Document:

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EXHIBIT 10.2

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SUNOCO PARTNERS LLC

DIRECTORS’ DEFERRED COMPENSATION PLAN

Amended as of January 1, 2005, and Restated effective December 20, 2005

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ARTICLE I

Definitions

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

     1.1 Change in Control — shall mean, and shall be deemed to have occurred, upon the
occurrence of one or more of the following events:

     (a) any sale, lease, exchange or other transfer (in one transaction or a series of
related transactions) of all or substantially all of the assets of the Company or the
Partnership to any Person or its Affiliates, other than to Sunoco or any Affiliate of
Sunoco;

     (b) the consolidation, reorganization, merger or other transaction pursuant to which
more than fifty percent (50%) of the combined voting power of the outstanding equity
interests in the Company cease to be owned by Sunoco and its Affiliates;

     (c) a “Change in Control” of Sunoco, as defined from time to time in the Sunoco stock
plans; or

     (d) the general partner (whether the Company or any other Person) of the Partnership
ceases to be an Affiliate of Sunoco.

     1.2 Committee — shall mean the entire board of directors of the Company acting as an
administrative committee of the whole, or such other committee of the Board as may be appointed
from time to time for purposes of administering this Plan

     1.3 Common Unit — shall mean a common unit, representing a limited partnership
interest in the Partnership.

     1.4 Company — shall mean Sunoco Partners LLC, a Pennsylvania limited liability
company. The term “Company” shall include any successor to Sunoco Partners LLC, any subsidiary or
affiliate which has adopted the Plan, or an entity that succeeds to the business of Sunoco Partners
LLC, or any subsidiary or affiliate, by merger, consolidation, liquidation or purchase of assets or
stock or similar transaction.

     1.5 Compensation — shall mean those fees and retainers payable by the Company to a
Participant in consideration for service as a Director.

     1.6 DER (or Distribution Equivalent Right) — shall mean, with regard to a specific
Restricted Unit (whether held in a Voluntary Deferred Compensation Account or in a Mandatory
Deferred Compensation Account), the contingent right to receive an amount in cash equal to the cash
distributions made by the Partnership with respect to a Common Unit during the period such
Restricted Unit is outstanding.

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     1.7 Director — shall mean a member of the Board of Directors of Sunoco Partners LLC.

     1.8 Mandatory Deferred Compensation Account — shall mean, with respect to any
Participant, the total amount of the Company’s liability for payment of compensation mandatorily
deferred by the Participant under this Plan.

     1.9 Mandatory Form of Continuing Deferral — shall mean and refer to the written
commitment by a Participant, in the form prescribed by the Committee, to mandatorily defer the
payment of all of the Board Restricted Unit Retainer awarded to such Participant under this Plan
pursuant to Article IV hereof.

     1.10 Participant — shall mean a Director, or former Director, who either voluntarily
has elected to defer, or is required mandatorily to defer, the receipt of Compensation in
accordance with the terms of this Plan.

     1.11 Partnership — shall mean Sunoco Logistics Partners L.P., a Delaware limited
partnership.

     1.12 Plan — shall mean this Sunoco Partners LLC Directors’ Deferred Compensation Plan,
as it may be amended from time to time.

     1.13 Restricted Unit — shall mean a phantom, or notional, unit (equivalent in value
and in cash distribution rights to a Common Unit), entered as a credit in either the Mandatory
Deferred Compensation Account, or the Voluntary Deferred Compensation Account of a Participant and
which, upon death, retirement or termination of Board service.(for mandatorily deferred
compensation) or upon earlier payout under the terms of this Plan (for voluntarily deferred
compensation), entitles the Participant to receive a Common Unit.

     1.14 Voluntary Deferred Compensation Account — shall mean, with respect to any
Participant, the total amount of the Company’s liability for payment to the Participant of
voluntarily deferred compensation under this Plan, including any payments in respect of DERs.

     1.15 Voluntary Deferred 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 this Plan pursuant to Article
II hereof.

ARTICLE II

Voluntary Deferral of Directors’ Compensation

     2.1 Election to Defer. Prior to the beginning of each calendar year beginning after
December 31, 2004, a Participant may elect voluntarily to defer in the form of Restricted Units,
all or a

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portion of the cash-based Compensation attributable to services to be performed by the Participant
in the next succeeding calendar year, by filing a written notice of election with the Committee on
the form(s) prescribed by the Committee. Any such voluntary deferral election shall apply only to
cash-based Compensation attributable to services to be performed during the calendar year following
the calendar year in which the election is received by the Secretary of the Company. An election
to defer, made in accordance with this Article II shall be irrevocable as of December 31 of the
year preceding the calendar year in which the Participant performs the services to which the
cash-based Compensation is attributable. All elections made by Directors on or before December 31,
2004 with respect to cash-based Compensation attributable to services performed in calendar year
2005, to the extent inconsistent with the terms of the Plan, shall be limited by and administered
in accordance with, the terms of the Plan. A separate election form shall be filed for each
calendar year. The deferral election form(s) also will permit the Participant to specify:

     (a) the percentage of cash-based Compensation to be deferred; and

     (b) the designation of a beneficiary as set forth in Article V.

     2.2 Amount of Deferral The amount of cash-based Compensation to be voluntarily
deferred shall be designated by the Participant as a percentage of such cash-based Compensation in
multiples of five percent (5%) but shall not be less than ten percent (10%).

     2.3 Time of Election An election to defer must be filed and received by the Secretary
of the Company by the end of the calendar year preceding the calendar year in which the services
are performed to which the cash-based Compensation is attributable. A new Director also may elect
to defer cash-based Compensation attributable to his or her first year of Board service prior to
the commencement of his or her term in office, and such election shall be irrevocable as of the
date immediately preceding such Director’s commencement of his or her term in office.

ARTICLE III

Voluntary Deferred Compensation Accounts

     3.1 Creation of Voluntary Deferred Compensation Accounts. Cash-based Compensation
voluntarily deferred hereunder shall be credited to a Voluntary Deferred Compensation Account
established by the Company for each Participant. The portion of cash-based Compensation thus
voluntarily deferred by the Participant shall be converted into a number of Restricted Units
credited to a Participant’s Voluntary Deferred Compensation Account as set forth in the Plan.

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     3.2 Crediting Restricted Units. Restricted Units shall be credited to a Participant’s
Voluntary Deferred Compensation Account at the time the cash-based Compensation otherwise would
have been paid had no election to defer been made. The number of Restricted Units to be credited
to the Voluntary Deferred Compensation Account shall be determined by dividing the cash-based
Compensation by the average closing price for Common Units as published in the Wall Street Journal
under the caption “New York Stock Exchange Composite Transactions” for the period of ten (10)
trading days immediately prior to the day on which the cash-based Compensation otherwise would have
been paid. Any fractional Restricted Units also shall be credited to a Participant’s Voluntary
Deferred Compensation Account. The number of Restricted Units in a Participant’s Voluntary
Deferred Compensation Account shall be adjusted appropriately by the Committee in the event of
changes in the Partnership’s outstanding Common Units by reason of any distribution,
re-capitalization, merger, consolidation, split-up, combination, exchange of units or the like, and
such adjustments shall be conclusive. Crediting of Restricted Units to a Participant’s Voluntary
Deferred Compensation Account shall not entitle the Participant to the rights of a limited partner
of the Partnership or holder of Partnership Common Units.

     3.4 Crediting DERs. For each Restricted Unit in the Participant’s Voluntary Deferred
Compensation Account, the Company shall credit such account with an amount, in respect of DERs,
equal to the cash distributions declared on a Common Unit of the Partnership. The crediting shall
occur as of the date on which such cash distributions on the Common Units are paid. The number of
Restricted Units to be credited to the Participant’s Voluntary Deferred Compensation Account shall
be calculated by dividing the number of DERs by the average closing price for the Partnership’s
Common Units as published in the Wall Street Journal under the caption “New York Stock Exchange
Composite Transactions” for the period of ten (10) trading days prior to the day on which the cash
distributions are paid on the Partnership’s Common Units. Any fractional Restricted Units also
shall be credited to the Participant’s Voluntary Deferred Compensation Account.

     3.5 Time of Payment. Except as provided in Article VII hereof, all payments of a
Participant’s Voluntary Deferred Compensation Account shall be made on the later of: (a) the first
day of the calendar year following the date of the Participant’s separation from Board service, or
(b) the first day following the six (6) month anniversary of the Participant’s separation from
Board service.

     Upon the death of a Participant prior to the final payment of all amounts credited to his or
her Voluntary Deferred Compensation Account, the balance of his or her Voluntary Deferred
Compensation Account shall be paid in accordance with Article V, on the latest of: (c) the first

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day of the calendar year following the year of death, (d) the first day following the six (6) month
anniversary of the Participant’s separation from Board service, or (e) the date that is thirty (30)
days after the Participant’s death.

     Notwithstanding the foregoing provisions of this Section 3.7, and except as provided in
Article VII, in no event shall any payment or distribution be made within six (6) months of the
cash-based Compensation being earned or awarded.

     3.6 Method of Payment. A Participant in this portion of the Plan shall receive
payment in a lump sum in cash of all voluntarily deferred cash-based Compensation credited to such
Participant’s Voluntary Deferred Compensation Account. Restricted Units credited to the
Participant’s Mandatory Deferred Compensation Account shall be valued at the average closing price
for Common Units as published in the Wall Street Journal under the caption “New York Stock Exchange
Composite Transactions” for the period of ten (10) trading days immediately prior to each new
calendar year.

ARTICLE IV

Mandatory Deferred Compensation Accounts

     4.1 Creation of Mandatory Deferred Compensation Accounts. Compensation deferred under
this Article IV shall be credited, in the form of Restricted Units, to a Mandatory Deferred
Compensation Account established by the Company for each Participant. Payout of such Mandatory
Deferred Compensation Accounts shall commence as provided in Section 4.5.

     4.2 Crediting Restricted Units. If the Committee elects to do so, each Participant
serving as a director of the Company, but who is not also an employee of the Company, or any
subsidiary or affiliate thereof, will be paid, in quarterly installments, an aggregate annual
dollar amount (the “Board Restricted Unit Retainer”) to be credited to a Participant’s Mandatory
Deferred Compensation Account in the form of Restricted Units. The number of Restricted Units to
be credited quarterly to the Participant’s Mandatory Deferred Compensation Account shall be
determined by dividing the Board Restricted Unit quarterly installment cash amount by the average
closing price for Common Units as published in the Wall Street Journal under the caption “New York
Stock Exchange Composite Transactions” for the period of ten (10) trading days immediately prior to
the day on which the quarterly installment payment is due.

     The number of Restricted Units in a Participant’s Mandatory Deferred Compensation Account
shall be adjusted appropriately by the Committee in the event of changes in the Partnership’s
outstanding Common Units by reason of any distribution, re-capitalization, merger, consolidation,

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split-up, combination, exchange of units or the like, and such adjustments shall be conclusive.
Crediting of Restricted Units to a Participant’s Mandatory Deferred Compensation Account shall not
entitle the Participant to the rights of a limited partner of the Partnership or holder of
Partnership Common Units.

     4.4 Crediting DERs. For each Restricted Unit in the Participant’s Mandatory Deferred
Compensation Account, the Company shall credit such account with an amount, in respect of DERs,
equal to the cash distributions declared on a Common Unit of the Partnership. The crediting shall
occur as of the date on which such cash distributions on the Common Units are paid. The number of
Restricted Units to be credited to the Participant’s Mandatory Deferred Compensation Account shall
be calculated by dividing the number of DERs by the average closing price for the Partnership’s
Common Units as published in the Wall Street Journal under the caption “New York Stock Exchange
Composite Transactions” for the period of ten (10) trading days prior to the day on which the cash
distributions are paid on the Partnership’s Common Units. Any fractional Restricted Units also
shall be credited to the Participant’s Mandatory Deferred Compensation Account.

     4.5 Time of Payment. Except as provided in Article VII hereof, all payments of a
Participant’s Mandatory Deferred Compensation Account shall be made on the later of: (a) the first
day of the calendar year following the date of the Participant’s separation from Board service, or
(b) the first day following the six (6) month anniversary of the Participant’s separation from
Board service.

     Upon the death of a Participant prior to the final payment of all amounts credited to his or
her Mandatory Deferred Compensation Account, the balance of his or her Mandatory Deferred
Compensation Account shall be paid in accordance with Article V, on the latest of: (c) the first
day of the calendar year following the year of death, (d) the first day following the six (6) month
anniversary of the Participant’s separation from Board service, or (e) the date that is thirty (30)
days after the Participant’s death.

     Notwithstanding the foregoing provisions of this Section 4.5, and except as provided in
Article VII, in no event shall any payment or distribution be made within six (6) months of any
quarterly installment of the Board Restricted Unit Retainer being earned.

     4.6 Method of Payment. A Participant in this portion of the Plan shall receive
payment in a lump sum in cash of all mandatorily deferred Compensation credited to such
Participant’s Mandatory Deferred Compensation Account. Restricted Units credited to the
Participant’s Mandatory Deferred Compensation Account shall be valued at the average closing price
for Common Units as published in the Wall Street Journal under the caption “New York Stock

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Exchange Composite Transactions” for the period of ten (10) trading days immediately prior to each
new calendar year.

ARTICLE V

Designation of Beneficiaries

     5.1 Designation of Beneficiary. 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 the Participant, 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 designation shall be applied to all amounts previously credited to the
Participant’s Mandatory Deferred Compensation Account (and/or Voluntary Deferred Compensation
Account, as the case may be), as well as to any amounts to be credited to such Participant’s
Mandatory Deferred Compensation Account (and/or Voluntary 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 be paid 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 has
predeceased 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 intestate succession.

     5.3 Survivor Benefits. Upon the Participant’s death, any balances in the
Participant’s Mandatory Deferred Compensation Account and/or Voluntary Deferred Compensation
Account shall be paid in a lump sum to the designated beneficiary(ies).

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 any assets in connection with the
maintenance of any Mandatory Deferred Compensation Account or Voluntary 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 of any kind, or a fiduciary relationship between the Company and
Participant. Title to the beneficial ownership of any assets, whether cash or

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investments, that the Company may designate to pay the amount credited to a Mandatory Deferred
Compensation Account or a Voluntary 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 any Mandatory Deferred Compensation Account or Voluntary
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 the Company.

ARTICLE VII

Change in Control

     7.1 Effect of Change in Control on Payment. Anything to the contrary in this Plan
notwithstanding, at any time prior to the calendar year in which the services are performed to
which Compensation is attributable, a Participant may make an election (a “Change in Control
Election”) (which shall be irrevocable as of December 31 of the year preceding the calendar year
for which it is made) to receive, in a single lump sum payment, upon the occurrence of a Change in
Control (provided that the Change in Control also is a change in control for purposes of IRC
Section 409A, as amended, and the regulations issued thereunder), the balance of such Participant’s
Mandatory Deferred Compensation Account and/or Voluntary Deferred Compensation Account attributable
to such Compensation, determined as of the valuation date immediately preceding the Change in
Control. Each such election shall be in writing and in conformity with such rules as may be
prescribed by the Committee.

     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, no action shall be taken that would affect
adversely the rights of any Participant or the operation of this Article VII with respect to the
balance in the Participant’s Accounts immediately before such action, including, by way of example
and not of limitation, the amendment, suspension or termination of the Plan.

     7.3 Attorney’s Fees. The Company shall pay all legal fees and related expenses
incurred by a Participant in seeking to obtain or enforce any payment, benefit or right such
Participant may be entitled to under the plan after a Change in Control. The Participant shall
reimburse the Company for such fees and expenses at such time as a court of competent jurisdiction,
or another independent third party having similar authority, determines that the Participant’s
claim was frivolously brought without reasonable expectation of success on the merits thereof.

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ARTICLE VIII

Miscellaneous

     8.1 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 any payment under
this Plan except in accordance with Article V.

     8.2 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.

     8.3 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 the
interpretation 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.

     8.4 Termination and Amendment. The Plan may be terminated at any time by the Board of
Directors of Sunoco Partners LLC, and may be amended at any time by the Committee; provided,
however, that, without the prior written consent of the Participant, no such amendment or
termination shall affect adversely the rights of any Participant or beneficiary of a Participant
with respect to amounts credited to such Participant’s Mandatory Deferred Compensation Account
and/or Voluntary Deferred Compensation Account prior to such amendment or termination.

     8.5 Severability. In the case any one or more of the provisions contained in this
Plan shall be invalid, illegal or unenforceable in any respect 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.

     8.6 Governing Law. THIS PLAN SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED
BY THE LAWS OF THE COMMONWEALTH OF PENNSYLVANIA, WITHOUT GIVING EFFECT TO THE CONFLICTS OF LAWS
PRINCIPLES THEREOF.

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EXHIBIT 10.3

 

SUNOCO PARTNERS LLC

LONG-TERM INCENTIVE PLAN

Amended as January 1, 2005, and Restated Effective December 20, 2005

 

 

 

SUNOCO PARTNERS LLC

LONG-TERM INCENTIVE PLAN

SECTION 1. Purpose of the Plan.

     The Sunoco Partners LLC Long-Term Incentive Plan (the “Plan”) is intended to promote the
interests of Sunoco Logistics Partners L.P., a Delaware limited partnership (the “Partnership”), by
providing to employees and directors of Sunoco Partners LLC, a Pennsylvania limited liability
company (the “Company”), and its Affiliates who perform services for the Partnership and its
subsidiaries, incentive awards for superior performance that are based on Units. The Plan is also
intended to enhance the ability of the Company and its Affiliates to attract and retain employees
whose services are key to the growth and profitability of the Partnership, and to encourage them to
devote their best efforts to the business of the Partnership and its subsidiaries, thereby
advancing the Partnership’s interests.

SECTION 2. Definitions.

     As used in the Plan, the following terms shall have the meanings set forth below:

     2.1 “Affiliate” means, with respect to any Person, any other Person that
directly or indirectly, through one or more intermediaries, controls, is controlled by or is
under common control with, the Person in question. As used herein, the term “control”
means the possession, direct or indirect, of the power to direct or cause the direction of
the management and policies of a Person, whether through ownership of voting securities, by
contract or otherwise.

     2.2 “Award” means a grant of one or more Options or Restricted Units pursuant
to the Plan, and shall include any tandem DERs granted with respect to such Award.

     2.3 “Board” means the Board of Directors of the Company.

     2.4 “Cause” means:

     (i) fraud or embezzlement on the part of the Participant;

     (ii) conviction of or the entry of a plea of nolo contendere by the Participant
to any felony;

     (iii) the willful and continued failure or refusal by the Participant to
perform substantially the Participant’s duties with the Company or an Affiliate
thereof (other than any such failure resulting from incapacity due to physical or
mental illness, or death, or following notice of employment termination by the
Participant for Good Reason) within thirty (30) days following the delivery of a
written demand for substantial performance to the Participant by the Board, or any
employee of the Company or an Affiliate with supervisory authority over the
Participant, that specifically identifies the manner in which the Board or such
supervising employee believes that the Participant has not substantially performed
the Participant’s duties; or

     (iv) any act of willful misconduct by the Participant which:

     (a) is intended to result in substantial personal enrichment of the
Participant at the expense of the Partnership, the Company or any of their
Affiliates; or

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     (b) has a material adverse impact on the business or reputation of the
Partnership, the Company or any Affiliate thereof (such determination to be
made by the Partnership, the Company or any such Affiliate in the good faith
exercise of its reasonable judgment).

     2.5 “Change of Control” means, and shall be deemed to have occurred upon the
occurrence of one or more of the following events:

     (i) the consolidation, reorganization, merger or other transaction pursuant to
which more than 50% of the combined voting power of the outstanding equity interests
in the Company cease to be owned by Sunoco and its Affiliates;

     (ii) a “Change in Control” of Sunoco, as defined from time to time in the
Sunoco stock plans; or

     (iii) the general partner (whether the Company or any other Person) of the
Partnership ceases to be an Affiliate of Sunoco.

     2.6 “Committee” means the Compensation Committee of the Board, such
subcommittee thereof, or such other committee of the Board appointed to administer the Plan.

     2.7 “DER” or “Distribution Equivalent Right” means contingent right,
granted in tandem with a specific Restricted Unit, to receive an amount in cash equal to the
cash distributions made by the Partnership with respect to a Unit during the period such
Restricted Unit is outstanding.

     2.8 “Director” means a member of the Board who is not an Employee.

     2.9 “Employee” means any employee of the Company or an Affiliate, who performs
services for the Partnership.

     2.10 “Exchange Act” means the Securities Exchange Act of 1934, as amended.

     2.11 “Fair Market Value” means, as of any date and in respect of any Unit, the
opening price of a Unit on such date (which price shall be the closing price of a Unit on
the previous trading day, as reflected in the consolidated trading tables of The Wall Street
Journal or any other publication selected by the Committee). If there is no sale of Units
on the New York Stock Exchange for more than ten (10) days immediately preceding such date,
or if deemed appropriate by the Committee for any other reason, the Fair Market Value of
such Units shall be as determined in good faith by the Committee in such other manner as it
may deem appropriate.

     2.12 “Good Reason” means:

     (i) a reduction in the Participant’s annual base salary;

     (ii) failure to pay the Participant any compensation due under an employment
agreement, if any;

     (iii) failure to continue to provide benefits substantially similar to those
then enjoyed by the Participant unless the Partnership, the Company or their
Affiliates provide aggregate benefits equivalent to those then in effect;

     (iv) failure to continue a compensation plan or to continue the
Participant’s participation in a plan on a basis not materially less favorable to
the Participant, subject to the power of the Partnership, the Company or their
Affiliates to amend such plans in their reasonable discretion, including, without
limitation, providing a replacement plan; or

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     (v) the Partnership, the Company or their Affiliates purported termination of
the Participant’s employment for Cause not pursuant to a procedure indicating the
specific provision of the definition of Cause contained in this Plan as the basis
for such termination of employment;

     The Participant may not terminate for Good Reason unless he has given written notice
delivered to the Partnership, the Company or their Affiliates, as appropriate, of the action
or inaction giving rise to Good Reason, such notice to state with specificity the nature of
the breach, failure or refusal, and such action or inaction is not corrected within thirty
(30) days thereafter.

     2.13 “Member” means, as of any date, any Person that has executed the limited
liability company operating agreement of the Company (the “LLC Agreement”) as a member of
the Company, and thereafter been admitted to the Company as a member as provided in the LLC
Agreement, but such term does not include any Person who has ceased to be a member in the
Company.

     2.14 “Option” means on option to purchase Units granted under the Plan.

     2.15 “Participant” means any Employee or Director granted an Award under the
Plan.

     2.16 “Partnership Agreement” means the Amended and Restated Agreement of
Limited Partnership of the Partnership.

     2.17 “Person” means an individual or a corporation, limited liability company,
partnership, joint venture, trust, unincorporated organization, association, government
agency or political subdivision thereof or other entity.

     2.18 “Restricted Period” means the period established by the Committee with
respect to an Award during which the Award either remains subject to forfeiture or is not
exercisable by the Participant.

     2.19 “Restricted Unit” means a phantom, or notional, unit granted under the
Plan which is equivalent in value and in distribution rights to a Unit and which, upon
vesting, entitles the Participant to receive a Unit or its Fair Market Value in cash,
whichever is determined by the Committee.

     2.20 “Rule 16b-3” means Rule 16b-3 promulgated by the SEC under the Exchange
Act, or any successor rule or regulation thereto as in effect from time to time.

     2.21 “SEC” means the Securities and Exchange Commission, or any successor
thereto.

     2.22 “Sunoco” means Sunoco, Inc.

     2.23 “Unit” means a Common Unit of the Partnership.

SECTION 3. Administration.

     The Plan shall be administered by the Committee. A majority of the Committee shall constitute
a quorum, and the acts of the members of the Committee who are present at any meeting thereof at
which a quorum is present, or acts unanimously approved by the members of the Committee in writing,
shall be the acts of the Committee. Annual grant levels for Participants will be recommended to
the Committee by the Chief Executive Officer of the Company.

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     Subject to the terms of the Plan and applicable law, and in addition to other express powers
and authorizations conferred on the Committee by the Plan, the Committee shall have full power and
authority to:

     (i) designate Participants;

     (ii) determine the type or types of Awards to be granted to a Participant;

     (iii) determine the number of Units to be covered by Awards;

     (iv) determine the terms and conditions of any Award;

     (v) determine whether, to what extent, and under what circumstances Awards may
be settled, exercised, canceled, or forfeited;

     (vi) interpret and administer the Plan and any instrument or agreement relating
to an Award made under the Plan

     (vii) establish, amend, suspend, or waive such rules and regulations and
appoint such agents as it shall deem appropriate for the proper administration of
the Plan; and

     (viii) make any other determination and take any other action that the
Committee deems necessary or desirable for the administration of the Plan.

     Unless otherwise expressly provided in the Plan, all designations, determinations,
interpretations, and other decisions under or with respect to the Plan or any Award shall be within
the sole discretion of the Committee, may be made at any time and shall be final, conclusive, and
binding upon all Persons, including the Company, the Partnership, any Affiliate, any Participant,
and any beneficiary of any Award.

          Subject to the following and any applicable law, the Committee, in its sole discretion, may
delegate any or all of its powers and duties under the Plan to the Chief Executive Officer of the
Company, including the power to grant Awards under the Plan, provided the Chief Executive Officer
is also a member of the Board, subject to such limitations on such delegated powers and duties as
the Committee may impose, if any. Upon any such delegation all references in the Plan to the
“Committee”, other than in Section 7 (“Amendment and Termination”), shall be deemed to include the
Chief Executive Officer; provided, however, that such delegation shall not limit the Chief
Executive Officer’s right to receive Awards under the Plan. Notwithstanding the foregoing, the
Chief Executive Officer may not grant Awards to, or take any action with respect to any Award
previously granted to, a person who is an officer subject to Rule 16b-3 or a member of the Board.

SECTION 4. Units Available for Awards.

     4.1 Units Available. Subject to adjustment as provided in Section 4.3, the
number of Units with respect to which Awards may be granted under the Plan is one million
two hundred fifty thousand (1,250,000). If any Award is forfeited or otherwise terminates
or is canceled without the delivery of Units, then the Units covered by such Award, to the
extent of such forfeiture, termination , or cancellation, shall again be Units with respect
to which Awards may be granted.

     4.2 Sources of Units Deliverable Under Awards. Any Units delivered pursuant to
an Award shall consist, in whole or in part, of Units acquired in the open market, from any
Affiliate, the Partnership or any other Person, or any combination of the foregoing, as
determined by the Committee in its discretion.

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     4.3 Adjustments. If the Committee determines that any distribution (whether in
the form of cash, Units, other securities, or other property), re-capitalization, split,
reverse split, reorganization, merger, consolidation, split-up, spin-off, combination,
repurchase, or exchange of Units or other securities of the Partnership, issuance of
warrants or other rights to purchase Units or other securities of the Partnership, or other
similar transaction or event affects the Units such that an adjustment is determined by the
Committee to be appropriate in order to prevent dilution or enlargement of the benefits or
potential benefits intended to be made available under the Plan, then the Committee shall,
in such manner as it may deem equitable, adjust any or all of:

     (i) the number and type of Units (or other securities or property) with respect
to which Awards may be granted;

     (ii) the number and type of Units (or other securities or property) subject to
outstanding Awards; and

     (iii) if deemed appropriate, make provision for a cash payment to the holder of
an outstanding Award; provided, that the number of Units subject to any Award will
always be a whole number.

SECTION 5. Eligibility.

     Any Employee or Director will be eligible to be designated a Participant and receive an Award
under the Plan.

SECTION 6. Awards.

     6.1 Options. The Committee shall have the authority to determine the Employees
and Directors to whom Options will be granted, the number of Units to be covered by each
Option, the purchase price therefor and the conditions and limitations applicable to the
exercise of the Option, including the following terms and conditions and such additional
terms and conditions, as the Committee shall determine, that are not inconsistent with the
provisions of the Plan.

     (i) Exercise Price. The purchase price per Unit purchasable under an Option
shall be determined by the Committee at the time the Option is granted but shall not
be less than its Fair Market Value as of the date of grant.

     (ii) Time and Method of Exercise. The Committee shall determine the Restricted
Period, i.e., the time or times at which an Option may be exercised in whole or in
part, and the method or methods by which payment of the exercise price with respect
thereto may be made or deemed to have been made which may include, without
limitation, cash, check acceptable to the Company, a “cashless-broker” exercise
(through procedures approved by the Company), other securities or other property, a
note from the Participant (in a form acceptable to the Company), or any combination
thereof, having a Fair Market Value on the exercise date equal to the relevant
exercise price.

     (iii) Forfeiture. Except as otherwise provided in the terms of the Option
grant, upon termination of a Participant’s employment with the Company and its
Affiliates or membership on the Board, whichever is applicable, for any reason
during the applicable Restricted Period, all Options shall be forfeited by the
Participant, unless otherwise provided in a written employment agreement (if any)
between the Participant and the Company or one or more of its Affiliates. The
Committee may, in its discretion, waive in whole or in part such forfeiture with
respect to a Participant’s Options.

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     6.2 Restricted Units. The Committee shall have the authority to determine the
Employees and Directors to whom Restricted Units shall be granted, the number of Restricted
Units to be granted to each such Participant, the duration of the Restricted Period, the
conditions under which the Restricted Units may become vested or forfeited, and such other
terms and conditions as the Committee may establish respecting such Awards, including
whether DERs are granted with respect to such Restricted Units.

     (i) DERs. To the extent provided by the Committee, in its discretion, a grant
of Restricted Units may include a tandem DER grant, which may provide that such DERs
shall be paid directly to the Participant, be credited to a bookkeeping account
(with or without interest in the discretion of the Committee) subject to the same
restrictions as the tandem Award, or be subject to such other provisions or
restrictions as determined by the Committee in its discretion. Notwithstanding the
foregoing, payment of all DERs under a tandem DER grant made pursuant to this
Section 6.2(i) shall be made no later than two and one-half (2-1/2) months following
the calendar year in which such DERs become nonforfeitable.

     (ii) Forfeiture. Except as otherwise provided in the terms of the Award
agreement, upon termination of a Participant’s employment with the Company and its
Affiliates or membership on the Board, whichever is applicable, for any reason
during the applicable Restricted Period, all Restricted Units shall be forfeited by
the Participant, unless otherwise provided in a written employment agreement (if
any) between the Participant and the Company or one or more of its Affiliates. The
Committee may, in its discretion, waive in whole or in part such forfeiture with
respect to a Participant’s Restricted Units.

     (iii) Lapse of Restrictions. Upon, or as soon as reasonably practicable
following, the vesting of each Restricted Unit, but no later than two and one-half
(2-1/2) months following the calendar year in which such Restricted Unit becomes
nonforfeitable, the Participant shall be entitled to receive from the Company, and
the Company shall pay to the Participant, one Unit or its Fair Market Value, in
cash, as determined by the Committee, subject to the provisions of Section 8.2.”

     6.3 General.

     (i) Awards May Be Granted Separately or Together. Awards may, in the
discretion of the Committee, be granted either alone or in addition to, in tandem
with, or in substitution for any other Award granted under the Plan or any award
granted under any other plan of the Company or any Affiliate. Awards granted in
addition to or in tandem with other Awards or awards granted under any other plan of
the Company or any Affiliate may be granted either at the same time as or at a
different time from the grant of such other Awards or awards.

     (ii) Limits on Transfer of Awards.

     (a) Except as provided in (b) below:

     (1) no Award and no right under any such Award may be assigned,
alienated, pledged, attached, sold or otherwise transferred or
encumbered by a Participant and any such purported assignment,
alienation, pledge, attachment, sale, transfer or encumbrance shall be
void and unenforceable against the Company or any Affiliate

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     (2) each Option shall be exercisable only by the Participant
during the Participant’s lifetime, or by the person to whom the
Participant’s rights shall pass by will or the laws of descent and
distribution; and

     (b) To the extent specifically provided by the Committee with respect to
an Option grant, an Option may be transferred by a Participant without
consideration to immediate family members or related family trusts, limited
partnerships or similar entities or on such terms and conditions as the
Committee may from time to time establish. In addition, Awards may be
transferred by will and the laws of descent and distribution.

     (iii) Term of Awards. The term of each Award shall be for such period as may
be determined by the Committee.

     (iv) Unit Certificates. All certificates for Units or other securities of the
Partnership delivered under the Plan pursuant to any Award or the exercise thereof
shall be subject to such stop transfer orders and other restrictions as the
Committee may deem advisable under the Plan or the rules, regulations, and other
requirements of the SEC, any stock exchange upon which such Units or other
securities are then listed, and any applicable federal or state laws, and the
Committee may cause a legend or legends to be put on any such certificates to make
appropriate reference to such restrictions.

     (v) Consideration for Grants. Awards may be granted for such consideration as
the Committee determines including, without limitation, services or such minimal
cash consideration as may be required by applicable law.

     (vi) Delivery of Units or other Securities and Payment by Participant of
Consideration. Notwithstanding anything in the Plan or any grant agreement to the
contrary, delivery of Units pursuant to the exercise or vesting of an Award may be
deferred for any period during which, in the good faith determination of the
Committee, the Company is not reasonably able to obtain Units to deliver pursuant to
such Award without violating the rules or regulations of any applicable law or
securities exchange. No Units or other securities shall be delivered pursuant to
any Award until payment in full of any amount required to be paid pursuant to the
Plan or the applicable Award agreement (including, without limitation, any exercise
price or any tax withholding) is received by the Company. Such payment may be made
by such method or methods and in such form or forms as the Committee shall
determine, including, without limitation, cash, other Awards, withholding of Units,
cashless broker exercises with immediate sale, or any combination thereof; provided,
however, that the combined value, as determined by the Committee, of all cash and
cash equivalents and the Fair Market Value of any such Units or other property so
tendered to the Company, as of the date of such tender, is at least equal to the
full amount required to be paid to the Company pursuant to the Plan or the
applicable Award agreement.

     (vii) Change of Control. In the event of a Change in Control, Restricted Units
will be paid to the Participant no later than the earlier of ninety (90) days
following the date of occurrence of such Change in Control or two and one-half
(2-1/2) months following the end of the calendar year in which occurs the date of
such Change in Control, regardless of whether the applicable performance goals or
targets have been met.”

     For a Change of Control occurring within the first consecutive
twelve-month period following the date of grant, the number of performance-based
Restricted Units paid out with regard to such grant shall be equal to the total
number of Restricted Units outstanding in

7

 

such grant as of the Change of Control, not adjusted for any performance factors.

     For a Change of Control occurring after the first consecutive
twelve-month period following the date of grant, the number of performance-based
Restricted Units paid out with regard to such grant shall be the greater of:

     (a) the total number of Restricted Units outstanding in such grant as of
the Change of Control, not adjusted for any performance factors, or

     (b) the total number of such Restricted Units outstanding in such grant,
multiplied by the applicable performance factors related to the Partnership’s
actual performance immediately prior to the Change of Control.

     In the case of an award of Restricted Units conditioned upon the Participant’s
continued employment, the total number of Restricted Units outstanding in such grant
as of the Change of Control shall be paid to the Participant.

     The Participant’s Restricted Units shall be payable to the Participant in cash
or Units, as determined by the Committee prior to the Change of Control, as follows:

     (c) if the Participant is to receive Units, the Participant will receive
the total number of Units stated above in this Section 6.3(vii); or

     (d) if the Participant is to receive cash, the Participant will be paid
an amount in cash equal to the number of Units stated above in this Section
6.3(vii), multiplied by the Fair Market Value per Unit. Such amount will be
reduced by the applicable federal, state and local withholding taxes due.

     On or before the earlier of the ninetieth (90th) day following the date of
occurrence of such Change in Control or the day that is two and one-half (2-1/2)
months following the end of the calendar year in which occurs the date of such
Change in Control, the Participant will be paid an amount in cash equal to the
value of the applicable DERs on the number of Units being paid pursuant to this
Section 6.3(vii) for the time period immediately preceding the Change in Control.
Payout of Restricted Units and DERs shall be made to each Participant:

     (e) who is employed by the Company on the earlier of the ninetieth (90th)
day following the date of occurrence of such Change in Control or the day that
is two and one-half (2 1/2) months following the end of the calendar year in
which occurs the date of such Change in Control; or

     (f) whose employment relationship with the Company is terminated:

     (1) for Good Reason, or as a result of any “Qualifying Termination”
(as such term may be defined in the applicable agreement with the
Participant, evidencing the grant) prior to the earlier of the ninetieth
(90th) day following the date of occurrence of such Change in Control or
the day that is two and one-half (2-1/2) months following the end of the
calendar year in which occurs the date of such Change in Control; or

     (2) as a result of death, permanent disability or retirement (as each
is determined by the Committee), that has occurred prior to the earlier of
the ninetieth (90th) day following the date of occurrence of such Change
in Control or the day that is two and one-half (2-1/2) months following
the end of the calendar year in which occurs the date of such Change in
Control.

     The Committee may establish, at the time of the grant of Restricted Units,
other conditions that must be met for payout to occur. These conditions shall be
set forth in the Committee’s resolution granting the Restricted Units and in the
applicable agreements with

8

 

     Participants.

     Notwithstanding any provisions to the contrary in agreements evidencing Options
granted thereunder, or in this Plan, each outstanding Option shall become
immediately and fully exercisable upon the occurrence of any Change of Control.

     (viii) Sale of Significant Assets. In the event the Company or the Partnership sells
or otherwise disposes of, other than to an Affiliate, a significant portion of the
assets under its control, (such significance to be determined by action of the Board
of the Company in its sole discretion), and as a consequence of such disposition:

     (a) a Participant’s employment is terminated by the Partnership, the
Company or their Affiliates without Cause or by the Participant for Good
Reason; provided, however, that in the case of any such termination by the
Participant under this subparagraph 6.3(viii)(a), such termination shall not
be deemed to be for Good Reason unless the termination occurs within 180 days
after the occurrence of the applicable sale or disposition constituting the
reason for the termination; or

     (b) as a result of such sale or disposition, the Participant’s employer
shall no longer be the Partnership, the Company or one of their Affiliates,

then all of such Participant’s Awards shall automatically vest and become payable or
exercisable, as the case may be, in full. In this regard, all Restricted Periods
shall terminate and all performance criteria, if any, shall be deemed to have been
achieved at the maximum level. Payment of Restricted Units (and applicable DERs)
under this Section 6.3(viii) shall be made to the Participant no later than the
earlier of ninety (90) days following the date of such sale of other disposition or
two and one-half (2-1/2) months following the end of the calendar year in which
occurs the date of such sale of other disposition.

SECTION 7. Amendment and Termination.

     Except to the extent prohibited by applicable law and unless otherwise expressly provided in
an Award agreement or in the Plan:

     (i) Amendments to the Plan. Except as required by applicable law or
the rules of the principal securities exchange on which the Units are traded and
subject to Section 7(ii) below, the Board or the Committee may amend, alter,
suspend, discontinue, or terminate the Plan in any manner; provided, however, that
neither the Board nor the Committee may increase the number of Units available for
Awards under the Plan, without the express prior written consent of the Members of
the Company.

     (ii) Amendments to Awards. The Committee may waive any conditions or
rights under, amend any terms of, or alter any Award theretofore granted, provided
no change, other than pursuant to Section 7(iii), in any Award shall materially
reduce the benefit to Participant without the consent of such Participant.

     (iii) Adjustment of Awards Upon the Occurrence of Certain Unusual or
Nonrecurring Events. The Committee is hereby authorized to make adjustments in
the terms and conditions of, and the criteria included in, Awards in recognition of
unusual or nonrecurring events (including, without limitation, the events described
in Section 4.3 of the Plan) affecting the Partnership or the financial statements of
the Partnership, or of changes in applicable laws, regulations, or accounting
principles, whenever the Committee determines that such adjustments are appropriate
in order to prevent dilution

9

 

     or enlargement of the benefits or potential benefits intended to be made available
under the Plan.

SECTION 8. General Provisions.

     8.1 No Rights to Awards. No Person shall have any claim to be granted any
Award, and there is no obligation for uniformity of treatment of Participants. The terms
and conditions of Awards need not be the same with respect to each Participant.

     8.2 Withholding. The Company or any Affiliate is authorized to withhold from
any Award, from any payment due or transfer made under any Award or from any compensation or
other amount owing to a Participant the amount (in cash, Units, other securities, Units that
otherwise would be issued pursuant to such Award or other property) of any applicable taxes
payable in respect of the grant of an Award, its exercise, the lapse of restrictions
thereon, or any payment or transfer under an Award or under the Plan and to take such other
action as may be necessary in the opinion of the Company to satisfy its withholding
obligations for the payment of such taxes.

     8.3 No Right to Employment. The grant of an Award shall not be construed as
giving a Participant the right to be retained in the employment of the Company or any
Affiliate or to remain on the Board, as applicable. Further, the Company or an Affiliate
may at any time dismiss a Participant from employment, free from any liability or any claim
under the Plan, unless otherwise expressly provided in the Plan or in any Award agreement.

     8.4 Governing Law. THE VALIDITY, CONSTRUCTION, AND EFFECT OF THE PLAN AND
ANY RULES AND REGULATIONS RELATING TO THE PLAN SHALL BE DETERMINED IN ACCORDANCE WITH THE
LAWS OF THE COMMONWEALTH OF PENNSYLVANIA AND APPLICABLE FEDERAL LAW.

     8.5 Severability. If any provision of the Plan or any Award is or becomes
or is deemed to be invalid, illegal, or unenforceable in any jurisdiction or as to any
Person or Award, or would disqualify the Plan or any Award under any law deemed applicable
by the Committee, such provision shall be construed or deemed amended to conform to the
applicable laws, or if it cannot be construed or deemed amended without, in the
determination of the Committee, materially altering the intent of the Plan or the Award,
such provision shall be stricken as to such jurisdiction, Person or Award and the remainder
of the Plan and any such Award shall remain in full force and effect.

     8.6 Other Laws. The Committee may refuse to issue or transfer any Units or
other consideration under an Award if, in its sole discretion, it determines that the
issuance or transfer of such Units or such other consideration might violate any applicable
law or regulation, the rules of the principal securities exchange on which the Units are
then traded, or entitle the Partnership or an Affiliate to recover the entire then Fair
Market Value thereof under Section 16(b) of the Exchange Act, and any payment tendered to
the Company by a Participant, other holder or beneficiary in connection with the exercise of
such Award shall be promptly refunded to the relevant Participant, holder or beneficiary.

     8.7 No Trust or Fund Created. Neither the Plan nor any Award shall create or
be construed to create a trust or separate fund of any kind or a fiduciary relationship
between the Company or any Affiliate and a Participant or any other Person. To the extent
that any Person acquires a right to receive payments from the Company or any Affiliate
pursuant to an Award, such right shall be no greater than the right of any general unsecured
creditor of the Company or any Affiliate.

10

 

     8.8 No Fractional Units. No fractional Units shall be issued or delivered
pursuant to the Plan or any Award, and the Committee shall determine whether cash, other
securities, or other property shall be paid or transferred in lieu of any fractional Units
or whether such fractional Units or any rights thereto shall be canceled, terminated, or
otherwise eliminated.

     8.9 Headings. Headings are given to the Sections and subsections of the Plan
solely as a convenience to facilitate reference. Such headings shall not be deemed in any
way material or relevant to the construction or interpretation of the Plan or any provision
thereof.

     8.10 Facility Payment. Any amounts payable hereunder to any person under legal
disability or who, in the judgment of the Committee, is unable to properly manage his
financial affairs, may be paid to the legal representative of such person, or may be applied
for the benefit of such person in any manner which the Committee may select, and the Company
shall be relieved of any further liability for payment of such amounts.

     8.11 Gender and Number. Words in the masculine gender shall include the
feminine and the neuter, the plural shall include the singular and the singular shall
include the plural.

SECTION 9. Term of the Plan.

The Plan shall be effective on the date of its approval by the Board and shall continue until the
date terminated by the Board or Units are no longer available for grants of Awards under the Plan,
whichever occurs first. However, unless otherwise expressly provided in the Plan or in an
applicable Award Agreement, any Award granted prior to such termination, and the authority of the
Board or the Committee to amend, alter, adjust, suspend, discontinue, or terminate any such Award
or to waive any conditions or rights under such Award, shall extend beyond such termination date.

11

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