Sunoco 2012 Annual Report Download - page 158

DIRECTOR COMPENSATION
Compensation Philosophy: The Board of Directors believes that the compensation program for independent
directors should be designed to attract experienced and highly qualified individuals; provide appropriate
compensation for their commitment and contributions to us and our unitholders; and align the interests of the
independent directors and unitholders. The Board of Directors may engage a third-party compensation consultant
to benchmark director compensation against other pipeline companies, and general industry, and to provide
advice regarding “best practices” and trends in director compensation. Independent directors are compensated
partly in cash and partly in restricted units, representing limited partnership interests in us. Currently, directors
who are also employees of our general partner, or its affiliates, receive no additional compensation for service on
the general partner’s Board of Directors or any committees of the Board. As such, they are not included in the
narrative or tabular disclosures below.
Each independent director is reimbursed for out-of-pocket expenses in connection with attending meetings
of the Board of Directors or committees, including room, meals and transportation to and from the meetings.
When traveling on Partnership business, a director occasionally may be accompanied by a spouse. At times, a
director may travel to and from Board of Directors and/or committee meetings on corporate aircraft. Directors
also may be reimbursed for attendance at qualified third-party director education programs.
Each director will be indemnified fully by us for actions associated with being a member of our general
partner’s Board of Directors, to the extent permitted under applicable state law.
Current Director Compensation Program: Following the consummation of the Merger of Sunoco with
Energy Transfer Partners, L.P., our general partner approved a new program of compensation for non-
employee directors, which consists of an annual cash retainer and equity award for all directors, chair
retainers for the Audit Committee and Compensation Committee, annual cash retainers for members of the
Audit, Compensation and Conflicts Committees, and per meeting fees for all directors. This new director
compensation program will become effective during the 2013 calendar year. Messrs. Anderson, Angelle,
and Bray received no compensation under this new program during 2012.
Director Compensation Program Prior to the Merger with ETP: Prior to the consummation, on
October 5, 2012, of the Merger of Sunoco with Energy Transfer Partners, L.P., each non-employee director
of our general partner received an annual retainer of $66,000 in cash, paid quarterly, and a number of
restricted units, granted quarterly, under the Sunoco Partners LLC Long-Term Incentive Plan. These
restricted units had an aggregate fair market value equal to $44,000 on an annual basis (the fair market value
of each quarterly payment of restricted units was calculated as of the payment date). These restricted units
were required to be deferred, and were credited to each independent director’s mandatory deferred
compensation account under the Directors’ Deferred Compensation Plan. Amounts deferred in the form of
restricted units were treated as if invested in common units of the Partnership, and included a credit for
distribution equivalent rights (in the form of additional restricted units), credited on the applicable date(s)
for Partnership cash distributions. In addition, the committee chairs of the Board of Directors also received
the following supplemental annual retainers (payable in quarterly installments):
• the chair of the Audit Committee received an annual committee chair retainer of $6,000 in cash;
• the chair of the Conflicts Committee received an annual chair retainer of $2,000 in cash;
• the chair of the Compensation Committee received an annual chair retainer of $3,500 in cash;
• the “presiding director,” appointed to chair meetings of the independent directors of the Board,
received an annual retainer of $5,000
In connection with the Merger, all of our general partner’s directors (except for Mr. Hennigan) resigned
from the Board effective October 5, 2012, and were replaced with the current slate of directors. Since the
Merger, the Directors’ Deferred Compensation Plan was terminated in January 2013, and the former
directors’ deferred compensation accounts thereunder were liquidated and paid out in cash as a consequence
of their termination of Board service in connection with the Merger.
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