Sunoco 2013 Annual Report Download - page 138

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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, except as described below with respect to grants of restricted units under the LTIP to Messrs. McCrea and Welch,
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 of Directors. As such, those officers, except for Messrs.
McCrea and Welch as set forth below, 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.
Our program of compensation for non-employee directors was approved by our general partner following the
consummation of the Merger and became effective during the 2013 calendar year. This director compensation program consists
of an annual cash retainer and equity award for all directors, which were $50,000 in cash (paid quarterly) and 1,649 restricted
units under the LTIP, having a fair market value equal to $100,000 on the date of grant, respectively, for each director in 2013.
In addition, the director compensation program includes:
• annual retainers for the chairs of the Audit Committee and Compensation Committee, which were $15,000
and $7,500, respectively, in cash (paid quarterly) for 2013;
• annual retainers for the members of the Audit and Compensation Committees, which were $10,000 and
$5,000, respectively, in cash (paid quarterly) for 2013; and
• per meeting fees for the members of the Audit Committee and Compensation Committee, which were $1,200
and $1,200, respectively, in cash per meeting for 2013.
The members of the Conflicts Committee also each received $15,000 in cash for their service on the Conflicts Committee
during 2013, which payment was determined by the Board of Directors as compensation for evaluation of transactions by the
Conflicts Committee. In addition, each non-employee director who is elected or appointed to the Board of Directors for the first
time is entitled to receive an award of 2,500 restricted units under the LTIP.
Since the current slate of directors was appointed in connection with the Merger, each non-employee director listed in the
table below was entitled to an award of 2,500 restricted units under the LTIP. These awards, as well as the annual equity awards
of 1,649 restricted units under the LTIP, were granted to each non-employee director in March 2013. In addition, in January
2014, each non-employee director received 1,334 restricted units under the LTIP, having a fair market value equal to $100,000
on the date of grant, representing such directors’ annual equity award for 2014. These restricted units vest over a five-year
period, with 60% vesting at the end of the third year and the remaining 40% vesting at the end of the fifth year, subject to each
director’s continued service through each specified vesting date.
Mr. McCrea, the Chairman of the Board of Directors and the President, Chief Operating Officer and Director of ETP’s
general partner, and Mr. Welch, our director and the Group Chief Financial Officer and Head of Business Developments for the
Energy Transfer family, are entitled to receive grants of restricted units pursuant to the LTIP in recognition of their commitment
and contributions to us and our unitholders. In January 2013, Mr. McCrea received 16,667 restricted units granted pursuant to
the LTIP, vesting at a rate of 20% per year over a five-year period, subject to his continued employment through each specified
vesting date. In addition, in December 2013, Mr. McCrea received 27,300 restricted units granted pursuant to the LTIP, vesting
over a five-year period, with 60% vesting at the end of the third year and the remaining 40% vesting at the end of the fifth year,
subject to his continued service as a director through each specified vesting date. In January 2014, Mr. Welch received 5,450
restricted units granted pursuant to the LTIP, vesting over a five-year period, with 60% vesting at the end of the third year and
the remaining 40% vesting at the end of the fifth year, subject to his continued service as a director through each specified
vesting date.
All restricted units granted to the directors entitle their holders to receive, with respect to each common unit subject to
such restricted unit that has not either vested or been forfeited, a cash payment equal to each cash distribution per common unit
made by us on our common units promptly following each such distribution by us to our unitholders.