Exhibit 10.9
SUN COMPANY, INC.
EXECUTIVE RETIREMENT PLAN
Amendment No. 1997-1
1. The second sentence of Section 1.01 is deleted.
2. There is added a new Section 1.07A as follows:
"1.07A 'Cause' shall mean termination of a Participant's employment by
the Company, due to:
(a) the Participant's indictment for a criminal offense (other
than a traffic offense) including, without limitation, a crime
involving moral turpitude or common law fraud;
(b) excessive absenteeism by the Participant, unrelated to any
illness; or
(c) the Company's reasonable determination that the Participant
has either:
(1) committed an act of fraud, embezzlement, theft, or
misappropriation of funds in connection with such
Participant's duties in the course of his employment with
the Company; or
(2) engaged in mismanagement, negligence, or misconduct in the
course of his employment with the Company."
3. There is added a new Section 1.07B as follows:
"1.07B 'Change in Control' shall be deemed to have occurred if:
(a) Continuing Directors cease, within one year of such 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
(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 twenty percent (20%) of the outstanding
voting shares."
4. There is added a new Section 1.09A as follows:
"1.09A 'Continuing Director' shall mean a Director who was a member of
the Board of Directors of Sun Company, Inc. immediately prior to a
Control Transaction which results in a Change in Control."
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5. There is added a new Section 1.09B as follows:
"1.09B '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 the Company by a shareholder or a
Group of shareholders in a proxy solicitation or otherwise."
6. Section 1.11 is restated as follows:
"1.11 'Earnings' means:
(a) For periods beginning on or after September 1, 1997, the sum
of (i) base salary paid or payable to a Participant by the
Company or an Affiliated Company and (ii) the Participant's
unadjusted annual guideline bonus in effect for the
Participant under the Sun Company, Inc. Executive Incentive
Plan or successor plans ("EIP") pro rated over the applicable
period (e.g., for computation of Earnings for a one-month
period, the unadjusted annual guideline bonus would be divided
by 12); or
(b) For periods ending prior to September 1, 1997, the sum of (i)
base salary paid or payable to a Participant by the Company
or an Affiliated Company (including an amount equal to the
value on the date of grant of any restricted stock units
("RSUs") designated as base salary, and not as short-term or
long-term incentives, under the Sun Company, Inc. Long-Term
Incentive Plan or the Sun Company, Inc. Executive Long-Term
Stock Investment Plan, provided that such RSUs become vested
and payable) and (ii) the dollars represented by (I) the
Participant's unadjusted guideline incentive percentage in
effect under the EIP during such period, multiplied by (II)
the Participant's base salary paid or payable (as defined in
subsection (b)(i) herein)."
7. Section 1.16 is restated as follows:
"1.16 'Final Average Earnings' means the arithmetic average of the
Participant's aggregate Earnings during the 36 consecutive calendar
months of the last 120-consecutive calendar month period of Service
immediately preceding the earlier of actual retirement, Termination
Date or the Participant's 62nd birthday (or the actual number of
such months if less than 36) which produce the highest average."
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8. There is added a new Section 1.16A as follows:
"1.16A '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."
9. Section 1.19 is restated as follows:
"1.19 'Participant' means any Employee who is a Participant in the Sun
Company, Inc. Retirement Plan, who has not waived his rights to
participate in this Plan, and who is either (a) an Executive or (b)
designated as a Participant by the Board Committee. Except as
provided in Sections 6.01, 6.02 or 6.04, if any Participant ceases
to be an Executive, he will thereupon cease to be a Participant
(unless otherwise designated by the Board Committee), and will
forfeit all rights to benefits under this Plan."
10. There is added a new Section 1.22A as follows:
"1.22A 'Potential Change in Control' shall mean the occurrence of any of
the following events or transactions:
(1) any person (other than Sun Company, Inc., or any affiliate or
subsidiary thereof) makes a tender offer for capital stock of
Sun Company, Inc.;
(2) any person becomes the beneficial owner, directly or
indirectly, of capital stock of Sun Company, Inc. in an amount
which requires the filing of Schedule 13D or its equivalent
form pursuant to the Rules and Regulations under the
Securities Exchange Act of 1934 as from time to time amended;
(3) the submission of a nominee or nominees for the position of
director of Sun Company, Inc. by a shareholder or Group of
shareholders in a proxy solicitation or otherwise which, in
its judgment, the Board of Directors determines by adoption of
a resolution within thirty (30) days of such submission, might
result in a Change in Control of Sun Company, Inc.;
(4) any person files a pre-merger notification for the acquisition
of capital stock of Sun Company, Inc. pursuant to the Hart-
Scott-Rodino Act; or
(5) The Board of Directors in its judgment determines by adoption
of a resolution that a Potential Change in Control of Sun
Company, Inc. for purposes of this Plan has occurred."
11. There is added a new Section 1.23A as follows:
"1.23A 'Qualifying Termination' of the employment of a Participant shall
mean any of the following:
(a) a termination of employment by the Company within two (2)
years after a Change in Control, other than for Just Cause,
death or disability;
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(b) a termination of employment by the Participant within two (2)
years after a Change in Control for one or more of the
following reasons:
(1) the assignment to such Participant of any duties
inconsistent in a way adverse to such Participant, with
such Participant's positions, duties, responsibilities and
status with the Company immediately prior to the Change in
Control, or a reduction in the duties and responsibilities
held by the Participant immediately prior to the Change in
Control; a change in the Participant's reporting
responsibilities, title or offices as in effect immediately
prior to the Change in Control that is adverse to the
Participant; or any removal of the Participant from or any
failure to re-elect the Participant to any position with
the Company that such Participant held immediately prior to
the Change in Control except in connection with such
Participant's: (i) assignment to a new position at a higher
annual base salary and guideline bonus; or (ii) termination
of employment by the Company for Just Cause; or
(2) With respect to any Participant who is a member of the
Board of Directors immediately prior to the Change in
Control, any failure of the shareholders of the Company to
elect or reelect, or of the Company to appoint or
reappoint, the Participant as a member of the Board of
Directors;
(3) A reduction by the Company in the Participant's base annual
salary or guideline (target) bonus as in effect immediately
prior to the Change in Control; the failure by the Company
to continue in effect, or the taking of any action by the
Company that would adversely affect such Participant's
participation in or materially reduce such Participant's
benefits under, any employee benefit plan or compensation
plan in which such Participant was participating
immediately prior to the Change in Control; provided,
however, that in the aggregate such actions by the Company
significantly reduce the Participant's total compensation
(i.e., the sum of Participant's annual base salary,
guideline (target) bonus, and the aggregate value to the
Participant of all employee benefit or compensation plans);
or the failure by the Company, without the Participant's
consent, to pay to the Participant any portion of the
Participant's current compensation, or to pay to the
Participant any portion of an installment of deferred
compensation under any deferred compensation program of the
Company; or
(4) The Company requires the Participant to be based anywhere
other than the Participant's present work location or a
location within thirty-five (35) miles from the present
location; or the Company requires the Participant to travel
on Company business to an extent substantially more
burdensome than such Participant's travel obligations
during the period of twelve (12) consecutive months
immediately preceding the Change in Control;
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provided, however, that in the case of any such termination of
employment by the Participant under this subparagraph (b), such
termination shall not be deemed to be a Qualifying Termination
unless the termination occurs within 120 days after the
occurrence of the event or events constituting the reason for the
termination; or
(c) a termination of employment by the Company other than a
termination for Just Cause, or a termination of employment by
the Participant for one of the reasons set forth in (b) above,
following a Potential Change in Control, if the Participant
can demonstrate that such termination or circumstance in (b)
above leading to termination (i) was at the request of a third
party with which the Company had entered into negotiations or
an agreement with regard to a Change in Control or (ii)
otherwise occurred in connection with, or in anticipation of,
a Change in Control, provided that, in either such case, such
Change in Control actually occurs within one (1) year
following the Employment Termination Date.
(d) As used herein, 'Just Cause' shall mean:
(i) a judicial determination that the Participant has committed
fraud, misappropriation, or embezzlement against the
Company; or
(ii) a non-appealable conviction of, or entry of a plea of nolo
contendere for, an act by the Participant constituting a
felony which, as determined by the Company in good faith,
constitutes a crime involving moral turpitude and has
resulted in material harm to the Company, its subsidiaries
and affiliates taken as a whole.
A termination of employment pursuant to Just Cause shall not be
considered to be effective unless accompanied by a copy of a
resolution duly adopted by the affirmative vote of not less than a
majority of the Continuing Directors at a meeting of the Board of
Directors which was called and held for the purpose of considering
such termination, or if there are no Continuing Directors, then by
at least three quarters of the entire Board of Directors (after
reasonable notice to the Participant and an opportunity for the
Participant, together with the Participant's counsel, to be heard
before the Board of Directors) finding that, in the good faith
opinion of the Board of Directors, the Participant was guilty of
conduct set forth in the preceding sentence, and specifying the
particulars thereof in detail. In any Board deliberations or votes
concerning a determination under this Section, the Participant shall
recuse himself from such deliberations and votes."
12. Section 6.01 is restated as follows:
"6.01 Termination of Employment.
(a) Voluntary Termination.
A Participant whose employment is terminated for any reason other
than death or retirement, including early retirement, will not be
entitled to benefits under this Plan, except as provided in
Subsection (b) and Section 6.04 hereof.
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(b) Involuntary Termination.
Notwithstanding any other provision of the Plan (and except as
discussed herein), a Participant whose employment is involuntarily
terminated prior to his Early Retirement Date, other than for Just
Cause, and who executes a release and discharge of the Company from
any and all claims, demands or causes of action other than as to
amounts or benefits due to the Participant under any plan, program
or contract provided by, or entered into with, the Company will be
entitled to benefits in accordance with this Subsection (b). Such
release and discharge shall be in such form as is prescribed by the
Committee and shall be executed prior to the payment of any benefits
due hereunder. In addition, no benefits due hereunder shall be paid
to a Participant who is required by Company guidelines to execute an
agreement governing the assignment of patents or the disclosure of
confidential information unless an executed copy of such agreement
is on file with the Company. The benefits under this Subsection (b)
shall consist of a nonforfeitable percentage in the benefits
calculated under Section 3.06 (including the minimum benefit defined
under Section 3.04) equal to 1-2/3% times the number of completed
months of Executive Service. Such benefits shall commence
coincident with or next following the first day of the calendar
month in which the Participant attains age 55, or if the Participant
elects, the benefit will be paid no later than 30 days after the
Termination Date, in a lump sum payment of the Actuarial Equivalent
of the age 55 retirement income determined under Section 3.06, with
an additional reduction of such benefit by discounting it to the
date of payment using the interest rate used in Section 1.01. Any
participant who also is eligible to receive benefits under Section
6.04 shall not receive benefits hereunder but shall instead receive
the benefits under Section 6.04."
13. Section 6.04 is restated as follows:
"6.04 Change in Control.
(a) Notwithstanding any other provisions in the Plan, any
Participant who terminates employment as a result of a
Qualifying Termination shall become fully vested upon a Change
in Control of the Company and shall be entitled to benefits
calculated as follows:
(1) Except for purposes of Section 1.10(b), Service and
Credited Service shall be increased by 36 months, with the
number of months credited under this Section 6.04(a)(1)
reduced by one month for each completed month of Service of
the Participant after the date of the Change in Control,
but not below zero.
(2) If at the Termination Date, the Participant has attained
his Normal Retirement Date, he shall be entitled to a
benefit calculated in accordance with Section 3.02.
(3) If at the Termination Date, the Participant has not
attained his Normal Retirement Date, or has not attained
his Early Retirement Date, he shall be entitled to benefits
calculated under Section 3.06 (including the minimum
benefit defined under Section 3.04).
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(4) Final Average Earnings shall be determined using the
greater of: (i) the amount determined under Section 1.16
without reference to this Section 6.04(a)(4); (ii) Earnings
for the first full calendar month preceding the Termination
Date; or (iii) Earnings for the first full calendar month
preceding the date of a Change in Control.
(5) In the case of a Participant who has not attained his Early
Retirement Date at the Termination Date, such benefits
shall commence coincident with or next following the first
day of the calendar month in which the Participant attains
age 55, or if the Participant elects, the benefit will be
paid no later than 30 days after the Termination Date, in a
lump sum payment of the Actuarial Equivalent of the age 55
retirement income determined under Section 3.06 with
additional reduction of such benefit by discounting it to
the date of payment using the interest rate used in Section
1.01.
(b) Notwithstanding any other provisions in the Plan, upon a
Change in Control and for a period of twelve (12) months
thereafter, any retired Participant or Beneficiary who is
receiving an optional form of retirement income pursuant to
Article IV hereof, shall have the right to elect to receive in
a single lump-sum cash payment an amount equal to ninety-five
percent (95%) of the Actuarial Equivalent of the payments of
such retirement income to which the Participant or Beneficiary
is entitled for all future periods under the Plan; provided,
however, that if this option is exercised, such retired
Participant or Beneficiary will forfeit to the Company the
remaining five percent 5% of the Actuarial Equivalent of such
payments. Payments under this Section 6.04(b) shall be made
as soon as practicable, but no later than 30 days after the
retired Participant or Beneficiary notifies the Plan that he
is exercising his right to withdraw.
(c) The Company shall pay all reasonable legal fees and related
expenses incurred by a Participant in seeking to obtain or
enforce any payment, benefit or other right such Participant
may be entitled to under the Plan after a Change in Control;
provided, however, that the Participant shall be required to
repay any such amounts to the Company to the extent a court of
competent jurisdiction issues a final and non-appealable order
setting forth the determination that the position taken by the
Participant was frivolous or advanced in bad faith."
14. This amendment is effective September 1, 1997.