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STOCK OPTION AGREEMENT Under the SUNOCO, INC. LONG-TERM PERFORMANCE ENHANCEMENT PLAN II

Stock Option Agreement

STOCK OPTION AGREEMENT 

Under the 

SUNOCO, INC. LONG-TERM PERFORMANCE ENHANCEMENT PLAN II | Document Parties: SUNOCO INC You are currently viewing:
This Stock Option Agreement involves

SUNOCO INC

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Title: STOCK OPTION AGREEMENT Under the SUNOCO, INC. LONG-TERM PERFORMANCE ENHANCEMENT PLAN II
Governing Law: Pennsylvania     Date: 2/25/2009
Industry: Oil and Gas Operations     Sector: Energy

STOCK OPTION AGREEMENT 

Under the 

SUNOCO, INC. LONG-TERM PERFORMANCE ENHANCEMENT PLAN II, Parties: sunoco inc
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Exhibit 10.7

[Month, Year] Award

STOCK OPTION AGREEMENT

Under the

SUNOCO, INC. LONG-TERM PERFORMANCE ENHANCEMENT PLAN II

This Stock Option Agreement (the “Agreement”) entered into as of                      (the “Agreement Date”), by and between Sunoco, Inc. (“Sunoco”) and                      , who is 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 grant to the Participant, pursuant to the terms and conditions of the Plan, an award of an option to purchase shares of common stock of Sunoco; 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

OPTION TO PURCHASE COMMON STOCK

 

1.1

Identifying Provisions. For purposes of this Agreement, the following terms shall have the following respective meanings:

 

(a) Participant

 

:

 

 

(b) Date of Grant

 

:

 

 

(c) Shares Subject To Option

 

:

 

 

(d) Option Price (per share)

 

:

 

 

(e) Earliest Vesting and Exercise Date

 

:

 

 

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 Stock Option. Subject to the terms and conditions of the Plan and this Agreement, the Participant is hereby granted an option (the “Stock Option”) to purchase up to the number of Shares Subject To Option of Sunoco’s common stock (the “Common Stock”), at the Option Price set forth herein at Section 1.1. The Stock Option is not intended to be, and shall not be treated as, an “incentive stock option” as such term is defined under Section 422 of the Internal Revenue Code of 1986, as amended.

 

1.3

Exercisability. The Stock Option shall become exercisable in whole or in part with respect to all of the shares of Common Stock subject thereto [insert vesting/exercisability schedule – not before the first anniversary of the date of grant]; provided, however, that, upon the occurrence of any Change in Control, the Stock Option shall become immediately and fully exercisable, notwithstanding any provision to the contrary in this Agreement or in the Plan, and without regard to any period of time then elapsed from the Date of Grant.

 

1.4

Term. The Stock Option shall not be exercisable, either in whole or in part, on or after the Expiration Date. Unless fully exercised by the Expiration Date, the Stock Option shall automatically be canceled to the extent not yet exercised. The Expiration Date shall be the earliest to occur of:

 

 

(a)

                     , which is the ten-year anniversary of the Date of Grant; or

 

 

(b)

(1) the 90-calendar day anniversary of the date of termination of the Participant’s employment, if the termination of employment occurs prior to a Change in Control for following the two-year anniversary of a Change in Control, and (2) the one-year anniversary of the date of termination of the Participant’s employment, if the termination of employment occurs with two years after a Change in Control, other than in the case of a termination of employment for Just Cause, as defined in the Plan.

Notwithstanding anything herein to the contrary, however, the Stock Option will be canceled immediately where (1) the Stock Option is unvested and the Participant’s termination of employment occurs by reason of retirement or permanent disability (as each is determined by the Committee), or death; or (2) the Participant’s employment has been terminated at any time for Just Cause.

 

1.5

Method of Exercising Stock Option.

 

 

(a)

The Stock Option may be exercised from time to time in whole or in part, by written notice delivered to and received by Sunoco prior to the Expiration Date, so long as the Participant is in compliance with the Company’s insider trading policy and the pre-clearance process. This notice must:

 

 

(1)

be signed by the Participant;

 

 

(2)

state the Participant’s election to exercise the Stock Option;

 

 

(3)

specify the number of whole shares of Common Stock with respect to which the Stock Option is being exercised;

 

 

(4)

be accompanied by a check payable to Sunoco, in the amount of the full Option Price for the number of shares purchased. Alternatively, the Participant may pay all or a portion of the Option Price by:

 

 

(i)

delivering to Sunoco shares of previously owned Common Stock having an aggregate Fair Market Value (valued as of the date of exercise) equal to the amount of cash that would otherwise be

 

2


 

required, in which event, the stock certificates evidencing the shares so to be used shall accompany the notice of exercise and shall be duly endorsed or accompanied by duly executed stock powers to transfer the same to Sunoco; provided, however, that before they may be used as payment of the Option Price, shares of Common Stock issued under:

 

 

(a)

the Plan, and/or

 

 

(b)

the Sunoco, Inc. Long-Term Performance Enhancement Plan,

must have been held by the Participant at least six (6) months.

 

 

(ii)

by authorizing a third party to sell a sufficient portion of the shares of Common Stock acquired upon exercise of the Stock Option and remit to Sunoco a sufficient portion of the sale proceeds to pay the entire Option Price and tax withholding resulting from such exercise.

 

 

(b)

As soon as practicable after Sunoco receives such notice and payment, and following receipt from the Participant of payment for any taxes which Sunoco is required by law to withhold by reason of such exercise, Sunoco will deliver to the Participant either:

 

 

(1)

a certificate or certificates for the shares of Stock so purchased; or

 

 

(2)

other evidence of the appropriate registration of such shares on Sunoco’s books and records.

 

1.6

Termination of Employment.

 

 

(a)

Retirement, Permanent Disability, or Death . Upon termination of the Participant’s employment by reason of retirement or permanent disability (as determined by the Committee) or death, all unvested stock options shall terminate immediately. All vested Stock Options shall not terminate, and the Participant (or in the case of death, the Participant’s estate, or any person who acquires the right to exercise the Stock Option by bequest or inheritance or otherwise by reason of Participant’s death) may exercise the Stock Option during the remaining option term of the Stock Option.

 

 

(b)

Other . Except as provided under Section 1.6(a) above, or except as otherwise determined by the Committee, upon termination of a Participant’s employment:

 

 

(1)

all unvested Stock Options shall terminate immediately; and

 

 

(2)

all vested Stock Options shall terminate as follows:

 

 

(A)

immediately, in the case of the Participant terminated by Sunoco or one of its Affiliates for Just Cause; or

 

 

(B)

(1) if the termination of employment occurs prior to a Change in Control or following the two-year anniversary of a Change in Control, upon the expiration of ninety (90) calendar days following the occurrence of the Participant’s Employment Termination Date and (2) if the termination of employment occurs within two (2) years after a Change in Control, upon the expiration of one (1) year following the occurrence of the Participant’s Employment Termination Date, other than, in the case of each clause (1) and clause (2) of this subparagraph (B), a termination of employment for Just Cause (in which case subparagraph (A) above will apply).

 

3


Under no circumstances shall the exercise period set forth in this Section 1.6 extend to or beyond the Expiration Date.

ARTICLE II

GENERAL PROVISIONS

 

2.1

Non-Assignability. Unless otherwise determined by the Committee, the Stock Option shall not be assignable or transferable by the Participant, except by will or the laws of descent and distribution (and then, only as set forth in Section 1.6(b) hereof). During the life of the Parti


 
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