Sunoco 2015 Annual Report Download - page 116

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In February 2016, in respect of 2015 performance under the ASIP, the Compensation Committee approved a cash
bonus to Mr. Hennigan of $856,152, representing 140 percent of his annual base earnings. The cash bonuses approved
for Messrs. Gvazdauskas, Lauterbach and Chalson were $274,283, $325,044 and $276,290, respectively, and Ms.
Shea-Ballay received a cash bonus of $325,713, each being 100 percent of such NEO's annual base earnings. In
approving the 2015 bonuses of the NEOs, the Compensation Committee took into account the achievement by the
Partnership of all of its targeted performance objectives for 2015 and the individual performances of these individuals
with respect to (i) promoting the Partnership's financial, strategic and operating objectives, (ii) the Partnership's
success in exceeding its internal financial budget, (iii) the development of new projects that are expected to result in
increased cash flows from operations in future years, (iv) the completion of mergers, acquisitions or similar
transactions that are expected to be accretive to the Partnership and increase distributable cash flow, and (v) the overall
management of the Partnership's business.
• Long-Term Incentive Awards (Equity Awards):
• Why the LTIP was adopted: Long-term incentive awards for executive officers are granted under the LTIP in order
to promote achievement of our long-term strategic business objectives. The LTIP was designed to align the
economic interests of executive officers, key employees and directors with those of our unitholders and to provide
an incentive to management for continuous employment with the general partner and its affiliates. Long-term
incentive awards are based upon the common units representing limited partnership interests in us, although they
may be payable in common units or in cash. The Compensation Committee administers the LTIP and, in its
discretion, may terminate or amend the LTIP at any time with respect to any units for which a grant has not yet
been made, including increasing the number of units that may be granted, subject to unitholder approval as
required by the exchange upon which the common units are listed at that time. Changes to any outstanding grant
that would materially impair the rights of a participant cannot be made without the consent of the affected
participant.
On December 1, 2015, our limited partners approved the amended and restated LTIP at a special meeting
called for that purpose. In addition to certain other non-material administrative changes, the amended and restated
LTIP (i) authorized an additional 10 million common units to be available for delivery with respect to awards
under the plan, (ii) added additional types of awards that can be granted under the plan, such as phantom unit
awards, unit appreciation rights, unrestricted unit awards and other unit-based awards, (iii) added a prohibition on
repricing of unit options and unit appreciation rights without the approval of the unitholders, and (iv) provided for
termination of the plan at the earliest of the date it is terminated by the Board, the date no more units remain
available for grants and December 1, 2025. The remainder of this CD&A describes the LTIP as amended and
restated by the unitholders.
• The elements of compensation under the LTIP: The LTIP provides for the following types of awards: restricted
units, phantom units, unit options, unit appreciation rights, unit awards or other unit-based awards. No types of
awards other than restricted units have been granted since the inception of the LTIP.
Each restricted unit entitles the grantee to receive a common unit upon vesting or, in the discretion of the
Compensation Committee, an amount of cash equivalent to the then-current value of a common unit at the time of
vesting. From time to time, the Compensation Committee may make grants under the plan to employees and/or
directors containing such terms as the Compensation Committee shall determine under the LTIP. The
Compensation Committee determines the conditions upon which the restricted units granted may become vested
or forfeited, and whether the restricted units will have distribution equivalent rights ("DERs") entitling the grantee
to receive an amount in cash equal to cash distributions made by us with respect to a like number of our common
units during the restricted period.
In December of 2015, consistent with the compensation methodology of ETP, all of the restricted units
granted, including to the NEOs, provided for vesting of 60 percent at the end of the third year and vesting of the
remaining 40 percent at the end of the fifth year, subject to continued employment of the NEO through each
specified vesting date. These restricted unit awards entitle the grantee of the unit awards to receive, with respect to
each Partnership common unit subject to such restricted unit 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 unit awards, the Compensation Committee took into account the same factors as discussed above under the
caption "Annual Bonuses," 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.
In December 2015, for their performance relative to the 2015 calendar year, the Compensation Committee
approved grants of restricted units to Messrs. Hennigan and Gvazdauskas, Ms. Shea-Ballay and Messrs.