**Exhibit 10.1**

 

 

 

**DIRECTORS’ DEFERRED COMPENSATION PLAN I**

(Amendedand Restated effective September 4, 2008) 

 

 

 

 

 

**ARTICLE I**

**Definitions**

As used in this Plan, the following terms shall have the meanings herein specified: 

1.1 95% Withdrawal - shall have the meaning provided herein at Section 7.1. 

1.2 Business Combination - shall have the meaning provided herein at Section 1.4(c). 

1.3 Cash Unit - shall mean the entry in a Deferred Compensation Account of a credit equal to One Dollar ($1.00). 

1.4 Change in Control - shall mean the occurrence of any of the following events: 

(a) The acquisition by any individual, entity or group (within the meaning of Section 13(d)(3) or 14(d)(2) of the Exchange Act of 1934, asamended) (a “Person”) of beneficial ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act) of 20% or more of either (1) the then-outstanding shares of common stock of the Company (the “Outstanding CompanyCommon Stock”) or (2) the combined voting power of the then-outstanding voting securities of the Company entitled to vote generally in the election of directors (the “Outstanding Company Voting Securities”); *provided*,*however*, that, for purposes of this Section (a), the following acquisitions shall not constitute a Change in Control: (A) any acquisition directly from the Company, (B) any acquisition by the Company, (C) any acquisition by anyemployee benefit plan (or related trust) sponsored or maintained by the Company or any company controlled by, controlling or under common control with the Company, or (D) any acquisition by any entity pursuant to a transaction that complieswith Sections (c)(1), (c)(2) and (c)(3) of this definition; 

(b) Individuals who, as of September 6, 2001, constitute the Boardof Directors (the “Incumbent Board”) cease for any reason to constitute at least a majority of the Board of Directors; *provided*, *however*, that any individual becoming a director subsequent to the date hereof whose election,or nomination for election by the Company’s shareholders, was approved by a vote of at least a majority of the directors then comprising the Incumbent Board shall be considered as though such individual were a member of the Incumbent Board, butexcluding, for this purpose, any such individual whose initial assumption of office occurs as a result of an actual or threatened election contest with respect to the election or removal of directors or other actual or threatened solicitation ofproxies or consents by or on behalf of a Person other than the Board of Directors; 

(c) Consummation of a reorganization, merger,statutory share exchange or consolidation or similar corporate transaction involving the Company or any of its subsidiaries, a sale or other disposition of all or substantially all of the assets of the Company, or the acquisition of assets or stockof another entity by the Company or any of its subsidiaries (each, a “Business Combination”), in each case unless, following such Business Combination, (1) all or substantially all of the individuals and entities that were thebeneficial owners of the Outstanding Company Common Stock and the Outstanding Company Voting Securities immediately prior to such Business Combination beneficially own, directly or indirectly, more than 60% of the then-outstanding shares of commonstock and the combined voting power of the then-outstanding voting securities entitled to vote generally in the election of directors, as the case may be, of the corporation resulting from such Business Combination (including, without limitation, acorporation that, as a result of such transaction, owns the Company or all or substantially all of the Company’s assets 

 

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either directly or through one or more subsidiaries) in substantially the same proportions as their ownership immediately prior to such Business Combination of theOutstanding Company Common Stock and the Outstanding Company Voting Securities, as the case may be, (2) no Person (excluding any corporation resulting from such Business Combination or any employee benefit plan (or related trust) of the Companyor such corporation resulting from such Business Combination) beneficially owns, directly or indirectly, 20% or more of, respectively, the then-outstanding shares of common stock of the corporation resulting from such Business Combination or thecombined voting power of the then-outstanding voting securities of such corporation, except to the extent that such ownership existed prior to the Business Combination, and (3) at least a majority of the members of the board of directors of thecorporation resulting from such Business Combination were members of the Incumbent Board at the time of the execution of the initial agreement or of the action of the Board of Directors providing for such Business Combination; or 

(d) Approval by the shareholders of the Company of a complete liquidation or dissolution of the Company. 

1.5 Change in Control Election - shall have the meaning provided herein at Section 7.1 

1.6 Committee - shall mean the Governance Committee of the Board of Directors of Sunoco, Inc. 

1.7 Company - shall mean Sunoco, Inc., a Pennsylvania corporation. The term “Company” shall include any successor to Sunoco, Inc., any subsidiaryor affiliate which has adopted the Plan, or a corporation succeeding to the business of Sunoco, Inc., or any subsidiary or affiliate by merger, consolidation, liquidation or purchase of assets or stock or similar transaction. 

1.8 Compensation - shall mean those fees and retainers payable by the Company to a Participant in consideration for his or her service as a Director.

1.9 Deferred Compensation Account - shall mean, with respect to any Participant, the total amount of the Company’s liability for paymentof voluntary deferred compensation to the Participant under this Plan, including any accumulated interest and/or Dividend Equivalents. 

1.10Deferred Payment Election Form - shall mean and refer to the written election by a Participant, in the form prescribed by the Committee, to voluntarily defer the payment of all or a portion of such Participant’s Compensation under thisPlan pursuant to Article II hereof. 

1.11 Director - shall mean a member of the Board of Directors of Sunoco, Inc. 

1.12 Dividend Equivalent - shall mean the entry in a Deferred Compensation Account or a Restricted Deferred Compensation Account of a dividend credit withrespect to a Share Unit, each Dividend Equivalent being equal to the dividend paid from time to time on a Share. 

1.13 Incumbent Board - shallhave the meaning provided herein at Section 1.4(b). 

1.14 Interest Equivalent - shall mean the entry in a Deferred Compensation Account ofan interest credit with respect to a Cash Unit, compounded on the basis of the balance in the Participant’s Deferred Compensation Account, applying the interest factor approved by the Committee each year for such purpose. 

 

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1.15 Outstanding Company Common Stock - shall have the meaning provided herein at Section 1.4(a).

1.16 Outstanding Company Voting Securities - shall have the meaning provided herein at Section 1.4(a). 

1.17 Participant - shall mean a Director who has elected to defer the receipt of compensation or a Director who is required to defer the receipt of theRestricted Share Units in accordance with the terms of this Plan. 

1.18 Person - shall have the meaning provided herein at Section 1.4(a).

1.19 Plan - shall mean this Directors’ Deferred Compensation Plan I, as it may be amended from time to time pursuant to Articles XI andXIV, and shall be effective for deferrals of Compensation pursuant to Article III and crediting of Restricted Share Units pursuant to Article IV, for periods ending prior to January 1, 2005. 

1.20 Restricted Deferred Compensation Account - shall mean, with respect to any Participant, the total amount of the Company’s liability for payment ofRestricted Share Units to the Participant under this Plan. 

1.21 Restricted Share Unit - shall mean the entry in a Restricted DeferredCompensation Account of a credit equal to one Share that will be restricted until death, retirement or termination of Board service. 

1.22Share - shall mean a share of the Company’s authorized voting Common Stock ($1.00 par value per share) and any share or shares of stock of the Company hereafter issued or issuable in substitution or exchange for each such share.

1.23 Share Unit - shall mean the entry in a Deferred Compensation Account of a credit equal to one Share. 

**ARTICLE II**

**Voluntary Deferral of Directors’Compensation**

2.1 Election to Defer. Prior to the beginning of any calendar quarter, a Participant may elect to defer all or a portion ofthe Compensation that would otherwise be paid to the Participant in the next succeeding calendar quarter, by filing a written notice of election with the Committee on the form(s) prescribed by the Committee. Any such deferral election shall applyonly to Compensation to be earned on or after the first day of the calendar quarter following the calendar quarter in which the election is received by the Committee, but in no event will apply to Compensation to be earned in calendar quartersbeginning on or after January 1, 2005. An election to defer, made in accordance with this Article II shall be irrevocable. The deferral election form(s) also will permit the Participant to specify: 

(a) the percentage of Compensation to be deferred; 

(b) the form of deferral, being either Cash Units, Share Units, or a combination of the two and the percentage allocations of such; 

(c) the selection of a method of payment as set forth in Article III; and 

(d) the designation of a beneficiaryas set forth in Article V. 

Without any further action by Participant, the choices specified in the Participant’s Deferred Payment Election Formregarding the percentage of Compensation deferred, the 

 

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form of deferral, the designation of a beneficiary, and the method of payment shall each continue and be applied from calendar quarter to calendar quarter to amountsyet to be deferred. Until further express written notification, on a form prescribed by the Committee, to the contrary, these choices shall continue to be applied to amounts to be credited to such Deferred Compensation Account balance prospectively.

2.2 Change in Method of Payment Following Commencement of Distribution or Payment. After payment or distribution of amounts credited to theParticipant’s Deferred Compensation Account has commenced, the Participant may not change the period of time for which such amounts are payable. However, the Participant who was not a Director at any time after December 31, 2006, mayconvert installment payments to a lump sum distribution subject to a penalty equal to a five percent (5%) reduction in the balance of the Participant’s Deferred Compensation Account, which shall be forfeited to the Company. 

2.3 Amount of Deferral The amount of Compensation to be deferred shall be designated by the Participant as a percentage of the Director’s Compensationin multiples of five percent (5%) but shall not be less than ten percent (10%). 

2.4 Time of Election Except as otherwise determined bythe Committee in its sole discretion, an election to defer must be filed and received by the Committee by the end of the calendar quarter preceding the calendar quarter in which the Compensation is to be earned. A new Director may also elect todefer Compensation prior to the commencement of his or her term in office. 

**ARTICLE III**

**Voluntary Deferred Compensation Accounts**

3.1 Creation of Voluntary Deferred CompensationAccounts. Compensation deferred hereunder shall be credited to a Deferred Compensation Account established by the Company for each Participant. The Participant must elect to convert the deferred compensation to either Cash Units or Share Units,which shall be credited to a Participant’s Deferred Compensation Account as set forth in the Plan. 

3.2 Crediting Share Units. Share Unitsshall be credited to a Participant’s Deferred Compensation Account at the time the Compensation would otherwise have been paid had no election to defer been made. The number of Share Units to be credited to the Deferred Compensation Accountshall be determined by dividing the Compensation by the average closing price for Shares as published in the Wall Street Journal under the caption “New York Stock Exchange Composite Transactions” for the ten (10) day period prior tothe day on which the Compensation would otherwise have been paid. Any fractional Share Units shall also be credited to a Participant’s Deferred Compensation Account. The number of Share Units in a Deferred Compensation Account shall beappropriately adjusted by the Committee in the event of changes in the Company’s outstanding common stock by reason of a stock dividend or distribution, recapitalization, merger, consolidation, split-up, combination, exchange of shares or thelike, and such adjustments shall be conclusive. Share Units shall not entitle any person to the rights of a stockholder. 

3.3 Crediting CashUnits. Cash Units shall be credited to a Participant’s Deferred Compensation Account at the time Compensation would otherwise have been paid had no election to defer been made. 

 

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3.4 Crediting Dividend Equivalents. For Share Units, the Company shall credit the Participant’sDeferred Compensation Account with Dividend Equivalents being equal to the dividends declared on the Company’s Shares. The crediting shall occur as of the date on which said dividends are paid. The number of Share Units to be credited to theDeferred Compensation Account shall be calculated by dividing the Dividend Equivalents by the average closing price for Shares as published in the Wall Street Journal (under the caption “New York Stock Exchange Composite Transactions”) orany other publication selected by the Committee for the period of ten (10) trading days prior to the day on which the dividends are paid on the Company’s Shares. Any fractional Share Units shall also be credited to a Participant’sDeferred Compensation Account. 

3.5 Crediting Interest Equivalents. For Cash Units credited to their Deferred Compensation Accounts, theCompany shall credit the Participant’s Deferred Compensation Account on a quarterly basis with an Interest Equivalent. 

3.6 Share UnitConversion. Immediately upon termination of Board service, and so prior to the commencement of any payout or distribution of any amounts hereunder, a Participant may make a one-time election to convert to Cash Units all or a portion of thebalance of Share Units in such Participant’s Deferred Compensation Account. Any Share Units so converted to Cash Units as a result of this one-time conversion election shall be valued at the average closing price for Shares as published in theWall Street Journal (under the caption “New York Stock Exchange Composite Transactions”) or any other publication selected by the Committee for the ten (10) day period immediately prior to such one-time conversion election.

3.7 Time of Payment. 

(a)*Benefit Commencement Date.* All payments of a Participant’s Deferred Compensation Account not in pay status on January 1, 2005 shall be on the first day of the calendar year following termination of Board service. Upon the death of aDirector or former Director, prior to the final payment of all amounts credited to his or her Deferred Compensation Account, the balance of the Deferred Compensation Account shall be paid in accordance with Article V. Provided, however, in no eventshall any payment or distribution be made within six (6) months of the Compensation being earned. 

(b) *2007**TransitionElection*. Notwithstanding Section 3.7(a), pursuant to Section 3.02 of IRS Notice 2006-79, as modified by Section 3.01(B)(1) of IRS Notice 2007-86, a Participant serving as a Director on or after December 6, 2007 who willattain age 72 on or before December 31, 2010, may elect, with respect to amounts in the Participant’s Deferred Compensation Account that are not in pay status and that are not otherwise payable in 2007, to receive payment of such amountson June 25, 2008, by filing a written notice of election with the Committee on the forms(s) prescribed by the Committee on or before December 14, 2007. Notwithstanding the second sentence of Section 3.8, with respect to amounts to bedistributed on June 25, 2008 pursuant to this transition election, (1) a Participant may elect, by filing a written notice of election with the Committee on the form(s) prescribed by the Committee on or before December 14, 2007, tohave all or any portion of Share Units converted to Cash Units on January 2, 2008, with Share Units so converted valued at the average closing price for Shares as published in the Wall Street Journal (under the caption “New York StockExchange Composite Transactions”) or any other publication selected by the Committee for the period of ten (10) trading day immediately prior to January 1, 2008, and (2) Share Units not so converted shall be valued at the averageclosing price for Shares as published in the Wall Street Journal (under the 

 

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caption “New York Stock Exchange Composite Transactions”) or any other publication selected by the Committee for the period of ten (10) trading daysimmediately prior to June 25, 2008. 

(c) *2008**Transition Election.*Notwithstanding Section 3.7(a), pursuant toSection 3.02 of IRS Notice 2006-79, as modified by Section 3.01(B)(1) of IRS Notice 2007-86, a Participant serving as a Director on or after September 4, 2008, may elect, with respect to amounts in the Participant’s Deferred CompensationAccount that are not otherwise payable in 2008, to receive payment of such amounts on June 25, 2009, by filing a written notice of election with the Committee on the form(s) prescribed by the Committee on or before December 12, 2008. Notwithstandingthe second sentence of Section 3.8, with respect to amounts to be distributed on June 25, 2009 pursuant to this transition election, (1) a Participant may elect, by filing a written notice of election with the Committee on the form(s) prescribed bythe Committee on or before December 12, 2008, to have all or any portion of Share Units converted to Cash Units on January 2, 2009, with Share Units so converted valued at the average closing price for Shares as published in the Wall Street Journal(under the caption “New York Stock Exchange Composite Transactions”) or any other publication selected by the Committee for the period of ten (10) trading days immediately prior to January 1, 2009, and (2) Share Units not so convertedshall be valued at the average closing price for Shares as published in the Wall Street Journal (under the caption “New York Stock Exchange Composite Transactions”) or any other publication selected by the Committee for the period of ten(10) trading days immediately prior to June 25, 2009. 

3.8 Method of Payment. For all payments not in pay status on January 1, 2005, aParticipant in this part of the Plan shall receive a lump sum payment in cash of all deferred compensation credited to such Participant’s Deferred Compensation Account. Share Units credited to the Participant’s Deferred CompensationAccount shall be valued at the average closing price for Shares as published in the Wall Street Journal (under the caption “New York Stock Exchange Composite Transactions”) or any other publication selected by the Committee for the periodof ten (10) trading days immediately prior to each new calendar year. 

**ARTICLE IV**

**Restricted Deferred Compensation Accounts**

4.1 Creation of Restricted Deferred CompensationAccounts. Compensation deferred under this Article IV shall be credited to a Restricted Deferred Compensation Account established by the Company for each Participant. The Restricted Deferred Compensation Accounts will be initialized as ofFebruary 15, 1996 by transferring to the Plan the present value of the accrued benefits of each Participant in the Non-Employee Directors’ Retirement Plan. The present value of these accrued benefits will then be converted into RestrictedShare Units. The number of Restricted Share Units to be credited to the Restricted Deferred Compensation Account of each Participant will be determined by using the average closing price for Shares as published in the Wall Street Journal (under thecaption “New York Stock Exchange Composite Transactions”) or any other publication selected by the Committee for the ten (10) business days prior to February 15, 1996. Payout of these Restricted Share Units that has not commencedprior to January 1, 2005 shall commence in accordance with the provisions of Section 4.5(a) of the Plan. 

 

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4.2 Crediting Share Units. If the Committee elects to do so, for each year ending before January 1,2005, in conjunction with either the Participant’s election or re-election to the Board, a yearly dollar amount (“Yearly Credit”) will be credited to a Participant’s Restricted Deferred Compensation Account in the form ofRestricted Share Units. The number of Restricted Share Units credited to a Participant’s Restricted Deferred Compensation Account shall be determined by dividing the Yearly Credit by the average closing price for Shares as published in the WallStreet Journal (under the caption “New York Stock Exchange Composite Transactions”) or any other publication selected by the Committee for the ten (10) day period prior to the Company’s annual meeting. Any fractional RestrictedShare Units shall also be credited to a Participant’s Restricted Deferred Compensation Account. The number of Restricted Share Units in a Restricted Deferred Compensation Account shall be appropriately adjusted by the Committee in the event ofchanges in the Company’s outstanding common stock by reason of a stock dividend or distribution, recapitalization, merger, consolidation, split-up, combination, exchange of shares or the like, and such adjustments shall be conclusive.Restricted Share Units shall not entitle any person to the rights of a stockholder. 

4.3 Crediting Dividend Equivalents. The Company shallcredit the Participant’s Restricted Deferred Compensation Account with Dividend Equivalents being equal to the dividends declared on the Company’s Shares. The crediting shall occur as of the date on which said dividends are paid. Thenumber of Restricted Share Units to be credited to the Restricted Deferred Compensation Account shall be calculated by dividing the Dividend Equivalents by the average closing price for Shares as published in the Wall Street Journal (under thecaption “New York Stock Exchange Composite Transactions”) or any other publication selected by the Committee for the period of ten (10) trading days prior to the day on which the dividends are paid on the Company’s Shares. Anyfractional Restricted Share Units shall also be credited to a Participant’s Restricted Deferred Compensation Account. 

4.4 Restricted ShareUnit Conversion. Immediately upon termination of Board service, and so prior to the commencement of any payout or distribution of any amounts hereunder, a Participant may make a one-time election to convert to Cash Units all or a portion of thebalance of Restricted Share Units in such Participant’s Restricted Deferred Compensation Account. Any Restricted Share Units so converted to Cash Units as a result of this one-time conversion election shall be valued at the average closingprice for Shares as published in the Wall Street Journal (under the caption “New York Stock Exchange Composite Transactions”) or any other publication selected by the Committee for the period of ten (10) trading days immediately priorto such one-time conversion election. 

4.5 Time of Payment. 

(a) *Benefit Commencement Date for Restricted Deferred Compensation Account.* All payments of a Participant’s Restricted DeferredCompensation Account not in pay status on January 1, 2005 shall be made on the first day of the calendar year following termination of Board service. Upon the death of a Director or former Director, prior to the final payment of all amountscredited to his or her Deferred Compensation Account, the balance of the Restricted Deferred Compensation Account shall be paid in accordance with Article V. Provided, however, in no event shall any payment or distribution be made within six(6) months of the Compensation being earned. 

(b) *2007 Transition Election*. Notwithstanding Section 4.5(a), pursuantto Section 3.02 of IRS Notice 2006-79, as modified by Section 3.01(B)(1) of IRS Notice 2007-86, a 

 

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Participant serving as a Director on or after December 6, 2007 who will attain age 72 on or before December 31, 2010, may elect, with respect to amounts inthe Participant’s Restricted Deferred Compensation Account that are not in pay status and that are not otherwise payable in 2007, to receive payment of such amounts on June 25, 2008, by filing a written notice of election with theCommittee on the form(s) prescribed by the Committee on or before December 14, 2007. Notwithstanding the second sentence of Section 4.6, with respect to amounts to be distributed on June 25, 2008 pursuant to this transition election,(1) a Participant may elect, by filing a written notice of election with the Committee on the form(s) prescribed by the Committee on or before December 14, 2007, to have all or any portion of Share Units converted to Cash Units onJanuary 2, 2008, with Share Units so converted valued at the average closing price for Shares as published in the Wall Street Journal (under the caption “New York Stock Exchange Composite Transactions”) or any publication selected bythe Committee for the period of ten (10) trading days immediately prior to January 1, 2008, and (2) Share Units not so converted shall be valued at the average closing price for Shares as published in the Wall Street Journal (underthe caption “New York Stock Exchange Composite Transactions”) or any other publication selected by the Committee for the period of ten (10) trading days immediately prior to June 25, 2008. 

(c) *2008 Transition Election.*Notwithstanding Section 4.5(a), pursuant to Section 3.02 of IRS Notice 2006-79, as modified by Section3.01(B)(1) of IRS Notice 2007-86, a Participant serving as a Director on or after September 4, 2008, may elect, with respect to amounts in the Participant’s Restricted Deferred Compensation Account that are not otherwise payable in 2008, toreceive payment of such amounts on June 25, 2009, by filing a written notice of election with the Committee on the form(s) prescribed by the Committee on or before December 12, 2008. Notwithstanding the second sentence of Section 4.6, with respectto amounts to be distributed on June 25, 2009 pursuant to this transition election, (1) a Participant may elect, by filing a written notice of election with the Committee on the form(s) prescribed by the Committee on or before December 12, 2008, tohave all or any portion of Share Units converted to Cash Units on January 2, 2009, with Share Units so converted valued at the average closing price for Shares as published in the Wall Street Journal (under the caption “New York Stock ExchangeComposite Transactions”) or any other publication selected by the Committee for the period of ten (10) trading days immediately prior to January 1, 2009, and (2) Share Units not so converted shall be valued at the average closing price forShares as published in the Wall Street Journal (under the caption “New York Stock Exchange Composite Transactions”) or any other publication selected by the Committee for the period of ten (10) trading days immediately prior to June 25,2009. 

4.6 Method of Payment. For all payments not in pay status on January 1, 2005, a Participant shall receive a lump sum payment incash of all deferred compensation credited to such Participant’s Restricted Deferred Compensation Account. Share Units credited to the Participant’s Restricted Deferred Compensation Account shall be valued at the average closing price forShares as published in the Wall Street Journal (under the caption “New York Stock Exchange Composite Transactions”) or any other publication selected by the Committee for the period of ten (10) trading days immediately prior to eachnew calendar year. 

4.7 Change in Method of Payment Following Commencement of Distribution or Payment. After payment or distribution of amountscredited to the Participant’s Restricted Deferred Compensation Account has commenced, the Participant may not change the period of time for which such amounts are payable. However, a Participant who was not a Director at any 

 

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time after December 31, 2006, may convert installment payments to a lump sum distribution subject to a penalty equal to a five percent (5%) reduction in thebalance of the Participant’s Restricted Deferred Compensation Account, which shall be forfeited to the Company. 

**ARTICLE V**

**Designation of Beneficiaries**

5.1 Designation ofBeneficiary. The Participant shall name one or more beneficiaries and contingent beneficiaries to receive any payments due Participant at the time of death. No designation of beneficiaries shall be valid unless in writing signed by theParticipant, dated and filed with the Committee during the lifetime of such Participant. A subsequent beneficiary designation will cancel all beneficiary designations signed and filed earlier under this Plan, and such new beneficiary designationshall be applied to all amounts previously credited to the Participant’s Deferred Compensation Account (or Restricted Deferred Compensation Account, as the case may be), as well as to any amounts to be credited to such Participant’sDeferred Compensation Account (or Restricted Deferred Compensation Account, as the case may be), prospectively. In case of a failure of designation, or the death of the designated beneficiary without a designated successor, distribution shall bepaid in one lump sum to the estate of the Participant. 

5.2 Spouse’s Interest. The interest in any amounts hereunder of a spouse who haspredeceased the Participant shall automatically pass to the Participant and shall not be transferable by such spouse in any manner, including but not limited to such spouse’s will, nor shall such interest pass under the laws of intestatesuccession. 

5.3 Survivor Benefits. Upon the Participant’s death, any balances in the Participant’s Deferred Compensation Account andRestricted Deferred Compensation Account shall be paid in a lump sum on the later of the first day of the calendar year following the Participant’s death or the date that is thirty (30) days after the Participant’s death. 

**ARTICLE VI**

**Source of Payments**

All payments of deferred compensation shall be paid in cash from the general funds of the Company and the Company shall be under no obligation to segregate anyassets in connection with the maintenance of a Deferred Compensation Account or Restricted Deferred Compensation Account, nor shall anything contained in this Plan nor any action taken pursuant to the Plan create or be construed to create a trust ofany kind, or a fiduciary relationship between the Company and Participant. Title to the beneficial ownership of any assets, whether cash or investments, which the Company may designate to pay the amount credited to the Deferred Compensation Accountor a Restricted Deferred Compensation Account shall at all times remain in the Company and Participant shall not have any property interest whatsoever in any specific assets of the Company. Participant’s interest in the Deferred CompensationAccount or a Restricted Deferred Compensation Account shall be limited to the right to receive payments pursuant to the terms of this Plan and such rights to receive shall be no greater than the right of any other unsecured general creditor of theCompany. 

 

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**ARTICLE VII**

**Change in Control**

7.1 Effect of Change in Control on Payment. 

(a) *Participants Not a Director After December 31, 2006*. In the case of a Participant who was not a Director at any time after December 31,2006, anything to the contrary in this Plan notwithstanding, at any time such Participant may make an election (a “Change in Control Election”) to receive, in a single lump sum payment, upon the occurrence of a Change in Control, thebalance of his or her Deferred Compensation Account and Restricted Deferred Compensation Account, as of the valuation date immediately preceding the Change in Control. Any Change in Control Election or revocation of an existing Change in ControlElection shall be null and void if a Change in Control occurs within 12 months after it is made, and the Participant’s most recent preceding Change in Control Election, if timely made and not revoked at least 12 months before the Change inControl, shall remain in force. Each such election or revocation shall be in writing and in conformity with such rules as may be prescribed by the Committee. If no Change in Control Election is in force upon the occurrence of a Change in Control,from the date of such Change in Control and for twelve (12) months thereafter, each such Participant, whether or not he or she is still an employee of the Company, shall have the right to withdraw, in a single lump-sum cash payment, an amount equalto ninety-five percent (95%) of the balance of each of his or her Deferred Compensation Account and Restricted Deferred Compensation Account (a “95% Withdrawal”), as of the valuation date immediately preceding the date of withdrawal;provided, however, that if this option is exercised, such Participant will forfeit to the Company the remaining five percent (5%) of the balance of each such account (as of the valuation date immediately preceding the date of withdrawal) from whichthe funds are withdrawn as a penalty. Payments pursuant to a 95% Withdrawal shall be made as soon as practicable, but no later than thirty (30) days after the Participant notifies the Committee in writing that he/she is exercising his/her right toundertake a 95% Withdrawal. 

(b) *Participants Serving as Directors after December 31, 2006*. In the case of a Participant whowas a Director at any time after December 31, 2006, anything to the contrary in this Plan notwithstanding, at any time prior to the calendar year in which services are performed to which Compensation is attributable, such Participant may make anelection (a “Change in Control Election”) to receive, in a single lump sum payment, upon the occurrence of a Change in Control (provided that the Change in Control is also a change in control for purposes of IRC Section 409A, and theregulations issued thereunder), the balance of his or her Deferred Compensation Account and Restricted Deferred Compensation Account attributable to such Compensation, determined as of the valuation date immediately preceding the Change in Control.

7.2 Amendment on or after Change in Control. On or after a Change in Control, or before, but in connection with, a Change in Control, noaction, including by way of example and not of limitation, the amendment, suspension or termination of the Plan, shall be taken which would adversely affect the rights of any Participant or the operation of this Article VII with respect to thebalance in the Participant’s Accounts immediately before such action. 

7.3 Attorney’s Fees. The Company shall pay all legal fees andrelated expenses incurred by or with respect to a Participant during his lifetime or within ten (10) years after his death in 

 

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seeking to obtain or enforce any payment, benefit or right such Participant may be entitled to under the Plan after a Change in Control. Reimbursement shall be made onor before the close of the calendar year following the calendar year in which the expense was incurred. The amount of expenses eligible for reimbursement under this provision in one calendar year may not affect the amount of expenses eligible forreimbursement under this provision in any other calendar year. The Participant (or the Participant’s representative) shall reimburse the Company for such fees and expenses at such time as a court of competent jurisdiction, or anotherindependent third party having similar authority, determines that the Participant’s (or the Participant’s representative’s) claim was frivolously brought without reasonable expectation of success on the merits thereof. For purposes ofIRC Section 409A, this Section 7.3 shall be treated as a plan providing for reimbursement of expenses within the meaning of Treasury Regulation Section 1.409A-1(c)(2)(i)(E), and shall be separate from the remainder of the Plan.

**ARTICLE VIII**

**Nonalienation of Benefits**

Participant shall not have the right to sell, assign, transfer or otherwise convey or encumber in whole or in part the right to receive anypayment under this Plan except in accordance with Article V. 

**ARTICLE IX**

**Acceptance of Terms**

The terms and conditions of this Plan shall be binding upon the heirs,beneficiaries and other successors in interest of Participant to the same extent that said terms and conditions are binding upon the Participant. 

**ARTICLE X**

**Administration of the Plan**

The Plan shall be administered by the Committee which may make such rules and regulations and establish such procedures for the administration of this Plan as it deems appropriate. In the event of any dispute or disagreements as to theinterpretation of this Plan or of any rule, regulation or procedure or as to any questioned right or obligation arising from or related to this Plan, the decision of the Committee shall be final and binding upon all persons. 

**ARTICLE XI**

**Termination and Amendment**

The Plan may be terminated at any time by the Board of Directors of Sunoco, Inc. and may be amended at any time by the Committee provided, however, that no suchamendment or termination shall adversely affect the rights of Participants or their beneficiaries with respect to amounts credited to Deferred Compensation Accounts or Restricted Deferred Compensation Accounts prior to such amendment or termination,without the written consent of the Participant. 

 

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**ARTICLE XII**

**Construction**

In the case any one or more of the provisions contained in this Plan shall be invalid, illegal or unenforceable in anyrespect the remaining provisions shall be construed in order to effectuate the purposes hereof and the validity, legality and enforceability of the remaining provisions contained herein shall not in any way be affected or impaired thereby.

**ARTICLE XIII**

**Governing Law**

This Plan shall be construed in accordance with and governed by the laws of the Commonwealth of Pennsylvania. 

**ARTICLE XIV**

**Cessation of Deferrals of Compensation andCrediting of Restricted Share under the Plan Effective January 1, 2005**

Notwithstanding any other provision of the Plan, no Director mayelect to defer any portion of his or her Compensation payable by the Company to his or her Deferred Compensation Account after December 31, 2004 pursuant to Article III of the Plan, and no amounts may be credited by the Committee to aDirector’s Restricted Deferred Compensation Account under Article IV of the Plan after December 31, 2004. It is intended that all amounts deferred by or with respect to a Director after December 31, 2004 will be pursuant to theDirectors’ Deferred Compensation Plan II. It is further intended that with respect to all Participants who were not Directors at any time after December 31, 2006, all amounts credited to such Participants’ Deferred CompensationAccounts and Restricted Deferred Compensation Accounts under the Plan made before January 1, 2005 (including Dividend Equivalents and Interest Equivalents credited with respect to such deferrals) not be subject to IRC Section 409A, and no actionshall be taken that would constitute a material modification to a benefit or right under the Plan as existing on October 3, 2004 with respect to such Participants, as set forth under Treasury Regulation 1.409A-6(a)(4), or such other guidance as maybe applicable under IRC Section 409A. 

**ARTICLE XV**

**Amounts Taxable under IRC Section 409A**

Upon determination that any amounts deferred under the Plan are included in the grossincome of a Participant pursuant to IRC Section 409A, as amended, and the regulations issued thereunder, such amounts shall be distributed to the Participant. 

 

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