<PAGE>
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES EXCHANGE ACT OF 1934
(AMENDMENT NO. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [_]
Check the appropriate box:
[_] Preliminary Proxy Statement [_] CONFIDENTIAL, FOR USE OF THE
COMMISSION ONLY (AS PERMITTED BY
[X] Definitive Proxy Statement RULE 14C-5(D)(2))
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to (S)240.14a-11(c) or (S)240.14a-12
SUN COMPANY, INC.
------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
Payment of Filing Fee (Check the appropriate box):
[X] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), 14a-6(i)(2) or
Item 22(a)(2) of Schedule 14A.
[_] $500 per each party to the controversy pursuant to Exchange Act Rule 14a-
6(i)(3).
[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
[_] Fee paid previously with preliminary materials.
[_] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:
Notes:
<PAGE>
- - --------------------------------------------------------------------------------
[SUNOCO LOGO APPEARS HERE]
SUN COMPANY, INC.
Ten Penn Center
1801 Market Street
Philadelphia, PA 19103-1699
----------------------------------
NOTICE OF ANNUAL MEETING
----------------------------------
Dear Sun Shareholder:
The 1996 Annual Meeting of Shareholders of Sun Company, Inc. will be held in
the Auditorium of The Academy of Natural Sciences, 1900 Benjamin Franklin
Parkway, Philadelphia, PA 19103 on Thursday, May 2, 1996 at 9:30 a.m., for the
following purposes:
1. To elect a Board of Directors (see pages 1 to 7);
2. To act upon the appointment of independent accountants (see pages 17 and
18); and
3. To transact such other business as may properly come before the Annual
Meeting (see page 22).
Only shareholders of record at the close of business on February 12, 1996 will
be entitled to vote at the 1996 Annual Meeting or any adjournments thereof.
By Order of the Board of Directors,
/S/ ANN C. MULE
Ann C. Mule
Corporate Secretary
March 22, 1996
------------------------------------------------------------------------------
PLEASE SIGN, DATE AND MAIL THE ENCLOSED PROXY CARD IN THE ENVELOPE
PROVIDED, WHETHER YOUR HOLDINGS ARE LARGE OR SMALL, THUS ASSURING YOUR
REPRESENTATION AT THE ANNUAL MEETING.
IF YOU PLAN TO ATTEND THE ANNUAL MEETING, PLEASE MARK YOUR PROXY CARD
IN THE SPACE PROVIDED. AN ADMISSION TICKET WILL BE MAILED TO YOU IN
ADVANCE OF THE ANNUAL MEETING.
A COPY OF THE COMPANY'S 1995 ANNUAL REPORT WAS RECENTLY MAILED TO ALL
SHAREHOLDERS.
------------------------------------------------------------------------------
- - --------------------------------------------------------------------------------
<PAGE>
PROXY STATEMENT________________________________________________________________
This proxy statement is furnished to shareholders of Sun Company, Inc. (the
"Company" or "Sun") in connection with the solicitation, by the Board of
Directors (the "Board"), of the proxy/voting instruction card ("proxy card")
to be used at the 1996 Annual Meeting of Shareholders to be held on May 2,
1996, or any adjournments thereof (the "Annual Meeting"). The approximate date
of mailing this proxy statement and the accompanying proxy card is March 22,
1996.
ELECTION OF DIRECTORS (ITEM 1 ON PROXY CARD)___________________________________
THE BOARD PROPOSES THAT THE PROXY CARD WILL BE VOTED FOR THE ELECTION OF THE
11 NOMINEES LISTED STARTING ON PAGE 2 TO SERVE AS DIRECTORS UNTIL THE NEXT
ANNUAL MEETING OF SHAREHOLDERS AND UNTIL THEIR SUCCESSORS ARE ELECTED AND
QUALIFIED. ALL NOMINEES ARE CURRENTLY DIRECTORS AND THEIR TERMS WILL EXPIRE
WHEN DIRECTORS ARE ELECTED AT THE 1996 ANNUAL MEETING. Although the Board does
not expect the contingency to occur, if any nominee were unable to stand for
election, the Board may nominate and the persons named on the proxy card as
proxies and attorneys-in-fact may vote for a substitute or, alternatively, the
Board may reduce its size. Certain key information concerning the Board is set
forth below:
. Each director is elected annually for a one-year term. The Board is
comprised of a majority of outside, independent directors.
. Over the past few years, Sun has taken actions to more closely align its
directors' compensation to the long-term interests of its shareholders:
--Sun pays its directors 70% of their annual retainer fee in the form of
Sun Company, Inc. Common Stock ("Common Stock").
--In February 1996, Sun eliminated its Non-Employee Directors' Retirement
Plan. The directors' accrued benefits under that Plan were transferred
into the Directors' Deferred Compensation Plan in the form of restricted
share units which mirror the performance of Common Stock (see pages 6
and 7 for more information).
. During 1995, Sun and two of its directors who previously had consulting
contracts with the Company agreed to mutually terminate those contracts
(see page 6 for more information).
. Sun has a process for the review and approval of the director slate under
which a Board Committee reviews and discusses each individual director in
deciding whether he or she should be nominated or renominated for
election. The full Board then votes on the entire slate.
. Sun has a mandatory retirement age of 70 for all directors.
. Every year the Board reviews and approves a three-year strategic plan and
a one-year operating plan for the Company.
. The Board holds at least one "Outside Directors Only" meeting annually to
discuss its assessment of Company direction and progress toward pre-
determined goals.
. Succession planning and management development are reported on annually
by the Chief Executive Officer ("CEO") to the Board.
. Sun's Board has 5 standing committees: AUDIT, BOARD POLICY AND
NOMINATING, COMPENSATION, PUBLIC AFFAIRS, and EXECUTIVE.
. The AUDIT COMMITTEE examines the Company's accounting processes,
financial controls and reporting systems and assesses the performance and
recommends the appointment of independent accountants.
1
<PAGE>
. The BOARD POLICY AND NOMINATING COMMITTEE is responsible for reviewing
and evaluating Board members as a part of identifying the annual director
slate and new Board nominees, if appropriate. This committee also reviews
the role, composition and structure of the Board and its committees as
well as director compensation.
. The COMPENSATION COMMITTEE reviews the compensation and benefit policies
and practices of the Company, approves annual CEO and Company goals,
evaluates the performance of the CEO and issues the Compensation
Committee Report to shareholders.
. The PUBLIC AFFAIRS COMMITTEE reviews the Company's compliance with laws
governing health, environment and safety; equal employment opportunity;
political activities; and oversees the administration of corporate
contributions and the Company's relationship with its shareholders and
all other constituencies.
. The EXECUTIVE COMMITTEE exercises the authority of the Board during the
intervals between meetings of the Board.
. Sun's Board held 13 meetings in 1995. Also, during 1995, the committees
held the following number of meetings: AUDIT, 8, BOARD POLICY AND
NOMINATING, 5, COMPENSATION, 8, PUBLIC AFFAIRS, 2, and EXECUTIVE, 3.
. During 1995, each director attended at least 75% of the aggregate of all
meetings of the Board and the committees on which the director served.
Thomas W. Langfitt and R. Anderson Pew are directors of The Glenmede Trust
Company ("Glenmede"), a beneficial owner of more than 5% of the Company's
outstanding Series A Cumulative Preference Stock ("Preference Stock") and of
the Company's outstanding Common Stock (see pages 20 and 21 for more
information on Glenmede). Dr. Langfitt is also Chairman of Glenmede.
Dr. Langfitt and Mr. Pew have advised that they have no arrangement or
understanding with respect to the manner in which they will exercise their
duties as directors of the Company, if elected. There is no arrangement or
understanding with Sun granting to Glenmede the right to representation on the
Company's Board.
NOMINEES FOR ELECTION AS A DIRECTOR
PRINCIPAL OCCUPATION, SUN BOARD COMMITTEE MEMBERSHIP AND OTHER INFORMATION
- - -------------------------------------------------------------------------------
ROBERT H. CAMPBELL
[PICTURE
APPEARS Director since 1988 Chair, Executive Committee
HERE] Age 58 Member, Board Policy and Nominating Committee
Mr. Campbell is Chairman of the Board, Chief Executive Officer and
President of the Company. He was elected Chairman of the Board in
May 1992; Chief Executive Officer in September 1991; and President
in February 1991. Previously, he was an Execu-tive Vice President
from November 1988 until February 1991. He joined the Company in
1960. Mr. Campbell is also a director of CIGNA Corporation and
Hershey Foods Corporation.
2
<PAGE>
RAYMOND E. CARTLEDGE
Director since 1990 Chair, Compensation Committee
Age 66 Member, Board Policy and Nominating Committee
Member, Executive Committee
[PICTURE
APPEARS Mr. Cartledge retired as Chairman and Chief Executive Officer of
HERE] Union Camp Corporation in June 1994, a position he had held since
1986, and he has been one of its directors since 1983. Mr.
Cartledge is also a director of Blount, Inc.; Chase Brass
Industries, Inc.; Delta Air Lines, Inc.; Savannah Foods and
Industries, Inc.; and UCAR International.
ROBERT E. CAWTHORN
Director since 1989 Member, Board Policy and Nominating Committee
Age 60 Member, Compensation Committee
Member, Executive Committee
[PICTURE
APPEARS Mr. Cawthorn has been Chairman of the Board of Rhone-Poulenc Rorer
HERE] Inc. since 1986. He became President in 1984, Chief Ex-ecutive
Officer in 1985, and continued as Chairman and Chief Executive
Officer until April 1995. Mr. Cawthorn is also Chairman of the
Board of Fisons plc, and a director of The Vanguard Group of
Investment Companies; and Westinghouse Elec-tric Corporation.
MARY J. EVANS
Director since 1980 Chair, Public Affairs Committee
Age 66 Member, Compensation Committee
[PICTURE
APPEARS Mrs. Evans is a director of the Company. She is also a direc-tor
HERE] of Baxter International Inc.; Delta Air Lines, Inc.; Household
International, Inc.; Saint-Gobain Corp.; Scudder New Europe Fund;
and The Dun & Bradstreet Corporation. In addi-tion, Mrs. Evans is
a member of the advisory board of Morgan Stanley, Inc. and a
trustee of several AARP trusts. She was a director of AMTRAK from
1974 to 1980, serving as Vice Chairman from 1974 until 1979.
THOMAS P. GERRITY
Director since 1990 Chair, Audit Committee
Age 54 Member, Public Affairs Committee
[PICTURE
APPEARS Dr. Gerrity has been Dean of The Wharton School of the Univer-sity
HERE] of Pennsylvania since July 1990. Previously, Dr. Gerrity had
served as President of CSC Consulting and Vice President of
Computer Science Corp. since 1989. He is also a director of
Digital Equipment Corporation; Melville Corporation; Reliance
Group Holdings, Inc.; and The Federal National Mortgage Asso-
ciation.
3
<PAGE>
JAMES G. KAISER
Director since 1993 Member, Compensation Committee
Age 53 Member, Public Affairs
Committee
[PICTURE
APPEARS Mr. Kaiser retired as President and Chief Executive Officer
HERE] and as a director of Quanterra Incorporated in January 1996,
positions he had held since June 1994. Quanterra succeeded to
the environmental analytical services division of Interna-
tional Technology Corporation and Enseco, a unit of Corning
Incorporated, for which Mr. Kaiser had been President and
Chief Executive Officer since June 1992. Previously, he had
served as Senior Vice President and General Manager of
Corning's Technical Products Division and Latin America/Asia
Pacific Exports Group since 1984. Mr. Kaiser is also a direc-
tor of Mead Corp.; The Stanley Works; and The Keystone Center.
ROBERT D. KENNEDY
Director since 1995 Member, Audit Committee
Age 63 Member, Public Affairs Committee
[PICTURE
APPEARS Mr. Kennedy retired as Chairman of the Board of Union Carbide
HERE] Corporation in December 1995, a position he had held since De-
cember 1986. Previously, he served as Chief Executive Officer
from April 1986 to April 1995 and President from April 1986 to
1993 and has been one of its directors since 1985. Mr. Kennedy
is also a director of UCAR International and Union Camp
Corporation.
THOMAS W. LANGFITT
Director since 1987 Member, Board Policy and Nominating Committee
Age 68 Member, Compensation Committee
Member, Executive Committee
[PICTURE
APPEARS Dr. Langfitt is Chairman and Chief Executive Officer of The
HERE] Glenmede Corporation and Chairman of its subsidiary, The
Glenmede Trust Company. He became Chairman of The Glenmede
Corporation in January 1994 and Chief Executive Officer in
1987. Previously, he held the additional position of President
from 1987 to 1994 and was also President of The Pew Charitable
Trusts, a division of Glenmede, until January 1994. Dr.
Langfitt is a director of The Glenmede Corporation and its
subsidiaries, The Glenmede Trust Company and The Glenmede
Trust Company of New Jersey; Brown & Glenmede Holdings, Inc.
and its subsidiary, Alex. Brown Capital Advisory and Trust
Company; New York Life Insurance Company; SmithKline Beecham
Corporation; and serves as Chairman of the Committee of Auto-
motive Safety of General Motors Corporation.
4
<PAGE>
R. ANDERSON PEW
Director since 1978 Member, Public Affairs Committee
Age 59
[PICTURE
APPEARS Mr. Pew has been Chief Executive Officer of Radnor Corporation
HERE] since March 1995 and President of Helios Capital Corporation since
August 1977, both Company subsidiaries. Previously, Mr. Pew served
as Sun's Corporate Secretary from May 1974 until July 1977. He
joined the Company in 1959. Mr. Pew is also a director of The
Glenmede Corporation and its subsidiary, The Glenmede Trust
Company; and Brown & Glenmede Holdings, Inc. and its subsidiary,
Alex. Brown Capital Advisory and Trust Company.
WILLIAM F. POUNDS
Director since 1973 Chair, Board Policy and Nominating Committee
Age 67 Member, Audit Committee
Member, Executive Committee
[PICTURE
APPEARS Dr. Pounds is a Professor at the Alfred P. Sloan School of
HERE] Management at Massachusetts Institute of Technology. He joined
MIT's faculty in 1961 and served as Dean of its Sloan School from
1966 to 1980. Dr. Pounds retired as President and Chief Executive
Officer of Rockefeller Financial Services, Inc. in May 1991, a
position he had held since 1982. Dr. Pounds is also a director of
EG&G, Inc.; IDEXX Laboratories, Inc.; Per-ceptive Biosystems,
Inc.; and the Putnam Mutual Funds.
ALEXANDER B. TROWBRIDGE
Director since 1990 Member, Audit Committee
Age 66 Member, Public Affairs Committee
[PICTURE
APPEARS Mr. Trowbridge is President of Trowbridge Partners Inc. He as-
HERE] sumed his present position in January 1990 upon his retirement as
President of the National Association of Manufacturers, a position
he had held since 1980. Mr. Trowbridge also serves as a director
of E. M. Warburg, Pincus Funds; Harris Corporation; ICOS
Corporation; New England Mutual Life Insurance Company; PHH
Corporation; SunResorts International; The Gillette Compa-ny; The
Rouse Company; and WMX Technologies, Inc.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE FOR EACH OF THE 11
NOMINEES FOR DIRECTOR.
5
<PAGE>
LITIGATION INVOLVING DIRECTORS
Shareholder derivative lawsuits on behalf of Corning Incorporated and the Dow
Chemical Company have been filed in the U.S. District Court for the Southern
District of New York against the directors of Dow Corning Corporation, which
had included James G. Kaiser. Plaintiffs in these cases allege, among other
things, misrepresentation, omission of material facts, breach of fiduciary
duties and waste of corporate assets relative to the manufacture, marketing
and sale of silicone breast implants by Dow Corning Corporation. The
defendants have denied the allegations of wrong-doing.
DIRECTORS' COMPENSATION________________________________________________________
Executive officers are not paid for their services as directors of the
Company; they receive only their remuneration as Company officers. Outside
directors (i.e., all directors except those who are executive officers of the
Company) are compensated for their services on the Board and its committees as
follows:
. Board retainer consisting of $28,400 paid 70% in shares of Common Stock
and 30% in cash.
. An attendance fee of $1,250 for each Board and committee meeting.
. Committee retainer of $2,000 paid in cash to the chair of each committee.
. A fee of $1,250 per day for special assignments in their role as
directors.
As of December 31, 1995, consulting contracts that the Company had with Mr.
Trowbridge and Mr. Kaiser, respectively, were terminated upon mutual consent.
During 1995, the Company paid Mr. Trowbridge $10,000 for federal government
relations consulting to the Company's Washington, D.C. office. The Company did
not make any payments to Mr. Kaiser in 1995 for consulting services in support
of the Company's committee on diversity and human resources.
. THE SUN COMPANY, INC. RETAINER STOCK PLAN FOR OUTSIDE DIRECTORS was approved
by the shareholders at the 1990 annual meeting. This plan was amended in
1994 to provide for 70% of the annual retainer fee to be paid in Common
Stock in order to provide the directors with a greater equity interest in
the Company and to make their compensation more dependent on the performance
of Common Stock. The number of shares of Common Stock awarded are based on
the closing price of Common Stock on the fifth business day prior to that
annual meeting.
. THE DIRECTORS' DEFERRED COMPENSATION PLAN permits a director to elect to
defer all or a portion of his or her compensation. Directors must convert
deferred compensation to either "Cash Units," "Share Units," or a
combination of both, as defined in the plan. Amounts converted to Cash Units
are credited quarterly with interest based on a factor determined by the
Compensation Committee after comparison with the interest rate for U.S.
Treasury Notes as of the beginning of the year. Amounts converted to Share
Units are treated as if they were invested in shares of Common Stock. Share
Units are paid in cash, based upon the fair market value of Common Stock at
the time of payment. Payments of compensation deferred under the Directors'
Deferred Compensation Plan are restricted in terms of the earliest and
latest dates that payments may begin.
In consideration for voluntarily relinquishing all rights to any benefit
under the NON-EMPLOYEE DIRECTORS' RETIREMENT PLAN (which was terminated in
February 1996), an account was established for each non-employee director
under the Directors' Deferred Compensation Plan. This account was then
credited with an amount based upon the director's accrued benefit under that
former plan. The amount was then converted to Share Units which will not be
6
<PAGE>
payable until death or termination of Board service ("Restricted Share
Units"). These Restricted Share Units together with any other Share Units
deferred under this plan are reflected under the column called "Directors'
Deferred Compensation Plan Total Share Unit Balance" in the table below. In
order to maintain an overall competitive directors' compensation package,
beginning in May 1996, the individual accounts of each non-employee director
will be credited with $10,000 annually in the form of Restricted Share Units.
Directors are also credited with dividend equivalents on all Share Units and
on all Restricted Share Units (collectively "Total Share Units") held under
the plan at such time and in such amount as all holders of Common Stock
receive dividends. These dividend equivalents are reinvested in additional
Share Units or Restricted Share Units.
OWNERSHIP INTERESTS IN COMPANY STOCK AND SHARE UNITS___________________________
The following table shows, as of December 31, 1995, the number of shares of
Common Stock beneficially owned (as defined by the Securities and Exchange
Commission ("SEC")) by each director, named executive officer, and by all
directors and executive officers as a group. No director or executive officer
beneficially owns more than 1% of the Common Stock. All directors and
executive officers as a group beneficially own approximately 1.6% of the
Common Stock. No director or executive officer owns any Depositary Shares
representing ownership of Preference Stock. The table also shows Total Share
Units held in the Directors' Deferred Compensation Plan as of February 15,
1996.
<TABLE>
<CAPTION>
- - --------------------------------------------------------------------------------
TOTAL OF
SHARES OF COMMON
STOCK BENEFICIALLY
DIRECTORS' OWNED PLUS
SHARES OF DEFERRED DIRECTORS' DEFERRED
COMMON STOCK COMPENSATION PLAN COMPENSATION PLAN
BENEFICIALLY TOTAL SHARE TOTAL SHARE
NAME OWNED(1) UNIT BALANCE(2) UNIT BALANCE(3)
- - --------------------------------------------------------------------------------
<S> <C> <C> <C>
Robert M. Aiken, Jr.(4)... 134,833 -0- 134,833
Robert H. Campbell(4)..... 484,638 -0- 484,638
Raymond E. Cartledge...... 3,752 4,808 8,560
Robert E. Cawthorn........ 4,585 15,906 20,491
J. Greg Driscoll(4)....... 39,124 -0- 39,124
Mary J. Evans............. 3,705 9,186 12,891
Deborah M. Fretz(4)....... 44,658 -0- 44,658
Thomas P. Gerrity......... 3,852 4,808 8,660
James G. Kaiser........... 2,094 2,645 4,739
Robert D. Kennedy......... 1,805 941 2,746
David E. Knoll(4)(5)...... 163,788 -0- 163,788
Thomas W. Langfitt........ 2,905 6,569 9,474
R. Anderson Pew(4)(5)(6).. 105,314 -0- 105,314
William F. Pounds......... 2,555 13,886 16,441
Sheldon L. Thompson(4).... 84,042 -0- 84,042
Alexander B. Trowbridge... 2,805 4,808 7,613
-------
All directors and
executive officers as a
group including those
named above(4)(5)(6)..... 1,215,006
- - --------------------------------------------------------------------------------
</TABLE>
(1) As defined by the SEC, securities beneficially owned as of December 31,
1995 include: securities that the above persons have the right to acquire
at any time within 60 days of this
7
<PAGE>
date, such as, through the exercise of any option or right; securities
directly or indirectly held by the above persons or by certain members of
their families for which the above persons have sole or shared voting or
investment power; and shares of Common Stock held on behalf of the above
persons in the Company's Capital Accumulation Plan ("SunCAP") and the
Company's Dividend Reinvestment Plan ("Dividend Reinvestment Plan").
(2) The amounts shown represent the number of Total Share Units in the
Directors' Deferred Compensation Plan as of February 15, 1996. Although
ultimately paid out in cash at the time of death or termination from Board
service, the value of the Total Share Units mirrors the value of Common
Stock. Thus, the amounts ultimately realized by the directors will reflect
all subsequent changes in the market value of the Common Stock. Neither the
Share Units nor Restricted Share Units carry any voting rights. See pages 6
and 7 for a more detailed discussion of the Directors' Deferred
Compensation Plan.
(3) This column represents for each director and named executive officer the
total of shares of Common Stock beneficially owned as of December 31, 1995
and the Directors' Deferred Compensation Plan Total Share Unit balance as
of February 15, 1996.
(4) The amounts shown include shares of Common Stock which the following
persons have the right to acquire within 60 days after December 31, 1995
under Sun's Long-Term Incentive Plan ("LTIP") and Executive Long-Term Stock
Investment Plan ("ELSIP"): R. M. Aiken, Jr.--123,614 shares; R. H.
Campbell--447,854 shares; J. G. Driscoll--32,973 shares; D. M. Fretz--
43,890 shares; D. E. Knoll--154,390 shares; R. A. Pew--23,179 shares; S. L.
Thompson--78,448 shares; and all directors and executive officers as a
group (including those named above)--1,015,702 shares.
(5) The individuals and group named above have sole voting and investment power
with respect to shares of Common Stock beneficially owned, except that
voting and investment power is shared as follows: D. E. Knoll--384 shares;
R. A. Pew--16,050 shares; and all directors and executive officers as a
group (including those named above)--16,434 shares.
(6) The shares of Common Stock above do not include 2,455 shares owned by
family members of R. A. Pew of which he has disclaimed beneficial
ownership.
--------------
Thomas W. Hofmann was elected Comptroller of the Company on July 6, 1995. A
Form 3 was required to be filed within 10 days after Mr. Hofmann became
Comptroller of the Company. However, the Form 3 was inadvertently not filed by
the Company on behalf of Mr. Hofmann as required by Section 16(a) of the
Securities Exchange Act of 1934 until August 8, 1995.
Richard L. Cartlidge resigned as Comptroller of the Company on July 6, 1995.
Mr. Cartlidge executed three open market transactions on July 24, 1995. A Form
4 was required to be filed on or before the tenth day after the end of the
month in which the change in beneficial ownership occurred. However, the Form 4
was inadvertently not filed by the Company on behalf of Mr. Cartlidge as
required by Section 16(a) of the Securities Exchange Act of 1934 until
September 8, 1995.
EXECUTIVE COMPENSATION__________________________________________________________
COMPENSATION COMMITTEE REPORT
THE COMMITTEE'S RESPONSIBILITIES
The Compensation Committee of the Board ("Committee") makes determinations
regarding the compensation of the Company's executive officers. The Committee
is responsible for setting and administering the policies which govern both
executive compensation and benefit programs. No employees of the Company serve
on the Committee--it is composed entirely of independent non-employee
directors. Reports of the Committee's actions and decisions by the Committee
are presented to the full Board except for awards under the Company's ELSIP
which are required by Rule 16b-3 of the Exchange Act to be made solely by the
Committee.
8
<PAGE>
The purpose of this Report is to summarize the philosophies, objectives and
other factors considered by the Committee in reaching its determinations
regarding executive compensation, particularly as these matters affected the
1995 compensation of the CEO, Robert H. Campbell, and the other five most
highly compensated executive officers during 1995: Robert M. Aiken, Jr., David
E. Knoll, Sheldon L. Thompson, Deborah M. Fretz and J. Greg Driscoll
(collectively with the CEO, the "named executive officers").
THE COMMITTEE'S PHILOSOPHIES AND OBJECTIVES
The cornerstone of the Committee's philosophy regarding executive compensation
is to reward results. The performance of the Company and the individual
executives are of key importance. Additionally, the Committee believes that
the Company's overall compensation program must be competitive in order to
attract, retain and motivate the qualified individuals necessary to lead the
Company and address the significant challenges facing the Company.
The Company's executive compensation program consists of three basic
components: (1) base salary; (2) annual incentive awards; and (3) long-term
incentive awards primarily in the form of Common Stock options. In determining
the appropriate levels and type of executive compensation, the Committee
reviews and considers various data discussed in greater detail below. Its
philosophy is to compensate executives within the mid-level of the range of
base salaries paid by comparable companies and to offer appropriate forms of
incentive compensation to recognize superior performance. These short- and
long-term forms of incentive compensation are utilized to motivate and
encourage executives' contributions to promote improved Company performance
and the overall enhancement of shareholder value. Incentives include annual
incentive awards, the payment of which is contingent upon the attainment of
performance goals, and long-term incentive awards, the realized value of which
is tied to the value of Common Stock.
It is the Committee's view that the Company's direct competition for executive
talent is not limited to the six companies included in the peer group
established for purposes of comparing shareholder returns. Thus, the
"compensation peer group" is not the same as the peer group indexed in the
Comparison of Five-Year Cumulative Total Return Graph ("Common Stock
Performance Graph") included in this proxy statement on page 16. To assist in
benchmarking the competitiveness of the Company's compensation programs, the
Company participates in executive compensation surveys, compiled by third-
party consultants, which embrace a total of 13 oil industry companies
("Compensation Peer Group") including three of the companies included in the
Common Stock Performance Graph. The summary compilations of survey data from
these sources reflect adjustments for each company's relative revenue, asset
base, employee population and capitalization, along with the scope of
managerial responsibility and reporting relationships.
The CEO participates in the same programs and receives compensation based on
the same factors as the other executive officers; however, the CEO's overall
compensation reflects his greater degree of policy and decision-making
authority and his level of responsibility with respect to the strategic
direction and financial and operational results of the Company.
BASE SALARY
The 1995 merit increases served to recognize performance by the executives
over the preceding twelve-month period. In addition, these merit increases
furthered the goals of maintaining competitive salary levels and providing
additional motivation for executive officers to contribute toward the
achievement of the Company's objectives.
In determining Mr. Campbell's base salary, the Committee noted that his last
merit increase was in September 1994. The Committee considered competitive
data regarding the base salaries of chief executive officers within the
Compensation Peer Group. This review was conducted in December 1995. It was
the Committee's view that Mr. Campbell's salary was competitive and
accordingly no change was made.
9
<PAGE>
ANNUAL INCENTIVE AWARDS
Annual incentive awards are provided for under the Executive Incentive Plan.
The purpose of this plan is to promote the achievement of the Company's short-
term business objectives by offering incentive opportunities to those
employees who have the ability to significantly impact the Company's
performance and thereby enhance shareholder value. Each year the Committee
considers the Company's prior year's performance and objectives, as well as
its expectations for the Company in the upcoming year. Bearing in mind these
considerations, the Committee sets certain Company performance criteria or
goals which must be met before awards are made.
Under the Executive Incentive Plan, awards are determined through a series of
steps. First, a guideline award ("Guideline Award") is established for each
participant. The Guideline Award is a predetermined percentage of the salary
midpoint; it is primarily dependent upon the participant's job level in the
corporation which takes into consideration the ability to influence Company
performance and an analysis of competitive data gathered from the Compensation
Peer Group. Second, for the named executive officers, the Guideline Award is
divided into two parts: (1) a Company performance-based portion; and (2) an
individual performance-based portion. The Committee determined that a
significantly larger portion of the Guideline Award for the named executive
officers should be specifically based upon the Company's performance because
these officers' positions reflect higher levels of responsibility, relative to
other employees, to direct and manage the Company and thereby influence its
performance. Accordingly, for the named executive officers, 70 percent of the
Guideline Award is contingent upon Company performance and 30 percent is
contingent upon the achievement of separate and distinct individual non-
financial goals. The third step is to separately assess Company performance
and individual performance and to adjust each component of the Guideline
Award--the Company performance portion and the individual performance
portion--based upon performance factors that are determined by the actual
results attained. These two components are assessed and calculated separately
and the amount of the incentive award is the sum of the two separate
calculations.
In assessing the Company's results, the Committee determines the extent to
which certain performance targets have been met and then determines the
appropriate factor, ranging from 0 percent to 200 percent, to apply to adjust
this portion of the Guideline Award. In determining the 1995 Company
performance targets, the Committee established specific quantitative goals for
the Company performance-based portion of the Guideline Award. These goals
were: (1) the achievement of a specified level of operating income; (2) the
achievement of a specified level of return on capital employed ("ROCE"); and
(3) ROCE, as compared (in rank order) to the six peer companies appearing in
the Common Stock Performance Graph (see page 16). Each of these goals was
ascribed a weight to indicate relative importance, and each had a
predetermined minimum threshold requirement, target and maximum payout
associated with its level of attainment.
The portion of the award related to the executive officers' individual
performance is determined both on an objective and subjective basis.
Qualitative and quantitative goals associated with strategic planning,
leadership, Company operations, environmental performance, organizational and
management development, and constituency relations are included in an
assessment to arrive at the factor for purposes of adjusting the individual
performance portion of the award. Personal assessment ratings can range from a
factor of 0 percent to 150 percent and the factor is used to adjust this
portion of the Guideline Award.
With regard to the Company's performance-based portion of the Guideline Award,
1995 financial results were above target relative to one of the goals and
minimum threshold levels of performance were achieved for the other two goals.
Overall, Company performance was assessed below target. This assessment was
then applied to the Company portion of the Guideline Incentive Award for the
CEO and other named executive officers.
10
<PAGE>
With regard to the CEO's individual performance-based portion of the Guideline
Award, the Committee applied equal weighting to goal areas embracing operating
efficiency, leadership and organizational renewal. The Committee was satisfied
with Mr. Campbell's overall performance in these areas. Accordingly, an
individual performance factor in excess of 100% was applied to the individual
portion of his Guideline Award.
Since 70% of Mr. Campbell's Annual Incentive Award is tied to Company
performance, his award amount earned was below the total guideline amount.
LONG-TERM INCENTIVE AWARDS
With respect to long-term incentive awards, the third component of executive
compensation, the Committee views the award of options in Common Stock as an
effective mechanism for aligning the interests of the Company's named
executive officers and other key employees to shareholders' long-term
interests.
The Executive Long-Term Stock Investment Plan ("ELSIP") helps to better align
management's interests with those of shareholders in that, (1) the Common
Stock price must increase for an option to have value, and (2) upon exercise,
the portion of Common Stock acquired and representing the increase in the
value of an option is paid in the form of Common Stock having certain transfer
and sale restrictions while the holder is employed, for up to ten years after
the date of grant.
The Committee grants awards under ELSIP to executive officers, and approves,
based upon management's recommendations, awards to other key employees, who,
in its judgment, are making a substantial contribution to the success of the
Company and thereby enhancing shareholder value.
Additionally, the Committee considers the amount of option awards previously
granted to the named executive officers in determining the size of the current
award. The number of options granted is based on individual performance and
surveys of similar awards made to individuals in comparable positions at other
companies which are viewed as competitors for purposes of executive talent.
The sources used for this comparison are the Compensation Peer Group.
In the Committee's view, the number of 1995 ELSIP options awarded to Mr.
Campbell provided an appropriate incentive to continue his leadership of the
Company toward improved Company performance and increased shareholder value.
The size of his award was based principally upon the Committee's satisfaction
with Mr. Campbell's organizational leadership and individual performance.
OMNIBUS BUDGET RECONCILIATION ACT OF 1993
This Act has had no material impact upon the Company's ability to take a tax
deduction for compensation paid to the CEO and each of the other named
executive officers. Therefore, the Committee has determined that it is not
necessary to seek shareholder approval to amend any compensation plan at this
time.
Respectfully submitted by the members of the Compensation Committee of the
Board of Directors:
Raymond E. Cartledge, Chair James G. Kaiser
Robert E. Cawthorn Thomas W. Langfitt
Mary J. Evans
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
There are none.
11
<PAGE>
SUMMARY COMPENSATION
The following table shows annual, long-term and other compensation for
services in all capacities to the Company for the named executive officers. As
required by SEC rules, information is shown for those years during the
previous three fiscal years in which the individuals served as named executive
officers of the Company. Ms. Fretz and Mr. Driscoll were both elected
executive officers on August 1, 1994.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
- - ------------------------------------------------------------------------------------------------
LONG-TERM
ANNUAL COMPENSATION COMPENSATION
AWARDS
- - ------------------------------------------------------------------------------------------------
(A) (B) (C) (D) (E) (G) (I)
- - ------------------------------------------------------------------------------------------------
NUMBER OF
OTHER UNDERLYING
NAME AND ANNUAL GRANTED
PRINCIPAL BASE COMP- SECURITIES ALL OTHER
POSITION YEAR SALARY(1) BONUS ENSATION(2) OPTIONS/AARS(3) COMPENSATION(5)
($) ($) ($) (#) ($)
- - ------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Robert H. Campbell
Chairman of the Board, 1995 699,140 377,000 3,409 100,000 36,367
Chief Executive Officer 1994 664,545 107,200 3,899 97,530 35,748
and President 1993 652,018 474,600 1,466 176,050(4) 16,947
- - ------------------------------------------------------------------------------------------------
Robert M. Aiken, Jr.
Senior Vice President 1995 327,886 122,000 2,650 21,820 16,437
and Chief Financial 1994 305,530 36,900 2,339 21,990 15,347
Officer 1993 299,641 137,200 11,081 44,030(4) 7,336
- - ------------------------------------------------------------------------------------------------
David E. Knoll
Senior Vice President, 1995 339,749 100,000 3,885 21,820 16,573
Corporate 1994 319,826 34,200 2,068 21,990 15,952
Development 1993 316,016 148,200 11,185 43,630(4) 8,095
- - ------------------------------------------------------------------------------------------------
Sheldon L. Thompson
Senior Vice President 1995 259,324 94,000 704 21,820 13,424
and Chief 1994 231,151 30,000 600 19,120 12,538
Administrative Officer 1993 223,360 137,200 9,577 40,390(4) 6,095
- - ------------------------------------------------------------------------------------------------
Deborah M. Fretz
Senior Vice President, 1995 233,836 103,000 2,863 21,820 11,094
Logistics 1994 176,440 29,500 3,388 16,530 8,951
- - ------------------------------------------------------------------------------------------------
J. Greg Driscoll
Senior Vice President, 1995 236,018 89,000 576 21,820 11,955
Marketing 1994 168,721 31,400 889 19,120 8,571
- - ------------------------------------------------------------------------------------------------
</TABLE>
(1) The cash component of base salary for certain of the named executive
officers was frozen in 1991 and each of these individuals was awarded
Restricted Stock Units ("RSUs") under the RSU Program. As of December 31,
1994, there were no outstanding RSUs. The final awards vested in 1994 and
there is no RSU component in the 1995 Base Salary column. Accordingly, the
amounts set forth under column (c), "Base Salary," for 1993 and 1994
include both cash and RSUs which were valued as of the grant date. For the
periods that the RSUs were outstanding, the named executive officers
received "dividend equivalent" payments equal to the dividends the Company
would have paid to each if he had been the owner of record of shares of
Common Stock equal in number to his outstanding RSUs.
12
<PAGE>
Included in this column are fees received by Messrs. Aiken and Knoll and Ms.
Fretz for serving on the board of directors of Suncor Inc., the Company's
former Canadian subsidiary. The U.S. dollar value of these fees was as
follows: Mr. Aiken, 1995--$10,738, 1994--$16,175, 1993--$20,238; Mr. Knoll,
1995--$19,585, 1994--$16,175, 1993--$14,035; and Ms. Fretz, 1995--$14,780.
Mr. Campbell was the chairman and a director of Suncor from April 1994 to
July 1995; however, he received no fees for this service as a member of
Suncor's board. Sun sold its remaining interest in Suncor on June 8, 1995.
(2) The amounts in this column reflect reimbursements for the payment of taxes
associated with certain payments for the named executive officers for club
memberships. In addition, the following amounts were reimbursed during
1993 for the payment of taxes associated with certain payments made to the
named executive officers to purchase their Company vehicles: Mr. Aiken,
$10,109; Mr. Knoll, $10,031; and Mr. Thompson, $9,577.
(3) All grants reflected in this column are stock options. There were no
Alternate Appreciation Rights ("AARs") granted in the period from 1993
through 1995.
(4) The number of options stated above for each of the named executive
officers for the year 1993 reflects two sets of awards of options by the
Committee--one set of awards in January 1993 and the other in November
1993. The Committee's practice prior to the November 1993 award was to
determine awards at the end of the current year and to make those awards
effective at the beginning of the subsequent year. Starting with the
November 1993 awards, the Committee determines and makes annual awards in
the fourth quarter of each year.
(5) This column consists of the following components for each of the
individuals listed in the Summary Compensation Table:
(a) The Company's contributions allocated under defined contribution plans,
SunCAP and the Savings Restoration Plan, to the individual accounts of the
named executive officers was as follows: Mr. Campbell, 1995--$34,957, 1994--
$34,422, 1993--$15,713; Mr. Aiken, 1995--$15,857, 1994--$14,786, 1993--
$6,842; Mr. Knoll, 1995--$16,008, 1994--$15,386, 1993--$7,560; Mr. Thompson,
1995--$12,966, 1994--$12,079, 1993--$5,700; Ms. Fretz, 1995--$10,953, 1994--
$8,822; and Mr. Driscoll, 1995--$11,801, 1994--$8,436. For 1993, the Company
reduced the amount of its SunCAP contributions by one-half; however,
effective January 1, 1994, the Company's matching contributions were
restored to prior levels. The Savings Restoration Plan permits a SunCAP
participant to continue receiving the Company-matching contribution after
the participant reaches the limitations (i) under Section 415 of the
Internal Revenue Code ("IRC") with respect to participant and Company-
matching contributions to SunCAP and (ii) under Section 401(a) of the IRC
with respect to compensation which may be earned by SunCAP participants.
(b) The dollar value of term life insurance premiums paid by the Company for
the benefit of the named executive officers was as follows: Mr. Campbell,
1995--$1,410, 1994--$1,326, 1993--$1,234; Mr. Aiken, 1995--$580, 1994--$561,
1993--$494; Mr. Knoll, 1995--$565, 1994--$566, 1993--$534; Mr. Thompson,
1995--$457, 1994--$459, 1993--$395; Ms. Fretz, 1995--$141, 1994--$129; and
Mr. Driscoll, 1995--$154, 1994--$135.
13
<PAGE>
OPTION GRANTS
The following table presents additional information concerning the option
awards shown on the Summary Compensation Table for fiscal year 1995. These
options to purchase Common Stock were granted to the named executive officers
pursuant to the ELSIP.
OPTION GRANTS IN 1995
<TABLE>
<CAPTION>
- - -----------------------------------------------------------------------------------------------------
POTENTIAL REALIZABLE VALUE AT
ASSUMED ANNUAL RATES OF STOCK
PRICE APPRECIATION FOR OPTION
INDIVIDUAL GRANTS TERM(1)
- - -----------------------------------------------------------------------------------------------------
(A) (B) (C) (D) (E) (F) (G) (H)
- - -----------------------------------------------------------------------------------------------------
SECURITIES PERCENT OF TOTAL
UNDERLYING OPTIONS GRANTED EXERCISE OR 0%(3) ($) 5%(4) ($) 10%(4) ($)
OPTIONS/AARS TO EMPLOYEES IN BASE PRICE EXPIRATION STOCK STOCK STOCK
NAME GRANTED(2) FISCAL YEAR (%) ($/SHARE) DATE VALUE VALUE VALUE
(DATE) (#) (27.25) (44.39) (70.70)
- - -----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Robert H.
Campbell 12/7/95 100,000 14.5 27.25 12/6/05 -0- 1,714,000 4,345,000
- - -----------------------------------------------------------------------------------------------------
Robert M.
Aiken, Jr. 12/7/95 21,820 3.2 27.25 12/6/05 -0- 373,995 948,079
- - -----------------------------------------------------------------------------------------------------
David E.
Knoll 12/7/95 21,820 3.2 27.25 12/6/05 -0- 373,995 948,079
- - -----------------------------------------------------------------------------------------------------
Sheldon L.
Thompson 12/7/95 21,820 3.2 27.25 12/6/05 -0- 373,995 948,079
- - -----------------------------------------------------------------------------------------------------
Deborah M.
Fretz 12/7/95 21,820 3.2 27.25 12/6/05 -0- 373,995 948,079
- - -----------------------------------------------------------------------------------------------------
J. Greg
Driscoll 12/7/95 21,820 3.2 27.25 12/6/05 -0- 373,995 948,079
- - -----------------------------------------------------------------------------------------------------
</TABLE>
(1) The value, excluding any dividends, that would be realized by all
shareholders of Common Stock as a group (based on 74,009,718 shares of
Common Stock outstanding as of December 31, 1995) at appreciation levels
of 0%, 5% and 10% are: at $27.25 per share--$0; $1,268,526,567; and
$3,215,722,247 respectively.
(2) These options were granted along with an equal number of limited rights
and an authorization for equity options pursuant to the ELSIP. Limited
rights become exercisable only in the event of a change in control, as
defined in the plan. The exercise of an option using Common Stock which
has been held for at least 12 months will result in the issuance of new
options called "equity options." Equity options are issued at the market
price of Common Stock at the time of exercise and for the number of shares
tendered.
These options are fully exercisable six months after the date of grant. Upon
exercise, the portion of Common Stock acquired and representing the increase
in value (market price minus exercise price, withholding taxes and
applicable brokerage commission or interest charges) will be paid in Common
Stock having transfer and sale restrictions, while the executives are
employed, for up to ten years after the date of grant.
(3) Executives will not benefit unless the Common Stock price increases above
$27.25 per share. Any gain to the executives resulting from Common Stock
price appreciation will benefit all shareholders commensurately.
(4) These amounts are the result of calculations of assumed annual rates of
return set by the SEC over the option term: 5% (i.e., assuming a Common
Stock price of $44.39 per share at the end of the option term) and 10%
(i.e., assuming a Common Stock price of $70.70 per share at the end of the
option term). These amounts are not intended to forecast possible future
appreciation, if any, of the Common Stock price.
14
<PAGE>
OPTION/AAR EXERCISES AND YEAR-END VALUES
The following table shows information concerning: (i) exercises of options and
AARs during 1995 by the named executive officers; and (ii) the amount and
values of unexercised options and AARs as of December 31, 1995.
AGGREGATED OPTION/AAR EXERCISES IN 1995 AND YEAR-END OPTION/AAR VALUES(1)
<TABLE>
<CAPTION>
- - -----------------------------------------------------------------------------
(A) (E) (F)
- - -----------------------------------------------------------------------------
VALUE OF UNEXERCISED IN-
THE-MONEY
NUMBER OF SECURITIES UNDERLYING OPTIONS/AARS AT YEAR-
OPTIONS/AARS GRANTED (#) END(2) ($)
- - -----------------------------------------------------------------------------
NAME EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- - -----------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Robert H.
Campbell 447,854 100,000 -0- 12,500
- - -----------------------------------------------------------------------------
Robert M.
Aiken, Jr. 123,614 21,820 -0- 2,728
- - -----------------------------------------------------------------------------
David E.
Knoll 154,390 21,820 -0- 2,728
- - -----------------------------------------------------------------------------
Sheldon L.
Thompson 78,448 21,820 -0- 2,728
- - -----------------------------------------------------------------------------
Deborah M.
Fretz 43,890 21,820 -0- 2,728
- - -----------------------------------------------------------------------------
J. Greg
Driscoll 32,973 21,820 -0- 2,728
- - -----------------------------------------------------------------------------
</TABLE>
(1) No stock options or AARs were exercised during 1995.
(2) The dollar values have been calculated by multiplying the number of in-
the-money options/AARs at December 31, 1995 by the difference between the
exercise price and the fair market value of Common Stock at year-end. An
option/AAR is in-the-money if the fair market value of the underlying
Common Stock exceeds the exercise price of the option/AAR.
PENSION PLAN TABLE
The following table shows estimated annual retirement benefits payable to
executive officers and key employees based upon the final average pay formulas
of the Sun Company, Inc. Retirement Plan, Pension Restoration Plan and
Supplemental Executive Retirement Plan ("SERP"). The estimates assume that
benefits are received in the form of a single life annuity.
<TABLE>
<CAPTION>
- - -----------------------------------------------------------------------------------
ESTIMATED ANNUAL BENEFITS UPON RETIREMENT AT AGE 62
OR LATER
FINAL AVERAGE AFTER COMPLETION OF THE FOLLOWING YEARS OF SERVICE
TOTAL CASH-------------------------------------------------------------------
COMPENSATION(1) 20 YEARS 25 YEARS 30 YEARS 35 YEARS 40 YEARS
- - -----------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
$ 200,000 $ 80,000 $ 90,000 $100,000 $108,000 $115,000
400,000 160,000 180,000 200,000 215,000 230,000
600,000 240,000 270,000 300,000 323,000 345,000
800,000 320,000 360,000 400,000 430,000 460,000
1,000,000 400,000 450,000 500,000 538,000 575,000
1,200,000 480,000 540,000 600,000 645,000 690,000
1,400,000 560,000 630,000 700,000 750,000 805,000
- - -----------------------------------------------------------------------------------
</TABLE>
The retirement benefits shown above for the Retirement Plan, Pension
Restoration Plan and SERP are amounts calculated prior to the Social Security
offset. The Social Security offset is equal to one and two-thirds percent of
primary Social Security benefits for each year of Retirement Plan
participation up to 30 years or a maximum offset of 50% of primary Social
Security benefits.
Credited years of service under the plans for the named executive officers are
as follows: Mr. Campbell, 35; Mr. Aiken, 26; Mr. Knoll, 28; Mr. Thompson, 34;
Ms. Fretz, 19; and Mr. Driscoll, 30.
- - -------
(1) Final Average Total Cash Compensation is the average of the base salary
and annual incentive award in the highest 36 consecutive months during the
last 120 months of service. The salaries and annual incentive awards
(subsidiary directors' fees are excluded from this computation) reported
on pages 12 and 13 reflect for the year 1995, total cash compensation
covered by the pension plans except that SERP substitutes the unadjusted
Guideline Award for the actual annual incentive award received.
15
<PAGE>
SPECIAL EMPLOYEE SEVERANCE PLAN AND ARRANGEMENT
ALL eligible exempt, non-exempt and hourly employees of the Company and its
participating subsidiaries may be entitled to receive benefits under the
Special Employee Severance Benefits Plan ("Severance Benefits Plan").
Participation is NOT limited to only the executive officers. The Severance
Benefits Plan will provide single lump sum cash payments for eligible
employees in the event of their "termination of employment" within two years
of a "change in control" of the Company (as such terms are defined in the
plan). The Severance Benefits Plan also provides for extended life insurance
and medical benefits for such employees. The amount of the lump sum payment
will be based on the employee's years of service, annualized base earnings at
the time of a change in control and the average of the employee's three most
recent annual incentive award payments. The formula for calculating the lump
sum payment is the same for the executive officers as it is for all other
eligible employees. Based upon the terms of the Severance Benefits Plan,
payments received under the plan do not constitute "parachute payments" (as
defined in the IRC). The terms of the plan expressly limit total payments to a
participant under the plan to a maximum amount (when combined with certain
other payments made by the Company contingent upon a change in control), which
is up to three times the participant's average cash compensation for the
preceding five years. The severance benefit will be payable no later than ten
days after termination of employment. As of December 31, 1995, payments under
the Severance Benefits Plan to the named executive officers would have been as
follows: Mr. Campbell, $2,037,480; Mr. Aiken, $733,723; Mr. Knoll, $793,629;
Mr. Thompson, $720,133; Ms. Fretz, $409,646; and Mr. Driscoll, $495,436.
STOCK PERFORMANCE GRAPHS_______________________________________________________
Assuming an initial investment of $100 in the Company's Common Stock, as of
the periods indicated, and the reinvestment of all dividends, the following
graphs compare Sun's cumulative total return (i.e., based on Common Stock
price and dividends), plotted on a quarterly basis, with a performance
indicator of the overall stock market (the S&P 500 Stock Index) and a group of
peer companies. As required by the SEC, the first graph compares Sun's
cumulative total return for the previous five fiscal years.
FIVE-YEAR CUMULATIVE TOTAL RETURN
[GRAPH APPEARS HERE]
<TABLE>
<CAPTION>
Sun Peers S&P 500
<S> <C> <C> <C>
12/90 100 100 100
120 102 115
107 96 114
118 111 120
12/91 116 97 130
106 88 127
101 97 130
98 101 134
12/92 114 96 140
112 110 146
101 108 147
122 121 151
12/93 128 109 154
143 107 149
120 117 149
131 122 156
12/94 133 118 156
134 130 172
131 128 188
124 128 203
12/95 133 136 215
</TABLE>
16
<PAGE>
The second graph has been voluntarily added by the Company. It is a cutaway
view of the Company's total return of the Common Stock since the Third
Quarter, 1992. Consistent with the first graph, it charts, on a quarterly
basis, total return for the Company, the same group of peers and the S&P 500
Stock Index. The manner in which total return has been calculated is
consistent with the first graph, and it similarly assumes an initial $100
investment.
In October 1992, Sun announced a strategic plan for the Company. Implicit in
the Compensation Committee's evaluation of Sun's senior management team is
their evaluation of the success of Sun's strategy. Additionally, on a periodic
basis, all members of the Company's Board receive information, similar to that
set forth on the second graph, about the Company's total return to the
shareholders of Common Stock since October 1992. Therefore, the Company
believes that the second graph may be of special interest to shareholders
because it measures total return using a base line date that corresponds to
the announcement of the Company's strategy.
Cumulative Total Return
Measured from 3rd Quarter 1992
[GRAPH APPEARS HERE]
<TABLE>
<CAPTION>
Sun Peers S&P 500
<S> <C> <C> <C>
9/92 100 100 100
12/92 117 95 105
3/93 114 107 110
6/93 104 104 110
9/93 125 117 113
12/93 131 105 116
3/94 146 103 111
6/94 123 113 112
9/94 134 117 117
12/94 136 113 117
3/95 137 124 128
6/95 134 123 141
9/95 127 123 152
12/95 136 130 161
</TABLE>
RELATIONSHIP WITH INDEPENDENT ACCOUNTANTS
(ITEM 2 ON THE PROXY CARD)______________________________________________________
In the fiscal year 1995, Coopers & Lybrand L.L.P. ("Coopers & Lybrand") served
as independent accountants for the Company. Based on the results of a
competitive bidding process, on September 7, 1995, the Company's management
recommended and the Board subsequently approved the appointment of Ernst &
Young LLP ("Ernst & Young") as independent accountants for the fiscal year
1996, subject to the approval of shareholders.
The report of Coopers & Lybrand on the Company's financial statements for the
fiscal years December 31, 1994 and 1995 did not contain an adverse opinion or
disclaimer of opinion, nor was it qualified or modified as to uncertainty,
audit scope, or accounting principles. During the fiscal years ended December
31, 1994 and 1995, there were no disagreements with Coopers & Lybrand on any
matter of accounting principles or practices, financial statement disclosure,
or auditing scope or procedure, which disagreement(s), if not resolved to the
satisfaction of Coopers & Lybrand, would have caused it to make a reference to
the subject matter of the disagreement(s) in connection with its report.
17
<PAGE>
In addition, during the fiscal years ended December 31, 1994 and 1995, Coopers
& Lybrand did not advise the Company:
(1) that the internal controls necessary for the Company to develop
reliable financial statements did not exist;
(2) that information had come to its attention that had led it to no longer
be able to rely on management's representations, or that had made it
unwilling to be associated with the financial statements prepared by
management;
(3) of the need to expand significantly the scope of its audit, or that
information had come to its attention during such period that, if
further investigated, might (i) materially have impacted the fairness or
reliability of either: a previously issued audit report or the
underlying financial statements, or the financial statements issued or
to be issued covering the fiscal period(s) subsequent to the date of the
most recent financial statements covered by an audit report or (ii) have
caused it to be unwilling to rely on management's representations or be
associated with the Company's financial statements; or
(4) that information had come to its attention that it had concluded
materially impacts the fairness or reliability of either: (i) a
previously issued audit report or the underlying financial statements,
or (ii) the financial statements issued or to be issued covering the
fiscal period(s) subsequent to the date of the most recent financial
statements covered by an audit report.
During the fiscal years ended December 31, 1994 and 1995, neither the Company
nor anyone on its behalf consulted Ernst & Young regarding either the
application of accounting principles to a specified transaction, either
completed or proposed, or the type of audit opinion that might be rendered on
the Company's financial statements, and neither a written report nor oral
advice was provided to the Company by Ernst & Young.
It is expected that representatives of Coopers & Lybrand and Ernst & Young
will be present at the 1996 Annual Meeting with the opportunity to make a
statement if they desire to do so and that they will be available to respond
to appropriate questions.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE FOR APPROVAL OF ERNST &
YOUNG AS INDEPENDENT ACCOUNTANTS FOR THE FISCAL YEAR 1996.
PROXY CARDS____________________________________________________________________
There are two different colors of proxy cards. The yellow proxy and voting
instruction card sets forth voting and proxy instructions as indicated therein
by the record holders of Depositary Shares, each of which represents one-half
of one share of Sun's Series A Cumulative Preference Stock ("Preference
Stock"). Each share of Preference Stock is entitled to one vote; however, a
Depositary Share represents one-half of one share of Preference Stock, so each
Depositary Share is entitled to one-half of a vote. Accordingly, the
Depositary Shareholders will have one vote for every two Depositary Shares
owned. Each record holder of Depositary Shares is entitled to instruct First
Chicago Trust Company of New York ("First Chicago") on how to vote the
respective number of shares of Preference Stock represented by the Depositary
Shares that the shareholder owns. First Chicago has authorized The Corporation
Trust Company, the Company's independent proxy tabulation agent, to tabulate
all proxy cards received directly from shareholders in accordance with the
instructions provided by shareholders. Also, First Chicago has authorized and
instructed R.H. Campbell, J.L. Foltz and S.L. Thompson as the proxies and
attorneys-in-fact indicated on the yellow proxy card to vote the shares of
Preference Stock based on the tabulation of the shareholder voting
instructions by the independent proxy tabulation agent. The proxies and
attorneys-in-fact will abstain from voting to the extent that proxy and voting
instruction cards are not received from the holders of the Depositary Shares.
The blue proxy card appoints proxies and attorneys-in-fact as indicated
therein for record holders of Common Stock and also serves as the voting
instruction from the plan participants to the trustee of the SunCAP. Each
share of Common Stock is entitled to one vote.
18
<PAGE>
If proxy cards covering shares of Common Stock in SunCAP are not returned or
are returned signed but with no or an unclear voting designation, according to
the terms of the plan, the trustee will vote the shares of Common Stock in the
same proportion as the shares of Common Stock for which clearly designated
voting instructions have been received from other participants in the plan.
The administrator of the Dividend Reinvestment Plan has certified to the
independent proxy tabulation agent that certain shares of Common Stock
registered in its name are held for the accounts of specified beneficial
owners. Pursuant to the bylaws of the Company, for purposes of notice and
voting at the Annual Meeting, the beneficial owners of Dividend Reinvestment
Plan shares are deemed to be the record holders of the number of shares of
Common Stock specified next to their name in the certification. Such shares
are included on the blue proxy card with the shares of Common Stock of which
the respective beneficial owners are record holders.
THE TOTAL NUMBER OF DEPOSITARY SHARES OR SHARES OF COMMON STOCK THAT EACH
SHAREHOLDER IS ELIGIBLE TO VOTE AS OF THE FEBRUARY 12, 1996 RECORD DATE IS
REPRESENTED AS A SINGLE NUMBER ON THE RIGHT SIDE OF THE RESPECTIVE PROXY CARD.
FOR THE SHAREHOLDERS OF COMMON STOCK, THIS TOTAL NUMBER INCLUDES ANY SHARES OF
COMMON STOCK OWNED THROUGH SUNCAP AND THE DIVIDEND REINVESTMENT PLAN.
If a holder of Depositary Shares or shares of Common Stock returns the proxy
card signed, but with no or an unclear voting designation, the independent
proxy tabulation agent will tabulate the vote and the proxies and attorneys-
in-fact will vote FOR items (1) and (2) as more fully described in this proxy
statement.
Shareholders who return a properly signed and dated proxy card will have the
number of shares of Preference Stock or shares of Common Stock represented by
such proxy card counted as "present" for purposes of establishing a quorum.
Any shareholder of Depositary Shares or Common Stock who returns a proxy card
but who does not desire to vote and wishes to record this fact may abstain
from voting by marking the appropriate space on the proxy card. However, a
proxy card marked as abstaining (including a proxy card containing broker non-
votes) will be counted as present for purposes of establishing a quorum. In
certain cases where a shareholder does not return a proxy card for Depositary
Shares or Common Stock held in brokerage accounts, a broker is permitted to
submit the proxy card on behalf of such shareholder to cast votes for or
against director nominees or independent accountants. A broker non-vote occurs
when a broker is prohibited by law from exercising discretionary authority on
behalf of the shareholder to vote for or against a proposal. Sun is a
Pennsylvania corporation and pursuant to Pennsylvania law and the Company's
bylaws, the terms, "voting" or "casting a vote," do not include either the act
of abstaining or failing to vote. Thus, abstentions and broker non-votes are
not counted either in the tally of votes "for" or "against" a director nominee
or proposal. A "withheld" vote is the equivalent of an abstention.
The Company utilizes a confidential voting procedure whereby all proxy cards
and ballots are mailed or returned directly to the Company's independent proxy
tabulation agent, and handled in a manner that protects shareholder voting
privacy. No such vote or voting instruction shall be disclosed by the
independent proxy tabulation agent except: to permit such agent to tabulate
and certify the vote; as necessary to meet any legal requirements; and in
limited circumstances such as a proxy contest in opposition to the Board.
Any shareholder returning a proxy card to the independent proxy tabulation
agent may revoke it at any time before it is exercised by providing written
notice of revocation or by executing a proxy card bearing a later date which
shall be deemed to be a written notice of revocation.
SOLICITATION OF PROXY CARDS____________________________________________________
The Company has provided proxy materials to brokers, banks, custodians,
nominees and fiduciaries and requested that such materials be promptly
forwarded to the beneficial owners of
19
<PAGE>
Depositary Shares and Common Stock registered in the names of such brokers,
banks, custodians, nominees and fiduciaries. In addition, solicitation of
proxy cards may be made by directors, officers and employees of the Company by
personal interview, mail, telephone, facsimile transmission or telegraph.
Morrow & Co. has been retained to assist in the distribution of Sun's proxy
materials and in the solicitation of proxy cards from shareholders, brokers,
banks, custodians, nominees and fiduciaries. The fee to be paid Morrow & Co.,
including reasonable out-of-pocket expenses, is not expected to exceed
$25,000. The cost of soliciting proxy cards and related services will be borne
by the Company.
VOTING SECURITIES______________________________________________________________
On February 12, 1996, the record date for voting at the Annual Meeting, the
Company had outstanding 12,500,000 shares of Preference Stock and 73,806,308
shares of Common Stock. The holders of shares of the Preference Stock shall be
entitled to vote on all matters submitted to a vote of the holders of the
Common Stock, voting together with the holders of the Common Stock as one
class. Each share of the Preference Stock shall be entitled to one vote. Each
share of Preference Stock is represented by two Depositary Shares and each
Depositary Share is entitled to one-half of a vote. Every shareholder is
entitled to one vote for each share of Common Stock registered (or deemed
registered under SunCAP or the Dividend Reinvestment Plan). Approval of the
two matters scheduled to be presented for vote by the shareholders at the
Annual Meeting will require a majority of votes present, in person or
represented by proxy.
OWNERSHIP INTERESTS OF PRINCIPAL BENEFICIAL OWNERS_____________________________
The following shareholders were the only beneficial owners known by the
Company to hold more than five percent of its outstanding Preference Stock or
Common Stock as of December 31, 1995:
<TABLE>
<CAPTION>
- - ---------------------------------------------------------------------------------------------------
PERCENT PERCENT
PERCENT OF SHARES OF OF TOTAL
SHARES OF PREFERENCE OF COMMON VOTING
PREFERENCE STOCK COMMON STOCK STOCK
NAME, ADDRESS AND NATURE OF OWNERSHIP STOCK(1) OUTSTANDING STOCK OUTSTANDING OUTSTANDING
- - ---------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
The Glenmede Trust Company
One Liberty Place
1650 Market Street, Suite 1200
Philadelphia, PA 19103
. Trustee of The Pew Memorial Trust 3,811,979 30.5 2,510,788 3.4 7.3
. Fiduciary and Co-Fiduciary for a
number of other trusts and estates 1,264,763 10.1 1,699,377 2.3 3.4
. Trustee of The J. Howard Pew
Freedom Trust 898,176 7.2 -0- -0- 1.0
- - ---------------------------------------------------------------------------------------------------
Mellon Bank Corporation
One Mellon Bank Center -0- -0- 4,703,023 6.4 5.4
Pittsburgh, PA 15258
- - ---------------------------------------------------------------------------------------------------
The State Teachers Retirement Board
of Ohio -0- -0- 3,836,991 5.2 4.4
275 East Broad Street
Columbus, OH 43215
- - ---------------------------------------------------------------------------------------------------
</TABLE>
(1) The Preference Stock listed above as beneficially owned by Glenmede is
represented by 11,949,835 Depositary Shares. Each Depositary Share
represents ownership of one-half of a share of Preference Stock (see pages
18 and 19 for additional information regarding the Preference Stock).
20
<PAGE>
The information contained in the table on page 20 relating to The Glenmede
Trust Company was obtained from a Schedule 13G received by the Company in
February 1996. Glenmede has sole voting and investment power with respect to
all Preference Stock and Common Stock held as Trustee of The Pew Memorial
Trust and all Preference Stock held as Trustee of The J. Howard Pew Freedom
Trust. Voting power is shared with respect to 240,966 shares of Preference
Stock and 174,763 shares of Common Stock. Investment power is shared with
respect to 285,650 shares of Preference Stock and 399,215 shares of Common
Stock held by Glenmede as Fiduciary and Co-Fiduciary for a number of other
trusts and estates.
The information contained in the table on page 20 relating to Mellon Bank
Corporation was obtained from a Schedule 13G received by the Company in
February 1996. Mellon Bank Corporation has sole voting power with respect to
476,000 shares, shared voting power with respect to 4,221,023 shares, sole
investment power with respect to 440,000 shares, and shared investment power
with respect to 37,000 shares. Included in the total are shares of Common
Stock held by Mellon Bank, N.A., a subsidiary of Mellon Bank Corporation,
which is the record holder of 4,204,023 shares of Common Stock as trustee of
SunCAP. Mellon Bank Corporation has disclaimed beneficial ownership of all
shares of Common Stock that have been allocated to the individual accounts of
participants in SunCAP for which voting instructions have been received and
followed.
The information contained in the table on page 20 relating to The State
Teachers Retirement Board of Ohio was obtained from a Schedule 13G received by
the Company in February 1996. The State Teachers Retirement Board of Ohio has
sole voting power and sole investment power with respect to all 3,836,991
shares.
Effective February 1, 1996, the Company entered into an agreement (the
"Registration Rights Agreement") with Glenmede, as trustee or co-trustee for
certain of the charitable trusts ("Charitable Trusts"). The Registration
Rights Agreement provides that Glenmede has the right to require the Company
to complete a maximum of two registrations under the Securities Act of
Depositary Shares, Common Stock and/or other voting stock of the Company held
by the Charitable Trusts. The expenses of any registration (other than fees
and expenses of the parties' legal counsel and the parties' internal costs)
are to be divided equally between the Company and Glenmede. The Registration
Rights Agreement places limitations upon certain sales or transfers of the
Charitable Trusts' interests in the Company during the term of the
Registration Rights Agreement. The Registration Rights Agreement expires on
July 31, 1997.
Pursuant to the Registration Rights Agreement, on March 7, 1996, Sun filed a
Registration Statement on Form S-3 with the SEC to sell 11,748,591 of the
Company's Depositary Shares which are held by the Charitable Trusts.
SHAREHOLDER NOMINATIONS AND PROPOSALS FOR THE 1997 ANNUAL MEETING______________
The Board Policy and Nominating Committee will consider shareholder
nominations for election to the Board at the 1997 Annual Meeting if such
nominations are submitted in compliance with the requirements of the Company's
bylaws relating to shareholder nominations. Pursuant to the bylaws, such
nominations must include the following information: name, residence and
business address of the nominating shareholder; a representation that the
shareholder is a record holder or beneficial owner of the Company's voting
stock and a statement of the number of such shares; a representation that the
shareholder intends to appear in person or by proxy at the meeting to nominate
the individual proposed as a nominee; information regarding each nominee such
as would be required to be included in a proxy statement; a description of all
arrangements or understandings between and among the shareholder and each and
every nominee; and the written consent of each nominee to serve as a director,
if elected. These nominations must be received at the Company's principal
office no later than December 31, 1996.
21
<PAGE>
Any proposal to be presented at the Company's 1997 Annual Meeting must be
received at the Company's principal office no later than November 22, 1996, in
order to be considered for inclusion in the 1997 proxy materials and such
proposal must contain and be accompanied by such information required to be
included under the rules and regulations of the SEC.
Pursuant to the Company's bylaws, notice of any other proposal to be presented
by a shareholder (outside the solicitation of proxies under the rules and
regulations of the SEC) from the floor of the 1997 Annual Meeting shall be
delivered in writing to the Company's Secretary no later than December 31,
1996, and may be considered by the Company's shareholders upon the Board's
determination that it is a proper matter for consideration under the Company's
bylaws. Notice of such a proposal must include: the name and address of record
of the proposing shareholder, the number and class of all shares of Company
stock beneficially owned by such shareholder, a representation that such
shareholder is the holder of such stock, is entitled to vote at the 1997
Annual Meeting and intends to appear in person or by proxy to present the
proposal at such meeting. This required notice shall also include the text of
the proposal to be presented, a brief statement of the reasons for such
shareholder's support of the proposal, and any material interest of such
shareholder in the proposal.
All nominations, proposals, and required notices must be submitted in writing
and addressed to the attention of Sun's Corporate Secretary at Ten Penn
Center, 1801 Market Street, Philadelphia, PA 19103-1699.
OTHER BUSINESS_________________________________________________________________
The Board does not know of any business to come before the 1996 Annual Meeting
other than that set forth in the Notice of Annual Meeting of Shareholders.
However, if any other business shall properly come before the 1996 Annual
Meeting, it is the intention of the proxies and attorneys-in-fact to vote upon
such business in accordance with their judgment.
By Order of the Board of Directors,
/S/ ANN C. MULE
Ann C. Mule
Corporate Secretary
Philadelphia, PA
March 22, 1996
YOUR VOTE IS IMPORTANT.
PLEASE SIGN, DATE AND RETURN YOUR PROXY CARD AS SOON AS POSSIBLE.
22
<PAGE>
- - --------------------------------------------------------------------------------
[SUNOCO LOGO APPEARS HERE]
YOU ARE CORDIALLY INVITED
TO THE 1996
ANNUAL MEETING
THURSDAY, MAY 2, 1996
in the Auditorium
of The Academy of Natural Sciences
1900 Benjamin Franklin
Parkway Philadelphia, PA
9:30 A.M. -- Annual Meeting Starts
NOTICE OF ANNUAL MEETING AND PROXY STATEMENT
[PRINTED ON RECYCLED PAPER LOGO APPEARS HERE]
- - --------------------------------------------------------------------------------
<PAGE>
[THIS CARD WILL BE ON BLUE PAPER STOCK WITH BLACK INK]
[LOGO] SUN COMPANY, INC.
1996 ANNUAL MEETING
THE ACADEMY OF NATURAL SCIENCES
1900 Benjamin Franklin Parkway
Philadelphia, PA
[ID: MAP OF CENTRAL PHILADELPHIA]
YOUR VOTE IS IMPORTANT.
Please SIGN AND DATE your proxy card below. After voting
on the reverse side, detach the proxy card and RETURN it
in the envelope provided, whether your holdings are large or small,
thus assuring your representation at the ANNUAL MEETING.
Fold and Detach Here Fold and Detach Here
- - --------------------------------------------------------------------------------
(Logo) COMMON STOCK PROXY CARD
SUN COMPANY, INC.
Ten Penn Center
1801 Market Street
Philadelphia, PA 19103-1699
THIS PROXY CARD IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF SUN COMPANY,
INC. for the May 2, 1996 Annual Meeting of Shareholders or any adjournments
thereof.
The undersigned hereby appoints R. H. CAMPBELL, J. L. FOLTZ and S. L. THOMPSON
and each of them, with full power of substitution, as proxies and attorneys-in-
fact (the "Proxies") to vote as hereinafter indicated all shares of Sun Company,
Inc. Common Stock, which the undersigned is entitled to vote, and in their
discretion, to vote upon such other business as may properly come before the
Meeting. This proxy card also provides voting instructions for shares held for
the account of the undersigned, if any, in the Sun Company, Inc. Capital
Accumulation Plan ("SunCAP"). For additional explanatory information regarding
this proxy card, please see page 18 of the accompanying proxy statement.
SIGNATURE__________________SIGNATURE_________________DATED_____________, 1996
Please sign exactly as your name appears hereon. When signing as attorney,
executor, administrator, trustee, guardian, etc., give full title as such. If
stock is jointly owned, each joint owner should sign.
CONTINUED ON REVERSE SIDE
1
<PAGE>
THIS PROXY CARD WHEN PROPERLY EXECUTED WILL BE VOTED BY THE PROXIES IN THE
MANNER DESIGNATED BELOW. IF THIS PROXY CARD IS RETURNED SIGNED, BUT THERE IS NO
INDICATION OF A VOTE BY CHECKING A BOX OR IF IT IS NOT CLEAR WHICH BOX IS
CHECKED, THE PROXIES WILL VOTE FOR ITEMS (1) AND (2), AND THE TRUSTEE FOR SUNCAP
WILL VOTE AS DESCRIBED IN THE ACCOMPANYING PROXY STATEMENT.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE FOR ITEMS (1) AND (2).
---------------------
(1) ELECTION OF DIRECTORS.
FOR All nominees listed / / AGAINST all / / (1)
(except as indicated below) nominees listed
R. H. CAMPBELL M. J. EVANS R. D. KENNEDY W. F. POUNDS
R. E. CARTLEDGE T. P. GERRITY T. W. LANGFITT A. B. TROWBRIDGE
R. E. CAWTHORN J. G. KAISER R. A. PEW
INSTRUCTIONS: TO VOTE AGAINST ANY NOMINEE, LIST NOMINEE'S NAME.
- - --------------------------------------------------------------------------------
INSTRUCTIONS: TO WITHHOLD AUTHORITY TO VOTE FOR ANY NOMINEE (TO ABSTAIN),
LIST NOMINEE'S NAME.
- - --------------------------------------------------------------------------------
(2) Appointment of Ernst & Young LLP as independent accountants for the fiscal
year 1996.
FOR AGAINST ABSTAIN
/ / / / / / (2)
/ / Please check ONLY if you plan to attend the Meeting.
Admission tickets are required and will be mailed to you.
PLEASE SIGN AND DATE YOUR PROXY CARD ON THE REVERSE SIDE AND
RETURN IT PROMPTLY IN THE ENCLOSED ENVELOPE.
2
<PAGE>
[THIS CARD WILL BE ON YELLOW PAPER STOCK WITH BLACK INK]
[LOGO] SUN COMPANY, INC.
1996 ANNUAL MEETING
THE ACADEMY OF NATURAL SCIENCES
1900 Benjamin Franklin Parkway
Philadelphia, PA
[ID: MAP OF CENTRAL PHILADELPHIA]
YOUR VOTE IS IMPORTANT.
Please SIGN AND DATE your proxy card below. After voting
on the reverse side, detach the proxy card and RETURN it
in the envelope provided, whether your holdings are large or small,
thus assuring your representation at the ANNUAL MEETING.
Fold and Detach Here Fold and Detach Here
- - --------------------------------------------------------------------------------
(Logo) DEPOSITARY SHARES REPRESENTING SERIES A
SUN COMPANY, INC. CUMULATIVE PREFERENCE STOCK
Ten Penn Center
1801 Market Street
Philadelphia, PA 19103-1699
THIS PROXY AND VOTING INSTRUCTION CARD IS SOLICITED ON BEHALF OF THE BOARD OF
DIRECTORS OF SUN COMPANY, INC. for the May 2, 1996 Annual Meeting of
Shareholders or any adjournments thereof.
The undersigned holder of Depositary Shares hereby instructs First Chicago Trust
Company of New York ("First Chicago") to vote, as hereinafter indicated, all
shares of Sun Company, Inc. Series A Cumulative Preference Stock ("Preference
Stock"), as to the voting of which the undersigned is entitled to instruct First
Chicago, and in First Chicago's discretion, to vote upon such other business as
may properly come before the Meeting. First Chicago has authorized The
Corporation Trust Company to tabulate the vote received and has further
authorized and instructed R. H. Campbell, J. L. Foltz and S. L. Thompson and
each of them, with full power of substitution, to act as First Chicago's proxies
and attorneys-in-fact (the "Proxies") to vote as hereinafter indicated all
shares of Preference Stock represented by the Depositary Shares held by the
undersigned. The undersigned hereby approves the appointment of such Proxies by
First Chicago.
SIGNATURE__________________SIGNATURE_________________DATED__________, 1996
Please sign exactly as your name appears hereon. When signing as attorney,
executor, administrator, trustee, guardian, etc., give full title as such. If
stock is jointly owned, each joint owner should sign.
CONTINUED ON REVERSE SIDE
3
<PAGE>
THIS PROXY CARD WHEN PROPERLY EXECUTED WILL BE VOTED BY THE PROXIES IN THE
MANNER DESIGNATED BELOW. IF THIS PROXY CARD IS RETURNED SIGNED, BUT THERE IS NO
INDICATION OF A VOTE BY CHECKING A BOX OR IF IT IS NOT CLEAR WHICH BOX IS
CHECKED, THE PROXIES WILL VOTE FOR ITEMS (1) AND (2). THE PROXIES WILL ABSTAIN
FROM VOTING WITH RESPECT TO THE PREFERENCE STOCK TO THE EXTENT THAT PROXY CARDS
ARE NOT RECEIVED FROM THE HOLDERS OF THE DEPOSITARY SHARES.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE FOR ITEMS (1) AND (2).
---------------------
(1) ELECTION OF DIRECTORS.
FOR all nominees listed / / AGAINST all / / (1)
(except as indicated below) nominees listed
R. H. CAMPBELL M. J. EVANS R. D. KENNEDY W. F. POUNDS
R. E. CARTLEDGE T. P. GERRITY T. W. LANGFITT A. B. TROWBRIDGE
R. E. CAWTHORN J. G. KAISER R. A. PEW
INSTRUCTIONS: TO VOTE AGAINST ANY NOMINEE, LIST NOMINEE'S NAME.
- - --------------------------------------------------------------------------------
INSTRUCTIONS: TO WITHHOLD AUTHORITY TO VOTE FOR ANY NOMINEE (TO ABSTAIN),
LIST NOMINEE'S NAME.
- - --------------------------------------------------------------------------------
(2) Appointment of Ernst & Young LLP as independent accountants for the fiscal
year 1996.
FOR AGAINST ABSTAIN
/ / / / / / (2)
/ / Please check ONLY if you plan to attend the Meeting.
Admission tickets are required and will be mailed to you.
PLEASE SIGN AND DATE YOUR PROXY CARD ON THE REVERSE SIDE AND
RETURN IT PROMPTLY IN THE ENCLOSED ENVELOPE.
4
