Sunoco 2012 Annual Report Download - page 118

PART III
ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
Prior to October 5, 2012, Sunoco Partners LLC, our general partner, was a wholly-owned, indirect
subsidiary of Sunoco, Inc., a Pennsylvania corporation (“Sunoco”). Sunoco, through various subsidiaries, owned
our general partner, all of the incentive distribution rights, and a 32.4 percent limited partner interest in us.
However, on April 29, 2012, Sunoco entered into an Agreement and Plan of Merger, with Energy Transfer
Partners, L.P. a Delaware limited partnership (“ETP”) and certain of its affiliates (the “Merger Agreement”). The
Merger Agreement was amended on June 15, 2012. Upon consummation of the transactions contemplated by the
amended Merger Agreement (the “Merger”), Sunoco survived as a wholly owned, indirect subsidiary of ETP and
its affiliates. In connection with the Merger, Sunoco caused $2.0 billion in cash, together with the equity interests
in our general partner, to be contributed to ETP, in exchange for 90,706,000 newly issued Class F units of ETP.
As a result of the Merger, our general partner is now a directly and wholly owned subsidiary of ETP. Our
general partner manages our operations and activities. Our general partner’s Board of Directors (the “Board of
Directors”) held five meetings during 2012. The Board of Directors has established standing committees to
consider designated matters. The standing committees of the Board of Directors are: the Audit Committee, the
Compensation Committee, and the Conflicts Committee. The listing standards of the New York Stock Exchange,
or NYSE, do not require boards of directors of publicly-traded master limited partnerships to be composed of a
majority of independent directors nor are they required to have a standing nominating or compensation
committee. However, the Board of Directors has elected to have a standing compensation committee. The Board
of Directors has adopted governance guidelines for the Board of Directors and charters for each of the Audit,
Compensation, and Conflicts Committees.
•The Audit Committee oversees external financial reporting, engages independent auditors, and reviews
procedures for internal auditing and the adequacy of internal accounting controls. The Audit
Committee met six times during 2012. The current members of the Audit Committee are: Basil Leon
Bray (Chairman), Steven R. Anderson, and Scott A. Angelle.
•The Compensation Committee oversees compensation decisions for executive officers of the general
partner and the administration of the compensation plans described in the section entitled
“Compensation Discussion and Analysis,” below. The Compensation Committee met five times during
2012. The current members of the Compensation Committee are: Scott A. Angelle (Chairman), Steven
R. Anderson, Basil Leon Bray, Michael J. Hennigan, and Marshall S. (Mackie) McCrea, III. Since
Mr. Hennigan is also an officer of our general partner, and since Mr. McCrea is President, Chief
Operating Officer and Director of Energy Transfer Partners, L.L.C. (“ETP LLC”), the owner of ETP’s
general partner, they each recuse themselves from Compensation Committee decisions relating to
equity compensation awards (including awards under the Sunoco Partners LLC Long-Term Incentive
Plan, or LTIP) to executive officers of the general partner. Mr. Hennigan also recuses himself from
Compensation Committee discussion of his own compensation.
•The Conflicts Committee reviews specific matters that the Board of Directors believes may involve
conflicts of interest between Sunoco and us and determines whether the resolution of the conflict of
interest is fair and reasonable to us. The Conflicts Committee met twice during 2012. The current
members of the Conflicts Committee are: Steven R. Anderson (Chairman), Scott A. Angelle and Basil
Leon Bray.
The members of each of the Audit Committee and the Conflicts Committee consist of those directors of our
general partner who are not also executive officers of our general partner or its parent. In addition, all of the
members of the Audit Committee must meet certain independence and experience standards established by the
NYSE to serve on an audit committee of a board of directors. To be considered an independent director under the
NYSE listing standards, the Board of Directors must affirmatively determine that a director has no material
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