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
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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)
Participant
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(b) Date of
Grant
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(c) Shares
Subject To Option
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(d) Option
Price (per share)
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(e) Earliest
Vesting and Exercise Date
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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
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.
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1.3
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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.
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1.4
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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:
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(a)
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, which is the ten-year anniversary
of the Date of Grant; or
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(b)
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(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.
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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.
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1.5
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Method of
Exercising Stock Option.
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(a)
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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:
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(1)
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be signed by
the Participant;
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(2)
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state the
Participant’s election to exercise the Stock
Option;
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(3)
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specify the
number of whole shares of Common Stock with respect to which the
Stock Option is being exercised;
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(4)
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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:
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(i)
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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
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2
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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:
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(b)
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the Sunoco,
Inc. Long-Term Performance Enhancement Plan,
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must have been held by the
Participant at least six (6) months.
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(ii)
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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.
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(b)
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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:
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(1)
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a certificate
or certificates for the shares of Stock so purchased; or
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(2)
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other evidence
of the appropriate registration of such shares on Sunoco’s
books and records.
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1.6
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Termination
of Employment.
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(a)
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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.
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(b)
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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:
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(1)
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all unvested
Stock Options shall terminate immediately; and
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(2)
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all vested
Stock Options shall terminate as follows:
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(A)
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immediately, in
the case of the Participant terminated by Sunoco or one of its
Affiliates for Just Cause; or
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(B)
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(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).
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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
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2.1
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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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