EXHIBIT 10.2
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SUNOCO PARTNERS LLC
ANNUAL INCENTIVE PLAN
(AMENDED AND RESTATED AS OF APRIL 21, 2005)
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SUNOCO PARTNERS LLC LONG-TERM INCENTIVE PLAN
AMENDED AND RESTATED AS OF APRIL 21, 2005
SUNOCO PARTNERS LLC
ANNUAL INCENTIVE PLAN
1. DEFINITIONS. As used in this Plan, the following terms shall have the
meanings herein specified:
1.1 Affiliate - means, with respect to any entity, any other entity
that directly or indirectly, through one or more intermediaries,
controls, is controlled by or is under common control with, the
entity in question. For purposes of this definition, "control"
means the possession, direct or indirect, of the power to direct
or cause the direction of the management and policies of an
entity, whether through ownership of voting securities, by
contract or otherwise.
1.2 Board of Directors - shall mean the Board of Directors of the
Company.
1.3 Cause - shall mean
(a) fraud or embezzlement on the part of the Participant;
(b) conviction of or the entry of a plea of nolo contendere by the
Participant to any felony;
(c) 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 pursuant to subsections
1.6(c)(1), (2), (3), (4) or (5)) within thirty (30) days
following the delivery of a written demand for substantial
performance to the Participant by the Board of Directors, or
any employee of the Company or an Affiliate with supervisory
authority over the Participant, that specifically identifies
the manner in which the Board of Directors or such supervising
employee believes that the Participant has not substantially
performed the Participant's duties; or
(d) any act of willful misconduct by the Participant which:
(1) is intended to result in substantial personal enrichment
of the Participant at the expense of the Partnership, the
Company, or any respective Affiliates thereof; or
(2) has a material adverse impact on the business or
reputation of the Partnership, the Company, or any
respective 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).
1.4 Change of Control - shall mean, and shall be deemed to have
occurred upon the occurrence of one or more of the following
events:
(a) 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, Inc. and its
Affiliates;
(b) a "Change in Control" of Sunoco, as defined from time to time
in the Sunoco stock plans; or
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SUNOCO PARTNERS LLC LONG-TERM INCENTIVE PLAN
AMENDED AND RESTATED AS OF APRIL 21, 2005
(c) the general partner (whether the Company or any other Person)
of the Partnership ceases to be an Affiliate of Sunoco.
1.5 CIC Incentive Award - shall mean the incentive award payable in
cash following a Change of Control, as described herein at Section
8.4.
1.6 CIC Participant - shall mean a Participant:
(a) whose employment was terminated by the Company (other than for
cause) on or following the Change of Control, but before
payment of the CIC Incentive Award; or
(b) whose employment was terminated by the Company (other than for
Cause) before the Change of Control, or
(c) who terminated employment for one of the following reasons:
(1) the assignment to such Participant of any duties
inconsistent in a way significantly adverse to such
Participant, with such Participant's positions, duties,
responsibilities and status with the Company immediately
prior to the Change of Control, or a significant reduction
in the duties and responsibilities held by the Participant
immediately prior to the Change of Control, in each case
except in connection with such Participant's termination
of employment by the Company for Cause; or
(2) with respect to any Participant who is a member of the
Company's board of directors immediately prior to the
Change of Control, any failure of the members of the
Company to elect or re-elect, or of the Company to appoint
or re-appoint, the Participant as a member of such board
of directors; or
(3) a reduction by the Company in either the Participant's
annual base salary or guideline (target) bonus as in
effect immediately prior to the Change of Control; or
(4) the failure of the Company to provide the Participant with
employee benefits and incentive compensation opportunities
that:
(i) are not less favorable than those provided to other
executives who occupy the same grade level at the
Company as the Participant, or if the Company's grade
levels are no longer applicable, to a similar peer
group of the executives of the Company; and
(ii) provide the Participant with benefits that are at
least as favorable, measured separately for: (A)
incentive compensation opportunities, (B) savings and
retirement benefits, (C) welfare benefits, and (D)
fringe benefits and vacation, as the most favorable
of each such category of benefit in effect for the
Participant at any time during the 120-day period
immediately preceding the Change of Control; or
(5) 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
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SUNOCO PARTNERS LLC LONG-TERM INCENTIVE PLAN
AMENDED AND RESTATED AS OF APRIL 21, 2005
Participant's travel obligations during the period of
twelve (12) consecutive months immediately preceding the
Change of Control;
provided, however, that in the case of a Participant whose
employment terminates under either subsection 1.6(b) or (c), such
Participant can demonstrate that such termination, or circumstance
leading to the termination, was at the request of a third party
with which the Company had entered into negotiations or an
agreement regarding a Change of Control, or otherwise occurred in
connection with a Change of Control; and further provided, that in
either case, the Change of Control actually occurs within one (1)
year following the employment termination and, in the event of a
termination under 1.6(c), the termination occurs within 120 days
after the occurrence of the event or events constituting the
reason for such termination; or
(d) who was, immediately before the Change of Control, eligible
for a prorated award under the provisions of Section 8.3; or
(e) who was employed by the Company on the date of the Change of
Control and who does not incur a termination for Cause before
payment of the CIC Incentive Award, in the event that, prior
to the end of the calendar year in which the Change of Control
occurred, either:
(1) the Plan is terminated; or
(2) the performance measures and/or performance targets for
the applicable Plan Year are changed or modified,
resulting in a decrease in the amount of any CIC Incentive
Award otherwise payable.
1.7 CIC Short Period - shall mean the portion of the Plan Year from
January 1 to the date of the occurrence of a Change of Control.
1.8 Company - shall mean Sunoco Partners LLC, a Delaware limited
liability company. The term "Company" shall include any successor
to Sunoco Partners LLC, any subsidiary or Affiliate that has
adopted the Plan, or any company succeeding to the business of
Sunoco Partners LLC by merger, consolidation, liquidation, or
purchase of assets or stock, or similar transaction.
1.9 Compensation Committee - shall mean the Compensation Committee of
the Company's Board of Directors.
1.10 Participant - shall mean a person participating or eligible to
participate in the Plan, as determined under Section 4.
1.11 Partnership - shall mean Sunoco Logistics Partners L.P., a
Delaware limited partnership, and its subsidiaries.
1.12 Plan - shall mean the Company's Annual Incentive Plan as amended
and restated effective as of April 21, 2005.
1.13 Plan Year - shall mean the performance (calendar) year.
1.14 Pro-rated Bonus Award - shall mean an amount equal to the award
otherwise payable to a Participant for the Plan Year in which the
Participant's termination of employment with the Company (other
than for Cause) is effective, multiplied by a fraction the
numerator of which is the number of full and partial months in the
applicable Plan Year through the date of termination of such
Participant's employment, and the denominator of which is twelve
(12).
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SUNOCO PARTNERS LLC LONG-TERM INCENTIVE PLAN
AMENDED AND RESTATED AS OF APRIL 21, 2005
2. PURPOSE. The purpose of this Plan is to motivate management and the
employees of the Company and its Affiliates who perform services for the
Partnership to collectively produce outstanding results, encourage superior
performance, increase productivity, and aid in attracting and retaining key
employees.
3. PLAN GUIDELINES. The administration of the Plan and any potential awards
granted pursuant to the Plan is subject to the determination by the Compensation
Committee of the Company's Board of Directors that the performance goals for the
applicable periods have been achieved. The Plan is an additional compensation
program designed to encourage Participants to exceed specified objective
performance targets for the designated period. The Compensation Committee will
review the Partnership's performance results for the designated performance
period, and thereafter will determine whether or not to approve awards under the
Plan.
4. PERFORMANCE TARGETS.
4.1 Designation of Performance Targets. The Company's Chief Executive
Officer shall recommend, subject to approval by the Company's
Compensation Committee, the performance measures and performance
targets to be used for each Plan Year in determining the bonus
amounts to be paid under the Plan. Performance targets may be
based on Partnership, business unit and/or individual
achievements, or any combination of these, or on such other
factors as the Company's Chief Executive Officer, subject to the
approval of the Compensation Committee, may determine. Different
performance targets may be established for different participants
for any Plan Year. Satisfactory results, as determined by the
Company's Compensation Committee in its sole discretion, must be
achieved in order for an award to be made pursuant to the Plan.
4.2 Equitable Adjustment to Performance Targets. At its discretion,
the Compensation Committee may adjust actual performance measure
results for extraordinary events or accounting adjustments
resulting from significant asset purchases or dispositions or
other events not contemplated or otherwise considered by the
Compensation Committee when the performance measures and targets
were set.
5. PARTICIPANTS. The Compensation Committee, in consultation with the
Company's Chief Executive Officer, will designate members of management and
employees of the Company and its Affiliates as eligible to participate in the
Plan. Employees so designated shall be referred to as "Participants."
6. PARTICIPATION LEVELS. A Participant's designated level of participation
in the Plan, or target bonus, will be determined under criteria established or
approved by the Compensation Committee for that Plan Year or designated
performance period. Levels of participation in the Plan may vary according to a
Participant's position and the relative impact such Participant can have on the
Company's and/or Affiliates' operations. Care will be used in communicating to
any participant his performance targets and potential performance amount for a
Plan Year. The amount of target bonus a participant may receive for any Plan
Year, if any, will depend upon the performance level achieved (unless waived)
for that Plan Year, as determined by the Compensation Committee. No Participant
shall have any claim to be granted any award under the Plan, and there is no
obligation for uniformity of treatment of Participants. The terms and conditions
of awards need not be the same respecting each Participant.
7. AWARD PAYOUT. Awards typically will be determined after the end of the
Plan Year or designated performance period. Awards will be paid in cash
annually, unless otherwise determined by
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SUNOCO PARTNERS LLC LONG-TERM INCENTIVE PLAN
AMENDED AND RESTATED AS OF APRIL 21, 2005
the Compensation Committee. The Compensation Committee will have the discretion,
by Participant and by grant, to reduce (but not to increase) some or all of the
amount of any award that otherwise would be payable by reason of the
satisfaction of the applicable performance targets. In making any such
determination, the Compensation Committee is authorized to take into account any
such factor or factors it determines are appropriate, including but not limited
to Company, business unit and individual performance; provided, however, that
the exercise of such negative discretion with respect to one Participant may not
be used to increase the amount of any award otherwise payable to another
Participant.
8. TERMINATION OF EMPLOYMENT.
8.1 Voluntary Termination. Except in the event of a Change of Control,
if a Participant terminates his or her employment with the Company
(for any reason other than retirement, death, permanent
disability, or approved leave of absence) prior to December 31 of
any Plan Year, such Participant will not receive payment of the
award for such Plan Year, and will forfeit any right, title or
interest in such award, unless and to the extent waived by the
Compensation Committee in its sole discretion.
8.2 Termination for Cause. A Participant will not receive payment of
any award for a particular Plan Year if the Participant's
employment with the Company is terminated for Cause prior to the
payment of such award.
8.3 Death, Retirement, Disability, Leaves of Absence, Etc. A Pro-rated
Bonus Award, reflecting participation for a portion of the Plan
Year, will be paid to any Participant whose employment status
changed during the year as a result of:
(a) death;
(b) permanent disability (as determined by the Committee);
(c) retirement;
(d) approved leave of absence; or
(e) termination at the Company's request (other than for Cause),
for Participants in salary Grade 11 or above on the employment
termination date.
New hires and part-time employees also will receive a Pro-rated
Bonus Award. Unless otherwise required by applicable law, any
Pro-rated Bonus Award payable hereunder will be paid on the date
when awards are otherwise payable as provided in the Plan.
8.4 Change of Control. Upon the occurrence of a Change of Control, the
terms of this Section 8.4 shall immediately become operative,
without further action or consent by any person or entity, and
once operative shall supersede and control over any other
provisions of this Plan.:
(a) Acceleration. The CIC Incentive Award shall be payable in cash
to all CIC Participants within thirty (30) days following the
occurrence of a Change of Control (or as soon as it is
practicable to determine the level of attainment of applicable
performance targets under subsection 8.4(a)(1)). Such award
shall be calculated according to the terms of the Plan, except
as follows:
(1) the level of attainment of applicable performance targets
shall be determined based upon the performance of the
Partnership for completed months from January 1 through
the date of the Change of Control.
(2) The amount of the CIC Incentive Award shall be equal to
the respective award adjusted to reflect the level of
attainment of applicable performance
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SUNOCO PARTNERS LLC LONG-TERM INCENTIVE PLAN
AMENDED AND RESTATED AS OF APRIL 21, 2005
targets, multiplied by the number of full and partial
months in the CIC Short Period divided by twelve (12).
(3) Notwithstanding anything herein to the contrary, no action
taken by the Compensation Committee or the Board of
Directors after a Change of Control, or before, but in
connection with, a Change of Control, may:
(i) terminate or reduce the CIC Incentive Award or
prospective CIC Incentive Award payable to any
Participant in connection with such Change of Control
without the express written consent of such
Participant; or
(ii) adversely affect a Participant's rights under
subsection 8.4(b) in connection with such Change of
Control.
(b) Attorney's Fees. The Company shall pay all reasonable legal
fees and related expenses incurred by a Participant in seeking
to obtain or enforce payment of the CIC Incentive Award to
which such Participant may be entitled under the Plan after a
Change of Control; provided, however, that the Participant
shall be required to repay any such amounts to the Company to
the extent a court of competent jurisdiction issues a final
and non-appealable order setting forth the determination that
the position taken by the Participant was frivolous or
advanced in bad faith.
9. AMENDMENT AND TERMINATION. The Company's Compensation Committee, at
its sole discretion, may amend the Plan or terminate the Plan at any time.
(except as otherwise set forth in Section 8.4).
10. ADMINISTRATION. The Compensation Committee may delegate the
responsibility for the administration and operation of the Plan to the Chief
Executive Officer (or designee) of the Company or any participating Affiliate.
The Compensation Committee (or the person(s) to which administrative authority
has been delegated) shall have the authority to interpret and construe any and
all provisions of the Plan, including all performance targets and whether and to
what extent achieved. Any determination made by the Compensation Committee (or
the person(s) to which administrative authority has been delegated) shall be
final and conclusive and binding on all persons.
11. INDEMNIFICATION. Neither the Company, any participating Affiliate,
nor the Board of Directors, or any member or any committee thereof, of the
Company or any participating Affiliate, nor any employee of the Company or any
participating Affiliate shall be liable for any act, omission, interpretation,
construction or determination made in connection with the Plan in good faith;
and the members of the Company's Board of Directors, the Compensation Committee
and/or the employees of the Company or any participating Affiliate shall be
entitled to indemnification and reimbursement by the Company to the maximum
extent permitted by law in respect of any claim, loss, damage or expense
(including counsel's fees) arising from their acts, omission and conduct in
their official capacity with respect to the Plan.
12. GENERAL PROVISIONS.
12.1 Non-Guarantee of Employment. Nothing contained in this Plan shall
be construed as a contract of employment between the Company
and/or a participating Affiliate and a Participant, and nothing in
this Plan shall confer upon any Participant any right to continued
employment with the Company or a participating Affiliate, or to
interfere with the right of the Company or a participating
Affiliate to terminate a Participant's employment, with or without
cause.
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SUNOCO PARTNERS LLC LONG-TERM INCENTIVE PLAN
AMENDED AND RESTATED AS OF APRIL 21, 2005
12.2 Interests Not Transferable. No benefits under the Plan shall be
subject in any manner to alienation, sale, transfer, assignment,
pledge, attachment or other legal process, or encumbrance of any
kind, and any attempt to do so shall be void.
12.3 Facility Payment. Any amounts payable hereunder to any person
under legal disability or who, in the judgment of the Compensation
Committee or its designee, is unable to properly manage his or her
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 Compensation Committee or its designee may
select, and each participating Affiliate shall be relieved of any
further liability for payment of such amounts.
12.4 Controlling Law. To the extent not superseded by federal law, the
law of the Commonwealth of Pennsylvania shall be controlling in
all matters relating to the Plan.
12.5 No Rights to Award. No person shall have any claim to be granted
any award under the Plan, 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 recipient.
12.6 Severability. If any Plan provision 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 the law deemed applicable by the
Compensation 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 Compensation 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.
12.7 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
participating 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 participating Affiliate pursuant to an
award, such right shall be no greater than the right of any
general unsecured creditor of the Company or any participating
Affiliate.
12.8 Headings. Headings are given to the sections 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 of it.
12.9 Tax Withholding. The Company and/or any participating Affiliate
may deduct from any payment otherwise due under this Plan to a
Participant (or beneficiary) amounts required by law to be
withheld for purposes of federal, state or local taxes.
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SUNOCO PARTNERS LLC LONG-TERM INCENTIVE PLAN
AMENDED AND RESTATED AS OF APRIL 21, 2005