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Exhibit 13
CBI 1989 RESTRICTED STOCK AWARD PLAN
1. Purpose. The purpose of this CBI 1989 Restricted Stock Award Plan (the
"Plan") is to provide an incentive for Participants to contribute to the
continued growth and profitability of the Company by encouraging stock
ownership. The Plan is intended to further the interest of the Company by
enabling it to attract and retain the services of highly qualified and motivated
persons to serve the Company and its Subsidiaries.
2. Definitions. As used in the Plan, the following terms shall have the
following meanings:
Award - The grant of Common Stock subject to the restrictions and pursuant
to the terms of the Plan.
Award Date - The date on which an Award is made by the Committee as
provided by paragraph 4.2 below.
Board - The Board of Directors of the Company, as from time to time
constituted.
Committee - The Compensation Committee of the Board, no member of which
shall be eligible to participate in the Plan while serving as such member
or in the prior calendar year.
Common Stock - Common shares of the Company.
Company - CBI Industries, Inc., a Delaware corporation.
Disability - That condition of a Participant, including but not limited to
a physical or mental condition, which makes a Participant unable to
perform the regular duties of his employment, as determined by the
Committee, provided, however, that Disability shall not consist of a
condition resulting from a cause which the Committee has excluded.
Effective Date - May 15, 1989.
Participant - An employee or former employee who has received an Award
under the Plan.
Retirement - The termination of employment of a Participant with the
Company and all Subsidiaries after qualifying for any retirement as defined
under the terms of any qualified defined benefit pension plan sponsored by
the Company or any Subsidiary in which such Participant also participates,
or, if not participating in such a plan, then after attaining such age and
service as would qualify for retirement under the terms of the CBI Pension
Plan, as amended, or such earlier termination with the Company's consent
and as may be determined by the Committee to constitute early retirement
provided, however, that no termination of such employment by reason of
dishonesty, fraud or breach of trust against the Company or any of its
Subsidiaries or affiliates, as determined by the Committee, shall
constitute Retirement.
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Subsidiary - Any corporation of which more than 50% (by number of votes) of
the voting stock is owned by the Company and/or one or more corporations
which are themselves Subsidiaries of the Company.
3. Common Stock Subject to Plan. There will be reserved for issue upon
the granting of Awards during the term of the Plan an aggregate of 500,000
shares of Common Stock, as adjusted by the Committee as required to reflect any
stock dividend, stock split, reclassification or similar change in
capitalization. If any such adjustment shall result in a fractional share such
fraction shall be disregarded. Upon the granting of an Award, the number of
shares reserved for Award shall be reduced by the number of shares so awarded,
and upon the forfeiture to the Company of any shares awarded hereunder the
number of shares reserved for Award shall be increased by such number of shares,
and such forfeited shares may again be the subject of an Award. Awards may be
made from authorized but unissued shares or from treasury shares. All authorized
but unissued shares awarded hereunder shall be fully paid and nonassessable
shares.
4. Eligibility and Awards.
4.1 Eligibility. All management employees (including officers but not
directors unless also employees) of the Company and of its present and
future Subsidiaries are eligible to be selected by the Committee as
Participants.
4.2 Making of Awards. Subject to the express provisions of the Plan,
the Committee shall in its sole discretion determine the employees to whom,
and the time or times at which, Awards shall be made pursuant to the Plan
and the number of shares to be awarded. In making such determinations, the
Committee shall take into account the recommendations of the management of
the Company and the nature of the services rendered by the respective
employees, their present and potential contributions to the Company's
success and such other factors as the Committee in its discretion shall deem
relevant. Awards to any employee will not be made more frequently than once
in each calendar year.
4.3 Form of Award. As soon as reasonably practicable after making a
determination as provided in paragraph 4.2 above, the Committee or its
designee shall advise the Participant in writing of the making of such
Award, the number of shares awarded, the restrictions thereon and incidents
of forfeiture thereof, and any other terms and conditions relating thereto;
except, however, that in the case of any Award to the chief executive
officer of the Company, the Committee shall first submit such determination
to the Board, which shall approve or disapprove the Award.
5. Restrictions on Awarded Stock.
5.1 Rights of Participants as Shareholders. Shares awarded hereunder
shall forthwith be duly issued and identified on the books of the Company in
the Participant's name. The Participant shall thereupon be a shareholder
with respect to all such shares and shall have all the rights of a
shareholder with respect to all such shares, including the right to vote
such shares and to receive all dividends and other distributions (subject to
the provisions of paragraph 5.2 below) paid with respect to such shares,
provided, however, that such shares shall be subject to the restrictions
hereinafter described, and to such additional or more severe restrictions
(including more severe provisions relating the lapsing of restrictions) as
may be
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imposed by the Committee in making any individual award. In aid of such
restrictions, such shares shall be held by the Company in its control for
the account of such Participant until such restrictions lapse as provided in
paragraph 5.4 below or such shares are theretofore forfeited to the Company
as provided by paragraph 5.3 below.
5.2 Changes in Capitalization. In the event that, as the result of a
stock dividend, stock split, reclassification or similar change in
capitalization, the Participant shall, as the owner of shares subject to
restrictions hereunder, be entitled to new or additional or different shares
of stock or securities, the certificate or certificates for, or other
evidences of, such new or additional or different shares or securities,
shall also be held by the Company in its control for the account of such
Participant as provided in paragraph 5.1 above, and all provisions of the
Plan relating to restrictions and lapse of restrictions herein set forth
shall thereupon be applicable to such new or additional or different shares
or securities to the extent they were distributed; provided, however, that
if the Participant shall receive rights, warrants or fractional interests in
respect of any such shares, such rights or warrants may be held, exercised,
sold or otherwise disposed of, and such fractional interests may be settled,
by the Participant free and clear of the restrictions hereafter set forth.
5.3 Imposition of Restrictions. Each share awarded under the Plan
shall be subject to the following restrictions except to the extent
that such restrictions have lapsed pursuant to paragraph 5.4 below:
5.3.1 Transfer Restrictions. None of such shares shall be sold,
exchanged, transferred, pledged, hypothecated, or otherwise disposed
of in any manner, whether voluntarily or involuntarily.
5.3.2 Forfeitures. All of such shares shall be forfeited to the
Company without notice immediately upon the occurrence of any of the
following events:
a. The termination of the employment of the Participant
with the Company and all Subsidiaries for any reason other than
Retirement, Disability, or death, or
b. The performance of services by the Participant, while
an employee of the Company or any Subsidiary, as an employee,
consultant or independent contractor for, or the acquisition of an
ownership interest in excess of five percent (5%) in, any
competitor of the Company or any Subsidiary without the express
written consent of the Company, or
c. An attempt to transfer or cause to transfer such
shares, whether voluntarily or involuntarily, in violation of
paragraph 5.3.1 above, or
d. A violation of such additional or more severe
restrictions imposed by the Committee pursuant to paragraph 5.1.
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5.4 Release of Restrictions. The restrictions set forth in paragraph 5.3
above on shares awarded under the Plan, to the extent such shares have not been
forfeited pursuant to paragraph 5.3 above, shall lapse on the first to happen of
(i) the date of the Participant's death, (ii) the termination of the
Participant's employment by reason of his Retirement or Disability, (iii) such
earlier date as to any Participant or group of Participants as the Committee may
fix, (iv) termination of employment for any reason other than wilful and
material actions causing direct and substantial damage to the Company or its
Subsidiaries or affiliates, or any termination of the Plan, throughout the
three-year period following a "change of control", as defined in the CBI Pension
Plan, and (v) involuntary termination of employment pursuant to a program of
workforce reduction, as determined by the authorized officers of the Company;
and shall lapse prior thereto either (a) as to fifty percent (50%) of the shares
in such Award, on the fifth anniversary of the Award Date, or (b) pursuant to
such additional or more severe restrictions imposed by the Committee pursuant to
paragraph 5.1.
6. Miscellaneous.
6.1 Administration. Subject to the express provisions of the Plan, the
Committee shall have complete authority to interpret the Plan, to prescribe,
amend and rescind rules and regulations relating to it, and to make all other
determinations necessary or advisable for the administration of the Plan. The
Committee's determinations on the matters referred to herein shall be
conclusive.
6.2 Limitation. Nothing in the Plan or in any Award shall confer on any
employee the right to continue in the employ of the Company or any of its
Subsidiaries nor interfere in any way with the right of the Company or its
Subsidiaries to terminate the employment of that employee at any time.
6.3 Amendment and Termination. The Board may suspend or terminate the Plan,
or amend the Plan in such respect as it shall deem advisable, provided, however,
that such amendment shall not, without the consent of the Participant to whom
any Award shall theretofore have been granted under the Plan, adversely affect
the rights of such participant under such Award, and further provided that such
amendment shall not change the maximum number of shares available for awarding
to all Participants.
6.4 Effectiveness of the Plan. The Plan shall become effective on May 15,
1989. No stock shall be awarded under the Plan after April 30, 1994, or such
earlier date as the Plan may have been terminated pursuant to paragraph 6.3.
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CBI RESTRICTED STOCK AWARD PLAN
BRIEF DESCRIPTION OF FEDERAL INCOME TAX EFFECTS
The Plan is not qualified under Section 401(a) of the Internal Revenue Code of
1986 (hereinafter called "the Code") nor subject to the requirements of the
Employee Retirement Income Security Act of 1974. The Company is advised by
counsel that under the present laws and regulations, the Federal income tax
consequences to the Company and participants in the Plan will be as follows:
Participants in the Plan will incur no income for Federal income tax purposes at
the time they receive an award of restricted stock unless they affirmatively
elect under Section 83(b) of the Code to incur income then. Otherwise, each
participant will realize taxable income (and the Company will be entitled to a
corresponding deduction) as risk of forfeiture of the awarded stock lapses. The
amount of income will equal the fair market value of the stock at that time.
Thereafter, the participant will realize gain or loss upon the sale or taxable
exchange of the stock equal to the difference between the aggregate income
incurred under the foregoing rules and the price received for the shares. Under
the Tax Reform Act of 1986, capital gains will be taxed at the same rates as
ordinary income. Capital losses are allowed in full against capital gains plus
$3,000 of other income.
In the event a participant makes the election under Section 83(b) referred to
above (within 30 days of his receipt of the award), the participant will realize
income (and the Company is entitled to a corresponding deduction) at the time of
the award in an amount equal to the fair market value without regard to the
restrictions on the stock at that time. If the participant thereafter forfeits
the stock, no deduction will be allowed. Upon the lapse of restriction, the
participant will not incur income.
Thereafter, the participant will realize capital gain or loss upon the sale or
other taxable exchange of the stock equal to the difference between the
aggregate income incurred under the foregoing rules and the price received for
the stock.
The foregoing tax analysis is intended to assist in the understanding of the
operation and tax consequences of the Plan. The Company assumes no
responsibility with respect to the income taxes of its employees or how such
taxes should be computed, reported or paid. It is also pointed out that tax
laws and regulations are subject to change at any time.
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SAMPLE LETTER - 83(b) ELECTION
DATE
Send to: The Internal Revenue Service Center where you will file your 1992
U.S. Individual Income Tax Return
Attn: Internal Revenue Service Director
Re: Election of Gross Income in year of
Transfer Pursuant to Section 83(b)
of Internal Revenue Code of 1986
The undersigned hereby makes an election pursuant to 83(b) of Internal Revenue
Code with respect to the property described below and supplies the following
information in accordance with the regulations thereunder.
(1) Name, address and tax identification number of undersigned are:
Charles B. Iron
2960 South Street
Anytown, Illinois 60613
Social Security #999-99-9999
(2) Description of the property with respect to which the election is being
made:
One hundred (100) shares of common stock par value $2.50 per share of
CBI Industries, Inc.
(3) Date on which property was transferred is January 8, 1992.
(4) Taxable year to which this election relates is calendar year 1992.
(5) The nature of the restricted award is the following:
AA. Imposition of Restrictions. Each share awarded under the Plan shall be
subject to the following restrictions except to the extent that such
restrictions have lapsed pursuant to paragraph BB below:
A. Transfer Restriction. None of such shares shall be sold,
exchanged, transferred, pledged, hypothecated, or otherwise
disposed of in any manner, whether voluntarily or involuntarily.
B. Forfeitures. All of such shares shall be forfeited to the Company
without notice immediately upon the occurrence of any of the
following events:
B1 The termination of the employment of the Participant with
the Company and all subsidiaries for any reason other than
Retirement, Disability, or death, or
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Sample Letter - 83(b) Election
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B2 The performance of services by the Participant, while an
employee of the Company or any Subsidiary, as an employee,
consultant or independent contractor for, or the acquisition
of an ownership interest in excess of five percent (5%) in,
any competitor of the Company or any Subsidiary without the
express written consent of the Company, or
B3 An attempt to transfer or cause to transfer such shares,
whether voluntarily or involuntarily, in violation of
Paragraph A above, or
B4 A violation of such additional or more severe restrictions
imposed by the Company.
BB. Release of Restrictions. The restrictions set forth in paragraph B
above on shares awarded under the Plan, to the extent such shares have
not been forfeited pursuant to paragraph AA above, shall lapse on the
first to happen of (i) the date of the Participant's death, (ii) the
termination of the Participant's employment by reason of his
Retirement or Disability, (iii) such earlier date as to any
Participant or group of Participants as the Board may fix (iv)
termination of employment for any reason other than willful and
material actions causing direct and substantial damage to the Company
or its Subsidiaries or affiliates, or any termination of the Plan,
throughout the three-year period following a "change of control," as
defined in the CBI Pension Plan, and (v) involuntary termination of
employment pursuant to a program of workforce reduction, as determined
by the authorized officers of the Company; and shall lapse prior
thereto either (a) as to fifty percent (50%) of the shares in such
Award, on the fifth anniversary of the Award Date, or (b) pursuant to
such additional or more severe restrictions imposed by the Company.
(6) The fair market value at the time of transfer of the property with respect
to which this election is being made is $_________ per share.
(Insert CBI stock closing price per share on January 8, 1992.)
(7) The amount paid by the taxpayer for said property is $0.00 per share.
(8) A copy of this statement has been furnished to CBI Industries, Inc.
(9) Date Signature
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(10) Copies to: CBI Industries, Inc.
800 Jorie Blvd.
Oak Brook, Illinois 60522-7001
(i) Attention: Mr. R. G. Douglass
Employee Benefit Plans
(ii) Attention: Mr. R. G. Owens
Tax Department