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EXHIBIT 10.3
SUN COMPANY, INC.
DIRECTORS' DEFERRED COMPENSATION PLAN
As Amended and Restated
Effective February 7, 1996
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ARTICLE I
Definitions
1.01 CASH UNIT is the entry in a Deferred Compensation Account of a credit equal
to one dollar.
1.02 COMMITTEE means the Board Nominating and Policy Committee of the Board of
Directors of the Company.
1.03 COMPANY means Sun Company, Inc., a Pennsylvania corporation
1.04 COMPENSATION means those fees and retainers payable by the Company to a
Director in consideration for his or her service as a Director.
1.05 DEFERRED COMPENSATION ACCOUNT with respect to any Participant means the
total amount of the Company's liability for payment of voluntary deferred
compensation to the Participant under this Plan.
1.06 DIRECTOR means a member of the Board of Directors of the Company.
1.07 DIVIDEND EQUIVALENT is 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.
1.08 INTEREST EQUIVALENT is the entry in a Deferred Compensation Account of an
interest credit with respect to a Cash Unit, the interest factor being
determined by the Compensation Committee of the Board of Directors of the
Company in the same manner as in the Executive Resource Deferred
Compensation Plan.
1.09 PARTICIPANT means 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.
1.10 PLAN means this Directors' Deferred Compensation Plan, as it may be amended
from time to time.
1.11 RESTRICTED DEFERRED COMPENSATION ACCOUNTS with respect to any Participant
means the total amount of the Company's liability for payment of Restricted
Share Units to the Participant under this Plan.
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1.12 RESTRICTED SHARE UNITS is 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.
1.13 SHARE means 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, except for the Company's Series A Preference Stock.
1.14 SHARE UNIT is the entry in a Deferred Compensation Account of a credit
equal to one Share.
ARTICLE II
Voluntary Deferral of Directors' Compensation
2.01 ELECTION TO DEFER - A Director may elect to defer all or a portion of his
or her Compensation by filing a written election with the Committee on
forms prescribed by the Committee. Such election must include the
following: a) 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) a designation of beneficiary as
set forth in Article V; and d) an irrevocable election of a method of
payment as set forth in Article III. Except as otherwise determined by the
Committee in its sole discretion, effective with the first quarter 1992,
any such election shall apply only to Compensation to be earned on or after
the first day of the quarter following the calendar quarter in which the
election is received by the Committee. Such election shall continue, and
be effective, until revoked.
2.02 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 5% but shall not be less than 10%. Effective
with the first quarter 1992, from time to time, but not more than once in
any one quarter, a Participant may designate the portion of fees to be
deferred and the fractions of such Compensation to be allocated to Share
Units and Cash Units. Such a designation shall not apply to any previously
credited balance in the Participant's Deferred Compensation Account, but
is only applicable to Compensation to be earned on or after the first day
of the quarter following the calendar quarter in which the designation
request is received by the Committee.
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2.03 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 quarter preceding the 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. Any
election by a Participant with respect to Compensation to be earned in a
given quarter will not preclude a different action with respect to
Compensation to be earned in subsequent quarters, consistent with the
provisions of this Article II with respect to the giving of notice of
deferral election.
ARTICLE III
Voluntary Deferred Compensation Accounts
3.01 CREATION OF 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.
3.02 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 reported on the 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 stock dividends, stock splits,
recapitalizations, reorganizations, mergers, consolidations, combinations,
exchanges or other relevant changes in capitalization, and such adjustments
shall be conclusive. Share Units shall not entitle any person to the
rights of a stockholder.
3.03 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.
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3.04 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 closing
price for Shares as reported on the New York Stock Exchange-Composite
Transactions on the date the dividends are paid on the Company's Shares.
Any fractional Share Units shall also be credited to a Participant's
Deferred Compensation Account.
3.05 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.
3.06 TIME OF PAYMENT - 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 Article. The date of
payment or distribution must be irrevocably specified by the Director in
his or her written notice of election. The Director may elect to defer the
receipt of his or her Compensation to: (a) the first day of any calendar
year, provided such date is at least six months after the end of the
quarter in which the Compensation is earned; or (b) the first day of the
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 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 3.06, in no event, however, shall any payment or
distribution be made within six 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.
3.07 METHOD OF PAYMENT - Participant in this portion of the Deferred
Compensation Plan shall have the option of selecting (a) a lump-sum
payment, (b) a series of equal annual installments in such number as the
Participant shall specify (not exceeding 10) or (c) not selecting a method
of payment at the time the Form for Deferred Payment Election/Designation
of Beneficiary 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
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either in a lump sum or in equal annual installments. 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 reported on the New York Stock Exchange-Composite Transactions
for the ten (10) day period prior to each new calendar year.
ARTICLE IV
Restricted Deferred Compensation Accounts
4.01 CREATION OF RESTRICTED DEFERRED COMPENSATION ACCOUNTS -Compensation
deferred hereunder 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 reported on the 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.
4.02 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
reported on the New York Stock Exchange-Composite Transactions for the 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
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by reason of stock dividends, stock splits, recapitalizations,
reorganizations, mergers, consolidations, combinations, exchanges or other
relevant changes in capitalization, and such adjustments shall be
conclusive. Restricted Share Units shall not entitle any person to the
rights of a stockholder.
4.03 CREDITING DIVIDED 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 closing price for Shares as reported on the New York
Stock Exchange-Composite Transactions on the date 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.
4.04 TIME OF PAYMENT - 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 the
directorship. The Participant may elect to defer the receipt of his or her
Compensation to the first day of the 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 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
4.04, in no event, however, shall any payment or distribution be made
within the six 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.
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4.05 METHOD OF PAYMENT - Participant shall have the option of selecting a (a) a
lump sum payment, (b) a series of equal annual installments in such number
as Participant shall specify (not exceeding 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 equal annual
installments. 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 reported
on the New York Stock Exchange-Composite Transactions for the ten (10) day
period prior to each new calendar year.
ARTICLE V
Designation of Beneficiaries
The Participant shall name a beneficiary and a contingent beneficiary to
receive any payments due him or her at the time of his or her death, with the
right to change such beneficiary at any time. In case of a failure of
designation or the death of the designated beneficiary with a designated
successor, distribution shall be made to the estate of the Participant. No
designation of beneficiaries shall be valid unless in writing signed by the
Participant, dated and filed with the Committee. Upon the Participant's death,
any balance in the Participant's Deferred Compensation Account and Restricted
Deferred Compensation Account is payable under the method and form elected by
the Participant.
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
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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
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 VIII
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 IX
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 X
Termination and Amendment
The Plan may be terminated at any time by the Board of Directors of Sun
Company, 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.
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ARTICLE XI
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 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 XII
Governing Law
This Plan shall be construed in accordance with and governed by the laws of
the Commonwealth of Pennsylvania.