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EXHIBIT 10.9
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 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, each of whom
shall meet applicable requirements set forth in pertinent regulations under
Section 16 of the Securities Exchange Act of 1934, as amended, and Section
162(m) of the Code.
(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.
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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) Common 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
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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 Common 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.
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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 or such longer period as the
Committee shall determine in its discretion 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.
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2.6 Issuance and Delivery of Shares. As soon as practicable after
receipt of payment, the Company shall deliver to the optionee a certificate
or certificates for such shares of Common Stock. The optionee shall become
a shareholder of the Company with respect to Common Stock represented by
share certificates so issued and, as such, shall be entitled to receive
dividends, to vote and to exercise all other rights of a shareholder.
2.7 Death of Optionee. Any rights in respect of Stock Options to the
extent exercisable on the date of the Optionee's death may be exercised by
the Optionee's estate or by any person that acquires the legal right to
exercise such Stock Option by bequest, inheritance, or otherwise by reason
of the death of the Optionee. Any such exercise to be valid must occur
within the remaining option term of the Stock Option. The foregoing
provisions of this Section 2.7 shall apply to an Optionee who dies while
employed by the Company and to an Optionee whose employment may have
terminated prior to death; provided, however, that
(a) an Optionee who dies while employed by the Company will be treated
as if the Optionee had retired on the date of death. Accordingly, the
Optionee's estate or a person who acquires the right to exercise such Stock
Option by bequest or inheritance will have the right to exercise the Stock
Option in accordance with Section 2.8 hereof; or
(b) the estate or a person who acquires the right to exercise a Stock
Option by bequest or inheritance from an Optionee who dies after
terminating employment with the Company will have the remainder of any
exercise period provided under Sections 2.8 and 2.9
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 sixty months from
the date of such termination, exercise any Stock Options to the extent such
Stock Options are exercisable during such sixty-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:
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(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.
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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. Any rights in respect of Incentive Stock
Options to the extent exercisable on the date of the optionee's death may
be exercised by the optionee's estate or by any person who acquires the
legal right to exercise such Incentive Stock Option by bequest,
inheritance, or otherwise by reason of the death of the optionee. Any such
exercise to be valid must occur within the remaining option term of the
Incentive Stock Option. The foregoing provisions of this Section 3.6 shall
apply to an optionee who dies while employed by the Company and to an
optionee whose employment may have terminated prior to death; provided,
however, that
(a) an optionee who dies while employed by the Company will be treated
as if the optionee had retired on the date of death. Accordingly, the
optionee's estate or a person who acquires the right to exercise such
Incentive Stock Option by bequest or inheritance will have the right to
exercise the Incentive Stock Option in accordance with Section 3.7 hereof;
or
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(b) the estate or a person who acquires the right to exercise a Stock
Option by bequest or inheritance from an optionee who dies after
terminating employment with the Company will have the remainder of any
exercise period provided under Sections 3.7 and 3.8.
3.7 Retirement or Disability. Upon the termination of the optionee's
employment by reason of retirement or permanent disability (as each is
determined by the Committee), the optionee may, within 60 months from the
date of such termination, exercise any Stock Options to the extent such
Incentive Stock Options are exercisable during such 60-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 Options 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.
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3.9 Applicability of Stock Options Sections. Sections 2.5, Manner of
Payment; 2.6, Issuance and Delivery of 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.
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4.4 Term and Exercise. Each Reload Option is fully exercisable six
months from the effective date of grant. The term of each Reload shall be
equal to the remaining option term of the underlying Stock Option and/or
Incentive Stock Option. No additional Reload Options may be authorized in
connection with the award of Stock Options or Incentive Stock Options on or
after October 1, 1996.
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, Issuance and Delivery of 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
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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:
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(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 immediately exercisable in
full upon grant for a period of seven months following the date of a Change
in Control of Sun Company, Inc. (the "Exercise Period").
As used in the Plan, a "Change in Control" shall be deemed to have
occurred if: (a) Continuing Directors cease, within one year of a Control
Transaction, to constitute a majority of the Board of Directors of Sun
Company, Inc. (or of the Board of Directors of any successor to Sun
Company, Inc. or to all or substantially all of its assets), or
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(b) 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 50% of
the outstanding voting shares.
As used herein, "Control Transaction" shall mean any of the following
transactions or any combination thereof: (i) any tender offer for or
acquisition of capital stock of Sun Company, Inc., (ii) any merger,
consolidation, or sale of all or substantially all of the assets of Sun
Company, Inc. or (iii) 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, "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.
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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
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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
Common Stock Units
7.1 Award of Common Stock Units. The Committee, from time to time,
and subject to the provisions of the Plan, may grant to any participant in
the Plan rights to receive shares of Common Stock which are subject to a
risk of forfeiture by the participant ("Common Stock Units"). At the time
it grants any Common Stock Units, the Committee shall determine whether the
payment of such Common Stock Units shall be conditioned upon either (i) the
participant's continued employment with the Company throughout a stated
period (Section 7.4); or (ii) the attainment of certain predetermined
Performance Goals during a stated period (Section 7.5). The date Common
Stock Units are granted shall mean the date selected by the Committee as of
which the Committee allots a specific number of Common Stock Units to a
participant pursuant to the Plan.
7.2 Common Stock Unit Agreements. Common Stock Units granted under
the Plan shall be evidenced by written agreements stating the number of
Common Stock Units evidenced thereby or in such form and as the Committee
may from time to time determine.
7.3 Dividend Equivalents. A holder of Common 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, been the
holder of record of shares of Common Stock equal to the number of Common
Stock Units which had been awarded to such holder as of the close of
business on such record date. The Company shall establish a bookkeeping
account on behalf of each participant in which the Dividend Equivalents
that would have been paid to the holder of Common Stock Units ("Dividend
Equivalent Account") shall be credited. The Dividend Equivalent Account
will not bear interest.
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7.4 Performance Period. Upon making an award, the Committee shall
determine (and the Common Stock Unit Agreement shall state) the length of
the applicable period during which employment must be maintained or certain
performance goals must be attained (the "Performance Period"). Performance
Periods will normally be from three to five years; however, the Committee
at its sole discretion may establish other time periods.
7.5 Performance Goals. Common Stock Units and the related Dividend
Equivalents earned may be based upon the attainment of performance goals
established by the Committee in accordance with Section 162(m)
("Performance Goals"). Such Performance Goals may vary by participant and
by grant and shall be based upon the attainment of specific targeted
amounts of, or changes in financial or operating goals including: revenues;
expenses; net income; operating income; equity; return on equity, assets or
capital employed; working capital; shareholder return; operating capacity
utilized, production or sales volumes, or throughput. Other financial or
operating goals may also be used as determined by the Committee. The
foregoing goals may be applicable to the Company as a whole or one or more
of its business units and may be applied in total or on a per share, per
barrel or percentage basis and on an absolute basis or relative to other
companies, industries or indices or any combination thereof, as determined
by the Committee.
Within the first 90 days of the Performance Period, the Committee
shall establish, in writing, the weighted Performance Goals and related
performance factors for various goal achievement levels for the Company
("Performance Factors"). Performance Factors shall mean the various payout
percentages related to the attainment of one or more Performance Goals, as
determined by the Committee. In establishing the weighted Performance
Goals, the Committee shall take the necessary steps to insure that the
Company's ability to achieve the pre-established goals is uncertain at the
time the goals are set. The established written performance goals,
assigned weights and performance factors shall be written, in terms of an
objective formula, whereby any third party having knowledge of the relevant
Company performance results could calculate the amount to be paid. The
number of Common Stock Units and Dividend Equivalents earned will be equal
to the amounts awarded multiplied by the Performance Factor. However, the
Committee shall have the discretion, by participant and by grant, to reduce
(but not to increase) some or all of the amount that would otherwise be
payable by reason of the satisfaction of the Performance Goals.
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In making any such determination, the 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.
7.6 Payment of Common Stock Units and Dividend Equivalent Account.
Payment in respect of Common Stock Units earned (as determined under
Sections 7.4 and 7.5) shall be made to the holder thereof within 90 days
after the Performance Period for such units has ended, but only to the
extent the Committee determines that the continuing employment and/or any
applicable Performance Goals have been met. Payment for Common Stock Units
earned shall be made in shares of Common Stock, except as provided in
Section 7.9. The number of shares paid shall be equal to the number of
Common Stock Units earned. The holder may elect to reduce this amount by
the number of shares of Common Stock which have, on the date of the Common
Stock Units are paid, a fair market value equal to the applicable federal,
state and local withholding tax due on the receipt of Common Stock, in lieu
of making a cash payment equal to the amount of such withholding tax due.
A holder of Common Stock Units will be entitled to receive payment from the
Company at the end of the Performance Period an amount in cash equal to the
Dividend Equivalent Account earned (as determined under Sections 7.4 and
7.5) by the holder minus applicable federal, state and local withholding
tax due.
7.7 Death, Disability or Retirement. A portion of the Common Stock
and the Dividend Equivalent Account shall be forfeited upon the death of a
participant or the termination of a participant's employment by reason of
retirement or permanent disability (as each is determined by the Committee)
prior to the end of the Performance Period. The number of Common Stock
Units forfeited will be equal to the remaining number of months in the
Performance Period divided by the total number of months in the Performance
Period times the number of Common Stock Units outstanding and will be
rounded down to the next lowest whole amount. The Dividend Equivalent
account will be reduced in a similar fashion. The Common Stock Units and
the Dividend Equivalent Account retained will remain subject to any
adjustment for any Performance Factors in accordance with Section 6.5.
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7.8 Termination of Employment. Except as provided in Section 6.7 and
6.9, or as determined by the Committee, 100% of all Common Stock Units of a
participant under the Plan shall be forfeited and the Dividend Equivalent
Account shall be forfeited upon termination of the participant's employment
with the Company prior to the end of the Performance Period, and in such
event the participant shall not be entitled to receive any Common Stock or
any payment of the Dividend Equivalent Account regardless of the level of
Performance Goals achieved for the respective Performance Periods.
7.9 Change in Control. Common Stock Units and the Dividend Equivalent
Account shall not be forfeited in the case of a participant (i) who was
employed by the Company at the time of a Change in Control and (ii) who 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 holder of the Common Stock Units that as a result of
the Change in Control the holder is unable to effectively discharge the
holder's present duties or the duties of the position occupied just prior
to the Change in Control. In that event, all outstanding Common Stock Units
and the related Dividend Equivalent Account shall be payable to the
Employee in cash within nintey (90) days following the date of occurrence
of such Change in Control, regardless of whether the applicable Performance
Period has expired. However, the Committee may establish, at the time of
the grant of Common Stock Units, other conditions which must be met for
payout to occur. These conditions shall be set forth in the Committee's
resolution granting the Common Stock Units and in the Agreement with the
holder. The participant shall receive in cash an amount equal to the
percentage of awards earned multiplied by the sum of: (i) the number of
Common Stock Units outstanding multiplied by the Market Price as defined in
Section 6.4 and (ii) the Dividend Equivalent Account. There will be no
adjustment for the Performance Factors described in Section 7.5. Such
amounts will be reduced by the applicable federal, state and local
withholding tax due.
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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 partici-
pant the right to continue in the employment of the Company or effect any
right which the Company may have to terminate the employment of such
participant.
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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 shall be the opening price on such date of a share of Common
Stock (which price shall be the closing price on the previous trading day
of a share of Common Stock as reported on the New York Stock Exchange
Composite Transactions Tape, and as reflected in the consolidated trading
tables of The Wall Street Journal or any other publication selected by the
Committee). If there is no sale of shares of Common Stock on the New York
Stock Exchange for more than ten days immediately preceding such date, or
if deemed appropriate by the Committee for any other reason, the fair
market value of the shares of Common Stock shall be as determined by the
Committee in such other manner as it may deem appropriate. In no event
shall the fair market value of any share of Common Stock be less than its
par value.
(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.
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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, recapital-
ization, 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
22
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.