Sunoco 2012 Annual Report Download - page 148

on which Sunoco merged into a wholly owned subsidiary of ETP. Payment of severance benefits under
this plan provides severance allowances to executives whose employment is terminated in connection
with, or following, a change of control. A “change of control” is defined as any one or more of the
following events:
• a transaction pursuant to which more than 50 percent of the combined voting power of the
outstanding equity interests in the general partner cease to be owned by Sunoco, Inc. and its
affiliates;
• a “Change in Control” of Sunoco, Inc., as defined from time to time in the Sunoco, Inc. stock
plans; or
• the general partner of the Partnership ceases to be an affiliate of Sunoco.
There is a “double trigger” mechanism for the payment of severance benefits under this plan,
requiring both a change of control and a qualifying termination of employment (as defined in the plan)
following such change of control to trigger payment. Severance benefits under this plan are paid in a
lump sum equal to three times annual compensation for the CEO, and two times annual compensation
for the other NEOs. For these purposes, annual compensation consists of:
• the executive’s annual base salary in effect immediately prior to a change of control or
immediately prior to the employment termination date, whichever is greater, plus
• the greater of 100 percent of the executive’s annual incentive guideline in effect immediately
before the change of control or employment termination date.
Each eligible NEO would be entitled to medical, dental, vision and life insurance coverage for the
period of severance received, at the same rate that such benefits are generally provided to active
employees of the general partner. In the case of a change of control, the plan also provides for the
protection of certain pension benefits and reimbursement for any additional tax liability incurred as a
result of excise taxes imposed on payments deemed to be attributable to the change in control.
•SCIRP: In the event of a change of control, the benefits of a participant whose employment began
before September 5, 2001, and who is terminated (as defined in the plan) following a change in control,
become 100 percent vested and are increased as follows:
•Final Average Pay formula. A participant’s service is increased by three years, subject to
reduction for service after the change in control. Final Average Pay will be the greater of : (A) the
regularly determined Final Average Pay, (B) Final Average Pay based on earnings of the full
month preceding the change in control, or (C) Final Average Pay based on earnings for the month
preceding the termination of employment. For purposes of (B) and (C) monthly earnings will
include base pay and 1/12 of the unadjusted annual guideline annual incentive under the Sunoco
Partners LLC Annual Incentive Plan.
•Career Pay (cash balance) formula. A participant’s service is increased by three years, subject to
reduction for service after the change in control. In the month of termination, a participant’s
Career Pay Earnings are increased by an amount equal to 36 months less the number of months
worked after the Change in Control, times the greater of Career Pay Earnings for: (A) the month
preceding termination or (B) the month preceding the change in control. For purposes of (A) and
(B) monthly earnings will include base pay and 1/12 of the annual guideline annual incentive under
the Sunoco Partners LLC Annual Incentive Plan.
•SERP: Under the SERP, after a change of control and qualifying termination (as defined in the plan) (a
“double trigger”), a participant becomes 100 percent vested in his SERP benefit. The following
provisions also apply:
• A participant’s service is increased by three years, subject to reduction for service following the
change in control.
146