EXHIBIT 10.10
SUN COMPANY, INC.
EXECUTIVE LONG-TERM STOCK INVESTMENT PLAN
ARTICLE I
General
1.1 PURPOSE. The purposes of this Sun Company, Inc. Executive Long-Term
Stock Investment Plan (the "Plan") are to: (1) better align the interests
of shareholders and management of Sun Company, Inc. and its subsidiaries
and affiliates (collectively referred to as the "Company") by creating a
direct linkage between participants' rewards and shareholders' gains; (2)
provide management with an equity ownership in Sun Company, Inc.
commensurate with Company performance, as reflected in increased
shareholder value; (3) maintain competitive compensation levels; and (4)
provide an incentive to management for continuous employment with the
Company.
1.2 ADMINISTRATION. (a) The Plan shall be administered by a Committee
of disinterested persons appointed by the Board of Directors of Sun
Company, Inc. (the "Committee"), as constituted from time to time. The
Committee shall consist of at least two members of the Board of Directors.
During the year prior to commencement of service on the Committee, the
Committee members will not have participated in, and while serving on the
Committee, such members shall not be eligible for selection as persons to
whom stock may be allocated or to whom stock options or stock appreciation
rights may be granted under the Plan or any other discretionary plan of the
Company under which participants are entitled to acquire stock, stock
options or stock appreciation rights of Sun Company, Inc.
(b) The Committee shall have the authority, in its sole discretion and
from time to time to: (i) designate the employees or classes of employees
eligible to participate in the Plan; (ii) grant awards provided in the Plan
in such form and amount as the Committee shall determine; (iii) impose such
limitations, restrictions and conditions upon any such award as the
Committee shall deem appropriate; and (iv) 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.
(c) 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 decision made in good faith relating to the Plan or
any award thereunder.
1.3 ELIGIBILITY FOR PARTICIPATION. Participants in the Plan shall be
selected by the Committee from the executive 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 form and 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
the Company's profitability and sound growth.
1.4 TYPES OF AWARDS UNDER PLAN. Awards under the Plan may be in the
form of any one or more of the following:
(i) Stock Options, as described in Article II;
(ii) Incentive Stock Options, as described in Article III;
(iii) Reload Options (referred to and generally described as "Equity
Options"), as described in Article IV;
(iv) Alternate Appreciation Rights, as described in Article V;
(v) Limited Rights, as described in Article VI; and/or
(vi) Restricted Stock Units, as described in Article VII.
1.5 AGGREGATE LIMITATION ON AWARDS. (a) Shares of stock which may be
issued under the Plan shall be authorized and unissued or treasury shares
of Common Stock of Sun Company, Inc. ("Common Stock"). The maximum number
of shares of Common Stock which may be issued under the Plan shall be 5.8
million.
(b) For purposes of calculating the maximum number of shares of Common
Stock which may be issued under the Plan: (i) 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, Incentive Stock Option or Reload Option; (ii)
only the shares issued (including the shares, if any, withheld for tax
withholding requirements) as a result of an exercise of Alternate
Appreciation Rights shall be counted; and (iii) only the net shares issued
(including the shares, if any, withheld for tax withholding requirements)
shall be counted when shares of Common Stock are used as full or partial
payment for shares issued upon exercise of a Stock Option, Incentive Stock
Option or Reload Option.
(c) In addition to shares of Common Stock actually issued pursuant to the
exercise of Stock Options, Incentive Stock Options, Reload Options or
Alternate Appreciation Rights, there shall be deemed to have been issued a
number of shares equal to the sum of
(i) the number of shares of Common Stock in respect of which Limited
Rights (as described in Article VI) shall have been exercised, and (ii) the
number of Restricted Stock Units (as described in Article VII), the value
of which the Company shall have paid under the Plan.
(d) Shares tendered by a participant as payment for shares issued upon
exercise of a Stock Option, Incentive Stock Option or Reload Option shall
be available for issuance under the Plan. Any shares of Common Stock
subject to a Stock Option, Incentive Stock Option or Reload 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, Incentive Stock Option or Reload Option which are not issued as a
result of the exercise of Limited Rights shall not again be available for
issuance under the Plan.
1.6 EFFECTIVE DATE AND TERM OF PLAN. (a) The Plan shall become
effective on the date approved by the holders of a majority of the shares
of Common Stock voting at the 1991 Annual Meeting of Shareholders of Sun
Company, Inc.
(b) No awards shall be made under the Plan after the last day of the
Company's 1996 fiscal year provided, however, that 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.
1.7 PRIOR PLAN. Effective on December 31, 1991, no further awards shall
be made under the Sun Company, Inc. Long-Term Incentive Plan adopted in
May, 1986 provided, however, that any rights theretofore granted under that
plan shall not be affected.
ARTICLE II
Stock Options
2.1 AWARD OF STOCK OPTIONS. 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 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.
2.2 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 (the "optionee"), 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.
2.3 STOCK OPTION PRICE. The option price per share of Common Stock
deliverable upon the exercise of a Stock Option shall be 100% of the fair
market value of a share of Common Stock on the date the Stock Option is
granted.
2.4 TERM AND EXERCISE. Each Stock Option shall be fully exercisable six
months from the date of its grant and unless a shorter period is provided
by the Committee or by another Section of this Plan, may be exercised
during a period of ten years from the date of grant thereof (the "option
term"). No Stock Option shall be exercisable after the expiration of its
option term.
2.5 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 Common Stock. All
shares of Common Stock issued under the Sun Company, Inc. Executive Long-
Term Incentive Plan, the Sun Company, Inc. Long-Term Incentive Plan or this
Plan must be held at least six months before they may be used as payment of
the option price.
2.6 RESTRICTION ON CERTAIN 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. Notwithstanding the
foregoing, a number of shares of Common Stock received upon the exercise of
the options shall be subject to certain restrictions. The number of shares
subject to the restrictions shall be determined based on the optionee's
method of financing the payment of the option price. If the optionee
finances the option exercise by borrowing money which is secured by
unrestricted shares of Common Stock which will be sold to repay the loan,
the number of shares subject to the restrictions shall be equal to the
total number of shares received in the exercise of the option minus (i) the
number of shares that needed to be sold in order to satisfy the loan,
including interest thereupon, and any brokerage commissions involved in the
sale of such stock and (ii) the number of shares which have a fair market
value on the date of the option exercise equal to the applicable federal,
state and local withholding tax on the option exercise. If the optionee
finances the payment of the option price by any other method, the number of
shares subject to the restrictions shall be equal to the total number of
shares received in the exercise of the option minus (i) the number of
shares which have a fair market value on the date of the option exercise
equal to the total amount paid for all the shares received in the option
exercise and (ii) the number of shares which have a fair market value on
the date of the option exercise equal to the applicable federal, state and
local withholding tax on the option exercise. The restrictions on these
shares of Common Stock shall be as follows:
(a) the optionee shall be prohibited from the sale, exchange,
transfer, pledge, hypothecation, gift or other disposition of such
shares of Common Stock until the earlier of the expiration of the
option term or termination of the optionee's employment for any
reason. Notwithstanding the foregoing, six months after the
exercise of the option, such shares of Common Stock may be used as
payment of the option price of shares issued upon the exercise of
other Stock Options. However, all such shares issued will be
restricted shares.
(b) The restrictions shall apply to any new, additional or different
securities the optionee may become entitled to receive with
respect to such shares by virtue of a stock split or stock
dividend or any other change in the corporate or capital structure
of the Company.
(c) Until such time as the restrictions hereunder lapse, the share
certificate representing such shares shall contain a restrictive
legend evidencing said restrictions. Alternatively, the optionee
shall be required to deposit the share certificate with the
Company or its agent, endorsed in blank or accompanied by a duly
executed irrevocable stock power or other instrument of transfer.
2.7 DEATH OF OPTIONEE. (a) Upon the death of the optionee, any rights
to the extent exercisable on the date of death may be exercised by the
optionee's estate, or by a person who acquires the right to exercise such
Stock Option by bequest or inheritance or by reason of the death of the
optionee, provided that such exercise occurs within both the remaining
option term of the Stock Option and one year after the optionee's death.
(b) The provisions of this Section shall apply notwithstanding the fact
that the optionee's employment may have terminated prior to death, but only
to the extent of any Stock Options exercisable on the date of death.
2.8 RETIREMENT OR DISABILITY. Upon termination of the optionee's
employment by reason of retirement or permanent disability (as each is
determined by the Committee), the optionee may, within 36 months from the
date of termination, exercise any Stock Options to the extent such options
are exercisable during such 36-month period.
2.9 TERMINATION FOR OTHER REASONS. Except as provided in Sections 2.7
and 2.8, or except as otherwise determined by the Committee, all Stock
Options shall terminate upon the termination of the optionee's employment;
provided, however, that the Limited Rights (described herein at Article VI)
awarded in tandem with such Stock Options shall not terminate and such
Limited Rights shall remain exercisable during the Exercise Period for any
optionee who:
(a) was employed by the Company at the time of the Change in Control and
is subsequently terminated by the Company other than for just cause; or
(b) voluntarily terminates if such termination was the result of a good
faith determination by the optionee that, as a result of the Change in
Control, he is unable to effectively discharge his present duties or the
duties of the position which he occupied just prior to the Change in
Control.
As used herein, "just cause" shall mean willful misconduct or dishonesty
or conviction of or failure to contest prosecution for a felony or
excessive absenteeism unrelated to illness.
2.10 EFFECT OF EXERCISE. The exercise of any Stock Option shall cancel
that number of related Alternate Appreciation Rights and/or Limited Rights,
if any, which is equal to the number of shares of Common Stock purchased
pursuant to said options.
ARTICLE III
Incentive Stock Options
3.1 AWARD OF INCENTIVE STOCK OPTIONS. 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 one or more "incentive stock options" (intended to qualify as such
under the provisions of Section 422 of the Internal Revenue Code of 1986,
as amended ("Incentive Stock Options")) to purchase for cash or shares the
number of shares of Common Stock allotted by the Committee. The date an
Incentive 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.
Notwithstanding the foregoing, Incentive Stock Options shall not be
granted to any owner of 10% or more of the total combined voting power of
the Company and its subsidiaries.
3.2 INCENTIVE STOCK OPTION AGREEMENTS. The grant of an Incentive Stock
Option shall be evidenced by a written Incentive Stock Option Agreement,
executed by the Company and the holder of an Incentive Stock Option (the
"optionee"), stating the number of shares of Common Stock subject to the
Incentive Stock Option evidenced thereby, and in such form as the Committee
may from time to time determine.
3.3 INCENTIVE STOCK OPTION PRICE. The option price per share of Common
Stock deliverable upon the exercise of an Incentive Stock Option shall be
100% of the fair market value of a share of Common Stock on the date the
Incentive Stock Option is granted.
3.4 TERM AND EXERCISE. Each Incentive Stock Option shall be fully
exercisable six months from the date of its grant and unless a shorter
period is provided by the Committee or another Section of this Plan, may be
exercised during a period of ten years from the date of grant thereof (the
"option term"). No Incentive Stock Option shall be exercisable after the
expiration of its option term.
3.5 MAXIMUM AMOUNT OF INCENTIVE STOCK OPTION GRANT. The aggregate fair
market value (determined on the date the option is granted) of Common Stock
subject to an Incentive Stock Option granted to an optionee by the
Committee in any calendar year shall not exceed $100,000.
3.6 DEATH OF OPTIONEE. (a) Upon the death of the optionee, any
Incentive Stock Option exercisable on the date of death may be exercised by
the optionee's estate or by a person who acquires the right to exercise
such Incentive Stock Option by bequest or inheritance or by reason of the
death of the optionee, provided that such exercise occurs within both the
remaining option term of the Incentive Stock Option and one year after the
optionee's death.
(b) The provisions of this Section shall apply notwithstanding the fact
that the optionee's employment may have terminated prior to death, but only
to the extent of any Incentive Stock Options exercisable on the date of
death.
3.7 RETIREMENT OR DISABILITY. Upon the termination of the optionee's
employment by reason of permanent disability or retirement (as each is
determined by the Committee), the optionee may, within 36 months from the
date of such termination of employment, exercise any Incentive Stock
Options to the extent such Incentive Stock Options are exercisable during
such 36-month period. Notwithstanding the foregoing, the tax treatment
available pursuant to Section 422 of the Internal Revenue Code of 1986 upon
the exercise of an Incentive Stock Option will not be available to an
optionee who exercises any Incentive Stock Option more than (i) 12 months
after the date of termination of employment due to permanent disability or
(ii) three months after the date of termination of employment due to
retirement.
3.8 TERMINATION FOR OTHER REASONS. Except as provided in Sections 3.6
and 3.7 or except as otherwise determined by the Committee, all Incentive
Stock Options shall terminate upon the termination of the optionee's
employment; provided, however,
that the Limited Rights (described herein at Article VI) awarded in tandem
with such Incentive Stock Options shall not terminate and such Limited
Rights shall remain exercisable during the Exercise Period for any optionee
who:
(a) was employed by the Company at the time of the Change in Control and
is subsequently terminated by the Company other than for just cause; or
(b) voluntarily terminates if such termination was the result of a good
faith determination by the optionee that, as a result of the Change in
Control, he is unable to effectively discharge his present duties or the
duties of the position which he occupied just prior to the Change in
Control.
As used herein, "just cause" shall mean willful misconduct or dishonesty
or conviction of or failure to contest prosecution for a felony or
excessive absenteeism unrelated to illness."
3.9 APPLICABILITY OF STOCK OPTIONS SECTIONS. Sections 2.5, Manner of
Payment; 2.6, Restrictions on Certain Shares; and 2.10, Effect of Exercise,
applicable to Stock Options, shall apply equally to Incentive Stock
Options. Said Sections are incorporated by reference in this Article III
as though fully set forth herein.
ARTICLE IV
Reload Options
4.1 AUTHORIZATION OF RELOAD OPTIONS. Concurrently with the award of
Stock Options and/or the award of Incentive Stock Options to any
participant in the Plan, the Committee may authorize reload options
("Reload Options") to purchase for cash or shares a number of shares of
Common Stock. The number of Reload Options (which are referred to and
generally described as "Equity Options") shall equal (i) the number of
shares of Common Stock used to exercise the underlying Stock Options or
Incentive Stock Options and (ii) to the extent authorized by the Committee,
the number of shares of Common Stock used to satisfy any tax withholding
requirement incident to the exercise of the underlying Stock Options or
Incentive Stock Options. The grant of a Reload Option will be effected
upon the exercise of underlying Stock Options, Incentive Stock Options or
Reload Options through the use of shares of Common Stock held by the
optionee for at least 12 months. Notwithstanding the fact that the
underlying option may be an Incentive Stock Option, a Reload Option is not
intended to qualify as an "incentive stock option" under Section 422 of the
Internal Revenue Code of 1986.
4.2 RELOAD OPTION AMENDMENT. Each Stock Option Agreement and Incentive
Stock Option Agreement shall state whether the Committee has authorized
Reload Options with respect to the underlying Stock Options and/or
Incentive Stock Options. Upon the exercise of an underlying Stock Option,
Incentive Stock Option or other Reload Option, the Reload Option will be
evidenced by an amendment to the underlying Stock Option Agreement or
Incentive Stock Option Agreement.
4.3 RELOAD OPTION PRICE. The option price per share of Common Stock
deliverable upon the exercise of a Reload Option shall be the fair market
value of a share of Common Stock on the date of grant of the Reload Option.
4.4 TERM AND EXERCISE. Each Reload Option is fully exercisable six
months from the effective date of grant. The term of each Reload Option
shall be equal to the remaining option term of the underlying Stock Option
and/or Incentive Stock Option.
4.5 TERMINATION OF EMPLOYMENT. No additional Reload Options shall be
granted to optionees when Stock Options, Incentive Stock Options and/or
Reload Options are exercised pursuant to the terms of this Plan following
termination of the optionee's employment.
4.6 APPLICABILITY OF STOCK OPTIONS SECTIONS. Sections 2.5, Manner of
Payment; 2.6, Restrictions on Certain Shares; 2.7, Death of Optionee; 2.8,
Retirement or Disability; 2.9, Termination for Other Reasons; and 2.10,
Effect of Exercise, applicable to Stock options, shall apply equally to
Reload Options. Said Sections are incorporated by reference in this
Article IV as though fully set forth herein.
ARTICLE V
Alternate Appreciation Rights
5.1 AWARD OF ALTERNATE APPRECIATION RIGHTS. Concurrently with or
subsequent to the award of any Stock Option, Incentive Stock Option or
Reload 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 alternate appreciation
right ("Alternate Appreciation Right"), permitting the optionee to be paid
the appreciation on the option in lieu of exercising the option.
5.2 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.
5.3 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 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 5.4 and 5.5.
Alternate Appreciation Rights shall be exercisable only to the same extent
and subject to the same conditions as the 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.
5.4 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 option related to said Alternate
Appreciation Right was granted.
5.5 FORM OF PAYMENT. The number of shares to be paid shall be
determined by dividing the amount of payment determined pursuant to Section
5.4 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 2.6.
5.6 EFFECT OF EXERCISE. The exercise of any Alternate Appreciation
Rights shall cancel an equal number of Stock Options, Incentive Stock
Options, Reload Options and Limited Rights, if any, related to said
Alternate Appreciation Rights.
5.7 RETIREMENT OR DISABILITY. Upon termination of the optionee's
employment (including employment as a director of the Company after an
optionee terminates employment as an officer or key employee of the
Company) by reason of permanent disability or retirement (as each is
determined by the Committee), the optionee may, within six 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.
5.8 DEATH OF OPTIONEE OR TERMINATION FOR OTHER REASONS.
Except as provided in Section 5.7, 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;
provided, however, that the Limited Rights (described herein at Article VI)
awarded in tandem with such Alternate Appreciation Rights shall not
terminate and such Limited Rights shall remain exercisable during the
Exercise Period for any optionee who:
(a) was employed by the Company at the time of the Change in Control and
is subsequently terminated by the Company other than for just cause; or
(b) voluntarily terminates if such termination was the result of a good
faith determination by the optionee that, as a result of the Change in
Control, he is unable to effectively discharge his present duties or the
duties of the position which he occupied just prior to the Change in
Control.
As used herein, "just cause" shall mean willful misconduct or dishonesty
or conviction of or failure to contest prosecution for a felony or
excessive absenteeism unrelated to illness."
ARTICLE VI
Limited Rights
6.1 AWARD OF LIMITED RIGHTS. Concurrently with or subsequent to the
award of any Stock Option, Incentive Stock Option, Reload Option or
Alternate Appreciation Right, 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 limited right permitting the optionee, during a specified
limited time period, to be paid the appreciation on the option in lieu of
exercising the option ("Limited Right").
6.2 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.
6.3 EXERCISE PERIOD. Limited Rights are exercisable in full for a
period of seven months following the date of a Change in Control of Sun
Company, Inc. (the "Exercise Period"); provided, however, that Limited
Rights may not be exercised under
any circumstances until the expiration of the six-month period following
the date of grant. As used in the Plan, a "Change in Control" shall be
deemed to have occurred if: (i) Continuing Directors cease, within one
year of a Control Transaction, to constitute a majority of the Board (or of
the Board of Directors of any successor to Sun Company, Inc., or to all or
substantially all of its assets) or (ii) any entity, person or Group
acquires shares of Sun Company, Inc. in a transaction or series of
transactions that result in such entity, person or Group directly or
indirectly owning beneficially more than fifty percent (50%) of the
outstanding voting shares.
As used herein, "Control Transaction" shall mean any of the following
transactions or any combination thereof: (1) any tender offer for or
acquisition of capital stock of Sun Company, Inc., (2) any merger,
consolidation or sale of all or substantially all of the assets of Sun
Company, Inc., or (3) the submission of a nominee or nominees for the
position of director of Sun Company, Inc. by a shareholder or a Group of
shareholders in a proxy solicitation or otherwise. As used herein,
"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. As used herein, "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."
6.4 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 price
per share of Common Stock covered by the related option on the date the
option was granted and the market price of a share of such Common Stock.
Market price is defined to be the greater of (i) the highest price per
share of Common Stock paid in connection with any Change in Control and
(ii) 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.
6.5 FORM OF PAYMENT. Payment of the amount to which an optionee is
entitled upon the exercise of Limited Rights, as determined pursuant to
Section 6.4, shall be made solely in cash.
6.6 EFFECT OF EXERCISE. If Limited Rights are exercised, the Stock
Options, Incentive Stock Options, Reload Options and Alternate Appreciation
Rights, 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 options, and Alternate Appreciation
Rights, 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 options and Alternate Appreciation Rights were exercised
or terminated; provided, however, that with respect to Stock Options,
Incentive Stock Options and/or Alternate Appreciation Rights 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 who:
(a) was employed by the Company at the time of the Change in Control and
is subsequently terminated by the Company other than for just cause; or
(b) voluntarily terminates if such termination was the result of a good
faith determination by the optionee that, as a result of the Change in
Control, he is unable to effectively discharge his present duties or the
duties of the position which he occupied just prior to the Change in
Control.
As used herein, "just cause" shall mean willful misconduct or dishonesty
or conviction of or failure to contest prosecution for a felony or
excessive absenteeism unrelated to illness.
6.7 RETIREMENT OR DISABILITY. Upon termination of the optionee's
employment (including employment as a director of this Company after an
optionee terminates employment as an officer or key employee of this
Company) by reason of permanent disability or retirement (as each is
determined by the Committee), the optionee may, within six months from the
date of termination, exercise any Limited Right to the extent such Limited
Right is exercisable during such six-month period.
6.8 DEATH OF OPTIONEE OR TERMINATION FOR OTHER REASONS. Except as
provided in Sections 6.7 and 6.9, 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.
6.9 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 6.7
and 6.8 respectively, is waived during the Exercise Period as to any
optionee who (i) was employed by the Company at the time of the Change in
Control and (ii) is subsequently terminated by the Company other than for
just cause or who voluntarily terminates if such termination was the result
of a good faith determination
by the optionee that as a result of the Change in Control he is unable to
effectively discharge his present duties or the duties of the position
which he occupied just prior to the Change in Control. As used herein
"just cause" shall mean willful misconduct or dishonesty or conviction of
or failure to contest prosecution for a felony, or excessive absenteeism
unrelated to illness.
ARTICLE VII
Restricted Stock Units
7.1 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
restricted rights to receive either cash or shares of Common Stock
("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 upon either (i) the participant's
continued employment with the Company throughout a stated period; or (ii)
the attainment of certain predetermined performance targets during a stated
period.
7.2 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.
7.3 LENGTH OF RESTRICTION PERIOD. Upon making an award, the Committee
shall determine (and the Restricted Stock Unit Agreement shall state) the
length of the applicable period during which employment must be maintained
or certain performance targets must be attained (the "Restriction Period").
Restriction Periods will normally be from three to five years; however, the
Committee may establish other time periods in its sole discretion.
7.4 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. The initial number of
Restricted Stock Units granted may be adjusted by a performance factor, in
accordance with Section 7.8, to be applied at the conclusion of the
Restriction Period to determine the final number of Restricted Stock Units
to be paid.
7.5 DIVIDEND EQUIVALENT. At the Committee's discretion, a 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,
on the record date for payment of such dividend, owned of record 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 the Dividend Equivalent 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.
7.6 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 90 days after the Restriction Period for such units has ended.
(b) Payment in respect of Restricted Stock Units conditioned upon the
attainment of performance targets shall be made to the holder thereof
within 90 days after the Restriction Period for such 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 7.8(b).
7.7 FORM OF PAYMENT. Payment for Restricted Stock Units shall be made
in cash, shares of Common Stock or partly in cash and partly in Common
Stock as the Committee shall determine in its sole discretion. To the
extent that payment is made in cash, the amount shall be determined by
multiplying the number of Restricted Stock Units paid out by the fair
market value of a share of Common Stock as of the close of business on the
day after the Restriction Period has ended. To the extent that payment is
made in Common Stock, the number of shares paid shall be equal to the
number of Restricted Stock Units so paid out.
7.8 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 units being paid 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
paid 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 units (on a scale from 0 to 100%) being paid out, as
determined by the Committee.
7.9 TERMINATION OF EMPLOYMENT. Except as provided in Sections 7.10 and
7.11, 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.
7.10 DEATH, DISABILITY OR RETIREMENT. In the event that the employment
of a holder of Restricted Stock Units shall terminate during a Restriction
Period by reason of death, permanent disability or retirement (as
disability and retirement are determined by the Committee), such holder
shall be entitled to receive upon the expiration of the Restriction Period,
payment in respect of said Restricted Stock Units, as adjusted. Such 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.
7.11 ACCELERATION OF RESTRICTED STOCK UNITS. (a) Notwithstanding any
provisions to the contrary in Restricted Stock Unit Agreements or the
provisions of Sections 7.1 through 7.8, if there is a Change in Control of
the Company all outstanding Restricted Stock Units shall be payable in
shares of Common Stock, regardless of whether the applicable Restriction
Period has expired and regardless of whether the applicable performance
targets have been met.
(b) In the event of the occurrence of a Change in Control, the holder of
Restricted Stock Units shall be entitled to receive payment thereunder
within 90 days following the date of occurrence of such event.
(c) If a participant was employed by the Company at the time of the
Change in Control and is subsequently terminated by the Company other than
for just cause or who voluntarily terminates if such termination is the
result of a good faith determination by the participant that as a result of
the Change
in Control he is unable to effectively discharge the duties of the position
which he occupied just prior to the Change in Control, within the 90-day
period as described in subsection (b), he shall be eligible to receive
payment of Restricted Stock Units as provided in subsections (a) and (b).
As used herein, "just cause" shall mean willful misconduct or dishonesty or
conviction of or failure to contest prosecution for a felony, or excessive
absenteeism unrelated to illness.
ARTICLE VIII
Miscellaneous
8.1 GENERAL RESTRICTION. Each award under the Plan shall be subject to
the requirement that, if at any time the Committee shall determine that (i)
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 (ii) the consent or approval of any government
regulatory body, or (iii) 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.
8.2 NON-ASSIGNABILITY. No award under the Plan shall 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.
8.3 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 participant 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. Alternatively, the Company may issue or transfer such shares
of Common Stock net of the number of shares sufficient to satisfy the
withholding tax requirements. For withholding tax purposes, the shares of
Common Stock shall be valued on the date the withholding obligation is
incurred.
8.4 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
affect any right which the Company may have to terminate the employment of
such participant.
8.5 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.
8.6 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 to such recipient.
8.7 DEFINITIONS. In this Plan the following definitions shall apply:
(a) "Subsidiary" means any corporation of which, at the time more than 50%
of the shares entitled to vote generally in an election of directors are
owned directly or indirectly by Sun Company, Inc. or any subsidiary
thereof.
(b) "Affiliate" means any person or entity which directly, or indirectly
through one or more intermediaries, controls, is controlled by, or is under
common control with Sun Company, Inc.
(c) "Fair market value" as of any date and in respect of any share of
Common Stock means 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 on the New York Stock Exchange Composite
Transactions as reflected in the consolidated trading tables of THE WALL
STREET JOURNAL or any other publication selected by the Committee),
provided that, if shares of Common Stock shall not have been traded on the
New York Stock Exchange for more than 10 days immediately preceding such
date or if deemed appropriate by the Committee for any other reason, the
fair market value of 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.
(d) "Option" means Stock Option, Incentive Stock Option or Reload Option.
(e) "Option price" means the purchase price per share of Common Stock
deliverable upon the exercise of a Stock Option, Incentive Stock Option or
Reload Option.
8.8 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 leave of absence.
8.9 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.
8.10 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 options theretofore granted under the Plan, the option
price of options theretofore granted under the Plan, the amount of
Restricted Stock Units theretofore awarded under the Plan, the performance
targets referred to in Section 7.8 and any and all other matters deemed
appropriate by the Committee.
8.11 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 terminate or
modify or amend the Plan in any respect, except that without shareholder
approval the Committee may not (i) increase the maximum number of shares of
Common Stock which may be issued under the Plan (other than increases
pursuant to Section 8.10), (ii) extend the period during which any award
may be granted or exercised, or (iii) extend the term of the Plan. The
termination or any modification or amendment of the Plan, except as
provided in subsection (a), shall not without the consent of a participant,
affect the participant's rights under an award previously granted.