Document:

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                                                                    Exhibit 10.3

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                                  SUNOCO, INC.

                            LONG-TERM INCENTIVE PLAN

                   (Amended and Restated as of June 30, 1999)

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                                   ARTICLE I

                                  Definitions

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

          1.1   Affiliate - shall mean any person or entity which directly, or
indirectly through one or more intermediaries, controls, is controlled by, or is
under common control with Sunoco, Inc.

          1.2   Alternate Appreciation Rights - shall have the meaning provided
herein at Section 4.1.

          1.3   Board of Directors - shall mean the Board of Directors of
Sunoco, Inc.

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

                (a) Continuing Directors cease, within one year of a Control
          Transaction, to constitute a majority of the Board of Directors of
          Sunoco, Inc. (or of the Board of Directors of any successor to Sunoco,
          Inc. or to all or substantially all of its assets), or

                (b) any entity, person or Group acquires shares of Sunoco, Inc.
          in a transaction or series of transactions that result in such entity,
          person or Group directly or indirectly owning beneficially more than
          20% of the outstanding voting shares.

          1.5   Code - shall mean the Internal Revenue Code of 1986, as amended.

          1.6   Committee - shall mean the committee appointed to administer
this Plan by the Board of Directors of the Company, as constituted from time to
time. The Committee shall consist of at least two (2) members of the Board of
Directors, each of whom shall meet applicable requirements set forth in the
pertinent regulations under Section 16 of the Securities Exchange Act of 1934,
as amended, and Section 162(m) of the Code.

          1.7   Common Stock - shall mean the authorized and unissued or
treasury shares of common stock of Sunoco, Inc.

          1.8   Company - shall mean Sunoco, Inc., a Pennsylvania corporation.
The term "Company" shall include any successor to Sunoco, Inc., any Subsidiary
or 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.

          1.9   Continuing Director - shall mean a Director who was a member of
the Board of Directors immediately prior to a Control Transaction which results
in a Change in Control.

          1.10  Control Transaction - shall mean any of the following
transactions or any combination thereof:

                (a) any tender offer for or acquisition of capital stock of
          Sunoco, Inc.;

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                (b) any merger, consolidation, or sale of all or substantially
          all of the assets of Sunoco, Inc.; or

                (c) the submission of a nominee or nominees for the position of
          director of Sunoco, Inc. by a shareholder or a Group of shareholders
          in a proxy solicitation or otherwise.

          1.11  Disability - shall mean any illness, injury or incapacity of
such duration and type as to render a Participant eligible to receive long-term
disability benefits under the applicable broad-based long-term disability
program of the Company.

          1.12  Dividend Equivalents - shall have the meaning provided herein at
Section 6.5.

          1.13  Employment Termination Date - shall mean the date on which the
employment relationship between the Participant and the Company is terminated.

          1.14  Exercise Period - shall have the meaning provided herein at
Section 5.3.

          1.15  Fair Market Value - shall mean, as of any date and in respect of
any share of Common Stock, the opening price on such date of a share of Common
Stock (which price shall be the closing price on the previous trading day of a
share of Common Stock as reported on the New York Stock Exchange Composite
Transactions Tape, and 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 shares of Common Stock 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 the
shares of Common Stock shall be as determined by the Committee in such other
manner as it may deem appropriate.  In no event shall the fair market value of
any share of Common Stock be less than its par value.

          1.16  Group - shall mean persons who act in concert as described in
Sections 13(d)(3) and/or 14(d)(2) of the Securities Exchange Act of 1934, as
amended.

          1.17  Just Cause - shall mean:

                (a) a judicial determination that the Participant has committed
          fraud, misappropriation, or embezzlement against the Company; or

                (b) a non-appealable conviction of, or entry of a plea of nolo
          contendere for, an act by the Participant constituting a felony which,
          as determined by the Company in good faith, constitutes a crime
          involving moral turpitude and has resulted in material harm to the
          Company, its subsidiaries and affiliates taken as a whole.

                No termination of employment shall be deemed an effective
          termination for Just Cause unless accompanied by a copy of a
          resolution duly adopted by the affirmative vote of not less than a
          majority of the Continuing Directors at a meeting of the Board of
          Directors which was called and held for the purpose of considering
          such termination, or if there are no Continuing Directors, then by at
          least three quarters (3/4) of the entire Board of Directors (after
          reasonable notice to the Participant and an opportunity for the
          Participant, together with the Participant's counsel, to be heard
          before the Board of Directors) finding that, in the good faith opinion
          of the Board of Directors, the Participant was guilty of conduct set
          forth in the preceding sentence, and specifying the particulars
          thereof in detail.

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          In any deliberations or votes by the Board of Directors concerning a
          determination under this Section, the Participant shall recuse himself
          from such deliberations and votes.

          1.18  Limited Rights - shall have the meaning provided herein at
Article V.

          1.19  Option Price - shall mean the purchase price per share of Common
Stock deliverable upon the exercise of an Option.

          1.20  Optionee - shall mean the holder of an Option.

          1.21  Participant - shall have the meaning provided herein at Section
2.4(a).

          1.22  Plan - shall have the meaning provided herein at Section 2.2.

          1.23  Potential Change in Control - shall mean the occurrence of any
of the following events or transactions:

               (a) any person (other than Sunoco, Inc., or any affiliate or
          subsidiary thereof) makes a tender offer for capital stock of Sunoco,
          Inc.;

               (b) any person becomes the beneficial owner, directly or
          indirectly, of capital stock of Sunoco, Inc. in an amount which
          requires the filing of Schedule 13D or its equivalent form pursuant to
          the Rules and Regulations under the Securities Exchange Act of 1934 as
          from time to time amended;

               (c) the submission of a nominee or nominees for the position of
          director of Sunoco, Inc. by a shareholder or Group of shareholders in
          a proxy solicitation or otherwise which, in its judgment, the Board of
          Directors determines by adoption of a resolution within thirty (30)
          days of such submission, might result in a Change in Control of
          Sunoco, Inc.;

               (d) any person files a pre-merger notification for the
          acquisition of capital stock of Sunoco, Inc. pursuant to the Hart-
          Scott-Rodino Act; or

               (e) the Board of Directors in its judgment determines by adoption
          of a resolution that a Potential Change in Control of Sunoco, Inc. for
          purposes of this Plan has occurred.

          1.24  Qualifying Termination - shall mean, with respect to the
employment of any Participant, the following:

               (a) a termination of employment by the Company within seven (7)
          months after a Change in Control, other than for Just Cause, death or
          Disability; provided, however, that any Participant who also is
          eligible to receive benefits under the Sunoco, Inc. Executive
          Involuntary Severance Plan shall not receive benefits thereunder, but
          shall instead receive the Benefits provided under this Plan;

               (b) a termination of employment by the Participant within two (2)
          years after a Change in Control for one or more of the following
          reasons:

                    (1) the assignment to such Participant of any duties
               inconsistent in a way adverse to such Participant, with such
               Participant's positions, duties,

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               responsibilities and status with the Company immediately prior to
               the Change in Control, or a reduction in the duties and
               responsibilities held by the Participant immediately prior to the
               Change in Control; a change in the Participant's reporting
               responsibilities, title or offices as in effect immediately prior
               to the Change in Control that is adverse to the Participant; or
               any removal of the Participant from or any failure to re-elect
               the Participant to any position with the Company that such
               Participant held immediately prior to the Change in Control
               except in connection with such Participant's:

                         (i)  assignment to a new position at a higher combined
                    annual base salary and guideline (target) bonus; or

                         (ii) termination of employment by the Company for Just
                    Cause; or

                    (2) with respect to any Participant who is a member of the
               Board of Directors immediately prior to the Change in Control,
               any failure of the shareholders of the Company to elect or
               reelect, or of the Company to appoint or reappoint, the
               Participant as a member of the Board of Directors;

                    (3) a reduction by the Company in either of the
               Participant's annual base salary or guideline (target) bonus as
               in effect immediately prior to the Change in Control; the failure
               by the Company to continue in effect, or the taking of any action
               by the Company that would adversely affect such Participant's
               participation in or significantly reduce such Participant's
               benefits under, any employee benefit plan or compensation plan in
               which such Participant was participating immediately prior to the
               Change in Control, provided, however, that in the aggregate such
               actions by the Company significantly reduce the Participant's
               total compensation (i.e., the sum of Participant's annual base
               salary, guideline (target) bonus, and the aggregate value to the
               Participant of all employee benefit and compensation plans); or
               the failure by the Company, without the Participant's consent, to
               pay to the Participant any portion of the Participant's current
               compensation, or to pay to the Participant any portion of an
               installment of deferred compensation under any deferred
               compensation program of the Company; or

                    (4) The Company requires the Participant to be based
               anywhere other than the Participant's present work location or a
               location within thirty-five (35) miles from the present location;
               or the Company requires the Participant to travel on Company
               business to an extent substantially more burdensome than such
               Participant's travel obligations during the period of twelve (12)
               consecutive months immediately preceding the Change in Control;

          provided, however, that in the case of any such termination of
          employment by the Participant under this subparagraph (b), such
          termination shall not be deemed to be a Qualifying Termination unless
          the termination occurs within 120 days after the occurrence of the
          event or events constituting the reason for the termination; or

               (c) a termination of employment by the Company other than a
          termination for Just Cause, or a termination of employment by the
          Participant for one of the reasons set forth in (b) above, following a
          Potential Change in Control, if the Participant can demonstrate that
          such termination or circumstance in (b) above leading to termination:

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                    (1) was at the request of a third party with which the
               Company had entered into negotiations or an agreement with regard
               to a Change in Control; or

                    (2) otherwise occurred in connection with, or in
               anticipation of, a Change in Control;

          provided, however, that in either such case, such Change in Control
          actually occurs within one (1) year following the Employment
          Termination Date.

          1.25  Restricted Stock Unit - shall have the meaning provided herein
at Section 6.1.

          1.26  Restriction Period - shall have the meaning provided herein at
Section 6.4.

          1.27  RSU Payout Date - shall have the meaning provided herein at
Section 6.11.

          1.28  Stock Option - shall have the meaning provided herein at Section
3.1.

          1.29  Subsidiary - shall mean any corporation of which, at the time
more than fifty percent (50%) of the shares entitled to vote generally in an
election of directors are owned directly or indirectly by Sunoco, Inc. or any
subsidiary thereof.

                                  ARTICLE II

             Background, Purpose and Term of Plan; Participation & Eligibility
for Benefits

          2.1   Background.  Effective on December 31, 1986, no further awards
shall be made under the Sunoco, Inc. Executive Long-Term Incentive Plan adopted
in June, 1978 provided, however, that any rights theretofore granted under that
plan shall not be affected.

          2.2   Purpose of the Plan. The purposes of this Sunoco, Inc. Long-Term
Incentive Plan (the "Plan") are to:

                (a) more closely associate the interests of the Company with the
          shareholders by relating capital accumulation with increases in
          shareholder value;

               (b) encourage management success by providing capital
          accumulation as an incentive;

               (c) maintain competitive compensation levels; and

               (d) provide an incentive to management for continuous employment
          with the Company.

          It is intended that most awards made under the Plan qualify as
performance-based compensation under Section 162(m) of the Code.

          2.3   Term of the Plan.  This Plan became effective upon approval by
the holders of a majority of the votes present, in person or represented by
proxy, at the 1986 Annual Meeting of

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Shareholders of the Company. No awards will be made under the Plan after
December 31, 1991. The Plan and all awards made under the Plan prior to such
date shall remain in effect until such awards have been satisfied or terminated
in accordance with the Plan and the terms of such awards.

          2.4   Administration.  The Plan shall be administered by the Committee
which shall have the authority, in its sole discretion and from time to time to:

                (a) designate the employees or classes of employees eligible to
          participate in the Plan (each such employee being, a "Participant");

                (b) grant awards provided in the Plan in such form and amount as
          the Committee shall determine;

                (c) impose such limitations, restrictions and conditions upon
          any such award as the Committee shall deem appropriate; and

                (d) interpret the Plan, adopt, amend and rescind rules and
          regulations relating to the Plan, and make all other determinations
          and take all other action necessary or advisable for the
          implementation and administration of the Plan.

          The decisions and determinations of the Committee on all matters
relating to the Plan shall be in its sole discretion and shall be conclusive.
No member of the Committee shall be liable for any action taken or not taken or
decision made or not made in good faith relating to the Plan or any award
thereunder.

          2.5   Eligibility for Participation. Participants in the Plan shall be
the officers and other key employees of the Company who occupy responsible
managerial or professional positions and who have the capability of making a
substantial contribution to the success of the Company. In making this selection
and in determining the amount of awards, the Committee shall consider any
factors deemed relevant, including the individual's functions, responsibilities,
value of services to the Company and past and potential contributions to its
profitability and sound growth.

          2.6   Types of Awards Under the Plan.  Awards under the Plan may be in
the form of any one or more of the following:

                (a) Stock Options, as described in Article III;

                (b) Alternate Appreciation Rights, as described in Article IV;

                (c) Limited Rights, as described in Article V; and/or

                (d) Restricted Stock Units, as described in Article VI.

          2.7   Aggregate Limitation on Awards.  Shares of stock which may be
issued under the Plan shall be Common Stock.  The maximum number of shares of
Common Stock which may be issued under the Plan shall be three million
(3,000,000).  For purposes of calculating the maximum number of shares of Common
Stock which may be issued under the Plan:

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                (a) all the shares issued (including the shares, if any,
          withheld for tax withholding requirements) shall be counted when cash
          is used as full payment for shares issued upon exercise of a Stock
          Option;

                (b) only the shares issued (including the shares, if any,
          withheld for tax withholding requirements) net of shares of Common
          Stock used as full or partial payment for such shares upon exercise of
          a Stock Option, shall be counted; and

                (c) only the shares issued (including the shares, if any,
          withheld for tax withholding) upon vesting and payment of the
          Restricted Stock Units, shall be counted.

          In addition to shares of Common Stock actually issued pursuant to the
exercise of Stock Options, there shall be deemed to have been issued a number of
shares equal to the number of shares of Common Stock in respect of which
Alternate Appreciation Rights and Limited Rights shall have been exercised.
Shares tendered by a Participant as payment for shares issued upon exercise of a
Stock Option, shall be available for issuance under the Plan.  Any shares of
Common Stock subject to a Stock Option, which for any reason is terminated
unexercised or expires shall again be available for issuance under the Plan, but
shares subject to a Stock Option which are not issued as a result of the
exercise of Alternate Appreciation Rights or Limited Rights shall not be
available for issuance under the Plan.

                                  ARTICLE III

                                 Stock Options

          3.1   Award of Stock Options.  The Committee, from time to time, and
subject to the provisions of the Plan and such other terms and conditions as the
Committee may prescribe, may grant to any Participant in the Plan one or more
options to purchase for cash or shares the number of shares of Common Stock
("Stock Options") allotted by the Committee.  The date a Stock Option is granted
shall mean the date selected by the Committee as of which the Committee allots a
specific number of options to a Participant pursuant to the Plan.

          3.2   Stock Option Agreements.  The grant of a Stock Option shall be
evidenced by a written Stock Option Agreement, executed by the Company and the
holder of a Stock Option, stating the number of shares of Common Stock subject
to the Stock Option evidenced thereby, and in such form as the Committee may
from time to time determine.

          3.3   Stock Option Price.  The Option Price per share of Common Stock
deliverable upon the exercise of a Stock Option shall be not less than 100% of
the Fair Market Value of a share of Common Stock on the date the Stock Option is
granted.

          3.4   Term and Exercise.  Except as provided in Section 3.10 hereof,
and unless otherwise determined by the Committee, each Stock Option granted
under the Plan shall become exercisable with respect to twenty-five percent
(25%) of the shares subject thereto on the first anniversary of the date of
grant thereof, and with respect to an additional twenty-five percent (25%) of
such shares on each of the second, third and fourth anniversaries of such date
of grant. Stock Options may be partially exercised from time to time within such
percentage limitations. Stock Options granted under the Plan shall be
exercisable during such period or periods as the Committee shall determine;
provided, however, that no Stock Option shall be exercisable more than ten (10)
years after the date of grant thereof.

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          3.5   Manner of Payment.  Each Stock Option Agreement shall set forth
the procedure governing the exercise of the Stock Option granted thereunder, and
shall provide that, upon such exercise in respect of any shares of Common Stock
subject thereto, the Optionee shall pay to the Company, in full, the Option
Price for such shares with cash or with previously owned Common Stock.
Notwithstanding the foregoing, if previously owned Common Stock is used in
payment of the Option Price, the Optionee may not use the shares received upon
such exercise to immediately satisfy the exercise price of additional Stock
Options.

          3.6   Issuance and Delivery of Shares.  As soon as practicable after
receipt of payment, the Company shall deliver to the Optionee a certificate or
certificates for such shares of Common Stock.  The Optionee shall become a
shareholder of the Company with respect to Common Stock represented by share
certificates so issued and as such shall be fully entitled to receive dividends,
to vote and to exercise all other rights of a shareholder.

          3.7   Retirement or Disability.  Upon termination of the Optionee's
employment by reason of retirement or Disability (as each is determined by the
Committee), the Optionee may, within sixty (60) months from the date of
termination, exercise any Stock Options to the extent such options are
exercisable during such 60-month period.

          3.8   Termination for Other Reasons.  Except as provided in Sections
3.7 and 3.9, or except as otherwise determined by the Committee, upon
termination of an Optionee's employment; all Stock Options shall terminate:

                (a)  immediately, in the case of an Optionee terminated by the
Company for Just Cause; and

                (b)  upon the expiration of ninety (90) calendar days following
the date of termination of an Optionee's employment other than for Just Cause;

provided, however, that the Limited Rights awarded in tandem with such Stock
Options shall not terminate and such Limited Rights shall remain exercisable
during the Exercise Period for any Optionee whose employment relationship with
the Company has been terminated as a result of any Qualifying Termination.

          3.9   Death of Optionee.  Any rights in respect of Stock Options to
the extent exercisable on the date of the Optionee's death may be exercised by
the Optionee's estate or by any person that acquires the legal right to exercise
such Stock Option by bequest, inheritance, or otherwise by reason of the death
of the Optionee. Any such exercise to be valid must occur within the remaining
option term of the Stock Option. The foregoing provisions of this Section 3.9
shall apply to an Optionee who dies while employed by the Company and to an
Optionee whose employment may have terminated prior to death; provided, however,
that:

                (a) an Optionee who dies while employed by the Company will be
          treated as if the Optionee had retired on the date of death.
          Accordingly, the Optionee's estate or a person who acquires the right
          to exercise such Stock Option by bequest or inheritance will have the
          right to exercise the Stock Option in accordance with Section 3.7; or

                (b) the estate or a person who acquires the right to exercise a
          stock option by bequest or inheritance from an Optionee who dies after
          terminating employment with the Company will have the remainder of any
          exercise period provided under Sections 3.7 and 3.8.

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

          3.11  Effect of Exercise.  The exercise of any Stock Options shall
cancel that number of related Alternate Appreciation Rights, if any, and Limited
Rights, if any, which is equal to the number of shares of Common Stock purchased
pursuant to said options.

                                  ARTICLE IV

                         Alternate Appreciation Rights

          4.1   Award of Alternate Appreciation Rights.  Concurrently with or
subsequent to the award of any Stock Option to purchase one or more shares of
Common Stock, the Committee may, subject to the provisions of the Plan and such
other terms and conditions as the Committee may prescribe, award to the Optionee
with respect to each share of Common Stock, a related stock appreciation right
("Alternate Appreciation Right"), permitting the Optionee to be paid the
appreciation on the Stock Option in lieu of exercising the Stock Option.

          4.2   Alternate Appreciation Rights Agreement.  Alternate Appreciation
Rights shall be evidenced by written agreements in such form as the Committee
may from time to time determine.

          4.3   Exercise.  An Optionee who has been granted Alternate
Appreciation Rights may, from time to time, in lieu of the exercise of an equal
number of Stock Options, elect to exercise one or more Alternate Appreciation
Rights and thereby become entitled to receive from the Company payment in Common
Stock the number of shares determined pursuant to Sections 4.4 and 4.5 hereof.
Alternate Appreciation Rights shall be exercisable only to the same extent and
subject to the same conditions as the Stock Options related thereto are
exercisable, as provided in this Plan.  The Committee may, in its discretion,
prescribe additional conditions to the exercise of any Alternate Appreciation
Rights.

          4.4   Amount of Payment.  The amount of payment to which an Optionee
shall be entitled upon the exercise of each Alternate Appreciation Right shall
be equal to 100% of the amount, if any, by which the Fair Market Value of a
share of Common Stock on the exercise date exceeds the Fair Market Value of a
share of Common Stock on the date the Stock Option related to said Alternate
Appreciation Right was granted.

          4.5   Form of Payment.  The number of shares to be paid shall be
determined by dividing the amount of payment determined pursuant to Section 4.4
by the Fair Market Value of a share of Common Stock on the exercise date of such
Alternate Appreciation Rights.  As soon as practicable after exercise, the
Company shall deliver to the Optionee a certificate or certificates for such
shares of Common Stock.  All such shares shall be issued with the rights and
restrictions specified in Section 3.6 of this Plan.

          4.6   Effect of Exercise.  The exercise of any Alternate Appreciation
Rights shall cancel an equal number of Stock Options and Limited Rights, if any,
related to said Alternate Appreciation Rights.

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          4.7   Retirement or Disability.  Upon termination of the Optionee's
employment by reason of retirement or Disability (as each is determined by the
Committee), the Optionee may, within six (6) months from the date of such
termination, exercise any Alternate Appreciation Rights to the extent such
Alternate Appreciation Rights are exercisable during such six-month period.

          4.8   Death of Optionee or Termination for Other Reasons.  Except as
provided in Section 4.7, or except as otherwise determined by the Committee, all
Alternate Appreciation Rights shall terminate upon the termination of the
Optionee's employment or upon the death of the Optionee.

                                   ARTICLE V

                                Limited Rights

          5.1   Award of Limited Rights.  Concurrently with or subsequent to the
award of any Stock Option and Alternate Appreciation Rights, the Committee may,
subject to the provisions of the Plan and such other terms and conditions as the
Committee may prescribe, award to the Optionee with respect to each Stock
Option, a related limited right permitting the Optionee, during a specified
limited time period, to be paid the appreciation on the Stock Option in lieu of
exercising the Stock Option ("Limited Right").

          5.2   Limited Rights Agreement.  Limited Rights granted under the Plan
shall be evidenced by written agreements in such form as the Committee may from
time to time determine.

          5.3   Exercise Period.  Limited Rights are immediately exercisable in
full upon grant for a period of up to seven (7) months following the date of a
Change in Control (the "Exercise Period").

          5.4   Amount of Payment.  The amount of payment to which an Optionee
shall be entitled upon the exercise of each Limited Right shall be equal to 100%
of the amount, if any, which is equal to the difference between the Option Price
of the related Stock Option and the Market Price of a share of such Common
Stock.  Market Price is defined to be the greater of:

                (a) the highest price per share of Common Stock paid, in
          connection with any Change in Control, during the period from the date
          of occurrence of a Potential Change in Control through the ninetieth
          (90th) day following the subsequent related Change in Control; and

                (b) the highest price per share of Common Stock reflected in the
          consolidated trading tables of The Wall Street Journal (presently the
          New York Stock Exchange Composite Transactions quotations) during the
          60-day period prior to the Change in Control.

          5.5   Form of Payment.  Payment of the amount to which an Optionee is
entitled upon the exercise of Limited Rights, as determined pursuant to Section
5.4, shall be made solely in cash.

          5.6   Effect of Exercise.  If Limited Rights are exercised, the Stock
Options, if any, related to such Limited Rights cease to be exercisable to the
extent of the number of shares with respect to which the Limited Rights were
exercised.  Upon the exercise or termination of the Stock

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Options, if any, related to such Limited Rights, the Limited Rights granted with
respect thereto terminate to the extent of the number of shares as to which the
related Stock Options were exercised or terminated; provided, however, that with
respect to Stock Options that are terminated as a result of the termination of
the Optionee's employment status, the Limited Rights awarded in tandem therewith
shall not terminate and such Limited Rights shall remain exercisable during the
Exercise Period for any Optionee whose employment relationship with the Company
has been terminated as a result of any Qualifying Termination.

          5.7   Retirement or Disability.  Upon termination of the Optionee's
employment by reason of Disability or retirement (as each is determined by the
Committee), the Optionee may, within six (6) months from the date of
termination, exercise any Limited Rights to the extent such Limited Right is
exercisable during such six-month period.

          5.8   Death of Optionee or Termination for Other Reasons.  Except as
provided in Sections 5.7 and 5.9 or except as otherwise determined by the
Committee, all Limited Rights granted under the Plan shall terminate upon the
termination of the Optionee's employment or upon the death of the Optionee.

          5.9   Termination Related to a Change in Control. The requirement that
an Optionee be terminated by reason of retirement or permanent disability or be
employed by the Company at the time of exercise pursuant to Sections 5.7 and 5.8
respectively, is waived during the Exercise Period as to any Optionee whose
employment relationship with the Company has been terminated as a result of any
Qualifying Termination.

                                  ARTICLE VI

                            Restricted Stock Units

          6.1   Award of Restricted Stock Units.  The Committee may from time to
time, and subject to the provisions of the Plan and such other terms and
conditions as the Committee may prescribe, grant to any Participant in the Plan
rights to receive shares of Common Stock which are subject to a risk of
forfeiture by the Participant ("Restricted Stock Units").  At the time it grants
any Restricted Stock Units, the Committee shall determine whether the payment of
such Restricted Stock Units shall be conditioned solely upon the Participant's
continued employment with the Company throughout the Restriction Period or upon
the attainment of certain performance targets.

          6.2   Restricted Stock Unit Agreements. Restricted Stock Units granted
under the Plan shall be evidenced by written agreements in such form as the
Committee may from time to time determine.

          6.3   Number of Restricted Stock Units.  Upon making an award, the
Committee shall determine (and the Restricted Stock Unit Agreement shall state)
the number of Restricted Stock Units granted to the grantee.  The initial number
of Restricted Stock Units granted may be adjusted by a performance factor, in
accordance with Section 6.8, to be applied at the conclusion of the Restriction
Period to determine the final number of Restricted Stock Units to be paid.

          6.4   Length of Restriction Period.  Upon making an award, the
Committee shall determine (and the Restricted Stock Unit Agreement shall state)
the length of the Restriction Period.  Restriction Periods will normally be from
three (3) to five (5) years; however, the Committee may establish other time
periods in its sole discretion.

                                       12
<PAGE>

          6.5   Dividend Equivalents. At the Committee's discretion, each holder
of Restricted Stock Units will be entitled to receive payment from the Company
in an amount equal to each cash dividend ("Dividend Equivalent") the Company
would have paid to such holder had he or she, on the record date for payment of
such dividend, been the holder of record of shares of Common Stock equal to the
number of Restricted Stock Units which had been awarded to such holder as of the
close of business on such record date. Payment of Dividend Equivalents is
expressly conditioned on continued employment with the Company at the time of
payment. Each such payment shall be made by the Company on the payment date of
the cash dividend in respect of which it is to be made, or as soon as
practicable thereafter.

          6.6   Payment of Restricted Stock Units.

                (a) Payment in respect of Restricted Stock Units conditioned
          solely upon the Participant's continued employment with the Company
          throughout the Restriction Period shall be made within ninety (90)
          days after the Restriction Period for such Restricted Stock Units has
          ended;

                (b) Payment in respect of Restricted Stock Units conditioned
          upon the attainment of performance targets shall be made to the
          grantee thereof within ninety (90) days after the Restriction Period
          for such Restricted Stock Units has ended, but only to the extent the
          Committee determines that the applicable performance targets have been
          met and subject to any adjustment made to the number of Restricted
          Stock Units which shall be paid, pursuant to Section 6.8(b) hereof.

          6.7   Form of Payment.  Payment for Restricted Stock Units shall be
made in shares of Common Stock, except as provided in Section 6.11 hereof.  The
number of shares paid shall be equal to the number of Restricted Stock Units
earned.  The holder may elect to reduce this amount by the number of shares of
Common Stock which have, on the date the Restricted Stock Units are paid, a fair
market value equal to the applicable federal, state and local withholding tax
due on the receipt of Common Stock, in lieu of making a cash payment equal to
the amount of such withholding tax due.

          6.8   Performance Targets.

                (a) Upon the award of Restricted Stock Units, the Committee may
          establish (and the Restricted Stock Unit Agreement shall state) the
          performance targets to be attained within the Restriction Period as a
          condition of such Restricted Stock Units being earned out. Performance
          targets may be based entirely on each participant's business unit
          goals, or partially on business unit goals and partially on corporate
          goals, or entirely on corporate goals. Goals may include qualitative
          as well as quantitative measures. Performance targets may be adjusted
          during the Restriction Period, at the Committee's sole discretion, to
          reflect extraordinary events beyond management's control;

                (b) Attainment by the participant of performance targets in
          respect of a Restriction Period will result in 100% of the Restricted
          Stock Units being earned out. Attainment of performance below the
          performance targets in respect of a Restriction Period shall result in
          a proportionate amount of the value of the Restricted Stock Units (on
          a scale from 0 to 100%) being earned out, as determined by the
          Committee.

                                       13
<PAGE>

          6.9   Termination of Employment.  Except as provided in Sections 6.10
and 6.11, or except as otherwise determined by the Committee, all Restricted
Stock Units granted to a Participant under the Plan shall terminate upon
termination of the Participant's employment with the Company prior to the end of
the Restriction Period applicable to such Restricted Stock Units, and in such
event the Participant shall not be entitled to receive any payment in respect
thereof.

          6.10  Death, Disability or Retirement.  In the event that the
employment of a Participant who has been granted Restricted Stock Units under
the Plan shall terminate during a Restriction Period by reason of death,
Disability (as determined by the Committee), or retirement, such Participant
shall be entitled, in the sole discretion of the Committee, to receive upon the
expiration of the Restriction Period payment in respect of said Restricted Stock
Units; provided, however, that such Restricted Stock Units shall be adjusted by
multiplying the amount thereof by a fraction, the numerator of which shall be
the number of full and partial calendar months between the date of award of the
Restricted Stock Units and the date that employment terminated, and the
denominator of which shall be the number of full and partial calendar months
from the date of award to the end of the Restriction Period.

          6.11  Change in Control.  In the event of a Change in Control, all the
Participant's outstanding Restricted Stock Units shall be payable to the
Participant in cash or stock, as follows:

                (a) if pooling of interests accounting treatment is to be used
          with respect to such Change in Control, the Participant will receive
          shares of Common Stock equal in number to the total number of
          Restricted Stock Units granted to such Participant; or

               (b) if pooling of interests accounting treatment is not to be
          used with respect to such Change in Control, the Participant will be
          paid an amount in cash equal to the number of Restricted Stock Units
          outstanding multiplied by the Market Price as defined in Section 5.4.
          Such amount will be reduced by the applicable federal, state and local
          withholding taxes due.

          The cash or stock, as the case may be, shall be paid out to the
Participant no later than ninety (90) days following the date of occurrence of
such Change in Control (the "RSU Payout Date"), regardless of whether the
applicable Restriction Period has expired or whether performance targets have
been met.  There will be no adjustment for any performance factors described in
Section 6.8.

          On or before the RSU Payout Date, and regardless of whether pooling of
interests accounting treatment is to be used with respect to such Change in
Control, the Participant will be paid an amount in cash equal to the value of
the related accrued Dividend Equivalents immediately preceding the Change in
Control.  Payout of Restricted Stock Units and the related Dividend Equivalents
shall be made to each Participant:

               (c) who is employed by the Company on the RSU Payout Date; or

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

                    (1) as a result of any Qualifying Termination prior to the
               RSU Payout Date; or

                    (2) as a result of death or Disability following the
               occurrence of any Change in Control but prior to the RSU Payout
               Date.

                                       14
<PAGE>

          The Committee may establish, at the time of the grant of Common Stock
Units, other conditions which must be met for payout to occur.  These conditions
shall be set forth in the Committee's resolution granting the Common Stock Units
and in the Agreement with the holder.

                                  ARTICLE VII

                                 Miscellaneous

          7.1   General Restriction. Each award under the Plan shall be subject
to the requirement that, if at any time the Committee shall determine that:

                (a) the listing, registration or qualification of the shares of
          Common Stock subject or related thereto upon any securities exchange
          or under any state or Federal law; or

                (b) the consent or approval of any government regulatory body,
          or

               (c) an agreement by the recipient of an award with respect to the
          disposition of shares of Common Stock,

is necessary or desirable as a condition of, or in connection with, the granting
of such award or the issue or purchase of shares of Common Stock thereunder,
such award may not be consummated in whole or in part unless such listing,
registration, qualification, consent, approval or agreement shall have been
effected or obtained free of any conditions not acceptable to the Committee.

          7.2   Accounting and Tax Treatment for Change in Control.
Notwithstanding anything in this Plan to the contrary, in the event of a Change
in Control, the Committee shall not have the right to take any actions described
in the Plan that would make the Change in Control ineligible for pooling of
interests accounting treatment or that would make the Change in Control
ineligible for desired tax treatment if, in the absence of such right, the
Change in Control would qualify for such treatment and the Company intends to
use such treatment with respect to the Change in Control.

          7.3   Non-Assignability. Awards under the Plan shall not be assignable
or transferable by the recipient thereof, except by will or by the laws of
descent and distribution. During the life of the recipient, such award shall be
exercisable only by such person or by such person's guardian or legal
representative.

          7.4   Right to Terminate Employment.  Nothing in the Plan or in any
agreement entered into pursuant to the Plan shall confer upon any Participant
the right to continue in the employment of the Company or effect any right which
the Company may have to terminate the employment of such Participant.

          7.5   Non-Uniform Determinations. The Committee's determinations under
the Plan (including without limitation, determinations of the persons to receive
awards, the form, amount and timing of such awards, the terms and provisions of
such awards, and the agreements evidencing same) need not be uniform and may be
made by it selectively among persons who receive, or are eligible to receive,
awards under the Plan, whether or not such persons are similarly situated.

                                       15
<PAGE>

          7.6   Rights as a Shareholder. The recipient of any award under the
Plan shall have no rights as a shareholder with respect thereto unless and until
certificates for shares of Common Stock are issued on behalf of such recipient.

          7.7   Leaves of Absence.  The Committee shall be entitled to make such
rules, regulations and determinations as it deems appropriate under the Plan in
respect of any leave of absence taken by the recipient of any award.  Without
limiting the generality of the foregoing, the Committee shall be entitled to
determine (i) whether or not any such leave of absence shall constitute a
termination of employment within the meaning of the Plan and (ii) the impact, if
any, of any such leave of absence on awards under the Plan theretofore made to
any recipient who takes such leaves of absence.

          7.8   Newly Eligible Employees. The Committee shall be entitled to
make such rules, regulations, determinations and awards as it deems appropriate
in respect of any employee who becomes eligible to participate in the Plan or
any portion thereof after the commencement of an award or incentive period.

          7.9   Adjustments. In any event of any change in the outstanding
Common Stock by reason of a stock dividend or distribution, recapitalization,
merger, consolidation, split-up, combination, exchange of shares or the like,
the Committee may appropriately adjust the number of shares of Common Stock
which may be issued under the Plan, the number of shares of Common Stock subject
to Stock Options theretofore granted under the Plan, the Option Price of Options
theretofore granted under the Plan, the number of Restricted Stock Units
theretofore awarded under the Plan and any and all other matters deemed
appropriate by the Committee.

          7.10  Amendment of the Plan.

                (a) The Committee may, without further action by the
          shareholders and without receiving further consideration from the
          Participants, amend this Plan or condition or modify awards under this
          Plan in response to changes in securities or other laws or rules,
          regulations or regulatory interpretations thereof applicable to this
          Plan or to comply with stock exchange rules or requirements.

                (b) The Committee may at any time, and from time to time, modify
          or amend the Plan in any respect, except that without shareholder
          approval the Committee may not:

                       (1) increase the maximum award levels established in
                Section 2.7, including the maximum number of shares of Common
                Stock which may be issued under the Plan (other than increases
                pursuant to Section 7.9);

                       (2) extend the term during which any Stock Option may be
                exercised beyond ten (10) years from the date of grant; or

                       (3) extend the term of the Plan, except that the Board
                may extend the period during which awards may be made in
                accordance with Section 2.3.

          The termination or any modification or amendment of the Plan, except
as provided in Section 7.10(a) above, shall not without the consent of a
Participant, affect the Participant's rights under an award previously granted.

                                       16
<PAGE>

          7.11  Withholding Taxes.  Whenever the Company proposes or is required
to issue or transfer shares of Common Stock under the Plan, the Company shall
have the right to require the grantee to remit to the Company 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. Whenever under the Plan payments are to be made in cash, such payments
shall be net of an amount sufficient to satisfy any Federal, state and/or local
withholding tax requirements.

                                       17<PAGE>

                                                                    Exhibit 10.4

================================================================================

                     DIRECTORS' DEFERRED COMPENSATION PLAN

                              Amended and Restated

                                     as of

                                February 3, 2000

================================================================================
<PAGE>

                                   ARTICLE I

                                  Definitions

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

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

     1.2  Change in Control - shall mean the occurrence of any of the following
events or transactions:

          (a)  Continuing Directors cease, within one year of a Control
     Transaction, to constitute a majority of the Board of Directors of Sunoco,
     Inc. (or of the Board of Directors of any successor to Sunoco, Inc. or to
     all or substantially all of its assets); or

          (b)  any entity, person or Group acquires shares of Sunoco, Inc. in a
     transaction or series of transactions that results in such entity, person
     or Group directly or indirectly owning beneficially more than twenty
     percent (20%) of the outstanding voting shares of Sunoco, Inc.

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

     1.4  Company - shall mean Sunoco, Inc., a Pennsylvania corporation. The
term "Company" shall include any successor to Sunoco, Inc., any subsidiary or
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.

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

     1.6  Continuing Director - shall mean a Director who was a member of the
Board of Directors immediately prior to a Control Transaction which results in a
Change in Control.

     1.7  Control Transaction - shall mean any of the following transactions or
any combination thereof:

          (a)  any tender offer for or acquisition of capital stock of Sunoco,
     Inc.;

          (b)  any merger, consolidation, or sale of all or substantially all of
     the assets of Sunoco, Inc.; or

          (c)  the submission of a nominee or nominees for the position of
     director of Sunoco, Inc. by a shareholder or a Group of shareholders in a
     proxy solicitation or otherwise.

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

                                       1
<PAGE>

     1.9  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.

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

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

     1.12 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 Yearly Credit awarded to such
Participant under this Plan pursuant to Article IV hereof.

     1.13 Group - shall mean persons who act in concert as described in
Sections 13(d)(3) and/or 14(d)(2) of the Securities Exchange Act of 1934, as
amended.

     1.14 Interest Equivalent - shall mean the entry in a Deferred Compensation
Account of an 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.

     1.15 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
the Restricted Share Units in accordance with the terms of this Plan.

     1.16 Plan - shall mean this Directors' Deferred Compensation Plan, as it
may be amended from time to time.

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

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

     1.19 Share - 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.

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

                                       2
<PAGE>

                                   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 of the 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 apply only 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. 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 beneficiary as set forth in Article V.

     Without any further action by Participant, the choices specified in the
Participant's Deferred Payment Election Form regarding the percentage of
Compensation deferred, the 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 amounts yet 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  Subsequent Change in Method of Payment Election.

          (a)  Change in Method of Payment Prior to Commencement of Distribution
     or Payment. With the approval of the Committee, and at any time not later
     than twelve (12) months prior to the commencement of any payment or
     distribution of the amounts credited to the Participant's Deferred
     Compensation Account, a Participant in this portion of the Plan may file a
     written request with regard to the method of payment (i.e., a series of
     installments versus lump-sum payout), on a form prescribed by the
     Committee, which will revoke all such earlier or prior elections with
     regard to the method of payment (i.e., a series of installments versus
     lump-sum payout), and such new choice as to method of payment will be
     applied both to amounts previously credited to the Participant's current
     Deferred Compensation Account balance, as well as to amounts to be credited
     to such Deferred Compensation Account balance prospectively. Any such new
     or subsequent election that is made less than twelve (12) months prior to
     the commencement of any payment or distribution of the amounts credited to
     the Participant's Deferred Compensation Account, will be null and void, and
     the Participant's next preceding timely election will be reinstated.

          (b)  Change in Method of Payment Following Commencement of
     Distribution or Payment. After payment or distribution of amounts credited
     to the Participant's Deferred

                                       3
<PAGE>

     Compensation Account has commenced, the Participant may not change the
     period of time for which such amounts are payable. However the Participant
     may convert 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 Compensation in
multiples of five percent (5%) but shall not be less than ten percent (10%).

     2.4  Time of Election  Except as otherwise determined by the 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 to defer
Compensation prior to the commencement of his or her term in office.

                                  ARTICLE III

                    Voluntary Deferred Compensation Accounts

     3.1  Creation of Voluntary Deferred Compensation Accounts.  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 Units shall 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 Account shall 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 to the 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 be appropriately 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 the like, and such
adjustments shall be conclusive. Share Units shall not entitle any person to the
rights of a stockholder.

     3.3  Crediting Cash Units.  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.

     3.4  Crediting Dividend Equivalents.  For Share Units, the Company shall
credit the Participant's 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. The number of Share
Units to be credited to the Deferred Compensation Account shall be calculated by
dividing the Dividend Equivalents by the average closing price for

                                       4
<PAGE>

Shares 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 dividends are paid on the Company's Shares. Any
fractional Share Units shall also be credited to a Participant's Deferred
Compensation Account.

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

     3.6 Share Unit 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 the balance 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 the Wall Street Journal under the caption "New York
Stock Exchange Composite Transactions" for the ten (10) day period immediately
prior to such one-time conversion election.

     3.7  Time of Payment.

          (a)  Election of Benefit Commencement Date. Except as provided in
     Section 2.2 hereinabove, and in Article VII hereof, all payments of a
     Participant's Deferred Compensation Account shall be made at, or shall
     commence on, the date selected by the Participant in accordance with the
     terms of this Section 3.7. The date of payment or distribution must be
     irrevocably specified by the Participant in his or her most recently filed
     written Deferred Payment Election Form. If the Participant fails to
     designate a time of payment, payment shall commence on the first day of the
     calendar year following termination of Board membership. The Participant
     may elect to defer the receipt of his or her Compensation to:

               (1)  the first day of any calendar quarter, provided such date is
          at least six (6) months after the end of the calendar quarter in which
          the Compensation is earned; or

               (2)  the first day of the calendar year following the date of:

                    (i)   retirement as a Director;

                    (ii)  termination of Board membership; or

                    (iii) death. Upon the death of a Director 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, commencing on
                          the first day of the calendar year following the year
                          of 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 Compensation being earned or awarded. The benefit
commencement date may not be later than the third calendar year following the
attainment of mandatory retirement age for Directors.

                                       5
<PAGE>

          (b)  Acceleration of Benefit Commencement Date Prior to Payment. At
     any time prior to the commencement of any payment or distribution of a
     Participant's Deferred Compensation Account, such Participant may request
     in writing to accelerate the receipt of all or a specified portion of such
     deferred Compensation amounts to the first day of any calendar quarter;
     provided, however, that such date is at least six (6) months after the end
     of the quarter in which the Compensation is earned. Any such acceleration
     will be 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;

     3.8  Method of Payment.  A Participant in this portion of the Plan shall
have the option of:

          (a)  selecting a lump-sum payment;

          (b)  selecting a series of approximately equivalent annual
     installments (adjusted as necessary to reflect Dividend Equivalents and/or
     Interest Equivalents accrued during the installment payout period) in such
     number of installments as the Participant shall specify (not exceeding ten
     (10) installments); or

          (c)  not selecting a method of payment at the time the Deferred
     Payment Election Form is prepared. If the Participant does not select a
     method of payment, he or she must, at least twelve (12) months prior to the
     time the deferral amount is scheduled to be paid, notify the Corporate
     Secretary as to the specific method of payment which will be either in a
     lump sum or in approximately equivalent annual installments, and such
     election shall be subject to the consent of the Committee. Failure to
     provide appropriate notification to the Corporate Secretary will result in
     a lump sum payment on the deferral payment date.

     Participant shall receive in cash all deferred compensation credited to
such Participant's Deferred Compensation Account. Share Units credited to the
Participant's Deferred Compensation Account 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" for the ten (10) day
period prior to each new calendar year.

                                   ARTICLE IV

                   Restricted Deferred Compensation Accounts

     4.1  Creation of Restricted Deferred Compensation Accounts.  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 of February 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 Restricted Share
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 the caption "New York Stock Exchange Composite Transactions" for the ten
(10) business days prior to February 15, 1996. Payout of these Restricted Share
Units shall not commence until death, retirement or the termination of Board
service.

                                       6
<PAGE>

     4.2  Crediting Share Units.  If the Committee elects to do so, each year 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 of Restricted 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 Wall Street Journal
under the caption "New York Stock Exchange Composite Transactions" ten (10) day
period prior to the Company's annual meeting. Any fractional Restricted Share
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 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 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 shall credit 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. The number 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 the
caption "New York Stock Exchange Composite Transactions" 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 Restricted Share Units shall also be credited
to a Participant's Restricted Deferred Compensation Account.

     4.4  Restricted Share Unit 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 the balance 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 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 immediately prior to 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 Deferred Compensation
     Account shall be made at, or shall commence on, the date selected by the
     Participant in accordance with the terms of this Article IV. The date of
     payment or distribution must be specified by the Director in his or her
     written Form of Continuing Deferral unless such election is revoked. A
     Participant's revocation must be submitted to the Corporate Secretary in
     writing. If the Participant selects a new election with regard to the date
     of payment or distribution, such election will apply only prospectively to
     any additional Restricted Share Units to be credited to a Director's
     Restricted Deferred Compensation Account. If the Participant fails to
     designate a time of payment, payment shall commence on the first day of the
     calendar year following termination of Board service. The Participant may
     elect to defer the receipt of his or her Compensation to the first day of
     the year following the date of:

               (a)  retirement as a Director;

                                       7
<PAGE>

               (b)  termination of Board service; or

               (c)  death.  Upon the death of a Director or former Director,
               prior to the final payment of all amounts credited to his or her
               Account, the balance of the Restricted Deferred Compensation
               Account shall be paid in accordance with Article V, commencing on
               the first day of the calendar year following the year of death.

          Notwithstanding the foregoing provisions of this Section 4.5, in no
     event, however, shall any payment or distribution be made within the six
     (6) months of the Compensation being earned. The benefit commencement date
     may not be later than the third calendar year following the attainment of
     mandatory retirement age for Participants.

          (b)  Acceleration of Benefit Commencement Date Prior to Payment. At
     any time prior to the commencement of any payment or distribution of a
     Participant's Restricted Deferred Compensation Account, such Participant
     may request in writing to accelerate the receipt of all or a specified
     portion of such Restricted Deferred Compensation Account amounts to the
     first day of any calendar quarter; provided, however, that such date is at
     least six (6) months after the end of the quarter in which the Compensation
     is earned. Any such acceleration will be subject to a penalty equal to a
     five percent (5%) reduction in the balance of the Participant's Restricted
     Deferred Compensation Account, which shall be forfeited to the Company.

     4.6  Method of Payment.  Participant shall have the option of:

          (a)  selecting a lump sum payment;

          (b)  selecting a series of approximately equivalent annual
     installments (adjusted as necessary to reflect Dividend Equivalents and/or
     Interest Equivalents accrued during the installment payout period) in such
     number of installments as the Participant shall specify (not exceeding ten
     (10) installments); or

          (c)  not selecting a method of payment at the time the Form for
     Continuing Deferral is prepared. If the Participant does not select a
     method of payment, he or she must, at least twelve months prior to the time
     the deferral amount is scheduled to be paid, notify the Corporate Secretary
     as to the specific method of payment which will be either in a lump sum or
     in approximately equivalent annual installments, and such election shall be
     subject to the consent of the Committee. Failure to provide appropriate
     notification to the Corporate Secretary will result in a lump sum payment
     on the deferral payment date.

          Share Units credited to the Participant's Restricted Deferred
     Compensation Account 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" for the ten (10) day period prior to
     each new calendar year.

     4.7  Subsequent Change in Method of Payment Election.

          (a)  Change in Method of Payment Prior to Commencement of Distribution
     or Payment. With the approval of the Committee, and at any time not later
     than twelve (12) months

                                       8
<PAGE>

     prior to the commencement of any payment or distribution of the amounts
     credited to the Participant's Restricted Deferred Compensation Account, a
     Participant in this portion of the Plan may file a written request with
     regard to the method of payment (i.e., a series of installments versus
     lump-sum payout), on a form prescribed by the Committee, which will revoke
     all such earlier or prior elections with regard to the method of payment
     (i.e., a series of installments versus lump-sum payout), and such new
     choice as to method of payment will be applied both to amounts previously
     credited to the Participant's current Restricted Deferred Compensation
     Account balance, as well as to amounts to be credited to such Restricted
     Deferred Compensation Account balance prospectively. Any such new or
     subsequent election that is made less than twelve (12) months prior to the
     commencement of any payment or distribution of the amounts credited to the
     Participant's Restricted Deferred Compensation Account, will be null and
     void, and the Participant's next preceding timely election will be
     reinstated.

          (b)  Change in Method of Payment Following Commencement of
     Distribution or Payment. After payment or distribution of amounts credited
     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 the Participant may convert 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 Restricted
     Deferred Compensation Account, which shall be forfeited to the Company.

                                   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 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's Deferred 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 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 Deferred Compensation Account and Restricted Deferred Compensation
Account shall be paid in accordance with the method and form elected by the
Participant; provided, however, that the balance of the Participant's Deferred
Compensation Account and Restricted Deferred

                                       9
<PAGE>

Compensation Account may be paid out as a lump sum at the request of the
designated beneficiary, and with the consent of the Committee.

                                   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 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 of any 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 Account or 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 Compensation Account 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
the Company.

                                  ARTICLE VII

                               Change in Control

     7.1  Acceleration of Payment Upon Change in Control.  The terms of this
Section 7.1 shall immediately become operative, without further action or
consent by any person or entity, upon a Change in Control, and once operative
shall supersede and control over any other provisions of this Plan.  Upon the
occurrence of a Change in Control, and for twelve (12) months thereafter, each
Participant, whether or not he or she is still a Director, shall have the right
to withdraw, in a single lump-sum cash payment, an amount equal to ninety-five
percent (95%) of the balance of each of his or her Deferred Compensation Account
and Restricted Deferred Compensation Account, 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 which the funds are withdrawn
as a penalty. Payments under this Section 7.1 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 to withdraw
pursuant to this Section 7.1.

     7.2  Amendment on or after Change in Control.  On or after a Change in
Control, no action, including by way of example and not of limitation, the
amendment, suspension or termination of the Plan, shall be taken which would
affect the rights of any Participant or the operation of this Plan with respect
to the balance in the Participant's Accounts.

     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

                                      10
<PAGE>

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.

                                  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 any payment 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
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.

                                   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
such amendment 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.

                                  ARTICLE XII

                                  Construction

     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

                                      11
<PAGE>

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.

                                      12

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