein.
2.Scope of Employment. During the Term, the Company shall employ Executive and Executive shall render services to the Company as its Executive Vice President, Chief Operating Officer, Delek US Holdings and in such other capacities and positions as may be established by the Company from time to time. In addition, to the extent appointed by the board of directors of Delek Logistics GP, LLC, Executive will render services to Delek Logistics Partners, LP (“DKL”) as its Chief Operating Officer. During the Term, Executive may also serve as an executive vice president and Chief Operating Officer of any subsidiary of the Company. Executive shall devote Executive’s full business time and best efforts to the successful functioning of the Company’s business and shall faithfully and industriously perform all duties pertaining to Executive’s position, including such additional duties as may be assigned from time to time, to the best of Executive’s ability, experience and talent; provided, however, that Executive may engage in passive personal investments subject to the Company’s investment policies, Executive may pursue charitable or civic activities, participate in industry association and trade groups, and serve as an executor, trustee or in other similar fiduciary capacities; provided that any such activities do not interfere with the performance of his responsibilities and obligations pursuant to this Agreement as determined in the discretion of the Company’s Board of Directors (the “Board”) and subject to Executive’s reporting of such activities to the Board in the manner determined by the Company. In the event Executive desires to serve on the board of directors of any entity or otherwise serve in a fiduciary capacity with respect to any person, prior written approval of such service must be obtained from the Nominating and Corporate Governance Committee of the Company’s Board and such service may continue in the discretion of the Company’s Nominating and Corporate Governance Committee. Executive shall be subject at all times during the Term hereof to the direction and control of the Chief Executive Officer of the Company in respect of the work to be done in his capacity as Chief Operating Officer.
3.Compensation.
(a)Base Compensation. During the Term and effective as of the Effective Date, Executive’s annualized base salary (the “Base Compensation”) shall be (i) the Base Salary specified in the “Terms of Employment” (attached hereto as “Exhibit A”), (ii) subject to all appropriate federal and state withholding taxes and (iii) payable at the same times and under the same conditions as salaries are paid to the Company’s other employees in accordance with the normal payroll practices of the Company. The Base Compensation shall be reviewed and may be adjusted from time to time following the Effective Date by the Company’s Board (or any applicable committee thereof) in its sole discretion applied consistent with this Section 3(a). If the Base Compensation is adjusted after the Effective Date, the Base Compensation defined above shall also be adjusted for all purposes of this Agreement.
1

Exhibit 10.6
(b)Annual Bonus. Executive will be eligible to participate in the Company’s annual cash incentive plan with a target annual incentive bonus for service during each fiscal year that will be equal to a stated percentage of Executive’s Base Compensation as specified in the Terms of Employment (the “Target Bonus”) and that will be subject to the achievement of performance measures and objectives as established by the Board (or any applicable committee thereof) in its sole and reasonable discretion from time to time and payable in cash (the “Annual Bonus”). The Annual Bonus is typically paid in the first fiscal quarter of the year following the applicable bonus year.
(c)Long-Term Incentive Compensation. Executive shall be eligible to participate in the Company’s long-term incentive plans that may be in effect from time to time for the Company and its subsidiaries (collectively the “Plans”). Program design, including, without limitation, performance measures and weighting, is at the sole discretion of the Board or other applicable committee (or, if applicable, the Board or applicable committee of Delek Logistics Partners, LP (“DKL”)). Executive acknowledges that Executive may be granted awards under Plans that are not subject to the control of the Board (or any applicable committee thereof) including, without limitation, equity plans of DKL. If so, the obligations of the Board (or any applicable committee thereof) hereunder including, without limitation, any obligation to accelerate the vesting of any such award, shall be fully discharged so long as the Board (or any applicable committee thereof) uses reasonable efforts to ensure that such obligations are met by the applicable board of directors or committee thereof.
4.Fringe Benefits / Reimbursement of Business Expenses.
(a)General Employee Benefits. The Company shall make available to Executive, or cause to be made available to Executive, throughout the period of Executive’s employment hereunder, such benefits as may be put into effect from time to time by the Company generally for other senior executives of the Company. The Company expressly reserves the right to modify such benefits available to Executive at any time provided that such modifications apply to other similarly situated employees.
(b)Business Expenses. Executive will be reimbursed for all reasonable out-of-pocket business, business entertainment and travel expenses paid by Executive in connection with the performance of Executive’s duties for the Company, in accordance with and subject to Section 20(c) and all applicable Company expense incurrence and reimbursement policies.
(c)Other Benefits. During the Term, the Company will pay Executive’s reasonable costs of professional tax and financial counseling, provided that, the cost of each such benefit does not exceed $25,000 in any calendar year. Perquisites and other personal benefits that are not integrally and directly related to the performance of Executive’s duties and confer a direct or indirect benefit upon Executive that has a personal aspect may, in the Company’s sole discretion, be recorded as taxable compensation to Executive and disclosed in public filings according to SEC regulations.
5.Vacation Time / Sick Leave. Executive will be granted 25 business days of vacation per calendar year. Unused vacation will accrue and carry over into a new calendar year during the Term and the amount attributed to accrued and unused vacation will be paid to
2

Exhibit 10.6
Executive upon the termination of employment. Executive will be provided with sick leave according to the Company’s standard policies.
6.Compliance with Company Policies. Executive shall comply with and abide by all applicable policies and directives of the Company and its subsidiaries including, without limitation, the Codes of Business Conduct & Ethics for the Company and its subsidiaries, the Supplemental Insider Trading Policies for the Company and its subsidiaries and any applicable employee handbooks or manuals. The Company and its subsidiaries may, in their sole discretion, change, modify or adopt new policies and directives affecting Executive’s employment which shall be provided to Executive in writing and shall not be on a basis more burdensome than applicable to other officers or otherwise require any additional financial commitment from Executive. Executive acknowledges that the Company and its subsidiary, DKL, are currently subject to SEC reporting requirements pursuant to the Securities Exchange Act of 1934, as amended (the “Exchange Act”), the continued listing requirements of the New York Stock Exchange or any other securities exchange on which the securities of the Company may be listed from time to time for public trading (collectively, a “Securities Market”), and other federal securities laws and regulations applicable to publicly traded companies in the United States. As an employee, officer or director of the Company or as an officer or director of DKL, Executive will, in such capacities, be required to comply with applicable federal securities laws and regulations (including, without limitation, the reporting requirements under Exchange Act Section 16(a) and related SEC rules and regulations), Securities Market listing requirements as well as certain policies of the Company and its subsidiaries designed to comply with such laws and regulations.
7.Confidentiality. Executive recognizes that during the course of Executive’s employment, Executive will be exposed to information or ideas of a confidential or proprietary nature that pertain to Company’s business, financial, legal, marketing, administrative, personnel, technical or other functions or which constitute trade secrets (including, without limitation, business strategy, strategic plans, investment and growth plans and opportunities, client and customer needs and strategies, the identity of sources and markets, marketing information and strategies, business and financial plans and strategies, methods of doing business, data processing and technical systems, specifications, designs, plans, drawings, software, data, prototypes, programs and practices, sales history, financial health or material non-public information as defined under federal securities law) (collectively “Confidential Information”). Confidential Information also includes such information of third parties that has been provided to Company in confidence, and Confidential Information includes such information provided to Executive both before and after the date he enters into this Agreement. All such information is deemed “confidential” or “proprietary” whether or not it is so marked. Information will not be considered Confidential Information to the extent that it is or becomes generally available to the public other than through any breach of this Agreement by or at the discretion of Executive. Nothing in this Section will prohibit the use or disclosure by Executive of knowledge that is in general use in the industry or general business knowledge that was known to Executive prior to Executive’s service to the Company or which enters the public domain other than through any breach of this Agreement by or at the discretion of Executive. Executive may also disclose such information if required by court order or applicable law provided that Executive (a) uses Executive’s reasonable best efforts to give the Company written notice as far in advance as is practicable to allow the Company to seek a protective order or other appropriate remedy (except to the extent that Executive’s compliance with the foregoing would cause Executive to violate a court order or other legal requirement), (b) discloses only such information as is required by law, and (c) uses Executive’s reasonable best efforts to obtain confidential treatment for any Confidential Information so disclosed. During
3

Exhibit 10.6
Executive’s employment and for so long as the Confidential Information remains confidential or proprietary thereafter, Executive shall hold Confidential Information in strict confidence, shall use it only in connection with the performance of Executive’s duties on behalf of the Company, shall restrict its disclosure to those directors, employees or independent contractors of the Company with a need to know such Confidential Information, and shall not disclose, copy or use Confidential Information for the benefit of anyone other than the Company without the Company’s prior written consent. However, nothing in this Agreement shall prohibit Executive from reporting possible violations of law to any governmental agency or entity in accordance with applicable whistleblower protection provisions including, without limitation, the rules promulgated under Section 21F of the Exchange Act or Section 806 of the Sarbanes-Oxley Act of 2002, or require Executive to notify the Company (or obtain its prior approval) of any such reporting. Executive shall, at any time, upon Company’s request and at Company’s sole discretion or immediately upon Executive’s separation from employment, return to the Company and certify in a form satisfactory to the Company, the destruction of any and all written or electronic documents or data containing Confidential Information in Executive’s possession, custody or control. Further, pursuant to the federal Defend Trade Secrets Act of 2016, an individual shall not be held criminally or civilly liable under any federal or state trade secret law for the disclosure of a trade secret that: (A) is made (1) in confidence to a federal, state or local government official, either directly or indirectly, or to an attorney and (2) solely for the purpose of reporting or investigating a suspected violation of law; (B)    is made to the individual’s attorney in relation to a lawsuit for retaliation against the individual for reporting a suspected violation of law; or (C) is made in a complaint or other document filed in a lawsuit or proceeding, if such filing is made under seal. For the avoidance of doubt, Executive shall not retain any copy, in any form of any Confidential Information following such request or separation.
8.Restrictive Covenants.
(a)Non-Competition.
(i)In consideration of the Confidential Information provided to Executive and the other benefits provided to him pursuant to this Agreement, Executive agrees that, if his employment ends during the Term, then, during the Non- Compete Period (as defined below), he will not, without the prior written consent of the Company, conduct any business in or provide services with respect to or provide services with respect to the Territory (as defined below) by becoming an employee, officer, director, independent contractor, consultant, shareholder or partner of, or assist in any other capacity, a Competitor (as defined below). The terms of this Section 8(a) shall not apply to the passive ownership by Executive of less than 5% of a class of equity securities of an entity, which securities are publicly traded on any national securities exchange.
(ii)For any termination except for a termination by the Company for Cause, the “Non-Compete Period” shall commence upon the date that notice of termination of employment is delivered or deemed delivered under the notice provisions of this Agreement, and continue until the first anniversary of such date, it being acknowledged and agreed that the Non-Compete Period may commence to run, or even completely run, during a period of time during which Executive remains employed by the Company (assuming that he continues to be so employed after the delivery of such notice of termination). In the event of a termination by the Company for
4

Exhibit 10.6
Cause, the Non-Compete Period shall commence upon the date that Executive’s employment with the Company ends.
(iii)For purposes of this Section 8(a), a “Competitor” means a member of the peer group of companies set forth in the most recently filed Annual Reports on Form 10-K of the Company or Delek Logistics Partners, LP.
(iv)For purposes of Section 8(a), the “Territory” shall mean the following geographic areas as of the commencement of the Non-Compete Period (A) any state (or, in the case of Louisiana, any parishes set forth on Exhibit B), province or foreign analogue in which petroleum and biodiesel refining facilities of the Company are located, (B) any state (or, in the case of Louisiana, any parishes set forth on Exhibit B), province or foreign analogue in which owned wholesale refined products distribution facilities of the Company are located and (C) a 50 mile radius from any of the Company’s retail fuel and/or convenience merchandise facilities.
(b)Non-Interference with Commercial Relationships. During Executive’s employment with the Company, and for a period of one year thereafter, Executive will not, directly or indirectly, either as an individual or as an employee, officer, director, shareholder, partner, equity participant, sole proprietor, independent contractor, consultant or in any other capacity whatsoever approach or solicit any customer or vendor of Company for the purpose of causing, directly or indirectly, any such customer or vendor to cease doing business with the Company or its affiliates, nor will Executive engage in any other activity that interferes or could reasonably be expected to interfere in any material way with the commercial relationships between the Company and its affiliates and such customers or vendors. The foregoing covenant shall be in addition to any other covenants or agreements to which Executive may be subject.
(c)Non-Interference with Employment Relationships. During Executive’s employment with the Company, and for a period of one year thereafter, Executive shall not, without the Company’s prior written consent, directly or indirectly: (i) induce or attempt to induce any Company employee to terminate his/her employment with the Company; or (ii) interfere with or disrupt the Company’s relationship with any of its employees or independent contractors. The foregoing does not prohibit Executive (personally or as an employee, officer, director, shareholder, partner, equity participant, sole proprietor, independent contractor, consultant or in any other capacity) from hiring or employing an individual that contacts Executive on his/her own initiative without any direct or indirect solicitation by Executive other than customary forms of general solicitation such as newspaper advertisements or internet postings.
(d)It is understood and agreed that the scope of each of the covenants contained in this Section 8 is reasonable as to time, area, and persons and is necessary to protect the legitimate business interests of the Company. It is further agreed that such covenants will be regarded as divisible and will be operative as to time, area and persons to the extent that they may be so operative.
9.Copyright, Inventions, Patents. The Company shall have all right, title and interest to all intellectual property (including, without limitation, graphic designs, copyrights, trademarks and patents) created by Executive during the course of Executive’s employment with the Company. Executive hereby assigns to Company all copyright ownership and rights to any work product developed by Executive or at Executive’s
5

Exhibit 10.6
discretion and reduced to practice for or on behalf of the Company or which relate to the Company’s business during the course of the employment relationship. At the Company’s expense and for a period beginning on the Effective Date and continuing for three years following the termination of Executive’s employment, Executive shall use Executive’s reasonable best efforts to assist or support the Company to obtain, maintain, and assert its rights in such intellectual property and work product including, without limitation, the giving of evidence in suits and proceedings, and the furnishing and/or assigning of all documentation and other materials relative to the Company’s intellectual property rights.
10.Termination of Employment.
(a)Termination by Company for Cause. The Company may immediately terminate this Agreement and/or Executive’s employment at any time for Cause (as defined below). Upon any such termination, the Company shall be under no further obligation to Executive hereunder except as otherwise required by law, and the Company will reserve all further rights and remedies available to it at law or in equity.
(b)Termination by Executive for Good Reason. Within 30 calendar days after Executive becomes (or should have become) aware of the occurrence of a Good Reason (as defined below) during the Term, Executive may terminate this Agreement (and Executive’s employment hereunder) by providing 30 calendar days’ advance written notice of termination and provided that the condition remains uncured through the end of such 30-day period. After such 30-day period, Executive shall either resign Executive’s employment immediately or, if Executive continues in employment beyond such 30-day period, Executive shall have irrevocably waived and released any right to resign for Good Reason based upon the circumstances identified in Executive’s advance notice of termination. In the event of any such termination, if Executive timely executes and does not revoke the Separation Release (as that term is defined in Section 10(f) of this Agreement), Executive shall be entitled to the separation benefits under Section 10(c) as if the Company had terminated Executive’s employment without Cause. This provision shall not apply if Executive is terminated by reason of death or Disability (as defined below).
(c)Termination At-Will by Company. The Company may terminate this Agreement (and Executive’s employment hereunder) at any time and for any reason. If the termination occurs during the Term and is other than for Cause and if Executive timely executes and does not revoke the Separation Release (as that term is defined in Section 10(f) of this Agreement) provided to Executive at the time of Executive’s separation, Executive shall be entitled to the following (in addition to all accrued compensation and benefits, including accrued and unused vacation, through the date of termination): (i) the Separation Payment, (ii) the costs of continuing family health insurance coverage under the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended (“COBRA”), for 12 months following termination of employment, provided, that the Company may, in its sole discretion, (A) pay such amounts directly to the applicable provider or (B) pay an equivalent amount directly to Executive, (iii) the Post-Employment Annual Bonus and (iv) Accelerated Vesting upon termination. This provision shall not apply if Executive is terminated by reason of death or Disability.
(d)Termination At-Will by Executive. Executive may terminate this Agreement (and Executive’s employment hereunder) at any time and for any reason. If Executive
6

Exhibit 10.6
terminates this Agreement and Executive’s employment hereunder during the Term (other than due to Executive’s death or Disability), Executive must provide the Company with advance written notice of termination equal to the lesser of three months or the balance of the Term (the “Required Notice”).
(i)If Executive terminates Executive’s employment during the Term other than for a Good Reason and provides at least three months’ advance written notice of termination (even if the Required Notice is less than three months), If Executive timely executes and does not revoke the Separation Release, in a form to be determined by the Company and provided to Executive at the time of Executive’s separation and Executive fully complies with the ongoing obligations of Section 8 (above), Executive shall be entitled to receive (in addition to all accrued compensation and benefits, including accrued and unused vacation, through the date of termination) a single lump sum payment equal to fifty percent (50%) of Executive’s annualized Base Compensation at the time the notice of termination is delivered, subject to all appropriate federal and state withholding taxes, and the costs of continuing family health insurance coverage under COBRA for 12 months following termination of employment, provided, that the Company may, in its sole discretion, (A) pay such amounts directly to the applicable provider or (B) pay an equivalent amount directly to Executive. This Section 10(d)(i) shall not apply if Executive is terminated by reason of death or Disability.
(ii)If Executive (A) terminates Executive’s employment during the Term other than for a Good Reason without providing the Required Notice or (B) fails to render services to the Company in a diligent and good faith manner after the delivery of the Required Notice and continues or repeats such failure after receiving written notice of such failure, Executive shall receive compensation only in the manner stated in Section 10(a) and the Company may immediately terminate Executive’s employment, which termination shall not be deemed a termination without Cause under Section 10(c). This Section 10(d)(ii) shall not apply if Executive is terminated by reason of death or Disability.
(e)Accelerated Termination After Notice. Nothing herein shall limit the Company’s right to terminate this Agreement and/or Executive’s employment after the Company receives notice of termination from Executive, which termination shall not be deemed a termination without Cause under Section 10(c). However, if the Company receives the Required Notice from Executive and then terminates this Agreement and/or Executive’s employment for any reason other than for Cause or under Section 10(d)(ii), Executive’s employment shall terminate on (and post- employment provisions of Sections 7, 8(b), 8(c) and 9 shall be effective from) the date on which the Company terminates Executive’s employment, but Executive shall be entitled to a single lump sum payment of the amount of such compensation, bonuses, vesting and other benefits as if Executive’s termination had been effective on the earlier of (i) the termination date specified in Executive’s notice of termination or (ii) three months following Executive’s notice of termination.
(f)Separation Release. Notwithstanding anything to the contrary, but subject to Executive’s compliance with the ongoing obligations of Section 8 (above), and any applicable six-month delay required by Section 18 hereof and Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”), and the
7

Exhibit 10.6
applicable Treasury regulations and administrative guidance issued thereunder (collectively, “Section 409A”), if a payment is otherwise payable to Executive hereunder upon Executive’s termination of employment, such payment shall be payable in cash to Executive on the Company’s first payroll date that is on or after the 60th day following Executive’s “separation from service” (within the meaning of Section 409A) (or such later date as may be required by law). However, Executive’s right to receive the Separation Payment, and any other separation benefits provided by Section 10(c) or Section 10(d) shall be conditioned upon (i) Executive’s execution and delivery to the Company of a Separation Release (and the expiration of any statutorily mandated revocation period without Executive revoking the Separation Release) within the time provided by the Company to do so and (ii) Executive’s continued compliance with this Agreement, including Sections 7 and 8, and any other restrictive covenants to which Executive is bound. If Executive fails to timely execute and deliver the Separation Release or if Executive timely revokes Executive’s acceptance of the Separation Release thereafter (if such revocation is permitted), Executive shall not be entitled to the Separation Payment or any other separation benefits and shall repay any Separation Payment or other separation benefits received. If the foregoing consideration and revocation periods begin in one taxable year and end in a second taxable year, payment will be made in the second taxable year.
(g)Termination upon Disability or Death. In the event that Executive’s employment ceases due to Executive’s death or Disability, Executive shall be entitled to the following (in addition to all accrued compensation and benefits through the date of termination): (i) the costs of continuing family health insurance coverage under COBRA for 12 months following termination of employment, provided, that the Company may, in its sole discretion, (A) pay such amounts directly to the applicable provider or (B) pay an equivalent amount directly to Executive, (ii) the Post-Employment Annual Bonus and (iii) Accelerated Vesting upon termination.
(h)Definitions. The following terms shall have the following meanings as used in this Agreement:
(i)“Accelerated Vesting” means the vesting of all unvested equity awards granted to Executive under the Plans such that (A) performance awards will become vested on a prorated basis through the termination of employment, based on actual results evaluated after the close of the applicable performance period and payable in a lump sum at the same time as performance awards are paid to executives of the Company generally and (B) full value equity awards (e.g., restricted stock, restricted stock units and phantom units) and appreciation equity awards (e.g., non-qualified stock options and stock appreciation rights) will vest only to the extent that such awards that would have vested if Executive’s employment had continued during a period equal to the lesser of six months following termination of employment or the balance of the Term.
(ii)“Cause” means Executive’s: (A) fraud, gross negligence, willful misconduct involving the Company or its affiliates, willful breach of a fiduciary duty, including, without limitation, Section 7 hereof, owed to the Company or its affiliates, or any violation of the Company’s policies against discrimination or harassment; (B) conviction of, or plea of nolo contendere to, a felony or crime involving moral turpitude; or (C) deliberate and continual refusal to perform Executive’s duties in any material respect on substantially a full-time basis or to act in accordance
8

Exhibit 10.6
with any specific and lawful instruction of Chief Executive Officer of the Company provided that Executive has been given written notice of such conduct and such conduct is not cured within 30 days thereafter.
(iii)"Good Reason” means (A) the Company materially breaches this Agreement (it being acknowledged that any failure to pay any significant compensation or benefits at the times due under this Agreement shall be deemed a material breach), (B) the Company significantly reduces the scope of Executive’s duties under Section 2; provided, however, that any change to Executive’s duties with respect to DKL will not constitute Good Reason, (C) the Company reduces Executive’s compensation under Section 3 other than as part of a compensation reduction plan generally applicable to other similar senior executive employees, or (D) the Company requires Executive to relocate to any location that increases his commuting distance by more than 50 miles.
(iv) “Release Expiration Date” shall mean the date of the expiration of any and all waiting and revocation periods in the Separation Release.
(v)“Disability” means the inability of Executive to perform the customary duties of Executive’s employment or other service with the Company or its affiliates by reason of a physical or mental incapacity or illness that is expected to result in death or to be of indefinite duration, as determined by a duly licensed physician selected by the Company.
(vi)“Post-Employment Annual Bonus” shall mean the Annual Bonus to which Executive would have otherwise been entitled if Executive’s employment had continued through the end of the bonus year based upon the actual performance of the Company, prorated for the period of actual employment during the bonus year, and paid at the same time annual bonuses are paid to senior executives of the Company pursuant to the Company’s annual bonus programs, but not later than March 15 of the year following the year in which Executive’s termination of employment occurs.
(vii)“Separation Release” means a general release of claims against the Company (and its subsidiaries and affiliates) in a form reasonably satisfactory to the Company that pertains to all claims related to Executive’s employment and the termination of Executive’s employment and that contains appropriate anti-disparagement and continuing confidentiality covenants.
(viii)“Separation Payment” shall mean an amount equal to the sum of Executive’s then current Base Compensation and Executive’s Target Bonus as in effect immediately before any notice of termination, multiplied by one. The Separation Payment shall be payable in a cash lump sum pursuant to Section 10(f). Executive shall have no responsibility for mitigating the amount of any payment provided for herein by seeking other employment or otherwise, and any such payment will not be reduced in the event such other employment is obtained.
11.Change in Control.
9

Exhibit 10.6
(a)In the event of a change in control of the Company pursuant to which the Executive is paid and receives benefits pursuant to the Change in Control Severance Agreement between Executive and the Company (or any of its affiliates), any severance payments and benefits payable or made available to the Executive will be paid or made available pursuant to the Change in Control Severance Agreement and not this Agreement. In no event is the Executive entitled to duplicative payments or benefits under the Change in Control Severance Agreement and this Agreement.
(b)Anything in this Agreement to the contrary notwithstanding, if it shall be determined that any payment or distribution by the Company or its affiliates to or for the benefit of the Executive (whether paid or payable or distributed or distributable pursuant to the terms of this Agreement or otherwise, all such payments and benefits being hereinafter referred to as the “Total Payments”) would be subject to the excise tax imposed by Section 4999 of the Code or any interest or penalties are incurred by the Executive with respect to such excise tax (such excise tax, together with any such interest and penalties, collectively the “Excise Tax”), then, after taking into account any reduction in the Total Payments provided by reason of Section 280G of the Code in any other plan, arrangement or agreement providing for a payment or benefit, the payments under this Agreement shall be reduced in the order specified below, to the extent necessary so that no portion of the Total Payments is subject to the Excise Tax but only if (a) the net amount of such Total Payments, as so reduced (and after subtracting the net amount of federal, state and local income taxes on such reduced Total Payments and after taking into account the phase out of itemized deductions and personal exemptions attributable to such reduced Total Payments) is greater than or equal to (b) the net amount of such Total Payments without such reduction (but after subtracting the net amount of federal, state and local income taxes on such Total Payments and the amount of Excise Tax to which the Executive would be subject in respect of such unreduced Total Payments and after taking into account the phase out of itemized deductions and personal exemptions attributable to such unreduced Total Payments). The payments and benefits under this Agreement shall be reduced in the following order: (i) reduction of any cash severance payments otherwise payable to the Executive that are exempt from Section 409A of the Code; (ii) reduction of any other cash payments or benefits otherwise payable to the Executive that are exempt from Section 409A of the Code, but excluding any payments attributable to any acceleration of vesting or payments with respect to any equity award that are exempt from Section 409A of the Code; (iii) reduction of any other payments or benefits otherwise payable to the Executive on a pro-rata basis or such other manner that complies with Section 409A of the Code, but excluding any payments attributable to any acceleration of vesting and payments with respect to any equity award that are exempt from Section 409A of the Code; and (iv) reduction of any payments attributable to any acceleration of vesting or payments with respect to any equity award that are exempt from Section 409A of the Code, in each case beginning with payments that would otherwise be made last in time.
12.Survival of Terms. The provisions of Sections 7, 8(b), 8(c), 9, 10 and 11 shall survive the termination or expiration of this Agreement and will continue in effect following the termination of Executive’s employment for the periods described therein. The provisions of Section 8(a) shall survive the termination (but not the expiration) of this Agreement.
10

Exhibit 10.6
13.Assignment. This Agreement shall not be assignable by either party without the written consent of the other party (which will not be unreasonably withheld) except that the Company may assign this Agreement to a subsidiary, affiliate or, subject to the terms of this Section 13, a third-party successor of the Company.
14.No Inducement / Agreement Voluntary. Executive represents that (a) Executive has not been pressured, misled, or induced to enter into this Agreement based upon any representation by Company or its agents not contained herein, (b) Executive has entered into this Agreement voluntarily, after having the opportunity to consult with legal counsel and other advisors of Executive’s own choosing, and (c) Executive’s assent is freely given.
15.Interpretation. Any Section, phrase or other provision of this Agreement that is determined by a court, arbitrator or arbitration panel of competent jurisdiction to be unreasonable or in conflict with any applicable statute or rule, shall be deemed, if possible, to be modified or altered so that it is not unreasonable or in conflict or, if that is not possible, then it shall be deemed omitted from this Agreement. The invalidity of any portion of this Agreement shall not affect the validity of the remaining portions. Unless expressly stated to the contrary, all references to “days” in this Agreement shall mean calendar days.
16.Prior Agreements / Amendments. This Agreement (a) represents the entire agreement between the parties in relation to the employment of Executive by the Company on, and subsequent to, the Effective Date and (b) revokes and supersedes all prior agreements pertaining to the subject matter herein, whether written and oral. In entering into this Agreement, Executive expressly acknowledges and agrees that Executive has received all sums and compensation that Executive has been owed, is owed or ever could be owed for services provided to the Company through the date that Executive signs this Agreement except for the payment of any unpaid base salary earned in the Company’s pay period that includes the Effective Date. Notwithstanding anything else herein, Executive acknowledges that any other agreements between Employee and the Company and any of its Affiliates that create obligations for Employee with respect to confidentiality, non- disclosure, non-competition or non-solicitation shall remain in full force and effect. This Agreement shall not be subject to modification or amendment by any oral representation, or any written statement by either party, except for a dated writing signed by Executive and the Company.
17.Notices. All notices of any kind to be delivered in connection with this Agreement shall be in writing and shall be deemed to have been duly given if personally delivered or if sent by nationally-recognized overnight courier (e.g., FedEx, UPS, DHL, etc.) or by registered or certified mail, return receipt requested and postage prepaid, addressed to the Company at 7102 Commerce Way, Brentwood, Tennessee 37027, Attn: General Counsel, to Executive at Executive’s then-existing payroll address, or to such other address as the party to whom notice is to be given may have furnished to the other in writing in accordance with the provisions of this Section. Any such notice or communication shall be deemed to have been received: (a) if by personal delivery or nationally-recognized overnight courier, on the date of such delivery; and (b) if by registered or certified mail, on the third postal service day following the date postmarked.
18.Applicable Law. This Agreement shall be governed by and construed in accordance with the laws of the State of Tennessee without giving effect to its principles of conflicts of law. The state and federal courts for Davidson County, Tennessee shall be the exclusive venue for any litigation based in significant part upon this Agreement.
11

Exhibit 10.6
19.Mediation / Arbitration.
(a)Any dispute concerning a legally cognizable claim arising out of this Agreement or in connection with the employment of Executive by Company, including, without limitation, claims of breach of contract, fraud, unlawful termination, discrimination, harassment, retaliation, defamation, tortious infliction of emotional distress, unfair competition, arbitrability and conversion (collectively a “Legal Dispute”) shall be resolved according to the following protocol:
(i)The parties shall first submit the Legal Dispute to mediation under the auspices of the American Arbitration Association (“AAA”) and pursuant to the mediation rules and procedures promulgated by the AAA. The Company shall pay the expenses associated with the mediation.
(ii)In the event mediation is unsuccessful in fully resolving the Legal Dispute, binding arbitration shall be the method of final resolution. The parties expressly waive their rights to bring action against one another in a court of law except as expressly provided herein. In addition to remedies at law, the parties acknowledge that failure to comply with this provision shall entitle the non-breaching party to injunctive relief to enjoin the actions of the breaching party. Any Legal Dispute submitted to Arbitration shall be under the auspices of the AAA and pursuant to the “National Rules for the Resolution of Employment Disputes,” or any similar identified rules promulgated at such time the Legal Dispute is submitted for resolution. All mediation and arbitration hearings shall take place in either Davidson or Williamson County, Tennessee. The Company shall pay the filing expenses associated with the arbitration. All other expenses and fees associated with the arbitration shall be determined in accordance with the AAA rules.
(b)Notice of submission of any Legal Dispute to mediation shall be provided no later than one year following the date the submitting party became aware, or should have become aware of, the conduct constituting the alleged claims. Failure to do so shall result in the irrevocable waiver of the claim made in the Legal Dispute.
(c)Notwithstanding that mediation and arbitration are established as the exclusive procedures for resolution of any Legal Dispute, (i) either party may apply to an appropriate judicial or administrative forum for injunctive relief and (ii) claims by Company arising in connection with Sections 7, 8 and/or 9 may be brought in any court of competent jurisdiction.
(d)With respect to any breach or attempted breach of Sections 7, 8 and/or 9 of this Agreement, each party acknowledges that a remedy at law will be inadequate, agrees that the Company will be entitled to specific performance and injunctive and other equitable relief and agrees not to use as a defense that any party has an adequate remedy at law. This Agreement shall be enforceable in a court of equity, or other tribunal with jurisdiction, by a decree of specific performance, and appropriate injunctive relief may be applied for and granted in connection herewith. Such remedy shall not be exclusive and shall be in addition to any other remedies now or hereafter existing at law or in equity, by statute or otherwise. No delay or omission in exercising any right or remedy set forth in this Agreement shall operate as a waiver thereof or of any other right or remedy and no single or partial exercise thereof shall preclude any other or further exercise thereof or the exercise of any other right or remedy.
12

Exhibit 10.6
20.Section 409A.
(a)It is intended that each installment of the payments provided under this Agreement, if any, is a separate “payment” for purposes of Section 409A and the payments satisfy, to the greatest extent possible, the exemptions from the application of Section 409A provided under Treasury Regulations 1.409A-1(b)(4), 1.409A- 1(b)(9)(iii) and 1.409A-1(b)(9)(v). Notwithstanding any other provision to the contrary, a termination of employment with the Company shall not be deemed to have occurred for purposes of any provision of this Agreement providing for the payment of “deferred compensation” (as such term is defined in Section 409A and the Treasury Regulations promulgated thereunder) upon or following a termination of employment unless such termination is also a “separation from service” from the Company within the meaning of Section 409A and Section 1.409A-1(h) of the Treasury Regulations and, for purposes of any such provision of this Agreement, references to a “separation,” “termination,” “termination of employment” or like terms shall mean “separation from service.”
(b)Notwithstanding anything to the contrary in this Agreement, if the Company determines (i) that on the date Executive’s employment with the Company terminates or at such other time that the Company determines to be relevant, Executive is a “specified employee” (as such term is defined under Treasury Regulation 1.409A-1(i)(1)) of the Company and (ii) that any payments to be provided to Executive pursuant to this Agreement are or may become subject to the additional tax under Section 409A(a)(1)(B) or any other taxes or penalties imposed under Section 409A if provided at the time otherwise required under this Agreement, then such payments shall be delayed until the date that is six months after the date of Executive’s “separation from service” (as such term is defined under Treasury Regulation 1.409A-1(h)) with the Company, or, if earlier, the date of Executive’s death. Any payments delayed pursuant to this Section shall be made in a lump sum on the first business day of the seventh month following Executive’s “separation from service” (as such term is defined under Treasury Regulation 1.409A-1(h)), or, if earlier, the date of Executive’s death.
(c)In addition, to the extent that any reimbursement, fringe benefit or other, similar plan or arrangement in which Executive participates during the term of Executive’s employment under this Agreement or thereafter provides for a “deferral of compensation” within the meaning of Section 409A, then such amount shall be reimbursed in accordance with Section 1.409A-3(i)(1)(iv) of the Treasury Regulations, including (i) the amount eligible for reimbursement or payment under such plan or arrangement in one calendar year may not affect the amount eligible for reimbursement or payment in any other calendar year (except that a plan providing medical or health benefits may impose a generally applicable limit on the amount that may be reimbursed or paid), (ii) subject to any shorter time periods provided herein or the applicable plans or arrangements, any reimbursement or payment of an expense under such plan or arrangement must be made on or before the last day of the calendar year following the calendar year in which the expense was incurred, and (iii) the right to any reimbursement or in-kind benefit is not subject to liquidation or exchange for another benefit.
(d)For the avoidance of doubt, any payment due under this Agreement within a period following Executive’s termination of employment or other event, shall be made on a date during such period as determined by the Company in its sole discretion.
13

Exhibit 10.6
(e)Notwithstanding any other provision to the contrary, in no event shall any payment under this Agreement that constitutes “deferred compensation” for purposes of Section 409A be subject to offset by any other amount unless otherwise permitted by Section 409A.
(f)    This Agreement is intended to comply with the applicable requirements under Section 409A, as modified from time to time, including exceptions and exemptions provided for therein (the “409A Requirements”). Accordingly, this Agreement shall be administered, construed and interpreted in a manner to comply with the 409A Requirements. Specifically, and without limiting the foregoing, if any terms set forth in this Agreement are considered to be ambiguous, such terms shall be administered, construed and interpreted in a manner to comply with the 409A Requirements.
[Remainder of Page Intentionally Blank; Signature Page Follows]
14

Exhibit 10.6
In witness whereof, the parties have executed this Agreement as of the date set forth above.
COMPANY: DELEK US HOLDINGS, INC.    EXECUTIVE:

/s/ Jared Serff        /s/ Todd O’Malley    
By: Jared Serff        Todd O'Malley
Title: Executive Vice President


/s/ Denise McWatters    
By: Denise McWatters
Title: EVP, General Counsel



15

Exhibit 10.6

EXHIBIT A
Todd O’Malley
Terms of Employment,
Exhibit A to Executive Employment Agreement
Title:
EVP, Chief Operating Officer, Delek US Holdings, LLC
Reports To:
Chief Executive Officer
Base Salary:
$700,000 annually to be paid out (bi-weekly)

Executive to receive $50k cash payment at end of 2022
Annual Bonus:
Executive will be eligible for an annual bonus at target of 100% of your Base Salary. The annual bonus percent may range from 0x to 2x based off of company performance.

The annual bonus will be based on 60% Company’s financial (EPS) and 40% non-financial metrics (HSE & Refinery Utilization and Availability)
Long-Term Incentive (Equity Plan):
Executive will be eligible for the company’s long-term incentive plan, which would consist of annual grants, which at target would be equal to $1,500,000 split 50% time based Restricted Stock Units and 50% Performance Based Restricted Stock Units.

Time Based RSU Award Vesting: Quarterly over 3 years
•Grant Date: 3/10/2022 - ($750,00)
    o    $500,000 DK RSU
    o    $250,000 DKL RSU

PRSUs Performance Period and Vesting Schedule:
•Performance Metric: Relative TSR (Total Shareholder Return)
•Performance Period: Per Below Schedule
•Grant Date: 3/10/2022
    o    Performance Period: 1/1/2022 - 12/31/2024 ($750,000)
•0-200% Attainment
Vacation:
5 weeks of accrued vacation (Unused vacation carryover)
Medical, Dental, 401K and Other Benefits:
See attached benefits guide
Covenants:
Customary non-compete, non-solicit and confidentiality as applicable.
Severance:
Refer to Executive Employment Agreement terms for details
Location: Contract Term:
Brentwood, TN
as specified in Executive Employment Agreement
Effective Date:
TBD


16

Exhibit 10.6
EXHIBIT B
St. Landry Parish
17
Exhibit 10.7
Delek US Holdings, Inc.
7102 Commerce Way
Brentwood, TN 37027

February 25, 2022
Nithia Thaver
Dear Nithia
Congratulations! On behalf of Delek US Holdings, Inc. and/or its subsidiary companies (collectively “Delek”), I am pleased to extend this promotion as EVP, President Refining reporting to the EVP, Chief Operating Officer. The effective date of this promotion will be January 1, 2022
Position/Title:EVP, President Refining
Start Date:January 1, 2022
Base Salary:$400,000 paid in bi-weekly installments of $15,385
Annual Bonus Target:
75%
You will be eligible to participate in our discretionary Annual Cash Incentive Program at a target bonus of 75% of your annualized base salary. The annual bonus ranges between 0x and 2x bonus target based on the performance of the Company and attainment of objectives and is typically paid during the 1st quarter of the year following the applicable bonus year.
VacationExecutive will be granted 25 business days of vacation per calendar year. Unused vacation will accrue and carry over into a new calendar year during the Term and the amount attributed to accrued and unused vacation will be paid to Executive upon the termination of employment. Executive will be provided with sick leave according to the Company’s standard policies.
Equity Compensation:
$300,000 targeted.

Subject to approval by the Board of Directors or applicable committee thereof, your role may be eligible for an annual Award under Delek’s 2016 Long-Term Incentive Plan, as may be amended or replaced during the course of your employment (the “Plan”). The Award shall be made upon other terms and conditions applicable to Awards under the Plan (including, without limitation, exercise prices and vesting conditions). Subject to the foregoing, your first Award under the Plan will be made in the form of 50% Restricted Stock Units (RSUs) and a value based Award, which generally vest quarterly over the three (3) anniversaries of the grant date and 50 Performance Based Restricted Stock Units (PRSUs) which will have a 3 year, relative total shareholder return (rTSR) performance metric. Please note that Delek reserves the right to adjust the value and form of equity at any time during your employment.
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Exhibit 10.7
Fringe Benefits:
General Employee Benefits. The Company shall make available to Executive, or cause to be made available to Executive, throughout the period of Executive’s employment hereunder, such benefits as may be put into effect from time to time by the Company generally for other senior executives of the Company. The Company expressly reserves the right to modify such benefits available to Executive at any time provided that such modifications apply to other similarly situated employees.
Business Expenses. Executive will be reimbursed for all reasonable out-of-pocket business, business entertainment and travel expenses paid by Executive in connection with the performance of Executive’s duties for the Company, in accordance with and subject to Section 20(c) and all applicable Company expense incurrence and reimbursement policies.
Other Benefits. During the Term, the Company will pay Executive’s reasonable costs of professional tax and financial counseling, provided that, the cost of each such benefit does not exceed $25,000 in any calendar year. Perquisites and other personal benefits that are not integrally and directly related to the performance of Executive’s duties and confer a direct or indirect benefit upon Executive that has a personal aspect may, in the Company’s sole discretion, be recorded as taxable compensation to Executive and disclosed in public filings according to SEC regulations.
Restrictive Covenants.
(a)    Non-Competition.
(i)    In consideration of the Confidential Information provided to Executive and the other benefits provided to him pursuant to this Agreement, Executive agrees that, if his employment ends during the Term, then, during the Non-Compete Period (as defined below), he will not, without the prior written consent of the Company, conduct any business in or provide services with respect to or provide services with respect to the Territory (as defined below) by becoming an employee, officer, director, independent contractor, consultant, shareholder or partner of, or assist in any other capacity, a Competitor (as defined below). The
2

Exhibit 10.7
terms of this Section 8(a) shall not apply to the passive ownership by Executive of less than 5% of a class of equity securities of an entity, which securities are publicly traded on any national securities exchange.
(ii)    For any termination except for a termination by the Company for Cause, the “Non-Compete Period” shall commence upon the date that notice of termination of employment is delivered or deemed delivered under the notice provisions of this Agreement, and continue until the first anniversary of such date, it being acknowledged and agreed that the Non-Compete Period may commence to run, or even completely run, during a period of time during which Executive remains employed by the Company (assuming that he continues to be so employed after the delivery of such notice of termination). In the event of a termination by the Company for Cause, the Non-Compete Period shall commence upon the date that Executive’s employment with the Company ends.
(iii)    For purposes of this Section 8(a), a “Competitor” means a member of the peer group of companies set forth in the most recently filed Annual Reports on Form 10-K of the Company or Delek Logistics Partners, LP.
(iv)    For purposes of Section 8(a), the “Territory” shall mean the following geographic areas as of the commencement of the Non-Compete Period (A) any state (or, in the case of Louisiana, any parishes set forth on Exhibit A), province or foreign analogue in which petroleum and biodiesel refining facilities of the Company are located, (B) any state (or, in the case of Louisiana, any parishes set forth on Exhibit B), province or foreign analogue in which owned wholesale refined products distribution facilities of the Company are located and (C) a 50 mile radius from any of the Company’s retail fuel and/or convenience merchandise facilities.
(b)    Non-Interference with Commercial Relationships. During Executive’s employment with the Company, and for a period of one year thereafter, Executive will not, directly or indirectly, either as an individual or as an employee, officer, director, shareholder, partner, equity participant, sole proprietor, independent contractor, consultant or in any other capacity whatsoever approach or solicit any customer or vendor of Company for the purpose of causing, directly or indirectly, any such customer or vendor to cease doing business with the Company or its affiliates, nor will Executive engage in any other activity that interferes or could reasonably be expected to interfere in any material way with the commercial relationships between the Company and its affiliates and such customers or vendors. The foregoing covenant shall be in addition to any other covenants or agreements to which Executive may be subject.
(c)    Non-Interference with Employment Relationships. During Executive’s employment with the Company, and for a period of one year thereafter, Executive shall not, without the Company’s prior written consent, directly or indirectly: (i) induce or attempt to induce any Company employee to terminate his/her employment with the Company; or (ii) interfere with or disrupt the Company’s
3

Exhibit 10.7
relationship with any of its employees or independent contractors. The foregoing does not prohibit Executive (personally or as an employee, officer, director, shareholder, partner, equity participant, sole proprietor, independent contractor, consultant or in any other capacity) from hiring or employing an individual that contacts Executive on his/her own initiative without any direct or indirect solicitation by Executive other than customary forms of general solicitation such as newspaper advertisements or internet postings.
(d)    It is understood and agreed that the scope of each of the covenants contained in this Section 8 is reasonable as to time, area, and persons and is necessary to protect the legitimate business interests of the Company. It is further agreed that such covenants will be regarded as divisible and will be operative as to time, area and persons to the extent that they may be so operative.
4

Exhibit 10.7
Copyright, Inventions, PatentsThe Company shall have all right, title and interest to all intellectual property (including, without limitation, graphic designs, copyrights, trademarks and patents) created by Executive during the course of Executive’s employment with the Company. Executive hereby assigns to Company all copyright ownership and rights to any work product developed by Executive or at Executive’s discretion and reduced to practice for or on behalf of the Company or which relate to the Company’s business during the course of the employment relationship. At the Company’s expense and for a period beginning on the Effective Date and continuing for three years following the termination of Executive’s employment, Executive shall use Executive’s reasonable best efforts to assist or support the Company to obtain, maintain, and assert its rights in such intellectual property and work product including, without limitation, the giving of evidence in suits and proceedings, and the furnishing and/or assigning of all documentation and other materials relative to the Company’s intellectual property rights.
ConfidentialityDuring the course of employment, you will be exposed to information and ideas of a confidential or proprietary nature which pertain to the Company’s business, financial, legal, marketing, administrative, personnel, technical or other functions or which constitute trade secrets (including, without limitation, specifications, designs, plans, drawings, software, data, prototypes, the identity of sources and markets, marketing information and strategies, business and financial plans and strategies, methods of doing business, data processing and technical systems, programs and practices, customers and users and their needs, sales history, financial health or material non-public information as defined under federal securities law) (collectively “Confidential Information”). Confidential Information also includes such information of third parties which has been provided to the Company in confidence. All such information is deemed “confidential” or “proprietary” whether or not it is so marked, provided that it is maintained as confidential by the Company. Information will not be considered Confidential Information to the extent that it is generally available to the public. During your employment with the Company and for a period of three years thereafter, you shall hold Confidential Information in confidence, shall use it only in connection with your employment-related duties, shall restrict its disclosure to those directors, employees or independent contractors of the Company with need to know, and shall not disclose, copy or use Confidential Information for the benefit of anyone other than the Company without the Company’s prior written consent (unless otherwise required by law). Upon the Company’s request or your termination of employment, you will return any and all writings or other media containing Confidential Information in your possession, custody or control. Nothing herein shall prohibit you from reporting possible violations of law to any governmental agency or entity in accordance with applicable whistleblower protection provisions including, without limitation, the rules promulgated under Section 21F of the Securities Exchange Act of 1934 or Section 806 of the Sarbanes-Oxley Act of 2002, or require you to notify the Company (or obtain its prior approval) of any such reporting.


We extend this offer with the understanding that in consideration of your assignment, you agree to conform to the policies of Delek US Holdings, and you understand and acknowledge that you will be an “at will” employee.
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Exhibit 10.7
/s/ Jared Serff 3/11/2022         /s/ Nithia Thaver 3/4/2022    
Jared Serff, EVP CHRO Date         Nithia Thaver, EVP Refining Date


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Exhibit 10.7
EXHIBIT A
St. Landry Parish

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Exhibit 10.7

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Exhibit 10.8
CHANGE IN CONTROL SEVERANCE AGREEMENT
This Change in Control Severance Agreement (the “Agreement”) is entered into effective as of _____________, 2022 (the “Effective Date”), by and between DELEK US HOLDINGS, INC., a Delaware corporation (the “Company”) and [NAME] (the “Employee”).
W I T N E S S E T H:
    WHEREAS, the Employee is currently employed by the Company and is an integral part of its management;
    WHEREAS, the Company considers it essential to the best interests of its shareholders to foster the continuous employment of key management personnel such as Employee;
WHEREAS, the Company recognizes that the possibility of a change in control of the Company will cause uncertainty and distract the Employee from his assigned duties to the detriment of the Company and its shareholders; and
WHEREAS, the Board of Directors of the Company (the “Board”) has determined that appropriate steps should be taken to reinforce and encourage the Employee’s continued attention and dedication to the Employee’s assigned duties in the event of a change in control of the Company.
NOW, THEREFORE, in consideration of the mutual covenants and agreements contained in this Agreement and other good and valuable consideration, the Employee and the Company hereby agree as follows:
Section 1: Definitions
The following terms shall have the meanings set forth below whenever used herein:
(a)“Affiliate” shall mean a person that directly, or indirectly through one or more intermediaries, controls, or is controlled by, or is under common control with, a specified person.
(b)“Base Salary” shall mean the amount Employee was entitled to receive as salary on an annualized basis immediately prior to termination of Employee’s employment (or, if greater, immediately prior to a Change in Control), including any amounts deferred pursuant to any deferred compensation program, but excluding all bonus, overtime, welfare benefit premium reimbursement and incentive compensation, payable by the Company as consideration for the Employee’s services.
(c)“Beneficial Owner” shall mean the beneficial owner of a security as determined pursuant to Rule 13d-3 promulgated under the Securities Exchange Act of 1934, as amended.
(d)“Cause” shall mean the Employee’s (i) engagement in any act of willful gross negligence or willful misconduct on a matter that is not inconsequential, as reasonably determined by the Board in good faith, or (ii) conviction of a felony provided the conviction is damaging to the Company or to the public’s perception of the Company, as determined by the Board in good faith. For purposes hereof, no act or failure to act, on the Employee’s part, shall be deemed “willful” if the Employee reasonably believed such acts or omissions were in the best interests of the Company.
(e)“Change in Control” shall mean the occurrence of one of the following:
    
US 8696949v.2

(i)Any “person” (as defined in Section 13(h)(8)(E) of the Exchange Act), other than the Company or any of its subsidiaries or any employee benefit plan of the Company or any of its subsidiaries, becomes the Beneficial Owner, directly or indirectly, of securities of the Company (or any successor to all or substantially all of the Company’s assets) representing more than 30% of the combined voting power of the Company’s (or such successor’s) then outstanding voting securities that may be cast for the election of directors of the Company (other than as a result of an issuance of securities initiated by the Company (or such successor) in the ordinary course of business);
(ii)As the result of, or in connection with, any cash tender or exchange offer, merger or other business combination or contested election, or any combination of the foregoing transactions, less than 51% of the combined voting power of the then outstanding securities of the Company or any successor company or entity entitled to vote generally in the election of the directors of the Company or such other corporation or entity after such transaction are held in the aggregate by the holders of the Company’s securities entitled to vote generally in the election of directors of the Company immediately prior to such transaction;
(iii)All or substantially all of the assets of the Company are sold, exchanged or otherwise transferred;
(iv)The Company’s stockholders approve a plan of liquidation or dissolution of the Company; or
(v)During any 12-month period within the Term, Continuing Directors cease for any reason to constitute at least a majority of the Board. For this purpose, a “Continuing Director” is any person who at the beginning of the Term was a member of the Board, or any person first elected to the Board during the Term whose election, or the nomination for election by the Company’s shareholders, was approved by a vote of at least two-thirds of the Continuing Directors then in office, but excluding any person (A) initially appointed or elected to office as result of either an actual or threatened election and/or proxy contest by or on behalf of any “person” or “group” (within the meaning of Section 13(d) of the Exchange Act) other than the Board, or (B) designated by any “person” or “group” (within the meaning of Section 13(d) of the Exchange Act) ) who has entered into an agreement with the Company to effect a transaction described in Section 11(b)(i) through (iv).
(f)“Code” shall mean the Internal Revenue Code of 1986, as amended.
(g)“Good Reason” shall mean, without the express written consent of the Employee, the occurrence of any of the following:
        (i)    the material reduction in the Employee’s authority, duties or responsibilities from those in effect immediately prior to the Change in Control, or a material reduction in the authority, duties or responsibilities of the supervisor to whom Employee is required to report;

        (ii)    a material diminution in the budget or other spending over which the Employee has authority;

(iii)    a reduction in the Employee’s base compensation in effect immediately before the Change in Control;

(iv)    if applicable, a failure of the Employee to be re-elected or appointed as an officer or to the board of directors or similar governing board of the successor;

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        (v)    the relocation of the Employee to an office or location more than fifty (50) miles from the location at which the Employee normally performed Employee’s services immediately prior to the occurrence of a Change in Control, except for travel reasonably required in the performance of the Employee’s responsibilities; or

(vi)    a material breach of the terms of this Agreement.

    Notwithstanding the foregoing, in the case of the Employee’s allegation of Good Reason: (A) Employee shall provide notice to the Company of the event alleged to constitute Good Reason within ninety (90) days of the occurrence of such event, and (B) the Company shall be given the opportunity to remedy the alleged Good Reason event within thirty (30) days from receipt of notice of such allegation. In the event the alleged Good Reason event is not so remedied, Employee’s Termination of Employment will be effective immediately following the thirty (30) day cure period.

(h)“Person” shall mean any individual, group, partnership, corporation, association, trust, or other entity or organization.
(i)“Protection Period” shall mean the six (6) month period preceding a Change in Control and the twenty-four (24) month period beginning on the date of the Change in Control.
(j)“Subsidiary” shall mean, as to any Person, a corporation or other entity of which a majority of the combined voting power of the outstanding voting securities is owned, directly or indirectly, by that Person.
(k)“Target Bonus” shall mean the target annual incentive bonus established by the Company with respect to the Employee with respect to the year in which the Employee’s Termination of Employment occurs.
(l)“Termination Event” shall mean the Employee’s Termination of Employment either:
        (i)    by the Company or its successor without Cause; or

        (iii)    by the Employee for Good Reason.

(m)“Termination of Employment” shall mean a termination of Employee’s employment within the meaning of Treas. Reg. § 1.409A-1(h)(1)(ii).    
Section 2: Term of Agreement
(a)Term. The term of this Agreement (the “Term”) shall be for the period which commences on the Effective Date and which terminates on the day prior to the initial three (3) year anniversary of the Effective Date; provided, however, that the Term of this Agreement will be automatically extended for an additional two (2) year period as of the second anniversary of the Effective Date and any anniversary of the Effective Date occurring thereafter, unless the Board cancels further extension of this Agreement by giving notice to the Employee at least sixty (60) days prior to the initial two (2) year anniversary of the Effective Date and any anniversary of the Effective Date occurring thereafter.
(b)Modification of Term Upon a Change in Control. Upon a Change in Control during the Term, the Term will be extended (or reduced, as the case may be) through the end of the Protection Period, immediately following which time this Agreement will terminate. If, prior to a Change in Control, the Employee ceases to be an employee of the Company pursuant to a
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Termination Event, thereupon the Term will continue for a period of six (6) months following the date of the Employee’s Termination of Employment and, in the event a Change in Control does not occur during such six (6) month period, the Term shall be deemed to have expired immediately following the end of the six (6) month period and this Agreement shall immediately terminate and be of no further effect. If the Employee ceases, prior to a Change in Control, to be an employee of the Company for any other reason, the Term will be deemed to have expired as of the date of such cessation of service and this Agreement shall immediately terminate and be of no further effect.
(c)Survival of Certain Provisions. Notwithstanding the expiration of the Term or other termination of this Agreement, Sections 4, 5(a), 5(e) and 5(l) of this Agreement shall survive any expiration or termination of this Agreement, and if a Change in Control shall occur prior to the expiration of the Term or other termination of this Agreement, the terms of this Agreement shall survive to the extent necessary to enable Employee to enforce his rights under Sections 3 and 4 of this Agreement.
Section 3: Severance Benefits
(a)Termination due to a Termination Event. In the event that the Employee’s employment with the Company or its successor is terminated due to the occurrence of a Termination Event during the Protection Period, the Employee shall be entitled to the following payments and other benefits:
(i)The Company shall pay to the Employee a lump sum cash amount equal to the sum of (A) the Employee’s accrued and unpaid salary as of his date of termination plus (B) reimbursement for all expenses reasonably and necessarily incurred by the Employee (in accordance with Company policy) prior to termination in connection with the business of the Company plus (C) any accrued vacation pay, to the extent not theretofore paid. This amount shall be paid within ten (10) days after the Employee’s Termination of Employment.
(ii)The Company shall pay to the Employee an additional lump sum cash amount equal two (2) times the sum of Employee’s Base Salary plus Employee’s Target Bonus. Subject to the requirements of Section 3(c), this amount shall be paid within fifteen (15) days after the later of (A) Employee’s Termination of Employment, or (B) the Change in Control.
(iii)The Company shall pay to the Employee an amount equal to the annual incentive bonus to which Employee would have otherwise been entitled if Employee’s employment had continued through the end of the bonus year based upon the actual performance of the Company, prorated for the period of actual employment during the bonus year, and paid upon the payment of the annual bonuses to similarly situated employees of the Company pursuant to the Company’s annual bonus programs, but in no event later than March 15 of the year following Employee’s Termination of Employment.
(iv)The Company shall provide the Employee (and the Employee’s dependents, if applicable), beginning upon and continuing for a period of [one year] [six months] following the later of (A) his Termination of Employment, or (B) the Change in Control, with a similar level of medical and dental insurance benefits upon substantially the same terms and conditions as existed immediately prior to the Employee’s Termination of Employment subject to the following:
(A)To the extent that any such medical or dental benefits are self-funded and during the period Employee would, but for the continued coverage provided pursuant to this Section 3(a)(iii), be entitled to continuation coverage with respect to such benefits pursuant to the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended
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(“COBRA”), if Employee elected such coverage and paid the applicable premiums (the “COBRA Continuation Period”), the costs of the continued benefit coverage provided under this Section 3(a)(iii) will be imputed as income to the Employee and reported on Form W-2. Following the COBRA Continuation Period, to the extent Employee is still entitled to continued coverage pursuant to this Section 3(a)(iii), the medical and dental coverage to be continued under such self-funded arrangement shall be provided in accordance with the provisions of Treas. Reg. § 1.409A-3(i)(1)(iv)(A) as it applies to the provision of in-kind benefits.
(B)Notwithstanding the foregoing provisions of this Section 3(a)(iii), in the event the Company is unable to provide any of the promised medical or dental benefits under its benefit plans, or in the event the Company will be subject to additional taxes to the extent such promised medical or dental benefits are provided, the Company will reimburse Employee for amounts necessary to enable the Employee to obtain medical and dental benefits substantially equal to what was provided to the Employee immediately prior to the Employee’s termination; provided, that any such reimbursement will be made in accordance with the provisions of Treas. Reg. § 1.409A-3(i)(1)(iv), including but not limited to the requirements that (I) the expenses eligible for reimbursement will be determined by reference to the objective and nondiscretionary criteria set forth in the Company’s medical and dental benefit plans, (II) the expenses eligible for reimbursement during one taxable year of the Employee will not affect the expenses eligible for reimbursement in any other taxable year (provided, that a limit imposed on the amount of expenses that may be reimbursed over some or all of the continuation period described in this Section 3(a)(iii) shall not in and of itself cause the reimbursement arrangement described herein to fail to satisfy the requirements of Treas. Reg. § 1.409A-3(i)(1)(iv)), (III) the reimbursement of an eligible expense will be made on or before the last day of the Employee’s taxable year following the taxable year in which the expense was incurred, and (IV) the right to reimbursement will not be subject to liquidation or exchange for another benefit.
(C)Notwithstanding the foregoing provisions of this Section 3(a)(iii), in the event the Employee becomes reemployed with another employer and becomes eligible to receive medical and dental benefits similar to the benefits described herein from such employer, the medical and dental benefit coverage provided for herein shall terminate. Benefit continuation provided pursuant to this Section 3(a)(iii) will be applied towards any continuation coverage to which the Employee is entitled pursuant to COBRA.
(v)All outstanding equity-based compensation awards of the Company or its Affiliates shall become immediately vested, nonforfeitable, settleable (to the extent such settlement would not result in additional taxes under section 409A of the Code) and, if applicable, exercisable; provided, that, performance awards will become vested with respect to a number of such performance based equity awards equal to the greater of (A) the target number of such performance based equity awards, or (B) the actual number of such performance based equity awards that would have vested if the date of the termination of employment were the end of the performance period and the actual performance as of that date had been the actual performance for the entire performance period.
(b)Other Severance Pay. The Employee shall not be entitled to receive payment under any severance plan, policy or arrangement maintained by the Company, or any employment agreement with the Company or its Affiliate, other than as provided in this Agreement. By executing this Agreement, the Employee acknowledges and agrees that following a Change in Control Executive will receive the benefits provided under this Agreement and not the benefits under any employment agreement between Employee and the Company or its Affiliate. If the Employee is entitled to any notice or payment in lieu of any notice of termination of employment required by Federal, state or local law, including but not limited to the Worker Adjustment and Retraining Notification Act, the amounts to which the Employee would otherwise be entitled under this Agreement shall be reduced by the amount of any such
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payment in lieu of notice. Except as set forth above, the foregoing payments and benefits shall be in addition to and not in lieu of any payments or benefits to which the Employee and his dependents may otherwise be entitled to under the Company’s compensation and employee benefit plans. Nothing herein shall be deemed to restrict the right of the Company to amend or terminate any such plan in a manner generally applicable to similarly situated active employees of the Company, in which event the Employee shall be entitled to participate on the same basis (including payment of applicable contributions) as similarly situated active employees of the Company.
(c)Release. Payments under Sections 3(a)(ii) and (iii) shall be conditioned upon the execution and delivery of a Release Agreement in the form attached hereto as Exhibit A (the “Release”) by Employee within forty-five (45) days of the date of Employee’s Termination of Employment, provided such Release is not revoked. Notwithstanding the times of payment otherwise set forth in Section 3(a), the payments due under Sections 3(a)(ii) and (iii) shall be made (or commenced, in the case of the payments due under Section 3(a)(iii)) to the Employee within fifteen (15) days following receipt by the Company of the Release properly executed (and not revoked) by the Employee, or, if later, the Change in Control. If the Employee fails to properly execute and deliver the Release (or revokes the Release), the Employee agrees that he shall not be entitled to receive the benefits described in Sections 3(a)(ii) and (iii).
Section 4: Certain Covenants by the Employee
(a)Protection of Confidential Information. The Employee acknowledges that in the course of his employment with the Company, the Employee has obtained confidential, proprietary and/or trade secret information of the Company, relating to, among other things, (i) programs, strategies, information or materials related to the business, services, manner of operation and activities of the Company, (ii) customers, clients or prospects of the Company, (iii) computer hardware or software used in the course of the Company business, and (iv) marketing strategies or other activities of the Company from or on behalf of any of its clients, (hereinafter collectively referred to as “Confidential Information”); provided, however, that, for purposes of this Agreement, the term Confidential Information shall not include any information that is known generally to the public or accessible to a third party on an unrestricted basis. The Employee recognizes that such Confidential Information has been developed by the Company at great expense; is a valuable, special and unique asset of the Company which it uses in its business to obtain competitive advantage over its competitors; is and shall be proprietary to the Company; is and shall remain the exclusive property of the Company; and, is not to be transmitted to any other person, entity or thing. Accordingly, as a material inducement to the Company to enter into this Agreement with the Employee and in partial consideration for the compensation payable hereunder to the Employee, the Employee hereby:
(i)warrants and represents that he has not disclosed, copied, disseminated, shared or transmitted any Confidential Information to any person, firm, corporation or entity for any reason or purpose whatsoever, except in the course of carrying out the Employee’s duties and responsibilities of employment with the Company;
(ii)agrees not to so disclose, copy, disseminate, share or transmit any Confidential Information in the future;
(iii)agrees not to make use of any Confidential Information for his own purposes or for the benefit of any person, firm, corporation or other entity, except that, in the course of carrying out the Employee’s duties and responsibilities of employment, the Employee may use Confidential Information for the benefit of any Affiliate of the Company;
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(iv)warrants and represents that all Confidential Information in his possession, custody or control that is or was a property of the Company has been or shall be returned to the Company by or on the date of the Employee’s termination; and
(v)agrees that he will not reveal, or cause to be revealed, this Agreement or its terms to any third party (other than the Employee’s attorney, tax advisor, or spouse), except as required by law.
The Employee’s covenants in this Section 4(a) are in addition to, and do not supercede, the Employee’s obligations under any confidentiality, invention or trade secret agreements executed by the Employee, or any laws protecting the Confidential Information.
(b)Non-Disparagement. The Employee agrees to refrain from engaging in any conduct, or from making any comments or statements, which have the purpose or effect of harming the reputation or goodwill of the Company or any of its Affiliates, employees, directors or stockholders.
(c)Non-Solicitation. The Employee agrees that during the Term and for a period of one (1) year following Termination of Employment that the Employee will not, directly or indirectly, for the benefit of the Employee or for others, recruit, solicit or induce any employee or service provider of the Company or its Affiliates to terminate his or her employment or service relationship with the Company or its Affiliates, or hire or assist in the hiring of any such employee or service provider by a Person not affiliated with the Company or its Affiliates.
(d)Extent of Restrictions. The Employee acknowledges that the restrictions contained in this Section 4 correctly set forth the understanding of the parties at the time this Agreement is entered into, are reasonable and necessary to protect the legitimate interests of the Company, and that any violation will cause substantial injury to the Company. In the event of any such violation, the Company shall be entitled, in addition to any other remedy, to preliminary or permanent injunctive relief. If any court having jurisdiction shall find that any part of the restrictions set forth in this Agreement are unreasonable in any respect, it is the intent of the parties that the restrictions set forth herein shall not be terminated, but that this Agreement shall remain in full force and effect to the extent (as to time periods and other relevant factors) that the court shall find reasonable.
Section 5: Miscellaneous
(a)Clawback. Notwithstanding any provisions in this Agreement to the contrary, to the extent required by (i) applicable law, including, without limitation, the requirements of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, and/or (ii) any policy that may be adopted by the Board, amounts paid or payable pursuant to this Agreement shall be subject to clawback to the extent necessary to comply with such law(s) and/or policy, which clawback may include forfeiture and/or repayment of amounts paid or payable pursuant to this Agreement.
(b)Tax Withholding. All payments required to be made to the Employee under this Agreement shall be subject to withholding of amounts relating to income tax, excise tax, employment tax and other payroll taxes to the extent required to be withheld pursuant to applicable law or regulation.
(c)No Mitigation; Offset. The Employee shall be under no obligation to minimize or mitigate damages by seeking other employment, and the obtaining of any such other employment shall in no event effect any reduction of obligations hereunder for the payments or benefits required to be provided to the Employee, except as specifically provided in Section 3(a)(iii)
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above with respect to medical and dental benefits coverage. The obligations of the Company hereunder shall not be affected by any set-off or counterclaim rights which any party may have against the Employee; provided, however, that the Company may offset any amounts owed to the Company by the Employee against any amounts owed to the Employee by the Company hereunder.
(d)Overpayment. If, due to mistake or any other reason, the Employee receives benefits under this Agreement in excess of what this Agreement provides, the Employee shall repay the overpayment to the Company in a lump sum within thirty (30) days of notice of the amount of overpayment. If the Employee fails to so repay the overpayment, then without limiting any other remedies available to the Company, the Company may deduct the amount of the overpayment from any other benefits which become payable to the Employee under this Agreement or otherwise.
(e)Severability. In the event that any provision of this Agreement is determined to be partially or wholly invalid, illegal or unenforceable, then such provision shall be modified or restricted to the extent necessary to make such provision valid, binding and enforceable, or if such provision cannot be modified or restricted, then such provision shall be deemed to be excised from this Agreement, provided that the binding effect and enforceability of the remaining provisions of this Agreement shall not be affected or impaired in any manner. No waiver by a party of any provisions or conditions of this Agreement shall be deemed a waiver of similar or dissimilar provisions and conditions at the same time or any prior or subsequent time.
(f)Successors and Assigns. This Agreement and all rights hereunder are personal to the Employee and shall not be assignable by the Employee; provided, however, that any amounts that shall have become payable under this Agreement prior to the Employee’s death shall inure to the benefit of the Employee’s heirs or other legal representatives, as the case may be. This Agreement shall be binding upon and inure to the benefit of the Company and any successor of the Company. The Company shall require any successor to all or substantially all of the business and/or assets of the Company to expressly assume and agree to perform this Agreement in the same manner and to the same extent that the Company would be required to perform if no succession had taken place. Upon such assumption by the successor, the Company automatically shall be released from all liability hereunder (and all references to the Company herein shall be deemed to refer to such successor). In the event a successor does not assume this Agreement, the benefits payable pursuant to Section 3(a) will be paid immediately prior to the Change in Control.
(g)Entire Agreement. Except as otherwise specifically provided herein, this Agreement constitutes the entire agreement between the parties respecting the subject matter hereof and supersedes any prior agreements respecting severance benefits following a Change in Control. No amendment to this Agreement shall be deemed valid unless in writing and signed by the parties. A waiver of any term, covenant, agreement or condition contained in this Agreement shall not be deemed a waiver of any other term, covenant, agreement or condition, and any waiver of any default in any such term, covenant, agreement or condition shall not be deemed a waiver of any later default thereof or of any other term, covenant, agreement or condition.
(h)Notices. Any notice required or permitted to be given by this Agreement shall be effective only if in writing, delivered personally or by courier or by facsimile transmission or sent by express, registered or certified mail, postage prepaid, to the parties at the addresses hereinafter set forth, or at such other places that either party may designate by notice to the other.
Notice to the Employee shall be addressed to the employee’s then current work address.
Notice to the Company shall be addressed to:
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Delek US Holdings, Inc.
7102 Commerce Way
Brentwood, TN 37027
Attn: General Counsel
(i)Governing Law. Notwithstanding any conflicts of law or choice of law provision to the contrary, this Agreement shall be construed and interpreted according to the laws of the State of Tennessee.
(j)No Right to Continued Employment. Nothing in this Agreement shall confer on the Employee any right to continue in the employ of the Company or interfere in any way (other than by virtue of requiring payments or benefits as expressly provided herein) with the right of the Company to terminate the Employee’s employment at any time.
(k)Unfunded Obligation. Any payments hereunder shall be made out of the general assets of the Company. The Employee shall have the status of general unsecured creditor of the Company, and the Agreement constitutes a mere promise by the Company to make payments under this Agreement in the future as and to the extent provided herein.
(l)Arbitration. All claims, demands, causes of action, disputes, controversies or other matters in question (“Claims”), whether or not arising out of this Agreement or the Employee’s service (or termination from service) with the Company, whether arising in contract, tort or otherwise and whether provided by statute, equity or common law, that the Company may have against the Employee or that the Employee may have against the Company or its parents, Subsidiaries or Affiliates, or against each of the foregoing entities' respective officers, directors, employees or agents in their capacity as such or otherwise, shall be submitted to binding arbitration, if such Claim is not resolved by the mutual written agreement of the Employee and the Company, or otherwise, within thirty (30) days after notice of the dispute is first given. Claims covered by this Section 6(l) include, without limitation, claims by the Employee for breach of this Agreement, wrongful termination, discrimination (based on age, race, sex, disability, national origin, sexual orientation, or any other factor), harassment and retaliation. Any arbitration shall be conducted in accordance with the Federal Arbitration Act (“FAA”) and, to the extent an issue is not addressed by the FAA, with the then-current National Rules for the Resolution of Employment Disputes of the American Arbitration Association (“AAA”) or such other rules of the AAA as are applicable to the claims asserted. If a party refuses to honor its obligations under this Section 6(l), the other party may compel arbitration in either federal or state court. The arbitrator shall apply the substantive law of Tennessee (excluding choice-of-law principles that might call for the application of some other jurisdiction's law) or federal law, or both as applicable to the claims asserted. The arbitrator shall have exclusive authority to resolve any dispute relating to the interpretation, applicability or enforceability or formation of this Agreement (including this Section 6(l)), including any claim that all or part of the Agreement is void or voidable and any claim that an issue is not subject to arbitration. The results of arbitration will be binding and conclusive on the parties hereto. Any arbitrator's award or finding or any judgment or verdict thereon will be final and unappealable. All parties agree that venue for arbitration will be in Nashville, Tennessee and that any arbitration commenced in any other venue will be transferred to Nashville, Tennessee, upon the written request of any party to this Agreement. In the event that an arbitration is actually conducted pursuant to this Section 6(l), the party in whose favor the arbitrator renders the award shall be entitled to have and recover from the other party all costs and expenses incurred, including reasonable attorneys' fees, reasonable costs and other reasonable expenses pertaining to the arbitration and the enforcement thereof and such attorneys fees, costs and other expenses shall become a part of any award, judgment or verdict. Any and all of the arbitrator's orders, decisions and awards may be enforceable in, and judgment upon any award rendered by the arbitrator may be confirmed and entered by any federal or state court having jurisdiction. All privileges under state and federal
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law, including attorney-client, work product and party communication privileges, shall be preserved and protected. The decision of the arbitrator will be binding on all parties. Arbitrations will be conducted in such a manner that the final decision of the arbitrator will be made and provided to the Employee and the Company no later than 120 days after a matter is submitted to arbitration. All proceedings conducted pursuant to this agreement to arbitrate, including any order, decision or award of the arbitrators, shall be kept confidential by all parties. EMPLOYEE ACKNOWLEDGES THAT, BY SIGNING THIS AGREEMENT, EMPLOYEE IS WAIVING ANY RIGHT THAT EMPLOYEE MAY HAVE TO A JURY TRIAL OR A COURT TRIAL OF ANY SERVICE RELATED CLAIM ALLEGED BY EMPLOYEE.
(m)Injunctive Relief. The Employee recognizes and acknowledges that, in the event of a breach or threatened breach by the Employee of the provisions of this Agreement, the Company shall be entitled to an injunction to enforce the provisions hereof, without any requirement for the securing or posting of any bond in connection with such remedy, in addition to pursuing its other legal remedies.
(n)Section 409A.
(i)Notwithstanding any provision of this Agreement to the contrary, all provisions of this Agreement are intended to comply with Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”) and the applicable Treasury regulations and administrative guidance issued thereunder (collectively, “Section 409A”) or an exemption therefrom and shall be construed and administered in accordance with such intent. Any payments under this Agreement that may be excluded from Section 409A either as separation pay due to an involuntary separation from service or as a short-term deferral shall be excluded from Section 409A to the maximum extent possible. For purposes of Section 409A, each installment payment provided under this Agreement shall be treated as a separate payment. Any payments to be made under this Agreement upon a termination of Employee’s employment shall only be made if such termination of employment constitutes a “separation from service” under Section 409A.
(ii)To the extent that any right to reimbursement of expenses or payment of any benefit in-kind under this Agreement constitutes nonqualified deferred compensation (within the meaning of Section 409A), (i) any such expense reimbursement shall be made by the Company no later than the last day of Employee’s taxable year following the taxable year in which such expense was incurred by Employee, (ii) the right to reimbursement or in-kind benefits shall not be subject to liquidation or exchange for another benefit, and (iii) the amount of expenses eligible for reimbursement or in-kind benefits provided during any taxable year shall not affect the expenses eligible for reimbursement or in-kind benefits to be provided in any other taxable year; provided, that the foregoing clause shall not be violated with regard to expenses reimbursed under any arrangement covered by Section 105(b) of the Code solely because such expenses are subject to a limit related to the period in which the arrangement is in effect.
(iii)Notwithstanding any provision in this Agreement to the contrary, if any payment or benefit provided for herein would be subject to additional taxes and interest under Section 409A if Employee’s receipt of such payment or benefit is not delayed until the earlier of (A) the date of Employee’s death or (B) the date that is six (6) months after the Termination Date (such date, the “Section 409A Payment Date”), then such payment or benefit shall not be provided to Employee (or Employee’s estate, if applicable) until the Section 409A Payment Date. Notwithstanding the foregoing, the Company makes no representations that the payments and benefits provided under this Agreement are exempt from, or compliant with, Section 409A and in no event shall any member of the Company Group be liable for all or any portion of any
10



taxes, penalties, interest or other expenses that may be incurred by Employee on account of non-compliance with Section 409A.
(o)Captions and Headings. Captions and paragraph headings are for convenience only, are not a part of this Agreement and shall not be used to construe any provision of this Agreement.
(p)Counterparts. This Agreement may be executed in counterparts, each of which shall constitute an original, but both of which when taken together shall constitute one Agreement.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the day and year first above written.
DELEK US HOLDINGS, INC.


By:    ____________________________________
Name:
Its:    


EMPLOYEE

        
Name:         


11



EXHIBIT A
Agreement and Release
This Agreement and Release (“Release”) is entered into between you, the undersigned employee, and Delek US Holdings, Inc., a Delaware corporation (the “Company”), in connection with the Change in Control Agreement between you and the Company dated [●], 2022 (the “Change in Control Agreement”). You have 45 days to consider this Release, which you agree is a reasonable amount of time. While you may sign this Release prior to the expiration of this 45-day period, you are not to sign it prior to [●].
1.    Definitions     (a)    “Released Parties” means the Company and its past, present and future parents, subsidiaries, divisions, successors, predecessors, employee benefit plans and affiliated or related companies, and also each of the foregoing entities’ past, present and future owners, officers, directors, stockholders, investors, partners, managers, principals, members, committees, administrators, sponsors, executors, trustees, fiduciaries, employees, agents, assigns, representatives and attorneys, in their personal and representative capacities. Each of the Released Parties is an intended beneficiary of this Release.
    (b)    “Claims” means all theories of recovery of whatever nature, whether known or unknown, recognized by the law or equity of any jurisdiction. It includes but is not limited to any and all actions, causes of action, lawsuits, claims, complaints, petitions, charges, demands, liabilities, indebtedness, losses, damages, rights and judgments in which you have had or may have an interest. It also includes but is not limited to any claim for wages, benefits or other compensation; provided, however that nothing in this Release will affect your entitlement to benefits pursuant to the terms of any employee benefit plan (as defined in the Employee Retirement Income Security Act of 1974, as amended) sponsored by the Company in which you are a participant. The term Claims also includes but is not limited to claims asserted by you or on your behalf by some other person, entity or government agency.
2.    Consideration(a)    The Company agrees to pay you the consideration set forth in Section 3(a) of the Change in Control Agreement. The Company will make this payment to you within fifteen (15) business days of the date you sign this Release (and return it to the Company), unless Section 3(a) of the Change in Control Agreement provides a longer time before payment must be made. You acknowledge that the payment that the Company will make to you under this Release is in addition to anything else of value to which you are entitled and that the Company is not otherwise obligated to make this payment to you.
3.    Release of Claims     (a)    You, on behalf of yourself and your heirs, executors, administrators, legal representatives, successors, beneficiaries, and assigns, unconditionally release and forever discharge the Released Parties from, and waive, any and all Claims that you have or may have against any of the Released Parties arising from your employment with the Company, the termination thereof, and any other acts or omissions occurring on or before the date you sign this Release.
    (b)    The release set forth in Paragraph 3(a) includes, but is not limited to, any and all Claims under (i) the common law (tort, contract or other) of any jurisdiction; (ii) the Rehabilitation Act of 1973, the Age Discrimination in Employment Act, the Americans with Disabilities Act, Title VII of the Civil Rights Act of 1964, and any other federal, state and local statutes, ordinances, employee orders and regulations prohibiting discrimination or retaliation upon the basis of age, race, sex, national original, religion, disability, or other unlawful factor; (iii) the National Labor Relations Act; (iv) the Employee Retirement Income Security Act; (v) the Family and Medical Leave Act; (vi) the Fair Labor Standards Act; (vii) the Equal Pay
A - 1


Act; (viii) the Worker Adjustment and Retraining Notification Act; and (ix) any other federal, state or local law.
    (c)    In furtherance of this Release, you promise not to bring any Claims against any of the Released Parties in or before any court or arbitral authority.
5.    Acknowledgment     (a)    You acknowledge that, by entering into this Release, the Company does not admit to any wrongdoing in connection with your employment or termination, and that this Release is intended as a compromise of any Claims you have or may have against the Released Parties. You further acknowledge that you have carefully read this Release and understand its final and binding effect, have had a reasonable amount of time to consider it, have had the opportunity to seek the advice of legal counsel of your choosing, and are entering this Release voluntarily. In addition, you hereby certify your understanding that you may revoke the Release by providing written notice thereof to the Company within seven (7) days following execution of the Release and that, upon such revocation, this Release will not have any further legal effect.
6.    Applicable Law        (a)    This Release shall be construed and interpreted pursuant to the laws of the State of Nashville, Tennessee without regard to its choice of law rules and shall be subject to the arbitration clause set forth in Section 6(l) of the Change in Control Agreement.
7.    Severability        (a)    Each part, term, or provision of this Release is severable from the others. Notwithstanding any possible future finding by a duly constituted authority that a particular part, term, or provision is invalid, void, or unenforceable, this Release has been made with the clear intention that the validity and enforceability of the remaining parts, terms and provisions shall not be affected thereby. If any part, term, or provision is so found invalid, void or unenforceable, the applicability of any such part, term, or provision shall be modified to the minimum extent necessary to make it or its application valid and enforceable.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the day and year set forth below.
DELEK US HOLDINGS, INC. EMPLOYEE

By:        By:    
Name:                         Name:                         
Title:     
Date:        Date:    
A - 2
Exhibit 10.9
DELEK US HOLDINGS, INC.
2016 LONG-TERM INCENTIVE PLAN
PERFORMANCE-BASED RESTRICTED STOCK UNIT AGREEMENT
(CASH-SETTLED)
This Agreement is made as of             , 20     (the “Grant Date”) by and between Delek US Holdings, Inc., a Delaware corporation (the “Company”), and __________ (the “Participant”).
Whereas, pursuant to the Delek US Holdings, Inc. 2016 Long-Term Incentive Plan, as amended (the “Plan”), the Company desires to grant to the Participant, and the Participant desires to accept, an Award of cash-settled Performance-Based Restricted Stock Units with respect to shares of the Company’s common stock, $0.01 par value (the “Common Stock”), upon the terms and conditions set forth in this Agreement and the Plan. Capitalized terms used but not defined herein shall have the meanings ascribed to such terms in the Plan.
Now, therefore, the parties hereto agree as follows:
1.Award. The Company hereby grants to the Participant pursuant to the Plan an Award of cash-settled Performance-Based Restricted Stock Units (the “PRSUs”) as set forth in Exhibit A hereto.
2.PRSUs. The PRSUs constitute an unfunded and unsecured promise of the Company to deliver to the Participant, subject to the satisfaction of the vesting conditions set forth in Section 3 below and Exhibit A hereto and subject to the other terms and conditions of this Agreement and the Plan, a cash payment calculated by reference to that number of shares of Common Stock referenced by the PRSUs. At all times the Participant shall have the rights of a general unsecured creditor of the Company with respect to the PRSUs and shall not have any rights as a stockholder of the Company.
3.Vesting / Forfeiture. Except as otherwise provided herein, the Plan or any other agreement(s) between the Company and the Participant, the PRSUs shall vest pursuant to the terms and conditions set forth in Exhibit A hereto and all vesting is subject to the Participant’s continuous employment or other service with the Company or its affiliates through each applicable vesting date.
(a)Change in Control. For purposes of this Agreement, a “Change in Control” of the Company shall have occurred only if, and only to the extent that, such event has occurred under the terms of the Participant’s employment agreement with the Company and/or its subsidiaries in effect upon the occurrence of such event. Upon the occurrence of a Change in Control,
(i)In the event the entity surviving the Change in Control (the “Successor”) assumes the award granted hereby, (A) solely for purposes of determining the number of PRSUs eligible for vesting, any in process Performance Period shall be deemed to have ended upon the date immediately preceding the Change in Control, (B) the number of PRSUs that shall be eligible to vest shall be (x) the Target PRSUs if less than one-half of the Performance Period has elapsed prior to the effective date of the Change in Control, or (y) the actual number of PRSUs that would have vested if the date of the Change in Control were the end of the Performance Period and the actual performance as of that date had been the actual performance for the entire Performance Period, if one-half or more of the Performance Period has elapsed prior to the effective date of the Change in Control, and (C) notwithstanding subparagraph (b) below, in the event the Participant’s employment with the Successor is terminated without Cause by the Successor, or for Good Reason by the Participant, prior to the expiration of the Performance Period, the number of PRSUs otherwise eligible to vest pursuant to this paragraph shall immediately vest and cash settlement of the vested PRSUs shall be paid to the Participant upon the Participant’s termination of employment; or
(ii)In the event the Successor does not assume the award granted hereby, the PRSUs shall vest with respect to a number of PRSUs equal to (A) the Target PRSUs if less than one-half of the Performance Period has elapsed prior to the effective date of the Change in Control, or (B) the actual number of PRSUs that would have vested if the date
Delek US Holdings, Inc. • 2016 Long-Term Incentive Plan • Performance-Based Restricted Stock Unit Agreement (Cash Settled) •     Page 1 of #NUM_PAGES#
Exhibit 10.9
of the Change in Control were the end of the Performance Period and the actual performance as of that date had been the actual performance for the entire Performance Period, if one-half or more of the Performance Period has elapsed prior to the effective date of the Change in Control, and the appropriate number of PRSUs shall be vested and cash settlement shall be paid in accordance herewith.
For purposes of evaluating performance for any shortened Performance Period described above, appropriate adjustments to the performance targets, performance periods and the determination of actual performance shall be made by the Committee to enable it to make appropriate comparisons with peer groups and otherwise to carry out the intent of this paragraph.
(b)Termination of Employment. In the event that the Participant’s employment with the Company and/or its subsidiaries is terminated prior to the end of the Performance Period and prior to the occurrence of a Change in Control, the Participant shall forfeit the PRSUs and all of the Participant’s rights hereunder shall cease; provided, that the Committee shall have the discretion to provide for the vesting of all or a portion of the PRSUs upon or following the Participant’s termination of employment in circumstances such as Participant’s involuntary termination other than for cause, death, disability or retirement pursuant to any applicable Company policy as the Committee shall determine in its sole discretion. The Participant’s rights to the PRSUs shall not be affected by any change in the nature of the Participant’s employment so long as the Participant continues to be an employee or other applicable service provider, within the discretion of the Committee, of the Company or any of its Subsidiaries.
4.Cash Settlement / Payment. Any vested PRSUs shall be settled in cash paid to the Participant promptly following the vesting date in an amount equal to the product of (a) the number of vested PRSUs and (b) the Fair Market Value of the Company’s Common Stock on the vesting date, net of any applicable withholding amounts. The Participant shall have no right to receive any shares of Common Stock upon the vesting and settlement of the PRSUs.
5.Dividend Equivalents. The Participant shall be credited with dividend equivalents for any cash dividends paid to all holders of shares of Common Stock in an amount equal to the amount of dividends that would have been paid on the number of shares of Common Stock covered by the PRSUs had such shares been outstanding as of the record date applicable to the cash dividend. Such payments shall be treated as a cash deferral (bearing interest at the then prevailing prime interest rate as set forth in The Wall Street Journal), which deferral shall be settled in cash upon vesting of the related PRSUs, subject to the same terms and conditions as such PRSUs. For the avoidance of doubt, no dividend equivalents shall be paid with respect to PRSUs that do not vest.
6.Withholding / Consents. The payment of cash upon settlement of the PRSUs is conditioned on the Participant’s satisfaction of any applicable withholding taxes in accordance with the Plan and any other agreement(s) between the Company and the Participant. The Participant’s rights in respect of the PRSUs are conditioned on the receipt to the full satisfaction of the Company of any required consents that the Company may determine to be necessary or advisable, including, without limitation, consents to deductions from wages or other arrangements satisfactory to the Company.
7.Nontransferability. The PRSUs may not be loaned, pledged, hypothecated or otherwise encumbered or subject to any lien, obligation or liability of the Participant to any party (other than the Company or an affiliate thereof), or sold, assigned or transferred (collectively, “Transferred”) by the Participant other than by will or the laws of descent and distribution or to a beneficiary upon the death of the Participant. Any attempt by the Participant or any other person claiming against, through or under the Participant to cause the PRSUs or any part of it to be Transferred in any manner and for any purpose shall be null and void and without effect upon the Company, the Participant or any other person.
8.No Issuance of Common Stock. This is a cash-settled Award. In no event will the Company be obligated to issue or deliver shares of Common Stock pursuant to this Agreement.
Delek US Holdings, Inc. • 2016 Long-Term Incentive Plan • Performance-Based Restricted Stock Unit Agreement (Cash Settled) •     Page 2 of #NUM_PAGES#
Exhibit 10.9
9.No Employment or Other Rights. Nothing contained in the Plan or this Agreement shall confer upon the Participant any right with respect to the continuation of his or her employment or other service with the Company or its affiliates or interfere in any way with the right of the Company and its affiliates at any time to terminate such employment or other service or to increase or decrease, or otherwise adjust, the other terms and conditions of the Participant’s employment or other service.
10.Provisions of the Plan. The provisions of the Plan, the terms of which are incorporated in this Agreement, shall govern if and to the extent that there are inconsistencies between those provisions and the provisions hereof; provided, that in all events this Award shall be subject to the provisions relating to vesting of the Award upon termination, change in control or other event set forth in any employment agreement, offer letter or similar document between the Company and the Participant, regardless of whether there are inconsistencies between those provisions and the provisions of the Plan or this Agreement. The Participant acknowledges receipt of a copy of the Plan prior to the execution of this Agreement.
11.Administration. The Committee shall have the power to interpret the Plan and this Agreement and to adopt such rules for the administration, interpretation and application of the Plan as are consistent therewith and to interpret or revoke any such rules. No member of the Board or the Committee shall be personally liable for any action determination or interpretation made in good faith with respect to the Plan or the PRSUs granted hereunder. In its absolute discretion, the Board may at any time and from time to time exercise any and all rights and duties of the Committee under the Plan and this Agreement. All decisions and determinations made by the Board pursuant to the provisions hereof and, except to the extent rights or powers under the Plan are reserved specifically to the discretion of the Board, all decisions and determinations of the Committee, shall be final, binding and conclusive on all persons.
12.Resolution of Disputes. Any dispute or disagreement which may arise under, or as a result of, or in any way related to, the interpretation, construction or application of this Agreement shall be determined by the Committee. Any determination made hereunder shall be final, binding and conclusive on the Participant and Company for all purposes.
13.Miscellaneous. This Agreement shall be binding upon and shall inure to the benefit of the parties hereto and their respective successors and permitted assigns. This Agreement shall be governed by and construed in accordance with the laws of the State of Delaware, without regard to its principles of conflicts of law. This Agreement constitutes the entire agreement between the parties with respect to the subject matter hereof and, except as otherwise provided in the Plan, may not be modified other than by written instrument executed by the parties.

Delek US Holdings, Inc. • 2016 Long-Term Incentive Plan • Performance-Based Restricted Stock Unit Agreement (Cash Settled) •     Page 3 of #NUM_PAGES#
Exhibit 10.9
IN WITNESS WHEREOF, this Agreement has been executed as of the date first above written.
DELEK US HOLDINGS, INC.

By:
Name:
Title:

PARTICIPANT:

By:
Name:
Title:


Delek US Holdings, Inc. • 2016 Long-Term Incentive Plan • Performance-Based Restricted Stock Unit Agreement (Cash Settled) •     Page 4 of #NUM_PAGES#
Exhibit 10.9
EXHIBIT A :

Delek US Holdings, Inc.
Performance-Based Restricted Stock Unit Award Targets
1.    Target PRSUs. The target number of PRSUs that will vest for the Participant in connection with this award is _____.
2.    Maximum Shares. The maximum number of PRSUs that will vest for the Participant in connection with this award is _____.
3.    Performance Period. The “Performance Period” for this award shall begin on January 1, 2022, and end on December 31, 2024.
4.    Performance Goal. The “Performance Goal” for this award is the total shareholder return of the Company for the Performance Period ranked against the total shareholder return of companies that are included in the Comparator Group (as defined below) for the Performance Period as further described below.
5.    Definitions. For purposes of this Exhibit A, the following terms have the following meanings:
(a)    “Comparator Group” means the following companies: _____. Companies who become no longer publicly traded at any time during the Performance Period (including by reason of being acquired by another public company) shall be eliminated from the Comparator Group ab initio for the entirety of the Performance Period. Companies that become bankrupt during the Performance Period will be assigned the lowest rank in the percentiles.
(b)    “TSR Rank” means the aggregate total shareholder return on Common Stock over the Performance Period, ranked against the total shareholder return over the same period for each of the companies that comprise the Comparator Group. Total shareholder return will be calculated using a beginning price equal to the trading volume weighted average price over the period beginning 20 trading days prior to the start of the Performance Period and ending the trading day before the start of the Performance Period, and an ending price equal to the trading volume weighted average price over the period beginning 20 trading days prior to the end of the Performance Period and ending with the end of the Performance Period, and accounting for immediate reinvestment (as of the ex-dividend date) of all cash dividends and other cash distributions (excluding cash distributions resulting from share repurchases or redemptions by the Company) over this period. Following the Performance Period, the total shareholder return shall be computed for the Company and each company in the Comparator Group and each of such companies shall be ranked in accordance with this metric. The Schedule in paragraph 6 below refers to percentiles of this TSR Rank.
6.    Percentage of PRSUs Vested. Following the end of the Performance Period, the Committee will determine the extent to which the PRSUs have become vested pursuant to this award according to the following schedule:
The percentage of the Target PRSUs that will vest with TSR performance is as follows:
TSR Rank
Percentage of Target PRSUs Vested
75th Percentile or above
_____%
50th Percentile
_____%
25th Percentile
_____%
Below 25th Percentile
0%

Delek US Holdings, Inc. • 2016 Long-Term Incentive Plan • Performance-Based Restricted Stock Unit Agreement (Cash Settled) •     Page 5 of #NUM_PAGES#
Exhibit 10.9
Thus, up to _____% of the Target PRSUs may be earned if maximum performance is achieved for the Performance Goals. Vesting related to performance between the percentiles listed above will be determined by straight line interpolation. Any PRSUs that do not vest as provided above on the applicable determination date shall be forfeited. Vested PRSUs will be settled only in cash as provided in the award agreement.
7.    Adjustments Upon Change in Capitalization. In the event of any reorganization, merger, consolidation, recapitalization, reclassification, stock split, spin-offs, stock dividend or similar capital adjustment, as a result of which shares of any class shall be issued in respect of outstanding shares of Common Stock or shares of Common Stock shall be changed into a different number of shares or into another class or classes or into other property or cash, the number of Target PRSUs shall be adjusted proportionately or as otherwise appropriate to reflect such event so as to preserve (without enlarging) the value of the award hereunder, with the manner of such adjustment to be determined by the Committee in its sole discretion. This paragraph shall also apply with respect to any extraordinary dividend or other extraordinary distribution in respect of Common Stock (whether in the form of cash or other property).

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Exhibit 10.10
DELEK US HOLDINGS, INC.
2016 LONG-TERM INCENTIVE PLAN
RESTRICTED STOCK UNIT AGREEMENT
This Agreement is made as of             , 20     (the “Grant Date”) by and between Delek US Holdings, Inc., a Delaware corporation (the “Company”), and _____ (the “Participant”).
Whereas, pursuant to the Delek US Holdings, Inc. 2016 Long-Term Incentive Plan, as amended (the “Plan”), the Company desires to grant to the Participant, and the Participant desires to accept, an Award of cash-settled Restricted Stock Units with respect to shares of the Company’s common stock, $0.01 par value (the “Common Stock”), upon the terms and conditions set forth in this Agreement and the Plan. Capitalized terms used but not defined herein shall have the meanings ascribed to such terms in the Plan.
Now, therefore, the parties hereto agree as follows:
1.Award. The Company hereby grants to the Participant an Award of cash-settled Restricted Stock Units (the “RSUs”) with respect to _____ shares of Common Stock pursuant to the Plan.
2.RSUs. RSUs constitute an unfunded and unsecured promise of the Company to deliver to the Participant, subject to the satisfaction of the vesting conditions set forth in Section 3 below and the other terms and conditions of this Agreement and the Plan, a cash payment calculated by reference to that number of shares of Common Stock referenced by the RSUs. At all times the Participant shall have the rights of a general unsecured creditor of the Company with respect to the RSUs and shall not have any rights as a stockholder of the Company.
3.Vesting / Forfeiture. Except as otherwise provided herein, the Plan or any other agreement(s) between the Company and the Participant, the RSUs shall vest in full (100%) on the first anniversary of the Grant Date, subject to the Participant’s continuous employment or other service with the Company or its affiliates through each applicable vesting date. The Participant shall forfeit the unvested portion of the RSUs upon the termination of the Participant’s employment or other service with the Company or its affiliates.
4.Cash Settlement / Payment. Any vested RSUs shall be settled in cash paid to the Participant promptly following the vesting date in an amount equal to the product of (a) the number of vested RSUs and (b) the Fair Market Value of the Company’s Common Stock on the vesting date, net of any applicable withholding amounts. The Participant shall have no right to receive any shares of Common Stock upon the vesting and settlement of the RSUs.
5.Dividend Equivalents. The Participant shall be credited with dividend equivalents for any cash dividends paid to all holders of shares of Common Stock in an amount equal to the amount of dividends that would have been paid on the number of shares of Common Stock covered by the RSUs had such shares been outstanding as of the record date applicable to the cash dividend. Such payments shall be treated as a cash deferral which deferral shall be settled in cash upon vesting of the related RSUs, subject to the same terms and conditions as such RSUs.
6.Withholding / Consents. The payment of cash upon settlement of the RSUs is conditioned on the Participant’s satisfaction of any applicable withholding taxes in accordance with the Plan and any other agreement(s) between the Company and the Participant. The Participant’s rights in respect of the RSUs are conditioned on the receipt to the full satisfaction of the Company of any required consents that the Company may determine to be necessary or advisable, including, without limitation, consents to deductions from wages or other arrangements satisfactory to the Company.
7.Nontransferability. The RSUs may not be loaned, pledged, hypothecated or otherwise encumbered or subject to any lien, obligation or liability of the Participant to any party (other than the Company or an affiliate thereof), or assigned or transferred (collectively, “Transferred”) by the Participant other than by will or the laws of descent and distribution or to a beneficiary upon the death of the Participant. Any attempt by the Participant or any other person claiming against, through or under the
Restricted Stock Unit Agreement (Cash-Settled) • Delek US Holdings, Inc. • 2016 Long-Term Incentive Plan •     Page 1 of #NUM_PAGES#
Exhibit 10.10
Participant to cause the RSUs or any part of it to be Transferred in any manner and for any purpose shall be null and void and without effect upon the Company, the Participant or any other person.
8.No Issuance of Common Stock. This is a cash-settled Award. In no event will the Company be obligated to issue or deliver shares of Common Stock pursuant to this Agreement.
9.No Employment or Other Rights. Nothing contained in the Plan or this Agreement shall confer upon the Participant any right with respect to the continuation of his or her employment or other service with the Company or its affiliates or interfere in any way with the right of the Company and its affiliates at any time to terminate such employment or other service or to increase or decrease, or otherwise adjust, the other terms and conditions of the Participant’s employment or other service.
10.Provisions of the Plan . The provisions of the Plan, the terms of which are incorporated in this Agreement, shall govern if and to the extent that there are inconsistencies between those provisions and the provisions hereof; provided, that in all events this Award shall be subject to the provisions relating to vesting of the Award upon termination, change in control or other event set forth in any employment agreement, offer letter or similar document between the Company and the Participant, regardless of whether there are inconsistencies between those provisions and the provisions of the Plan or this Agreement. The Participant acknowledges receipt of a copy of the Plan prior to the execution of this Agreement.
11.Miscellaneous. This Agreement shall be binding upon and shall inure to the benefit of the parties hereto and their respective successors and permitted assigns. This Agreement shall be governed by and construed in accordance with the laws of the State of Delaware, without regard to its principles of conflicts of law. This Agreement constitutes the entire agreement between the parties with respect to the subject matter hereof and, except as otherwise provided in the Plan, may not be modified other than by written instrument executed by the parties.
IN WITNESS WHEREOF, this Agreement has been executed as of the date first above written.
DELEK US HOLDINGS, INC.

By:
Name:
Title:

PARTICIPANT:

By:
Name:
Title:

Restricted Stock Unit Agreement (Cash-Settled) • Delek US Holdings, Inc. • 2016 Long-Term Incentive Plan •     Page 2 of #NUM_PAGES#

                                        Exhibit 18.1


May 5, 2022


Board of Directors
Delek US Holdings, Inc.
7102 Commerce Way
Brentwood, Tennessee 37027


Ladies and Gentlemen:

Notes 1 and 6 of Notes to the condensed consolidated financial statements of Delek US Holdings, Inc. included in its Form 10-Q for the period ended March 31, 2022 describes a change in the method of accounting for valuing inventory held at the Tyler Refinery to the first-in, first-out (FIFO) cost method from the last-in, first-out (LIFO) cost method. There are no authoritative criteria for determining a 'preferable' inventory method based on the particular circumstances; however, we conclude that such change in the method of accounting is to an acceptable alternative method which, based on your business judgment to make this change and for the stated reasons, is preferable in your circumstances. We have not conducted an audit in accordance with the standards of the Public Company Accounting Oversight Board (United States) of any financial statements of the Company as of any date or for any period subsequent to December 31, 2021, and therefore we do not express any opinion on any financial statements of Delek US Holdings, Inc. subsequent to that date.

Very truly yours,


/s/ Ernst & Young LLP

Nashville, Tennessee
Exhibit 31.1
Certification by Chief Executive Officer pursuant to
Rule 13a-14(a) or Rule 15d-14(a) under the Securities Exchange Act of 1934,
As Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
I, Ezra Uzi Yemin, certify that:
1. I have reviewed this quarterly report on Form 10-Q of Delek US Holdings, Inc.;
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
By:/s/ Ezra Uzi Yemin
Ezra Uzi Yemin,
President and Chief Executive Officer
(Principal Executive Officer)
Dated: May 5, 2022


Exhibit 31.2
Certification by Chief Financial Officer pursuant to
Rule 13a-14(a) or Rule 15d-14(a) under the Securities Exchange Act of 1934,
As Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
I, Reuven Spiegel, certify that:
1. I have reviewed this quarterly report on Form 10-Q of Delek US Holdings, Inc.;
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
By:/s/ Reuven Spiegel
Reuven Spiegel,
Executive Vice President and Chief Financial Officer
(Principal Financial Officer)
Dated: May 5, 2022


Exhibit 32.1
Certification Pursuant to
18 U.S.C. Section 1350,
as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
In connection with the quarterly report of Delek US Holdings, Inc. (the “Company”) on Form 10-Q for the three months ended March 31, 2022, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Ezra Uzi Yemin, President and Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, and to the best of my knowledge, that:
(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
By:/s/ Ezra Uzi Yemin
Ezra Uzi Yemin,
President and Chief Executive Officer
(Principal Executive Officer)
Dated: May 5, 2022
A signed original of this written statement required by Section 906 has been provided to the Company and will be retained and furnished to the Securities and Exchange Commission or its staff upon request.


Exhibit 32.2
Certification Pursuant to
18 U.S.C. Section 1350,
as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
In connection with the quarterly report of Delek US Holdings, Inc. (the “Company”) on Form 10-Q for the three months ended March 31, 2022, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Reuven Spiegel, Executive Vice President and Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, and to the best of my knowledge, that:
(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
By:/s/ Reuven Spiegel
Reuven Spiegel,
Executive Vice President and Chief Financial Officer
(Principal Financial Officer)
Dated: May 5, 2022
A signed original of this written statement required by Section 906 has been provided to the Company and will be retained and furnished to the Securities and Exchange Commission or its staff upon request.