Energy Transfer 2015 Annual Report Download - page 137

Table of Contents
subject to such award that has not either vested or been forfeited, a DER cash payment promptly following each such distribution by us to our Unitholders. In
approving the grant of such restricted unit awards, the Compensation Committee took into account the same factors as discussed above under the caption
“Annual Bonus,” the long-term objective of retaining such individuals as key drivers of the Partnership’s future success, the existing level of equity
ownership of such individuals and the previous awards to such individuals of equity awards subject to vesting. Vesting of the 2014 and 2015 awards would
accelerate in the event of the death or disability of the named executive officer or in the event of a change in control of the Partnership as that term is defined
under the 2008 Incentive Plan.
In the case of Mr. Hennigan, he received a long-term incentive awards under the Sunoco Logistics Plan for 2015. The award of 116,750 restricted units was
awarded by the SXL Compensation Committee. This award was awarded on identical terms and conditions with respect to vesting and the right to DER
payments, as those awarded to Messrs. McCrea, Long and Mason under the 2008 Incentive Plan in 2015.
The issuance of Common Units pursuant to our equity incentive plans is intended to serve as a means of incentive compensation; therefore, no consideration
will be payable by the plan participants upon vesting and issuance of the Common Units.
The restricted unit awards under the 2008 Incentive Plan as well as awards under the Sunoco Logistics and Sunoco LP equity incentive plans generally
require the continued employment of the recipient during the vesting period, provided however, the unvested awards will be accelerated in the event of a
change in control of the applicable partnership or the death or disability of the award recipient prior to the applicable vesting period being satisfied. In
addition, in the event of a change in control of ETP, all unvested awards granted under the 2004 Unit Plan, as well as awards granted in 2014 and 2015 under
the 2008 Incentive Plan and the 2011 Incentive Plan, as applicable, would be accelerated. For awards previously granted under the 2008 Incentive Plan prior
to December 2014, unvested awards may also become vested upon a change in control at the discretion of the Compensation Committee. Under the Sunoco
Logistics and Sunoco LP equity incentive plans, awards granted in 2014 and 2015 would be accelerated in the event of a change in control of the applicable
partnership.
The ETP Compensation Committee or the compensation committees of one of the affiliated partnerships has in the past and may in the future, but is not
required to, accelerate the vesting of unvested restricted unit awards in the event of the termination or retirement of an executive officer. The ETP
Compensation Committee accelerated the vesting of 61,841 ETP restricted unit awards and the SXL Compensation Committee accelerated the vesting of
32,600 Sunoco Logistics restricted unit awards, with realized vesting values of $3,505,828 and $1,347,358, respectively, upon the resignation of Mr. Salinas.
The ETP Compensation Committee did not accelerate the vesting of restricted unit awards to any other named executive officers in 2015.
As discussed below under “Potential Payments Upon a Termination or Change of Control,” certain equity awards automatically accelerate upon a change in
control event, which means vesting automatically accelerates upon a change of control irrespective of whether the officer is terminated. In addition, the 2015
award to Mr. Ramsey in accordance with the terms of his offer letter, the 2014 awards to Mr. McCrea and the 2014 award to Mr. Hennigan included a
provision in the applicable award agreement for acceleration of unvested restricted unit awards upon a termination of employment without “cause” by the
general partner of the applicable partnership issuing the award. For purposes of the awards the term “cause” shall mean: (i) a conviction (treating a nolo
contendere plea as a conviction) of a felony (whether or not any right to appeal has been or may be exercised), (ii) willful refusal without proper cause to
perform duties (other than any such refusal resulting from incapacity due to physical or mental impairment), (iii) misappropriation, embezzlement or reckless
or willful destruction of property of the partnership or any of its affiliates, (iv) knowing breach of any statutory or common law duty of loyalty to the
partnership or any of its or their affiliates, (v) improper conduct materially prejudicial to the business of the partnership or any of its or their affiliates by, (vi)
material breach of the provisions of any agreement regarding confidential information entered into with the partnership or any of its or their affiliates or (vii)
the continuing failure or refusal to satisfactorily perform essential duties to the partnership or any of its or their affiliate.
We believe that permitting the accelerated vesting of equity awards upon a change in control creates an important retention tool for us by enabling
employees to realize value from these awards in the event that we undergo a change in control transaction.
In December 2013, the Board of Directors adopted the ETP Executive Unit Ownership Guidelines (the “Guidelines”), which set
forth minimum ownership guidelines applicable to certain executives of the Partnership with respect to Common Units representing limited partnership
interests in the Partnership. The applicable unit ownership guidelines are denominated as a multiple of base salary, and the amount of Common Units
required to be owned increases with the level of responsibility. Under these guidelines, the President and Chief Operating Officer is expected to own
Common Units having a minimum value of five times his base salary, while each of the remaining named executive officers (other than our CEO) are
expected to own Common Units having a minimum value of four times their respective base salary. In addition to the named executive officers, these
guidelines also apply to other covered executives, which executives are expected to own either directly or indirectly in accordance with the terms of the
Guidelines, Common Units having minimum values ranging from two to four
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