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Exhibit
10.3
[Month, Year]
Award
COMMON STOCK UNIT
AGREEMENT
under the
SUNOCO, INC. LONG-TERM
PERFORMANCE ENHANCEMENT PLAN II
This Common Stock Unit
Agreement (the “Agreement”), entered into as of
the (“Agreement Date”), by and between Sunoco, Inc.
(“Sunoco”) and
, an employee of Sunoco or one of its Affiliates (the
“Participant”);
W I T N E S S E T H
:
WHEREAS, in order to make
certain awards to key employees and directors of Sunoco and its
Affiliates, Sunoco maintains the Sunoco, Inc. Long-Term Performance
Enhancement Plan II (the “Plan”), approved by
shareholders at Sunoco’s 2001 Annual Meeting; and
WHEREAS, the Plan is
administered by a Committee (the “Committee”) appointed
by Sunoco’s Board of Directors and consisting of at least two
(2) members of such Board, each of whom meets the applicable
requirements of Section 16 of the Securities Exchange Act of
1934, as amended, and Section 162(m) of the Internal Revenue
Code; and
WHEREAS, the Committee has
determined to make an award to the Participant of Common Stock
Units (“CSUs”), representing rights to receive shares
of Common Stock which are subject to a risk of forfeiture by the
Participant, pursuant to the terms and conditions of the Plan;
and
WHEREAS, the Participant has
determined to accept such award;
NOW, THEREFORE, Sunoco and
the Participant each, intending to be legally bound hereby, agree
as follows:
ARTICLE I
AWARD OF COMMON STOCK
UNITS
| 1.1 |
Identifying Provisions. For purposes of this Agreement,
the following terms shall have the following respective
meanings: |
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| (a) Participant |
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| (b) Date of Grant |
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| (c) Number of CSUs |
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| (d) Performance Period |
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Any initially capitalized
terms and phrases used in this Agreement but not otherwise defined
herein, shall have the respective meanings ascribed to them in the
Plan.
| 1.2 |
Award of CSUs. Subject to the terms and conditions of
the Plan and this Agreement, the Participant is hereby granted the
number of CSUs set forth herein at Section 1.1. |
| 1.3 |
Dividend Equivalents. The Participant shall be entitled
to receive payment from Sunoco in an amount equal to each cash
dividend (“Dividend Equivalent”) payable subsequent to
the Date of Grant, just as though such Participant, on the
applicable record date for payment of such dividend, had been the
holder of record of shares of Common Stock equal to the actual
number of CSUs, if any, earned and received by the Participant at
the end of the Performance Period. Sunoco shall establish a
bookkeeping methodology to account for the Dividend Equivalents to
be credited to the Participant. The Dividend Equivalents will not
bear interest. |
| 1.4 |
Performance Measures. |
(a) Exhibit
, attached hereto and made a part hereof, sets forth the
performance measures that will be applied to determine the amount
of the award earned pursuant to this Agreement. These performance
measures may be modified by the Committee during, and after the end
of, the Performance Period to reflect significant events that occur
during the Performance Period.
(b) The number of CSUs and
Dividend Equivalents earned will be equal to the amounts awarded
multiplied by the applicable Performance Factors. However, the
Committee has the discretion to reduce (but not increase) some or
all of the amount that would otherwise be payable as a result of
the satisfaction of the Performance Goals. In making this
determination, the Committee may take into account any such factor
or factors it determines are appropriate, including but not limited
to Company, business unit or individual performance.
| 1.5 |
Payment of CSUs and Related Dividend
Equivalents. |
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(a)
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Payment in respect of the
earned CSUs, and the earned Dividend Equivalents related thereto,
shall be made to the Participant within two and one-half (2-
1 /
2 )
months after the Performance Period for such CSUs has ended, but
only to the extent the Committee determines that the applicable
performance targets have been met.
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(1) |
Payment in respect of CSUs earned . Except as
provided by Section 1.6 hereof, all payment for CSUs earned
shall be made in cash. The amount of cash paid shall be equal to
the number of Common Stock Units earned multiplied by the average
closing price for a share of Common Stock as published in the Wall
Street Journal (under the caption “New York Stock Exchange
Composite Transactions”) or any other publication selected by
the Committee for the period of ten (10) trading days
immediately prior to such date following the lapse of the
Performance Period, and the satisfaction of any other applicable
conditions established by the Committee at the time of grant, that
the Participant first becomes entitled to receive such payment. The
number of CSUs earned shall be determined in accordance with the
provisions of Exhibit
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(2)
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Payment of Earned
Dividend Equivalents . The Participant will be entitled to
receive from Sunoco, within two and one-half (2- 1 / 2 ) months after
the Performance Period, payment of an amount in cash equal to the
Dividend Equivalents earned as determined in accordance with the
provisions of Exhibit
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Applicable federal, state and
local taxes shall be withheld in accordance with Section 2.6
hereof.
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(a) |
Form of Payment of CSUs . For a Change in Control
occurring within the first consecutive twelve-month period
following the date of grant, the number of performance-based CSUs
paid out to the Participant with regard to such grant will be equal
to the total number of CSUs outstanding in such grant as of the
Change in Control, not adjusted for any Performance Factors
described in Exhibit
. For a Change in Control occurring after the first consecutive
twelve-month period following the date of grant, the number of
performance-based CSUs paid out to the Participant with regard to
such grant will be the greater of (i) the total number of CSUs
outstanding in such grant as of the Change in Control, not adjusted
for any Performance Factors described in Exhibit
or (ii) the total number of such CSUs outstanding in such
grant, multiplied by the applicable Performance Factors related to
Sunoco’s actual performance immediately prior to the Change
in Control. In the case of an award of CSUs conditioned upon the
Participant’s continued employment, the total number of CSUs
outstanding in such grant as of the Change in Control will be paid
to the Participant. The Participant’s CSUs will be payable to
the Participant in cash or stock, as determined by the Committee
prior to the Change in Control, as follows: |
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(1) |
if the Participant is to receive stock, the Participant will
receive shares of Common Stock equal in number to the total number
of CSUs as stated in this Section 1.6; or |
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(2) |
if the Participant is to receive cash, the Participant will be
paid an amount in cash equal to the number of CSUs as stated above
in this Section 1.6 multiplied by the greater of: |
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(i)
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the highest price per share
of Common Stock paid in connection with any Change in Control
during the period starting on the sixtieth (60 th ) calendar day immediately prior to
the Change in Control and ending on the earlier of (a) the
ninetieth (90th) calendar day following the Change in Control
or (b) the last day of the two and one-half (2- 1 / 2 ) months
following the end of the calendar year in which the date of the
such Change in Control occurs; and
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(ii) |
the highest trading 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 immediately prior to the
Change in Control. |
Such amount will be reduced
by the applicable federal, state and local withholding taxes due,
as provided in Section 2.6 hereof.
The cash or stock, as the
case may be, shall be paid out to the Participant no later than the
earlier of (i) ninety (90) days following the date of
occurrence of such Change in Control or (ii) two and one-half
(2- 1 / 2 ) months following the end of the calendar year in which
the date of such Change in Control occurs (the “CSU Payout
Date”), regardless of whether the applicable Performance
Period has expired or whether the applicable Performance Goals have
been met.
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(2) |
DIVIDEND EQUIVALENTS: |
On or before the CSU Payout
Date, the Participant will be paid an amount in cash equal to the
applicable Dividend Equivalents on the number of CSUs being paid
pursuant to this Section 1.6 for the time period immediately
preceding the Change in Control.
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(c) |
Eligibility for Payout . Payout of CSUs and the
related earned Dividend Equivalents shall be made to each
Participant: |
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(1) |
who is employed by Sunoco or one of its Affiliates on the CSU
Payout Date; or |
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(2) |
whose employment relationship with Sunoco or one of its
Affiliates is terminated: |
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(i) |
as a result of any Qualifying Termination prior to the CSU
Payout Date; or |
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(ii) |
as a result of either of the following prior to the CSU Payout
Date: |
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(B) |
permanent disability or retirement (as each is determined by
the Committee). |
| 1.7 |
Termination of Employment. |
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(a) |
Death, Disability or Retirement . No portion of
the Participant’s CSUs and the related Dividend Equivalents
shall be forfeited as a result of the occurrence, prior to the end
of the Performance Period, of either of the following: |
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