Exhibit 10.5
[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”);
WITNESSETH
:
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
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1.1
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Identifying
Provisions. For purposes
of this Agreement, the following terms shall have the following
respective meanings:
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(a)
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Participant
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(b)
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Date of
Grant
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(c)
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Number of
CSUs
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(d)
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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.
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1.2
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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.
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1.3
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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.
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1.4
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Performance
Measures.
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(a)
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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.
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(b)
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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.
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1.5
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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)
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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)
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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
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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)
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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)
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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 staring on the sixtieth (60th calendar
day immediately prior to the Change in Control and ending on the
earlier of (i) the ninetieth (90th) calendar day
following the date of occurrence of such Change in Control or
(ii) 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 such
Change in Control occurs; and
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(ii)
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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.
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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 calen
