Document:

Form of Stock Option Agreement

 Exhibit 10.6 
 [Month, Year] Award 
 STOCK OPTION AGREEMENT 

Under the  
 SUNOCO, INC. LONG-TERM PERFORMANCE ENHANCEMENT PLAN III 
 (for
Awards On or After March 1, 2012) 
 This Stock Option Agreement (the “Agreement”) entered into as of
                    (the “Agreement Date”), by and between Sunoco, Inc. (“Sunoco”) and
                    , who is an employee of Sunoco or one of its Affiliates (the “Participant”); 

W I T N E S S E T H: 

WHEREAS, the Sunoco, Inc. Long-Term Performance Enhancement Plan III (the “Plan”) is administered by a Committee (the
“Committee”) appointed by Sunoco’s Board of Directors, and the Committee has determined to grant to the Participant, pursuant to the terms and conditions of the Plan, an award (the “Award”) of an option to purchase shares of
common stock of Sunoco; and 
 WHEREAS, the Participant has determined to accept such Award. 

NOW, THEREFORE, Sunoco and the Participant each intending to be legally bound hereby, agree as follows: 

ARTICLE I 

OPTION TO PURCHASE COMMON STOCK 
  

	1.1	Identifying Provisions. For purposes of this Agreement, the following terms shall have the following respective meanings: 

 

			
	 (a)    Participant:
	  	  

		
	 (b)    Grant Date:
	  	  

		
	 (c)    Shares Subject To Option:
	  	  

		
	 (d)    Exercise Price (per share):
	  	  

		
	 (e)    Earliest Vesting and Exercise Date:
	  	  

 Any initially capitalized terms and phrases used in this Agreement but not otherwise defined herein,
shall have the respective meanings ascribed to them in the Plan. 
  

	1.2	 Award of Stock Option. Subject to the terms and conditions of the Plan and this Agreement, the Participant is hereby granted an option (the
“Stock Option”) to purchase 

	 	
up to the number of Shares Subject To Option of Sunoco’s common stock (the “Common Stock”), at the Exercise Price set forth herein at Section 1.1. The Stock Option is not
intended to qualify as an “incentive stock option” under Section 422 of the Internal Revenue Code of 1986, as amended. 

  

	1.3	Exercisability. Subject to the Participant’s employment with the Company through the applicable vesting date (except as otherwise provided in
Section 1.6), the Stock Option shall become exercisable in whole or in part with respect to all of the shares of Common Stock subject thereto [insert vesting/exercisability schedule – not before the first anniversary of the Grant Date].
The Stock Option shall remain exercisable for the exercise period following the Employment Termination Date as set forth in Section 1.6. 

  

	1.4	Term. The term of the Stock Option shall commence on the Grant Date and expire on the tenth anniversary of the Grant Date, unless the Stock Option shall have
sooner been terminated in accordance with Section 1.6 (the earlier of the tenth anniversary of the Grant Date and the date on which the Stock Option terminates in accordance with Section 1.6, the “Expiration Date”). The
Stock Option shall not be exercisable, either in whole or in part, on or after the Expiration Date. 

  

	1.5	Method of Exercising Stock Option.  

  

	 	(a)	The Stock Option may be exercised from time to time in whole or in part, by written notice delivered to and received by Sunoco prior to the Expiration Date, so long as
the Participant is in compliance with the Company’s insider trading policy and the pre-clearance process. This notice must: 

  

	 	(1)	be signed by the Participant; 

  

	 	(2)	state the Participant’s election to exercise the Stock Option; 

  

	 	(3)	specify the number of whole shares of Common Stock with respect to which the Stock Option is being exercised; 

 

	 	(4)	be accompanied by a check payable to Sunoco, in the amount of the full Exercise Price for the number of shares purchased. Alternatively, the Participant may pay all or
a portion of the Exercise Price by: 

  

	 	(i)	delivering to Sunoco shares of previously owned Common Stock having an aggregate Fair Market Value (valued as of the date prior to exercise) equal to the exercise
price, in which event, the stock certificates evidencing the shares so to be used shall accompany the notice of exercise and shall be duly endorsed or accompanied by duly executed stock powers to transfer the same to Sunoco; provided,
however, any use of Company Common Stock in accordance with this provision must be in compliance with the applicable accounting rules; 

  

	 	(ii)	 by authorizing a third party to sell a sufficient portion of the shares of Common Stock acquired upon exercise of the Stock Option and

  
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remit to Sunoco a sufficient portion of the sale proceeds to pay the entire Exercise Price and tax withholding resulting from such exercise. 

 

	 	(b)	As soon as practicable after Sunoco receives such notice and payment, and following receipt from the Participant of payment for any taxes which Sunoco is required by
law to withhold by reason of such exercise, Sunoco will deliver to the Participant either: 

  

	 	(1)	a certificate or certificates for the shares of Stock so purchased; or 

  

	 	(2)	other evidence of the appropriate registration of such shares on Sunoco’s books and records. 

 

	1.6	Termination of Employment. 

  

	 	(a)	Retirement, Permanent Disability, or Death. Upon termination of the Participant’s employment by reason of retirement or permanent disability (as
determined by the Committee) or death, (1) the unvested portion of the Stock Option shall terminate immediately, and (2) the Participant (or in the case of death, the Participant’s estate, or any person who acquires the right to
exercise the Stock Option by bequest or inheritance or otherwise by reason of Participant’s death) may exercise the vested portion of the Stock Option until the tenth anniversary of the Grant Date. 

 

	 	(b)	Qualifying Termination. Upon the occurrence of a Qualifying Termination, the unvested portion of the Stock Option immediately shall vest and any
unexercised portion of the Stock Option shall remain exercisable until the earlier of (1) the first anniversary of the Employment Termination Date, and (2) the tenth anniversary of the Grant Date. 

 

	 	(c)	Termination for Just Cause. Upon termination of the Participant’s employment by the Company for Just Cause, the Stock Option shall terminate
immediately. 

  

	 	(d)	Termination for Other Reasons. Except as provided under Section 1.6(a), (b) and (c) above, or except as otherwise determined by the
Committee, upon termination of the Participant’s employment: 

  

	 	(1)	the unvested portion of the Stock Option shall terminate immediately; and 

  

	 	(2)	the vested portion of the Stock Option shall terminate upon the earlier of (A) the expiration of ninety (90) calendar days following the occurrence of the
Participant’s Employment Termination Date, and (B) the tenth anniversary of the Grant Date. 

  
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 ARTICLE II 
 GENERAL PROVISIONS 
  

	2.1	Effect of Plan; Construction. The entire text of the Plan is expressly incorporated herein by this reference and so forms a part of this Agreement. In the event
of any inconsistency or discrepancy between the provisions of the Stock Option award covered by this Agreement and the terms and conditions of the Plan under which the Stock Option is granted, the provisions in the Plan shall govern and prevail. The
Stock Option and this Agreement are each subject in all respects to, and Sunoco and the Participant each hereby agree to be bound by, all of the terms and conditions of the Plan, as the same may have been amended from time to time in accordance with
its terms; provided, however, that no such amendment shall deprive the Participant, without such Participant’s consent, of the Stock Option or any rights hereunder. 

 

	2.2	Tax Withholding. All distributions under this Agreement are subject to withholding of all applicable taxes. Upon the exercise of the Stock Option, the
Participant shall remit an amount sufficient to satisfy any federal, state and/or local withholding tax requirements prior to the delivery of any certificate or certificates for such shares. At the election of the Participant, and subject to such
rules as may be established by the Committee, such withholding obligations may be satisfied through the surrender of shares of Common Stock which the Participant already owns, or to which the Participant is otherwise entitled under the Plan, having
a value as of the date of exercise sufficient to satisfy the applicable tax obligation. 

  

	2.3	Administration. Pursuant to the Plan, the Committee is vested with conclusive authority to interpret and construe the Plan, to adopt rules and regulations for
carrying out the Plan, and to make determinations with respect to all matters relating to this Agreement, the Plan and awards made pursuant thereto. The authority to manage and control the operation and administration of this Agreement shall be
likewise vested in the Committee, and the Committee shall have all powers with respect to this Agreement as it has with respect to the Plan. Any interpretation of this Agreement by the Committee, and any decision made by the Committee with respect
to this Agreement, shall be final and binding. 

  

	2.4	Amendment. This Agreement shall not be amended or modified except by an instrument in writing executed by both parties to this Agreement. No consent of any other
person shall be required in order to amend or modify this Agreement. 

  

	2.5	Captions. The captions at the beginning of each of the numbered Sections and Articles herein are for reference purposes only and will have no legal force or
effect. Such captions will not be considered a part of this Agreement for purposes of interpreting, construing or applying this Agreement and will not define, limit, extend, explain or describe the scope or extent of this Agreement or any of its
terms and conditions. 

  

	2.6	Governing Law. The validity, construction, interpretation and effect of this instrument shall be governed exclusively by, and determined in accordance with the
law of the Commonwealth of Pennsylvania (without giving effect to the conflicts of law principles thereof), except to the extent pre-empted by federal law, which shall govern. 

  
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	2.7	Notices. All notices, requests and demands to or upon the respective parties hereto to be effective shall be in writing, by facsimile, by overnight courier or by
registered or certified mail, postage prepaid and return receipt requested. Notices to Sunoco shall be deemed to have been duly given or made upon actual receipt by Sunoco. Such communications shall be addressed and directed to the parties listed
below (except where this Agreement expressly provides that it be directed to another) as follows, or to such other address or recipient for a party as may be hereafter notified by such party hereunder: 

 

			
	 (a)    if to Sunoco:
	  	SUNOCO, INC.,
		  	Compensation Committee of the Board of Directors
		  	1818 Market Street, Ste. 1500
		  	Philadelphia, Pennsylvania, 19103-3717
		  	Attention: Corporate Secretary
		
	 (b)    if to the Participant:
	  	to the address for Participant as it appears on Sunoco’s records.

  

	2.8	Severability. If any provision hereof is found by a court of competent jurisdiction to be prohibited or unenforceable, it shall, as to such jurisdiction, be
ineffective only to the extent of such prohibition or unenforceability, and such prohibition or unenforceability shall not invalidate the balance of such provision to the extent it is not prohibited or unenforceable, nor invalidate the other
provisions hereof. 

  

	2.9	Entire Agreement. This Agreement constitutes the entire understanding and supersedes any and all other agreements, oral or written, between the parties hereto,
in respect of the subject matter of this Agreement and embodies the entire understanding of the parties with respect to the subject matter hereof. 

  

	2.10	Forfeiture.  

  

	 	(a)	Notwithstanding any other provision of the Plan or this Agreement, any shares of Common Stock or cash payments received in respect of this Agreement shall be subject to
the provisions of Article VI “Forfeiture,” of the Plan. The Participant hereby acknowledges that such shares of Common Stock or cash payments shall be subject to the provisions of Article VI of the Plan and agrees to be bound thereby and
to make any payments to Sunoco that may be required thereunder. 

  

	 	(b)	The Common Stock or cash payments received under this Agreement constitute incentive compensation. The Participant agrees that any Common Stock or cash payments
received with respect to this Agreement will also be subject to any clawback/forfeiture provisions required by any the law, in the future, applicable to the Company, including, without limitation, the Dodd-Frank Wall Street Reform and Consumer
Protection Act and/or any applicable regulations. 

 IN WITNESS WHEREOF, the parties hereto, intending to be
legally bound hereby, have executed this Agreement as of the day first above written. 

  
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	SUNOCO, INC.
		
	By:	 	  

		 	for the Compensation Committee of the
Board of Directors
		
	By:	 	  

		 	Participant

  
 6Letter Agreement with Brian P. MacDonald

 Exhibit 10.7 
  

			
	

	  	
		  	Sunoco, Inc.
		  	1818 Market Street Ste 1500
		  	Philadelphia, PA 19103-3687

 March 1, 2012 
 Mr. Brian P. MacDonald 
 Sunoco, Inc. 

1818 Market Street, Suite 1500 
 Philadelphia, PA
19103 
 Dear Brian: 

Contained herein are the specifics of the compensation arrangements between you and Sunoco, Inc. (“Sunoco”) in connection with
your promotion to Chief Executive Officer (“CEO”) and President of Sunoco on March 1, 2012 (the “Promotion Date”) and your election to the Board of Directors of Sunoco (the “Sunoco Board”). As CEO you will report
directly to the Sunoco Board and have all of the customary authorities, duties and responsibilities that accompany being the CEO and President of a public company. 
 Compensation 
 As of the Promotion Date, your annual rate of salary
will be $1,000,000 (“Salary”) and, for years after 2012, your target annual bonus under Sunoco’s annual bonus plan will be 145% of your Salary, for total annualized target cash compensation of $2,450,000. For 2012, your target annual
bonus will be $1,307,500, taking into account your annual rate of salary and target bonus percentage described in the preceding sentence for the portion of 2012 on and following the Promotion Date, and your annual rate of salary ($700,000) and your
target annual bonus percentage (85%) for the portion of 2012 prior to the Promotion Date. 
 At the February 29, 2012
meeting of the Compensation Committee of the Sunoco Board (the “Compensation Committee”), you were granted an equity award having an aggregate value of $4,000,000. Sixty percent of this award is in the form of performance common stock
units (“PCSUs”) and forty percent of this award is in the form of restricted share units (“RSUs”). The actual number of PCSUs and RSUs granted was determined by dividing the targeted value by the closing price of Sunoco common
stock on the date of grant, rounded down to the nearest whole number of units. The PCSUs will measure Sunoco’s performance throughout calendar years 2012,2013 and 2014. The RSUs shall vest in three equal annual installments on the first, second
and third anniversaries of the date of grant, subject to continued employment through the applicable vesting date. The equity grants will be made under Sunoco’s Long-Term Performance Enhancement Plan III (the “LTPEP III”), and you
will receive separate award documents. 

 Mr. Brian P. MacDonald 
 March 1, 2012 
  Page
 2
 
  

 You will be eligible to receive equity grants with an annual target value of 400% of
your Salary in connection with the 2013 and subsequent equity grant cycles that occur while you are employed by Sunoco. However, the target value is not guaranteed to be granted to you, and the actual value of the equity grant (which may be higher
or lower than the target), the equity award mix and the applicable performance metrics will be determined at the discretion of the Compensation Committee. Future equity grants, if any, will be made under Sunoco’s then current equity plan
(currently the LTPEP III) and you will receive separate award documents in respect of any such equity grants. 
 Election as Chair of the
Board of Directors of Sunoco and SXL 
 Effective May 3, 2012, each of the Sunoco Board and the Board of Directors
of Sunoco Logistic Partners L.P. (the “SXL Board”) will take action to appoint you as Chair of the Sunoco Board and the SXL Board, respectively. 
 Stock Ownership Guidelines 
 Sunoco executives are subject to stock
ownership guidelines. The ownership guidelines, expressed as a multiple of annual base salary, vary by job level. For the CEO, the guideline is currently six times annual base salary. You are expected to meet that guideline within 5 years of the
Promotion Date. 
 Vacation 
 You will be entitled to 25 days of paid vacation annually. In addition, you will also be allocated two paid floating holidays each year. These floating holidays are in addition to the normal holidays
designated by Sunoco. 
 Benefits 
 Sunoco provides a full range of benefits for most of its salaried employees, including comprehensive health plans, disability, life insurance, and savings plans. Your memberships in certain, limited clubs
used strictly for business purposes will be paid for by Sunoco. Sunoco has a policy of supporting its executives who serve on non-profit organizations through matching contributions (subject to certain limitations). 

You will be entitled and encouraged to have a thorough physical examination performed annually at no cost to you. 

You will continue to participate in the Sunoco savings plan (the “SunCap Plan”), which matches your contributions up to 5% of
you base pay. The SunCap Plan also has a profit-sharing feature. This profit-sharing contribution is discretionary on the part of Sunoco, and can be made in any amount up to 3% of your base pay. Matching and profit-sharing amounts in excess of
statutory limits will be provided in Sunoco’s non-qualified Savings Restoration Plan. 

 Mr. Brian P. MacDonald 
 March 1, 2012 
  Page
 3
 
  

 Every executive of Sunoco, including the CEO, is an employee at will. You will continue
to be eligible to participate in the Sunoco, Inc. Executive Severance Plan (taking into account your status as CEO), which provides for severance benefits in the event of an involuntary termination of employment other than for cause, and the Sunoco,
Inc. Special Executive Severance Plan (taking into account your status as CEO), which provides severance benefits to an executive whose employment is involuntarily terminated or who resigns for good reason in connection with or following a change in
control. 
 You will have only two perquisites as CEO - free parking at corporate headquarters, and reasonable, limited personal
use of the corporate aircraft for safety/security reasons, including the ability to have a spouse and/or family member accompany you on business or personal trips. In accordance with company policy, you will not be grossed up for taxes you incur in
connection with the free parking or travel on the company aircraft that has a non-business, personal use. These perquisites are subject to the annual review of perquisites conducted by the Compensation Committee, and in any event the access to
corporate aircraft will cease when Sunoco no longer owns an interest in any aircraft. 
 More complete descriptions of
Sunoco’s plans, including the summary plan descriptions and plan documents, are available to you. The Sunoco Board and/or Sunoco reserves the right to make changes to its employee policies, procedures, and plans at any time. 

Indemnification and D&O Insurance 
 You will continue to receive indemnification and directors’ and officers’ insurance coverage pursuant to the terms and conditions of the Sunoco Amended and Restated Indemnification Agreement, as
amended from time to time. 

 Mr. Brian P. MacDonald 
 March 1, 2012 
  Page
 4
 
  

 Please review this letter. If you elect to accept the terms of this letter, please sign
and return to us as a counterpart signature page. This letter agreement will be effective if signed in counterparts, and delivery of a signature page is effective to bind the parties to this letter agreement. 

 

	
	Sincerely,
	
	 /s/ JOHN K. WULFF

	John K. Wulff
	Chair, Sunoco, Inc. Compensation Committee of the Board of Directors

 I accept this offer to be Chief Executive Officer and President, Sunoco, Inc. on the terms set
forth above. 
  

	
	 /s/ BRIAN P. MacDONALD

	Brian P. MacDonald

  

	cc:	John P. Jones, III 

 Dennis
Zeleny

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