Sunoco 2015 Annual Report Download - page 117

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Lauterbach and Chalson of 116,750 restricted units, 23,350 restricted units, 20,859 restricted units, 14,010
restricted units and 15,567 restricted units, respectively.
The issuance of restricted units pursuant to the LTIP is intended to serve as a means of incentive
compensation; therefore, no consideration will be payable by the plan participants upon issuance or vesting of the
restricted units.
Except as otherwise provided in an award agreement, the restricted units under the LTIP generally require
the continued employment of the recipient during the vesting period. The NEOs' December 2015 award
agreements include provisions for acceleration of their respective unvested restricted unit awards upon a change
of control (as defined in the LTIP), death or disability. Such award agreements also provide that a NEO with at
least ten years of service with the general partner, who leaves the general partner voluntarily due to retirement, is
eligible for accelerated vesting of 40 percent of his or her award for a NEO age 65 to 68 or 50 percent of his or
her award for a NEO over age 68.
During his tenure in 2015 as Chief Financial Officer of our general partner, Mr. Salinas also served as Chief
Financial Officer of ETP's general partner. The compensation committee of ETP's general partner set the
components of Mr. Salinas' compensation, including salary, long-term incentive awards and annual bonus.
However, a portion of Mr. Salinas' annual long-term incentive compensation was approved and awarded by the
Compensation Committee of our general partner in recognition of his services to the Partnership. Mr. Salinas and
ETP entered the Separation Agreement, which became effective after expiration of a revocation period on May 9,
2015. The Separation Agreement, amongst other things, provided for the acceleration of the vesting of all
unvested restricted units awarded to Mr. Salinas pursuant to the terms of the LTIP. As of May 9, 2015, Mr. Salinas
had outstanding awards amounting to 32,600 restricted units under the LTIP that were otherwise not scheduled to
vest until after his termination of employment, all of which awards were distributed to Mr. Salinas pursuant to the
Separation Agreement.
• Accounting and Tax Considerations: We account for the equity compensation expense of our general partner's
employees, including the NEOs, in accordance with GAAP, which requires us to estimate and record an expense
for each equity award over the vesting period of the award. For market-based awards, the value is determined
using a Monte Carlo simulation. The expense for restricted units settled in common units is recognized ratably
over the vesting period. For cash compensation, the accounting rules require us to record it as an expense at the
time the obligation is accrued. Because we are a partnership, and our general partner is a limited liability
company, Internal Revenue Code ("Code") Section 162(m) does not apply to the compensation paid to our NEOs
and, accordingly, the Compensation Committee did not consider its impact in determining compensation levels
for 2015.
• Equity Grant Practices: Equity awards to employees are approved at meetings of our general partner's
Compensation Committee. In limited situations, however, such awards may be approved by unanimous written
consent of the Compensation Committee. The grant date of an equity award is the date of the Compensation
Committee meeting at which such equity award is approved. The Compensation Committee may, in its discretion,
refrain from approving grants of equity awards to employees if the meeting at which such approval is to be
considered occurs during a period in which management is in possession of material non-public information, in
which case, approval of such equity awards may be deferred to the next Compensation Committee meeting. No
grant approvals were deferred to a later Compensation Committee meeting in 2015.
• Unit Ownership Guidelines: Our general partner has established guidelines for the ownership of our common
units, applicable to certain executives of the general partner with respect to common units representing limited
partnership interests in the Partnership. The applicable unit ownership guidelines are denominated as a multiple of
base salary, and the amount of common units required to be owned increases with the level of responsibility.
Under the current guidelines, the President and Chief Executive Officer is expected to own common units having
a minimum value of five times his base salary, the Chief Financial Officer is expected to own common units
having a minimum value of four times his base salary, and each of the remaining NEOs are expected to own
common units having a minimum value of three times their respective base salaries. Our general partner and the
Compensation Committee believe that the ownership of our common units, as reflected in these guidelines, is an
important means of tying the financial risks and rewards for our executives to our total unitholder return and
better aligning the interests of such executives with those of our unitholders. Any executive subject to the
guidelines who has not yet met his or her respective ownership guideline must accumulate our common units until
such guideline is met. Except for sales of common units in settlement of tax obligations relating to the receipt and
payment of LTIP awards, such persons are prohibited from disposing of any of our common units until the
applicable ownership guideline has been attained. However, those individuals who have met or exceeded their