EXHIBIT 10.5
SUN COMPANY, INC.
PENSION RESTORATION PLAN
As Amended and Restated Effective
February 1, 1996
PURPOSE
Sun Company, Inc. hereby amends and restates this Pension Restoration
Plan effective February 1, 1996 for the purpose of providing to
Participants (as hereinafter defined) retirement benefits which would
otherwise be provided by either the Sun Company, Inc. Retirement Plan or
the Sun Company, Inc. Cash Option Retirement Plan but for the restrictions
on benefits payable under these plans by Sections 401(a)(17) and 415 of the
Internal Revenue Code of 1986. This Plan is intended to constitute an
"excess benefit plan" within the meaning of Section 3(36) of the Employee
Retirement Income Security Act of 1974, as amended, ("ERISA") and an
unfunded plan maintained primarily to provide deferred compensation for a
select group of management or highly compensated employees within the
meaning of Sections 201(2), 301(a)(3) and 401(a)(1) of ERISA.
ARTICLE I
DEFINITIONS
1.01 "Actuarial Equivalent" means a benefit of equivalent current value
to the benefit which would otherwise have been provided to the
Participant, determined on the same basis as determined under the
Applicable Sun Retirement Plan.
1.02 "Affiliated Company" means the Company and:
(a) Any other corporation which is included within a "controlled
group of corporations" within which Sun Company, Inc., is also
included as determined under Section 1563 of the 1954 Internal
Revenue Code without regard to subsections (a)(4) and (e)(3)(C)
of said Section 1563;
(b) Any other trades or businesses (whether or not incorporated)
which, based on principles similar to those defining a
"controlled group of corporations" for purposes of (a) above,
are under common control; and
(c) Any other organization so designated by the Board Committee.
1.03 "Applicable Sun Retirement Plan" means the Sun Company, Inc.
Retirement Plan or the Sun Company, Inc. Cash Option Retirement
Plan, whichever plan the Participant will receive benefits under.
1.04 "Beneficiary" means the person or persons, other than a contingent
annuitant, designated by a Participant or retired Participant
pursuant to Article IV.
1.05 "Board of Directors" means the Board of Directors of Sun Company,
Inc.
1.06 "Board Committee" means those individual Directors who have been
appointed by the Board of Directors with the powers and
responsibilities specified in Article V and to which has been
delegated any fiduciary responsibilities of the Board of Directors
with respect to the Plan.
1.06A "Change in Control" of the Company shall be deemed to have occurred
for purposes of this Plan, 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, "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.
1.07 "Code" means the Internal Revenue Code of 1986, as amended.
1.08 "Company" means Sun Company, Inc. or any corporation which succeeds
to the position of Sun Company, Inc. as common parent of the Sun
Affiliated Group, within the meaning of regulations issued under
the Internal Revenue Code.
1.08A "Continuing Director" means a Director who was a member of the Sun
Company, Inc. Board of Directors immediately prior to a Control
Transaction which results in a Change in Control.
1.08B "Control Transaction" means 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.
1.09 "Effective Date" means September 2, 1974; as to this amendment and
restatement, February 1, 1996; and as to any amendment, the
effective date specified by the Board of Directors.
1.10 "Employee" means any individual who is employed by the Company or
an Affiliated Company.
1.11 "Participant" means any Employee who is a participant in an
Applicable Sun Retirement Plan who: (i) has had his retirement
benefit under that plan reduced due to Statutory Limitations or
(ii) has received Restricted Stock Unit Income.
1.12 "Plan" means the Sun Company, Inc. Pension Restoration Plan as set
forth in this document and as it may from time to time be amended.
1.13 "Plan Administrator" means the individual or entity designated as
such by the Board Committee pursuant to Article V.
1.14 "Plan Year" means the annual period beginning on January 1 of any
year and ending on the following December 31.
1.14A "Restricted Stock Unit Income" means the payment that would have
been made to a Participant upon the vesting of a restricted stock
unit granted under either the Sun Company, Inc. Long-Term Incentive
Plan or the Sun Company, Inc. Executive Long-Term Stock Investment
Plan had the price of Sun Company, Inc. common stock on the date of
such payment been equal to the price on the date the restricted
stock unit was granted.
1.15 "Spouse" means the individual who is the legally married husband or
wife of a Participant.
1.16 "Statutory Limitations" means the limitations placed the benefits
that can be accrued under a qualified pension plan pursuant to
Section 401(a)(17) and 415 of the Code
1.17 "Termination Date" means the date on which a Participant ceases to
be an Employee.
ARTICLE II
CONTRIBUTIONS
2.01 EMPLOYER CONTRIBUTIONS. All benefits payable under this Plan will be
paid by the Company. A Participant will have no right, title or
interest whatsoever in or to any investments which the Company may
make to aid in meeting such obligations as may arise under the Plan.
Nothing contained in the Plan, nor any action taken pursuant to its
provisions, will create or be construed to create a trust or a
fiduciary relationship between the Company and any Participant or any
other person. To the extent that any person acquires a right to
benefits under this Plan, such right will be no greater than the
right of an unsecured general creditor of the Company. All payments
to be made under the Plan will be paid from the general funds of the
Company and no special or separate fund will be established and no
segregation of assets will be made to assure payment of such amounts.
2.02 PARTICIPANT CONTRIBUTIONS. No contributions by Participants will be
required or permitted under this Plan.
2.03 EXPENSES OF ADMINISTRATION. All expenses of administering this Plan
will be paid by the Company.
ARTICLE III
RETIREMENT BENEFITS
3.01 AMOUNT OF BENEFITS. The benefit payable to a Participant or his
Beneficiary will be equal to the excess of:
(a) The benefits which would have been paid to the Participant or his
Beneficiary under the Applicable Sun Retirement Plan, if the
provisions of that plan were administered:
(i) without regard to the Statutory Limitations, and
(ii) so that the compensation used for benefit accrual
purposes under the Applicable Sun Retirement Plan was
increased to reflect Restricted Stock Unit income, over
(b) The benefits payable to the Participant or his Beneficiary under
the Applicable Sun Retirement Plan.
3.01A ADJUSTMENTS TO RETIREMENT BENEFITS SUBSEQUENT TO CERTAIN CONTROL
TRANSACTIONS. (a) If, subsequent to a Control Transaction which has
not been expressly approved by at least a majority vote of the
Continuing Directors, there is
a Change in Control and the Employer thereafter takes action or omits
to take action which will result in either a complete or partial
termination of the Plan, then:
(i) effective immediately prior to a complete termination of the
Plan, there shall be an increase in the benefits originally
calculated under Section 3.01 by an amount equal to three
percent (3%) per year reduced by any prior retiree benefit
adjustments to such benefits, compounded annually, for a
period of fifteen (15) years, for the benefit of active
Participants, Participants who retired on or after December
31, 1990 and each surviving Spouse of a Participant who was
entitled to pre- or post-retirement Spouse's benefits. Such
benefit increases shall be calculated immediately upon the
termination of the Plan, regardless of whether the payment of
such benefits has commenced;
(ii) effective immediately prior to a partial termination of the
Plan, the benefit increases set forth in Section 3.01A(a)(i)
above shall be provided to the affected Participants.
(b) If, subsequent to a Control Transaction which has not been
expressly approved by at least a majority vote of the Continuing
Directors, there is a Change in Control, then this Section 3.01A
shall be irrevocable, shall apply to successor Plans and cannot
be amended or modified at any time.
3.02 NORMAL FORM OF PAYMENT. Except as otherwise provided in Article IV,
retirement benefits under this Plan will be in the form of a lump sum
payment of the Actuarial Equivalent of the benefit determined under
Section 3.01.
3.03 COMMENCEMENT OF PAYMENTS. A Participant's retirement income will
commence on the same date as the commencement of benefits under the
Applicable Sun Retirement Plan.
ARTICLE IV
OPTIONAL FORMS OF RETIREMENT INCOME
4.01 ELECTION OF AN OPTIONAL FORM OF PAYMENT. Not later than thirty (30)
days prior to a Participant's retirement date a Participant may elect
in lieu of the normal form of retirement income, an optional form of
retirement income which is the Actuarial Equivalent of the monthly
income determined under Section 3.01. A Participant may not change or
revoke an elected option unless such change or revocation is made at
least thirty (30) days prior to the Participant's
retirement date. Each election, designation and revocation of an
option will be made in writing and in conformity with such rules as
may be prescribed by the Plan Administrator.
4.02 OPTIONAL FORMS OF PAYMENT. A Participant may elect to receive an
optional form of retirement income in the same form and manner as the
Participant is receiving under the Applicable Sun Retirement Plan.
4.03 ACCELERATION OF ANNUITY OPTIONS. Notwithstanding the foregoing, if
the Internal Revenue Service makes a determination that the
Participant must include any amounts from the Plan in his taxable
income in a taxable year prior to the year in which the Participant
actually receives those amounts, the Participant shall receive the
Actuarial Equivalent of the remainder of his benefit determined under
Section 4.02. Such distribution shall be made no later than the last
day of the calendar year in which the Participant informs the Plan
Administrator that the Internal Revenue Service has made such a
determination.
ARTICLE V
ADMINISTRATION OF THE PLAN
5.01 ALLOCATION AND DELEGATION OF FIDUCIARY RESPONSIBILITIES. Fiduciary
responsibilities with respect to the Plan are to be allocated as set
forth in this Article V. A fiduciary will have only those specific
powers, duties, responsibilities and obligations as are specifically
given him under this Plan. It is intended that each fiduciary be
responsible for the proper exercise of his own powers, duties,
responsibilities and obligations under this Plan, and generally will
not be responsible for any act or failure to act of another
fiduciary. A fiduciary may delegate to any person or entity, who may
or may not be a fiduciary, any of its powers or duties under the
Plan.
5.02 POWERS AND RESPONSIBILITIES OF THE BOARD OF DIRECTORS. The Board of
Directors has the following powers and responsibilities:
(a) To authorize amendments to the Plan;
(b) To terminate the Plan; and
(c) To appoint and remove members of the Board Committee, as set
forth in Section 5.03, below.
5.03 BOARD COMMITTEE.
(a) The Board Committee will consist of at least three Directors who
will be appointed by and serve at the pleasure of the Board of
Directors. The Board of Directors will also appoint one member of
the Board Committee to act as Chairman of such Committee.
Vacancies will be filled in the same manner as appointments. Any
member of the Board Committee may resign by delivering a written
resignation to the Board of Directors, to become effective upon
delivery or at any other date specified therein.
(b) The members of the Board Committee will appoint a Secretary who
may, but need not be, a member of the Board Committee. The Board
Committee may, in writing, delegate some or all of its powers and
responsibilities as specified in Section 5.03(d) to any other
person or entity, who may or may not be a fiduciary.
(c) The Board Committee will hold meetings upon such notice, at such
time or times, and at such place or places as it may determine.
The majority of the members of the Board Committee at the time in
office will constitute a quorum for the transaction of business
at all meetings and a majority vote of those present at any
meeting will be required for action. The Board Committee may also
act by written consent of a majority of its members.
(d) The Board Committee will have the following powers and
responsibilities:
(i) To prepare periodic administration reports to the Board of
Directors which will show, in reasonable detail, the
administrative operations of the Plan;
(ii) To appoint and remove the Plan Administrator; and
(iii) To appoint and remove other fiduciaries.
5.04 PLAN ADMINISTRATOR.
(a) The Plan Administrator will be appointed by and serve at the
pleasure of the Board Committee. The Plan Administrator may
resign by delivering a written resignation to the Board
Committee, to be effective on delivery or at any other date
specified therein. Upon the resignation or removal of the Plan
Administrator, a successor Plan Administrator will be appointed
by the Board Committee.
(b) The Plan Administrator may, in writing, delegate some or all of
his powers and responsibilities as set forth in Section 5.04(c)
to any other person or entity, who may or may not be a fiduciary.
(c) The Plan Administrator will adopt such rules for administration
of the Plan as he considers desirable, provided they do not
conflict with the Plan. Records
of administration of the Plan will be kept, and Participants and
their Spouses, Beneficiaries and contingent annuitants may
examine records pertaining directly to themselves. The Plan
Administrator will have the following powers and
responsibilities:
(i) To select and terminate an actuary for the Plan.
(ii) To establish and maintain claims review procedures.
(iii) To construe the Plan, correct defects, supply omissions and
reconcile inconsistencies to the extent necessary to
administer the Plan, with any instructions or
interpretation of the Plan made in good faith by the Plan
Administrator to be final and conclusive for all purposes.
(iv) To comply with any requirements of the Employee Retirement
Income Security Act of 1974 with respect to filing reports
with governmental agencies.
(v) To provide Employees with any and all information required
by the Employee Retirement Income Security Act of 1974.
(vi) To approve any actuarial assumptions.
(vii) To coordinate any necessary audit process with respect to
reports on administration data.
(viii)To conduct routine Plan administration.
5.05 EMPLOYMENT OF AGENTS. The fiduciaries may retain such counsel,
actuarial, medical, accounting, clerical and other services as they
may require to carry out the provisions and purposes of the Plan.
5.06 RELIANCE ON REPORTS AND CERTIFICATES. Fiduciaries under the Plan and
the officers and managers and Employees of the Company and any
Affiliated Company will be entitled to rely upon all tables,
valuations, certificates and reports furnished by a duly appointed
actuary, insurance company, or by any duly appointed accountant, and
upon all opinions given by any duly appointed legal counsel.
5.07 COMPENSATION. Fiduciaries under the Plan will not receive any
compensation for their services as such.
5.08 FIDUCIARY'S OWN PARTICIPATION. A fiduciary may not act, vote or
otherwise influence a decision specifically relating to his own
participation under the Plan.
5.09 LIABILITY FOR ADMINISTRATION OF THE PLAN. In the administration of
the Plan, neither a fiduciary, nor any officers, directors or
Employees of the Company or any Affiliated Company or their agents
will be liable jointly or severally for any loss due to his or its
error or acts of omission or commission, except for his or its own
individual misconduct. The Company will indemnify each fiduciary,
officer, director or Employee of the Company and any Affiliated
Company from any and all expenses arising out of his or its
responsibilities under the Plan, excepting such expenses and
liabilities arising out of his or its own individual willful
misconduct.
ARTICLE VI
GENERAL PROVISIONS
6.01 RIGHT TO AMEND OR TERMINATE. The Company expects and intends to
continue the Plan indefinitely, but necessarily reserves the right,
by action of the Board of Directors, to amend, alter, suspend or
terminate the Plan in whole or in part, and at any time. However, if
the Board of Directors should amend, alter, suspend or terminate the
Plan, the Company will be liable for any benefits accrued under this
Plan (determined on the basis of each employee's presumed termination
of employment as of the date of such amendment, alteration,
suspension or termination) as of the date of such action.
6.02 ALIENATION OF BENEFITS. No benefits payable under the Plan will be
subject in any manner to anticipation, alienation, sale, transfer,
assignment, pledge, encumbrance or charge, and any action by way of
anticipating, alienating, selling, transferring, assigning, pledging,
encumbering or charging the same will be void and of no effect nor
will any such benefit be in any manner liable for or subject to the
debts, contracts, liabilities, engagements or torts of the person
entitled to such benefit.
6.03 PAYMENT TO MINORS AND INCOMPETENTS. If a Participant, Spouse,
contingent annuitant or Beneficiary entitled to receive any benefits
hereunder is a minor, or is deemed by the Plan Administrator or is
adjudged to be legally incapable of giving a valid receipt and
discharge for such benefits, they will be paid to the duly appointed
guardian or committee of such minor or incompetent, or they may be
paid to such person or persons who the Plan Administrator believes is
or are caring for or supporting such minors or incompetents. Any such
payments, to the extent thereof, will be a complete discharge for the
payment of such benefit.
6.04 UNCLAIMED BENEFITS. If any benefit under the Plan had been payable to
and unclaimed by any person for a period of four years since the
whereabouts or existence of such person was last known to the Plan
Administrator, the Plan Administrator may direct that all rights of
such person to payments accrued and to future payments be terminated
absolutely, provided that if such person subsequently appears and
identifies himself to the satisfaction of the Plan Administrator,
then the liability will be reinstated.
6.05 PLAN VOLUNTARY. The Plan is purely voluntary on the part of the
Company. Neither the establishment of the Plan, nor any amendment
thereto, nor the creation of any fund or account, nor the payment of
any benefit will be construed as conferring upon any Employee or
Participant the right to be retained in the employ of the Company or
any Affiliated Company, and all Employees and Participants will
remain subject to discharge, discipline or termination to the same
extent as if the Plan had never been established.
6.06 GENDER. Whenever used herein, the masculine pronoun will include the
feminine and the singular the plural, unless a different meaning is
plainly required by the context.
6.07 CONSTRUCTION. The Plan will be construed, enforced and administered
according to the laws of the Commonwealth of Pennsylvania to the
extent not preempted by Federal law, which shall otherwise control.
In the event any provision of the Plan is held illegal or invalid for
any reason, it will not affect the remaining provisions of the Plan,
but the Plan will be construed and enforced as if such illegal and
invalid provision had not been included therein.