Directors' Deferred Compensation And Benefits Trust Agreement

Exhibit 10.12


DIRECTORS'

DEFERRED COMPENSATION AND BENEFITS

TRUST AGREEMENT

by and among

SUNOCO, INC.,

MELLON TRUST OF NEW ENGLAND, N.A.

and

TOWERS, PERRIN, FORSTER & CROSBY, INC.

Amended and Restated Effective as of November 1, 2007


TABLE OF CONTENTS

ARTICLE I Definitions 2

1.1 Account 2

1.2 Benefits Fund 2

1.3 Benefits Fund Amount 2

1.4 Board of Directors 2

1.5 Change in Control 2

1.6 Chief Executive Officer 4

1.7 CIC Date 4

1.8 Committee 4

1.9 Company 4

1.10 ERISA 4

1.11 Exchange Act 4

1.12 Group 4

1.13 Incumbent Board 4

1.14 Insolvent or Insolvency 4

1.15 Legal Defense Fund 4

1.16 Legal Defense Fund Amount 4

1.17 Payment Schedule 4

1.18 Plan 4

1.19 Plan Participant 5

1.20 Potential Change in Control 5

1.21 Recordkeeper 5

1.22 Required Funding Amount 5

1.23 Trust 6

1.24 Trust Agreement 6

1.25 Trust Corpus 6

1.26 Trustee 6

ARTICLE II

The Plans 6

2.1 Plans & Agreements Subject to Trust 6

2.2 Liability for Payments 6

ARTICLE III

Establishment of Trust 6

3.1 Principal of Trust 6

3.2 Term and Revocability 7

3.3 Grantor Trust 7

3.4 Segregation of Funds; Rights of Creditors 7

ARTICLE IV Administration of Trust 7

4.1 Authority and Duties of the Committee 7

4.2 Action by the Committee 8

4.3 Records, Reporting and Disclosure 8

4.4 Bonding 9


i ARTICLE V Potential Change in Control; Change in Control 9

5.1 Potential Change in Control 9

5.2 Change in Control 9 5.3 Method of Funding 9

5.4 Additional Contributions; Sufficiency of Funds 10

5.5 Additional Plans 10

5.6 Calculation of Required Funding Amount 10

5.7 Payment of Required Funding Amount 11

5.8 Sunset Provision 12 ARTICLE VI Legal Defense Fund 12

6.1 Legal Defense Fund 12

6.2 Trustee' s Duties 12

6.3 Claims 13

6.4 Insufficient Funds 13 ARTICLE VII The Benefits Fund 14

7.1 Benefits Fund 14

7.2 Company Information 14

7.3 Payment Schedule 15

7.4 Entitlement to Benefits 15

7.5 Payment of Benefits 15

7.6 Notice of Benefits Payable 16

7.7 Source of Payments 16

7.8 Tax on Amounts Held in Trust Prior to Distribution 17 ARTICLE VIII Investment Authority 17

8.1 Investment Authority of Trustee 17

8.2 Trustee' s Powers and Duties 18

8.3 Investment of Trust Income 21

8.4 Contractual Settlement and Income; Market Practice Settlements 21

8.5 Losses Charged Against Trust Corpus 22 ARTICLE IX Payments to Trust Beneficiary When Company Is Insolvent 22

9.1 Responsibilities of Trustee in Insolvency 22

9.2 Resumption of Discontinued Payments 23 ARTICLE X Payments to the Company 23

10.1 Reversion of Funds to Company 23

10.2 Limitation Upon Company' s Ability to Direct Payments 24

10.3 Limitation on Reversion of Legal Defense Fund Amount 24


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ARTICLE XI Powers, Duties & Responsibilities of Trustee 24

11.1 Limitation of Liability 24

11.2 Maintenance of Administrative Records 25

11.3 Trustee Compensation and Reimbursement of Costs & Expenses 25

11.4 Indemnification of Trustee by Company 26

11.5 Powers of Trustee 26

11.6 Responsibility of Trustee 27

ARTICLE XII Resignation and Removal of Trustee 28

12.1 Resignation of Trustee 28

12.2 Removal and Substitution of Trustee 28

12.3 Appointment of Successor Trustee 28

12.4 Failure to Appoint Successor Trustee 29

12.5 Statements of Account Upon Removal or Resignation 29

12.6 Transfer of Trust Corpus to Successor Trustee 30

ARTICLE XIII The Recordkeeper 30

13.1 Appointment of Recordkeeper 30

13.2 Maintenance of Records 30

13.3 Indemnification of Recordkeeper by Company 30

13.4 Resignation, Discharge & Replacement of Recordkeeper 31

ARTICLE XIV Authorization 31

14.1 Actions by Board of Directors; Committee 31

14.2 Actions by Chief Executive Officer; Treasurer 32

14.3 Other Actions of Company 32

14.4 Actions by the Committee 32

14.5 Authorized Parties 32

ARTICLE XV Notices 33

15.1 Notices 33

ARTICLE XVI Miscellaneous 34

16.1 No Contract of Employment 34

16.2 Rights of Plan Participants 34

16.3 Amendment or Waiver 34

16.4 Severability of Provisions 35

16.5 Non-Alienability of Benefits 35

16.6 Further Assurances 35

16.7 Successors, Heirs, Assigns, and Personal Representatives 35

16.8 Headings and Captions 35

16.9 Gender and Number 36

16.10 Payments to Incompetent Persons, Etc. 36


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16.11 Governing Law; Situs of Trust 36

16.12 Counterparts 36

16.13 Acceptance by Trustee 36

16.14 Insurance Policies 36

16.15 Survival 36

16.16 Entire Understanding 37

16.17 Reliance on Representations 37

Schedules:


Schedule 2.1 - Benefit Plans and Other Arrangements Subject to Trust 39

Schedule 16.17 - Customer Identification Program Notice 40


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DIRECTORS' DEFERRED COMPENSATION AND BENEFITS TRUST AGREEMENT

This Directors' Deferred Compensation and Benefits Trust Agreement, Amended and Restated effective as of November 1, 2007, (the " Trust Agreement" ), is by and among SUNOCO, INC., a Pennsylvania corporation (the " Company" ), MELLON TRUST OF NEW ENGLAND, N.A., a national association (the " Trustee" ), and TOWERS PERRIN, FORSTER & CROSBY, INC., a Pennsylvania corporation (the " Recordkeeper" ).

W I T N E S S E T H

WHEREAS, the Company is or may become obligated under the terms of certain benefit plans, agreements, or other arrangements, to make payments to certain persons who at any time prior to the occurrence of a Change in Control of the Company were members of the Company' s Board of Directors (the " Plan Participants" ), and their beneficiaries; and

WHEREAS, in order to: (1) provide an alternative source of funds to assist the Company in meeting its liabilities under the applicable director benefit plans, agreements, or other arrangements; and (2) assure that future payment of such amounts would not be improperly withheld in the event of a Change in Control of the Company, the Company has established a Trust (the " Trust" ) and contributes certain assets held therein, subject to the claims of the Company' s creditors in the event of the Company' s Insolvency until paid to Plan Participants and their beneficiaries in the manner and at the times specified in the applicable director benefit plans, agreements, or other arrangements; and

WHEREAS, Bankers Trust Company has resigned as trustee; and

WHEREAS, Mellon Trust of New England, N.A. has been appointed as Trustee in its stead, and is willing to act as Trustee of the Trust, upon all of the terms and conditions hereinafter set forth.

NOW THEREFORE, in consideration of the mutual terms, covenants, and conditions herein contained, the mutual benefits to be derived hereunder, and other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, and intending to be legally bound, the parties hereto agree as follows:


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ARTICLE I

Definitions

As used in this Trust Agreement, the following terms shall have the meanings herein specified:

1.1 Account - shall have the meaning provided herein at Section 5.7(c). 1.2 Benefits Fund - shall mean that portion of the Trust Corpus that is not in the Legal Defense Fund. 1.3 Benefits Fund Amount - shall have the meaning provided herein at Section 1.22(a). 1.4 Board of Directors - shall mean the Board of Directors of Sunoco, Inc., or any successor thereto. 1.5 Change in Control - shall mean the occurrence of any of the following events: (a) The acquisition by any individual, entity or group (within the meaning of Section 13(d)(3) or 14(d)(2) of the Exchange Act) (a " Person" ) of beneficial ownership (within the meaning of Rule 13d 3 promulgated under the Exchange Act) of 20% or more of either (1) the then-outstanding shares of common stock of the Company (the " Outstanding Company Common Stock" ) or (2) the combined voting power of the then-outstanding voting securities of the Company entitled to vote generally in the election of directors (the " Outstanding Company Voting Securities" ); provided , however , that, for purposes of this Section (a), the following acquisitions shall not constitute a Change in Control: (A) any acquisition directly from the Company, (B) any acquisition by the Company, (C) any acquisition by any employee benefit plan (or related trust) sponsored or maintained by the Company or any company controlled by, controlling or under common control with the Company, or (D) any acquisition by any entity pursuant to a transaction that complies with Sections (c)(1), (c)(2) and (c)(3) of this definition;

(b) Individuals who, as of September 6, 2001, constitute the Board of Directors (the " Incumbent Board" ) cease for any reason to constitute at least a majority of the Board of Directors; provided , however , that any individual becoming a director subsequent to the date hereof whose election, or nomination for election by the Company' s shareholders, was approved by a vote of at least a majority of the directors then comprising the Incumbent Board shall be considered as though such individual were a member of the Incumbent Board, but excluding, for this purpose, any such


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individual whose initial assumption of office occurs as a result of an actual or threatened election contest with respect to the election or removal of directors or other actual or threatened solicitation of proxies or consents by or on behalf of a Person other than the Board of Directors;

(c) Consummation of a reorganization, merger, statutory share exchange or consolidation or similar corporate transaction involving the Company or any of its subsidiaries, a sale or other disposition of all or substantially all of the assets of the Company, or the acquisition of assets or stock of another entity by the Company or any of its subsidiaries (each, a " Business Combination" ), in each case unless, following such Business Combination, (1) all or substantially all of the individuals and entities that were the beneficial owners of the Outstanding Company Common Stock and the Outstanding Company Voting Securities immediately prior to such Business Combination beneficially own, directly or indirectly, more than 60% of the then-outstanding shares of common stock and the combined voting power of the then-outstanding voting securities entitled to vote generally in the election of directors, as the case may be, of the corporation resulting from such Business Combination (including, without limitation, a corporation that, as a result of such transaction, owns the Company or all or substantially all of the Company' s assets either directly or through one or more subsidiaries) in substantially the same proportions as their ownership immediately prior to such Business Combination of the Outstanding Company Common Stock and the Outstanding Company Voting Securities, as the case may be, (2) no Person (excluding any corporation resulting from such Business Combination or any employee benefit plan (or related trust) of the Company or such corporation resulting from such Business Combination) beneficially owns, directly or indirectly, 20% or more of, respectively, the then-outstanding shares of common stock of the corporation resulting from such Business Combination or the combined voting power of the then-outstanding voting securities of such corporation, except to the extent that such ownership existed prior to the Business Combination, and (3) at least a majority of the members of the board of directors of the corporation resulting from such Business Combination were members of the Incumbent Board at the time of the execution of the initial agreement or of the action of the Board of Directors providing for such Business Combination; or

(d) Approval by the shareholders of the Company of a complete liquidation or dissolution of the Company.


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1.6 Chief Executive Officer - shall mean the Chief Executive Officer of Sunoco, Inc. as of the date of reference.

1.7 CIC Date - shall have the meaning provided herein at Section 5.2. 1.8 Committee - shall mean the Governance Committee (or any successor thereof) of the Board of Directors of Sunoco, Inc.; provided, that upon the occurrence of any Change in Control, the membership of the Committee shall become fixed as the members in office at the time of the Change in Control, and shall remain unchanged for the duration of this Trust Agreement; and provided, further, that in the event one or more members of the Committee resigns or otherwise terminates his or her membership in the Committee after a Change in Control, the remaining members of the Committee shall appoint a replacement by simple majority vote.

1.9 Company - shall have the meaning set forth in the introduction to this Trust Agreement. 1.10 ERISA - shall have the meaning set forth in the introduction to this Trust Agreement. 1.11 Exchange Act - shall mean the Securities Exchange Act of 1934, as amended. 1.12 Group - shall mean persons who act in concert as described in Sections 13(d)(3) and/or 14(d)(2) of the Exchange Act. 1.13 Incumbent Board - shall have the meaning provided herein at Section 1.5(b). 1.14 Insolvent or Insolvency - shall mean, with respect to the Company, that either: (a) the Company is unable to pay its debts as they become due; or (b) the Company is subject to a pending proceeding as a debtor under the United States Bankruptcy Code. 1.15 Legal Defense Fund - shall have the meaning provided herein at Section 6.1. 1.16 Legal Defense Fund Amount - shall mean an amount equal to the greater of ten percent (10%) of the Benefits Fund Amount and $5,000,000.

1.17 Payment Schedule - shall have the meaning provided herein at Section 7.3. 1.18 Plan - shall have the meaning provided herein at Section 2.1.


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1.19 Plan Participant - shall have the meaning set forth in the introduction to this Trust Agreement.

1.20 Potential Change in Control - shall mean the occurrence of any of the following events or transactions:

(a) any person (other than Sunoco, Inc., or any affiliate or subsidiary thereof) makes a tender offer for capital stock of Sunoco, Inc.;

(b) any person: (1) becomes the beneficial owner, directly or indirectly, of capital stock of Sunoco, Inc. in an amount which requires the filing of Schedule 13D or its equivalent form pursuant to the Rules and Regulations under the Exchange Act; and

(2) indicates in such Schedule 13D or equivalent filing that the purpose of such capital stock acquisition is part of a plan or proposal that reasonably could lead to a Change in Control of Sunoco, Inc.; (c) the submission of a nominee or nominees for the position of director of Sunoco, Inc. by a shareholder or Group of shareholders in a proxy solicitation or otherwise which, in its judgment, the Board of Directors by subsequent adoption of a resolution, determines might result in a Change in Control of Sunoco, Inc.; (d) any person files a pre-merger notification for the acquisition of capital stock of Sunoco, Inc. pursuant to the Hart-Scott-Rodino Act; or

(e) the Board of Directors in its judgment determines by adoption of a resolution that a Potential Change in Control of Sunoco, Inc. for purposes of this Trust Agreement has occurred.

1.21 Recordkeeper - shall have the meaning set forth in the introduction to this Trust Agreement.

1.22 Required Funding Amount - shall mean the aggregate of the amounts described in the following subparagraphs (a) and (b) of this Section 1.22:

(a) an amount sufficient to provide all benefits accrued for each Plan Participant (and any beneficiaries) under the Plans (including any interest or earnings due on such accrual) through the date of the contribution, to the extent not previously contributed; and

(b) the Legal Defense Fund Amount.


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1.23 Trust - shall have the meaning set forth in the introduction to this Trust Agreement.

1.24 Trust Agreement - shall have the meaning set forth in the introduction to this Trust Agreement. 1.25 Trust Corpus - shall mean the amounts delivered to the Trustee pursuant to the terms hereof, less amounts distributed from the Trust pursuant to the terms hereof, plus all income earned by the Trust, in whatever form held or invested as provided herein.

1.26 Trustee - shall have the meaning set forth in the introduction to this Trust Agreement.

ARTICLE II

The Plans

2.1 Plans & Agreements Subject to Trust . The plans, agreements, and other arrangements that are subject to this Trust (each a " Plan" and, collectively the " Plans" ) are listed on Schedule 2.1 hereto. Prior to a Change in Control, the Committee may from time to time designate such additional plans, agreements, and other arrangements to be subject to this Trust, or delete any Plan from this Trust. The Company shall immediately notify the Trustee and the Recordkeeper in writing of any such changes. No Plans may be added or deleted from this Trust at any time after a Change in Control.

2.2 Liability for Payments . The Company shall continue to be liable to the Plan Participants to make all payments required under the terms of the Plans to the extent such payments have not been made pursuant to this Trust Agreement. Distributions made from the Trust to or for Plan Participants in respect of the Plans pursuant to Article VII hereof, shall, to the extent of such distributions, satisfy the Company' s (or certain of its subsidiaries' ) obligation to pay benefits to such Plan Participants under the Plans.

ARTICLE III

Establishment of Trust

3.1 Principal of Trust . The Trustee shall hold such sums of money and other property as from time to time deposited by the Company and accepted by the Trustee in trust to be held, administered and disposed of by the Trustee as provided in this Trust Agreement.

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3.2 Term and Revocability . The Trust hereby established is revocable by the Company but shall become irrevocable upon the occurrence of a Change in Control. At any time prior to a Change in Control, this Trust may be terminated by the Committee. Upon or after a Change in Control, this Trust shall not terminate until the date on which Plan Participants and their beneficiaries are no longer entitled to benefits pursuant to the terms of the Plans. Upon termination of the Trust any assets remaining in the Trust shall be returned to the Company. 3.3 Grantor Trust . The Trust is intended to be a grantor trust, of which the Company is the grantor, within the meaning of subpart E, part I, subchapter J, chapter 1, subtitle A of the Internal Revenue Code of 1986, as amended, and shall be construed accordingly. The Company represents and warrants to the Trustee that the Plans for which benefits are or may become payable under this Trust are not subject to Part 4 of Title I of ERISA. The Company shall indemnify and hold harmless the Trustee, its parent, subsidiaries and affiliates and each of their respective officers, directors, employees and agents from and against all liability, loss and expense, including reasonable attorneys' fees and expenses suffered or incurred by any of the foregoing indemnitees as a result of a breach of the foregoing representation and warranty. The provisions of this subsection shall survive termination of this Agreement.

3.4 Segregation of Funds; Rights of Creditors . The principal of the Trust, and any earnings thereon shall be separate and apart from other funds of the Company and shall be used exclusively for the uses and purposes of Plan Participants and general creditors as herein set forth. Plan Participants and their beneficiaries shall have no preferred claim on, or any beneficial ownership interest in, any assets of the Trust. Any rights created under the Plans and this Trust shall be mere unsecured contractual rights of Plan Participants and their beneficiaries against the Company. Any assets held by the Trust will be subject to the claims of the Company' s general creditors under federal and state law in the event of Insolvency.

ARTICLE IV

Administration of Trust 4.1 Authority and Duties of the Committee . It shall be the duty of the Committee, on the basis of information supplied to it by the Company, to determine:

(a) the eligibility of each Plan Participant to receive payment of benefits under this Trust with respect to each Plan; and


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(b) the manner and time of payment of the benefits payable hereunder. The Recordkeeper shall determine, on behalf of the Committee, the amount of any benefit payable under this Trust to which each Plan Participant may be entitled.

The Trustee, on behalf of the Company, shall make such payments as the Committee instructs the Trustee to pay, to Plan Participants from the Benefits Fund, as provided in Article VII. The Committee shall have the full power and authority to manage claims and appeals as set forth in the respective Plan, and to construe, interpret and administer such Plan in accordance with its terms and provisions.

4.2 Action by the Committee . A majority of the members of the Committee shall constitute a quorum for the transaction of business at a meeting of the Committee. Any action of the Committee may be taken upon the affirmative vote of a majority of the members of the Committee at a meeting, or without a meeting by mail, telegraph, telephone or electronic communication device; provided, however, that all of the members of the Committee are informed of their right to vote on the matter before the Committee and of the outcome of the vote thereon. 4.3 Records, Reporting and Disclosure . The Committee shall keep all individual and group records relating to Plan Participants and former Plan Participants and all other records necessary for the proper administration and operation of the Trust. Such records shall be made available to the Company and to each Plan Participant for examination during business hours except that a Plan Participant shall examine only such records as pertain exclusively to the examining Plan Participant and to the Plan, in general. The Committee shall prepare and shall file as required by law or regulation all reports, forms, documents and other items required by the Internal Revenue Code, and every other applicable statute, each as amended, and all regulations thereunder (except that the Company, as payer of the benefits, shall prepare and distribute to the proper recipients all forms relating to withholding of income or wage taxes, Social Security taxes, and other amounts which may be similarly reportable).

All income, deductions and credits attributable to the Trust belong to the Company and will be included on the Company' s income tax returns. The Company shall pay any federal, state, local, or other taxes imposed or levied with respect to the assets and/or income of the Trust or any part thereof under existing or future laws. Upon furnishing the Trustee with evidence reasonably required by the Trustee of any such tax payments made directly by the Company, the Company shall be entitled to receive reimbursement from the assets of the Trust for the full amount of such taxes paid by it.


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4.4 Bonding . The Committee shall arrange any bonding that may be required by law, but no amount in excess of the amount required by law (if any) shall be required by the Trust.

ARTICLE V Potential Change in Control; Change in Control

5.1 Potential Change in Control . If a Potential Change in Control occurs, the Company shall immediately notify the Trustee and Recordkeeper and shall cause the Required Funding Amount to be remitted to the Trustee as a contribution to the Trust. The Required Funding Amount shall be paid to the Trust not later than thirty (30) days after the Potential Change in Control.

5.2 Change in Control . Whenever a Change in Control is expected to occur, if the date it will occur (the " CIC Date" ) is reasonably ascertainable, then (i) the Company shall notify the Trustee and the Recordkeeper of the CIC Date, (ii) the Required Funding Amount shall be determined as of the CIC Date, and (iii) to the extent that the amount then held in the Benefits Fund and Legal Defense Fund is less than the Benefits Fund Amount or Legal Defense Fund Amount, respectively, the Company shall cause the amount of the shortfall to be remitted to the Trustee as an irrevocable contribution to the Trust not later than one (1) business day before the CIC Date. If a Change in Control occurs, the Company shall immediately notify the Trustee and Recordkeeper. In addition, the Required Funding Amount shall be determined as of the actual date of the Change in Control and, to the extent that the amount then held in the Trust Corpus (other than the Legal Defense Fund) is less than the Required Funding Amount, the Company shall immediately cause the amount of the shortfall to be remitted to the Trustee, as an irrevocable contribution to the Trust, not later than one (1) business day after the Change in Control. The Trustee may rely conclusively on a notice from the Company that a Change of Control has occurred, and the Trustee shall be fully protected in failing to act in the absence of such notice from the Company.

5.3 Method of Funding . The contribution of the Required Funding Amount shall be made in (1) cash or in property acceptable to the Trustee having a fair market value equal to the Required Funding Amount, or in a combination of the two and/or (2) a standby, irrevocable (except as provided in Section 9.1) letter of credit, drawn on a bank acceptable to the Trustee, provided that the fair market value of the contribution in the aggregate shall equal the Required Funding Amount.


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5.4 Additional Contributions; Sufficiency of Funds . The Company shall be obligated to continue to cause additional contributions (or increases to the amount that may be drawn against the letter of credit) to be made as may be necessary from time to time to insure that at all times following a Change in Control the Trust contains sufficient funds, on a current basis, to pay all benefits due to the Plan Participants (or their designated beneficiaries) under the Plans, together with all reasonably anticipated claims against the Legal Defense Fund. The Trustee shall be under no duty to determine the sufficiency, or to enforce the making, of such contributions by the Company.

5.5 Additional Plans . In the event the Committee designates additional Plans that are subject to this Trust Agreement, or the Plans subject to this Trust Agreement are amended, after a Potential Change in Control or Change in Control, the Treasurer of the Company shall, unless the Trust Corpus shall theretofore have been released pursuant to Section 9.1 hereof, recalculate the Benefits Fund Amount. If the amount so calculated exceeds the fair market value of the assets then held in trust in the Benefits Fund, the Company shall promptly (and in no event later than thirty (30) days from the date of such recalculation):

(a) pay to the Trustee an amount of cash (or property acceptable to the Trustee having a fair market value equal to such amount, or some combination thereof) equal to such excess; or (b) increase the amount that may be drawn against the letter of credit described in Section 5.3, above, to cover such excess.

If the Benefits Fund Amount so calculated is less than the fair market value of the assets h ...