Sunoco 2015 Annual Report Download - page 91

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The Restated LTIP benefits eligible employees and directors of the general partner and its affiliates who perform services
for the Partnership. The Restated LTIP is administered by the independent directors of the Compensation Committee of the
general partner's board of directors with respect to employee awards, and by the general partner's board of directors with
respect to awards granted to the independent directors. At December 31, 2015, there were 9.7 million plan awards available for
future grants under the Restated LTIP.
Restricted Units
A restricted unit entitles the grantee to receive a common unit or, at the discretion of the Compensation Committee, an
amount of cash equivalent to the value of a common unit upon the vesting of the unit. Such grants may include requirements
related to the attainment of predetermined performance targets. The Compensation Committee may make additional grants
under the Restated LTIP to employees and directors containing such terms as defined by the Compensation Committee.
Common units to be delivered to the grantee upon vesting may be common units acquired by the general partner in the open
market, common units already owned by the general partner, common units acquired by the general partner directly from the
Partnership or any other person, or any combination of the foregoing. The general partner will be entitled to reimbursement by
the Partnership for the cost incurred in acquiring common units. If the Partnership issues new common units upon vesting of
the restricted units, the total number of common units outstanding will increase.
The Compensation Committee, at its discretion, may grant tandem distribution equivalent rights ("DERs") related to the
restricted units. Subject to applicable vesting criteria, DERs entitle the grantee to receive an amount of cash equal to the per
unit cash distributions made by the Partnership during the period the restricted unit is outstanding. All units granted during the
periods presented below included tandem DERs.
The Partnership's outstanding restricted unit awards are time-vested grants, the vesting of which occurs over a five-year
period, and is conditioned solely upon continued employment or service as of the applicable vesting date.
The following table summarizes information regarding restricted unit award activity for the periods presented:
Number of Units (1) Weighted Average
Grant Date Fair Value (1)
Granted, non-vested and outstanding, December 31, 2012 855,220 $ 19.48
Granted 858,246 $ 30.00
Performance factor adjustment (2) 202,620 $ 15.76
Vested (563,668) $ 18.33
Cancelled/forfeited (73,256) $ 24.19
Granted, non-vested and outstanding, December 31, 2013 1,279,162 $ 26.19
Granted 719,009 $ 41.59
Performance factor adjustment (2) 229,828 $ 17.52
Vested (693,326) $ 20.26
Cancelled/forfeited (72,872) $ 30.10
Granted, non-vested and outstanding, December 31, 2014 1,461,801 $ 35.01
Granted 1,412,257 $ 29.54
Vested (245,563) $ 22.08
Cancelled/forfeited (90,776) $ 36.83
Granted, non-vested and outstanding, December 31, 2015 2,537,719 $ 33.16
(1) The unit volumes and fair values have been adjusted to reflect the June 12, 2014 two-for-one unit split.
(2) Certain awards granted prior to October 5, 2012 were subject to the Partnership achieving certain market-based and cash
distribution performance targets as compared to a peer group average, or certain cash distribution performance targets as defined by
the Compensation Committee, which caused the actual amount of units that ultimately vested to range between 0 to 200 percent of
the original units granted.
The total fair value of restricted unit awards vested for the years ended December 31, 2015, 2014 and 2013, was $8, $30
and $21 million, respectively. As of December 31, 2015, estimated compensation cost related to non-vested awards not yet
recognized was $52 million, and the weighted average period over which this cost is expected to be recognized in expense is
3.0 years. The fair value of the Partnership's time-vested awards is based on the grant date market price of the Partnership's
common units.
The Partnership recognizes compensation expense on a straight-line basis over the requisite service period, and estimates
forfeitures over the requisite service period when recognizing compensation expense.