COMPENSATION PLANS:

ET Non-Cash Compensation Plan

We, Sunoco LP and USAC, have issued equity incentive plans for employees, officers and directors, which provide for various types of awards, including options to purchase Common Units, restricted units, phantom units, distribution equivalent rights (“DERs”), common unit appreciation rights, cash restricted units and other non-cash compensation awards. As of December 31, 2018, an aggregate total of 15.1 million ET Common Units remain available to be awarded under our equity incentive plans.

ET Long-Term Incentive Plan

We have granted restricted unit awards to employees that vest over a specified time period, typically a five-year service vesting requirement, with vesting based on continued employment as of each applicable vesting date. Upon vesting, ET Common Units are issued. These unit awards entitle the recipients of the unit awards to receive, with respect to each Common Unit subject to such award that has not either vested or been forfeited, a cash payment equal to each cash distribution per Common Unit made by us on our Common Units promptly following each such distribution by us to our Unitholders. We refer to these rights as “distribution equivalent rights.” Under our equity incentive plans, our non-employee directors each receive grants with a five-year service vesting requirement.

The following table shows the activity of the awards granted to employees and non-employee directors:



	Number of Units		Weighted Average Grant-Date Fair Value Per Unit
Unvested awards as of December 31, 2017 ⁽¹⁾	19.5		$	18.03
Awards granted	7.8		13.00
Awards vested	(3.5	)	21.35
Awards forfeited	(1.4	)	15.16
Unvested awards as of December 31, 2018	22.4		15.94


⁽¹⁾	In connection with the Energy Transfer Merger, ET assumed the former ETO plans, including the related unvested awards. Outstanding awards under the former ETO plans are reflected for the entire period above. Amounts related to the period prior to the Energy Transfer Merger are adjusted for the 1.28 to 1 conversion ratio that was applied in the merger.

During the years ended December 31, 2018, 2017, and 2016, the weighted average grant-date fair value per unit award granted was $13.00, $17.01 and $16.37, respectively. The total fair value of awards vested was $49 million, $40 million, and $40 million, respectively, based on the market price of the respective Common Units as of the vesting date. As of December 31, 2018, a total of 22 million unit awards remain unvested, for which ET expects to recognize a total of $228 million in compensation expense over a weighted average period of 2.7 years.

Cash Restricted Units. We previously granted cash restricted units, which entitled the award recipient to receive cash equal to the market value of one ET Common Unit upon vesting. The Partnership does not currently have any cash restricted units outstanding.

Subsidiary Non-Cash Compensation Plans

Each of Sunoco LP and USAC has granted restricted or phantom unit awards (collectively, the “Subsidiary Unit Awards”) to employees and directors that entitle the grantees to receive common units of the respective subsidiary. In some cases, at the discretion of the respective subsidiary’s compensation committee, the grantee may instead receive an amount of cash equivalent to the value of common units upon vesting. Substantially all of the Subsidiary Unit Awards are time-vested grants, which generally vest over a three or five-year period, that entitles the grantees of the unit awards to receive an amount of cash equal to the per unit cash distributions made by the respective subsidiaries during the period the restricted unit is outstanding.

The following table summarizes the activity of the Subsidiary Unit Awards:



	Sunoco LP				USAC
	Number of Units		Weighted Average Grant-Date Fair Value Per Unit		Number of Units		Weighted Average Grant-Date Fair Value Per Unit
Unvested awards as of December 31, 2017	1.7		$	31.89	1.0		$	14.24
Awards granted	1.1		27.67		1.1		15.47
Awards vested	(0.4	)	32.92		(0.6	)	14.79
Awards forfeited	(0.3	)	31.26		(0.1	)	17.85
Unvested awards as of December 31, 2018	2.1		29.15		1.4		14.98

The following table summarizes the weighted average grant-date fair value per unit award granted:



	Years Ended December 31,
	2018		2017		2016
Sunoco LP	$	27.67	$	28.31	$	26.95
USAC	15.47		N/A		N/A

The total fair value of Subsidiary Unit Awards vested for the years ended December 31, 2018, 2017 and 2016 was $22 million, $9 million, and $0.1 million, respectively, based on the market price of Sunoco LP and USAC common units as of the vesting date for the years ended December 31, 2018 and Sunoco LP for the years ended December 31, 2017 and 2016. As of December 31, 2018, estimated compensation cost related to Subsidiary Unit Awards not yet recognized was $45 million, and the weighted average period over which this cost is expected to be recognized in expense is 3.3 years.