Step 1Heat the broiler.
Step 2Stand the peppers on their ends and cut them into 4 flat sides and remove the seeds. Arrange the peppers skin side up in a single layer on a foil-lined pan and broil until blackened, 5 to 10 minutes. Remove them from the oven and wrap the peppers in the foil. Wait until they're cool enough to handle, then remove the skin. Cut them into strips and set them aside.
Step 3Heat the oil in a large nonstick skillet over medium-high heat. When hot, add the onions and sugar. Cook, stirring often, until the onions are lightly colored--not dark brown--about 10 minutes. Stir in the vinegar, mustard and salt. Cook, stirring often, until the onions are soft, about 7 minutes more. Stir in the red peppers; heat through. Adjust the seasoning. (This can be made several days ahead and refrigerated. To serve, gently reheat even if serving at room temperature). Stir in the basil, thyme and rosemary. When hot, stir in the butter until melted. Taste; adjust seasoning. Serve hot or at room temperature.