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EXHIBIT 17
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CBI EXECUTIVE LIFE INSURANCE
PLAN
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CBI EXECUTIVE LIFE INSURANCE PLAN
1. Introduction
This document sets forth the terms of the CBI Executive Life
Insurance Plan, a plan sponsored by CBI Industries, Inc. for Selected Key
Executives of the Company, its subsidiaries and affiliates. This document,
along with the Insurance Policy issued to the Executive or his designee under
the Plan, the Assignment Form, the Plan Participation Form and the life
insurance application documents described herein constitute the official Plan
documents.
2. Plan Purpose
The purpose of the Plan is to encourage Selected Key
Executives, who have rendered and will render in the future valuable services
to the Company, its subsidiaries and affiliates, to continue in employment by
providing an insured death benefit with respect to the Executive before and
after retirement.
3. Effective Date
December 1, 1992
4. Definitions
"Annual Premium" means the amount of consideration determined
annually by the Insurance Company for an Insurance Policy issued under the
Plan. For Plan purposes, if necessary, the Annual Premium shall be separated
into two component parts: (i) the "Basic Annual Premium" shall be the part of
the Annual Premium for standard risk life insurance coverage; and (ii) the
"Extra Premium" shall be the part of the Annual Premium, if any, required for a
life insurance risk determined by the Insurance Company to be substandard.
"Assignment" or "Assignment Form" means a written agreement
between the Executive and the Rabbi Trust, whereby the Executive assigns
certain Insurance Policy rights and interests to the Rabbi Trust, in accordance
with the terms of the Plan documents.
"Beneficiary(ies)" means the individual(s) or entity(ies)
designated by the Executive or his designee to be the beneficiary of certain
Death Benefit Proceeds payable under the Insurance Policy subject to the terms
of the Plan documents.
"CBI Group Life Insurance Plan" means that employee benefit
plan sponsored by the Company that provides group life insurance benefits to
certain salaried employees of the Company, its subsidiaries and affiliates, as
it may hereinafter be amended, and including any successor plan(s).
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"CBI Long Term Disability Plan" means that employee benefit
plan sponsored by the Company that provides disability benefits to certain
salaried employees of the Company, its subsidiaries and affiliates, as it may
be hereinafter amended,and including any successor plan(s).
"Change in Control" shall mean the occurrence at any time of
any of the following events: (a) An "Acquiring Person" (as defined below) has
become such; or "Continuing Directors" (as defined below) cease to comprise a
majority of the Board of Directors of the Company. For purposes of this
definition, the terms "Acquiring Person" and "Continuing Directors" shall have
the same meaning as ascribed to such terms in the Amendment and Restatement of
Rights Agreement dated as of March 4, 1986, between the Company and First
Chicago Trust Company of New York, as Rights Agent, without regard to whether
said Amendment and Restatement of Rights Agreement shall continue to remain in
effect. For convenience of reference, the relevant portions of said Amendment
and Restatement of Rights Agreement are reproduced as Exhibit B to this Plan
document.
"Corporate Capital Interest" means, at the earliest of the
following to occur, the cumulative amount of Annual Premiums paid by the Rabbi
Trust for an Insurance Policy, less the cumulative amount of Imputed Income
attributed to the Executive with respect to that Insurance Policy, plus
whichever of the following is applicable: (i) the amount, if any, at the
conclusion of the Normal Premium Period, by which the Insurance Policy's
remaining cash value exceeds the projected amount of cash value for that
Insurance Policy necessary, based on conservative, actuarial funding
assumptions as determined at the time by the Plan Administrator, to provide the
Executive or his designee with an Insurance Policy that will provide the
Scheduled Death Benefit Amount without the necessity of any further payment of
Annual Premiums by the Rabbi Trust, the Executive or his designee; (ii) the
amount, if any, in the event the Executive dies before the Corporate Capital
Interest is otherwise recovered, by which the Death Benefit Proceeds of the
Insurance Policy exceed the Scheduled Death Benefit Amount for the Executive at
the time of death; or (iii) the amount, if any, in the event of the insolvency
of the Company, the termination of the Plan pursuant to Section 12, or the
termination of the Executive's employment for any reason other than death or
Retirement, by which the Insurance Policy's remaining actual cash
value exceeds an estimated cash value determined by the Plan Administrator,
provided that the estimated cash value shall be equal to that amount of cash
value which would have accumulated in the Insurance Policy had Annual Premiums
been paid based upon: (a) the Executive's actual Salary progression rather
than the assumed Salary progression utilized by the Company in determining
funding of the Insurance Policy; and (b) the actual earnings performance of the
Insurance Policy rather than the earnings assumptions attributed to the
Insurance Policy utilized by the Company in determining the funding of the
Insurance Policy. At all times, the amount of the Corporate Capital Interest
shall be determined by the Company, and such determination shall be binding
upon the Insurance Company and any person or entity having an ownership or
beneficial interest in the Insurance Policy. The Corporate Capital Interest
shall be reduced by policy loans, if any (including interest thereon), made by
the Rabbi Trust from the Insurance Policy.
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"Company" means CBI Industries, Inc., a Delaware corporation,
and its successors and assigns.
"Death Benefit" or "Death Benefit Proceeds" means the amount
of proceeds paid, or to be paid, at the death of the Executive by the Insurance
Company under an Insurance Policy.
"Executive" or "Selected Key Executive" (collectively
"Executives" or "Selected Key Executives") means: (i) an actively employed
executive of the Company, or one of its subsidiaries or affiliates, nominated
by an Officer of the Company, and approved by the Chairman of the Board of
Directors of the Company, to be eligible to participate in the Plan; or (ii) a
retired Executive of the Company, or one of its subsidiaries or affiliates, who
was participating in the Plan at the date of Retirement.
"Imputed Income" means that amount of annual income imputed to
the Executive equal to the lower of (i) the one-year term insurance premium
rate prescribed by the Internal Revenue Service or (ii) the Insurance Company's
alternate term insurance premium rate, with either (i) or (ii), as applicable,
multiplied by the Scheduled Death Benefit Amount provided to the Executive
under the Plan at the time such imputed income is determined.
"Insurance Company" means the life insurance company(ies)
selected by the Company to issue Insurance Policies pursuant to the Plan.
"Insurance Policy" means the life insurance policy, together
with additional policy benefits and riders, if any, issued by the Insurance
Company pursuant to the Plan. Unless otherwise required by the Plan, Insurance
Policy terms used herein shall have the same meaning as in the Insurance Policy.
"Normal Premium Period" means that time period during which
the Rabbi Trust will pay Annual Premiums, subject to the limits on the amount
of Annual Premiums to be paid by the Rabbi Trust set forth in Section 15, to
the Insurance Company for an Insurance Policy issued pursuant to the Plan. The
Normal Premium Period will extend from the date the first Annual Premium is
paid until the later to occur of either: (i) the date the Executive reaches age
sixty-five (65); or (ii) the date the cumulative amount of Annual Premiums paid
by the Rabbi Trust and, if applicable, the cumulative amount of Extra Premiums
paid by the Executive or his designee pursuant to Section 15, create sufficient
cash value under the Insurance Policy, after taking into account the recovery
of the Corporate Capital Interest by the Rabbi Trust, so that the Scheduled
Death Benefit Amount can be sustained without further payment of Annual
Premiums by the Rabbi Trust, the Executive or his designee, provided that this
period shall generally not be less than ten (10) years nor more than fifteen
(15) years.
"Plan" means the CBI Executive Life Insurance Plan.
"Plan Participation Form" means a written agreement between
the Executive and the Company, wherein the Executive is designated as being
eligible to participate in the Plan, and whereby the Executive and the Company
agree to be bound by the terms and conditions of the Plan.
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"Rabbi Trust" means the CBI Industries, Inc. Supplemental
Survivors' Benefit, Executive Life Insurance and Benefit Restoration Trust, a
trust established by the Company for the purpose of providing funds for certain
employee benefits.
"Retirement" means retirement under the CBI Pension Plan.
"Salary" means: (i) in the case of an Executive paid on the
basis of a weekly base salary, the Executive's base weekly salary expressed in
terms of United States dollars, or the currency in which the Executive is
normally paid, multiplied by fifty-two (52); or (ii) in the case of an
Executive paid on any basis other than a weekly base salary, the aggregate of
the Executive's base salary expressed in terms of United States dollars, or the
currency in which the Executive is normally paid, received each pay period,
multiplied by the number of pay periods normally occurring during a calendar
year.
"Scheduled Death Benefit Amount" means that amount of life
insurance which is set forth in Appendix A and is to be provided to the
Executive pursuant to the Plan.
Definitions of other terms are provided in the Plan.
5. Eligibility
Selected Key Executives nominated by an Officer of the Company
and approved by the Chairman of the Board of Directors of the Company are
eligible to participate in the Plan as indicated herein.
6. Participation
Participation begins on the date an Insurance Policy under the
Plan is issued on the life of the Executive to the Executive or his designee
and all other Plan documents are completed by the Executive to the satisfaction
of the Plan Administrator and the Insurance Company. Participation in the Plan
by an Executive will not cause that Executive's participation in the CBI Group
Life Insurance Plan to terminate.
7. Plan Operation
The Plan is a "split dollar" life insurance program. In
general, the Executive or his designee is the owner of an Insurance Policy on
the Executive's life issued by the Insurance Company, for which the Company,
through the Rabbi Trust, pays the Annual Premiums for the duration of the
Normal Premium Period. The Company, through the Rabbi Trust, retains an
economic interest in both the cash value and Death Benefit Proceeds of the
Insurance Policy documented by the Assignment Form. Except as otherwise
provided in the Plan, the Executive is not responsible for payment of Annual
Premiums, but under United States tax laws in effect on the effective date of
the Plan, the Executive may be responsible for paying income tax on the Imputed
Income attributed to the Executive's participation in the Plan until the Rabbi
Trust recovers the Corporate Capital Interest and cancels the Assignment Form.
Executives who are not covered by
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United States income tax laws may have income
tax or other tax consequence under applicable laws of other countries.
The Scheduled Death Benefit Amount provided to the Executive
will be a multiple of the Executive's Salary. The amount of the Executive's
multiple is set forth in Exhibit A.
If applicable, at the conclusion of the Normal Premium Period,
the Rabbi Trust will cease paying Annual Premiums and, under the Assignment
Form, will recover from the Insurance Policy's cash value the Corporate Capital
Interest. The aggregate amount of Annual Premiums paid by the Rabbi Trust is
intended to produce sufficient cash value so that after the Rabbi Trust recovers
the Corporate Capital Interest and cancels the Assignment Form, the Executive or
his designee will own the Insurance Policy providing the Scheduled Death Benefit
Amount without payment of any further Annual Premiums. The Executive or his
designee may continue the Scheduled Death Benefit Amount from the Insurance
Policy or withdraw all or part of the remaining cash value at any point after
the Rabbi Trust has recovered the Corporate Capital Interest, although
withdrawing cash value will void the guarantee under Section 8. In the event
the Executive dies before the Corporate Capital Interest is recovered, the Rabbi
Trust will recover the Corporate Capital Interest from the Death Benefit
Proceeds attributable to the Executive's Insurance Policy pursuant to the
Assignment Form.
8. Guarantee of Benefits
The funding of the Plan is intended to create sufficient cash
values in the Insurance Policy at the conclusion of the Normal Premium Period
so that the Scheduled Death Benefit Amount will be available under the
Insurance Policy until the Executive's death, based upon conservative,
actuarial assumptions as determined from time to time by the Plan
Administrator.
However, in the event the Death Benefit Proceeds actually paid
to the Beneficiary under the Insurance Policy are not at least equal to the
Scheduled Death Benefit Amount, or, if applicable, the Reduced Death Benefit as
provided in Section 15, an additional payment will be made from the Rabbi Trust
to the Beneficiary. The amount of this additional payment from the Rabbi Trust
will be the difference between the Scheduled Death Benefit Amount, or Reduced
Death Benefit, whichever is applicable, and the Death Benefit Proceeds actually
paid to the Beneficiary under the Insurance Policy, adjusted so that the total
net after tax amount payable to the Beneficiary, both from the Insurance Policy
and the Rabbi Trust, after taking into account the assumed liability of the
Beneficiary to pay income taxes on the additional payment from the Rabbi Trust,
equals the Scheduled Death Benefit Amount, or Reduced Death Benefit, as the
case may be, under the Insurance Policy.
For purposes of determining assumed income taxes under this
Section, the highest marginal personal United States Federal Income Tax rate
for married individuals filing jointly in effect at the date of the Executive's
death will be used.
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It is the intent of the Plan to guarantee the Scheduled Death
Benefit Amount only insofar as such guarantee is described in this Section, and
there is no other guarantee concerning the cash value or any other Death
Benefit Proceeds under the Insurance Policy at any time. Furthermore, the
guarantee under this Section shall be void and of no effect in the event the
Executive or his designee withdraws any part of the cash value or dividends
payable under the Insurance Policy following recovery of the Corporate Capital
Interest and cancellation of the Assignment Form. In the event the Executive
or his designee obtains a loan under the Insurance Policy which has not been
completely repaid at the date of the Executive's death, the guarantee provided
by this Section shall be reduced by the amount of any such loan and any unpaid
interest thereon.
The guarantee under this Section shall not apply in the event
the Insurance Company, during the two year contestability period that begins
with the date of issue of the Insurance Policy, rescinds the Insurance Policy
or denies a claim thereunder on the basis of a misstatement in Insurance
Company applications, or in the event the Insurance Company denies or limits a
claim where the Executive dies by suicide within one year from the date of
issue of the Insurance Policy.
9. Scheduled Death Benefit Amount
The Executive's Scheduled Death Benefit Amount is set forth
in Appendix A.
10. Company Participation in Funding of Plan
Subject to the terms of the Plan, the Company, through the
Rabbi Trust, will pay Annual Premiums for Insurance Policies issued pursuant to
the Plan until the earliest to occur of the following:
- The termination of the Normal Premium Period.
- The Executive's death.
- The Executive's termination from employment
by reason other than death or Retirement,
provided the Executive's termination is not
in connection with a Change in Control.
Upon the earliest to occur of these events, the Rabbi Trust
will withdraw the Corporate Capital Interest and terminate the Assignment
against the Insurance Policy. Prior to such withdrawal, the Rabbi Trust may
borrow against the Insurance Policy to the extent of the Corporate Capital
Interest.
If the Executive is living after the Rabbi Trust withdraws the
Corporate Capital Interest, the Executive or his designee will own the
Insurance Policy free of any interest on the part of the Company or the Rabbi
Trust and may then exercise without restriction all the rights available under
the Insurance Policy, although the exercise of such rights may affect the
guarantee provided under Section 8.
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11. Security
The Company will ensure that the Rabbi Trust, on each date on
which the Rabbi Trust evaluates its obligations, has sufficient assets to
provide funding equal to the net present value (utilizing a discount rate equal
to the Insurance Company's then current dividend rate minus 100 basis points)
of future Annual Premiums for Insurance Policies issued to Executives under the
Plan and against which the Rabbi Trust holds an Assignment Form payable for the
next ten (10) years (hereinafter the "Security Fund"). In the case of a
decision by the Company to terminate or amend the Plan pursuant to Section 12,
or if the Company fails or refuses to ensure that the Rabbi Trust has
sufficient assets available to meet funding obligations pursuant to the Plan,
the Security Fund shall be used by the Rabbi Trust to pay Annual Premiums on
the Insurance Policies to the extent and in the amount available.
In the case of the insolvency of the Company, the Rabbi Trust
would be subject to the claims of the Company's creditors (which would include
participants in the Plan) and funds in the Rabbi Trust (including the Security
Fund) may not be available to pay future Annual Premiums or to meet the
guarantee to participants under Section 8. The amount of the Corporate Capital
Interest in the Insurance Policies would also be subject to the claims of the
Company's creditors. The interests of the Executive under the Insurance Policy
in excess of the Corporate Capital Interest, however, generally should not be
subject to the claims of the Company's creditors.
Accordingly, in the case of the insolvency of the Company (as
that term is defined in the Rabbi Trust) the Rabbi Trust will recover from the
Insurance Policy the Corporate Capital Interest, to the extent allowed by law,
terminate the Assignment of the Insurance Policy and have no further obligations
under this Plan. The Executive or his designee may thereafter elect to maintain
the Insurance Policy by assuming responsibility for paying Annual Premiums. If
the Executive or his designee elects to maintain the Insurance Policy, he will
deal directly with the Insurance Company.
12. Right to Terminate or Amend
The Company reserves the right to terminate the Plan if the
Company, in its sole discretion, determines that changes in the U.S. tax laws
or other laws, or other government action or events beyond the control of the
Executive or the Company adversely and materially affect the Plan. If the Plan
is terminated and the Company has instituted at the time of termination of the
Plan a comparable replacement plan providing benefits, security and a guarantee
to all Executives not less than the benefits, security and guarantee provided
under the Plan, the Rabbi Trust may recover the Corporate Capital Interest from
the Insurance Policies and the guarantee provided under Section 8 of the Plan
shall be void and of no further force and effect.
If the Plan is terminated and a comparable replacement plan
has not been instituted at the time of termination of the Plan, to the extent
outlined in Section 11 payment of future Annual Premiums will be made from the
Rabbi Trust from the Security Fund. The Rabbi Trust will thereafter recover
the Corporate Capital Interest upon the earliest to occur of
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the following: (a) the date on which funds in the Security Fund are exhausted;
or (b) the date on which the Company's obligations to pay Annual Premiums
pursuant to Section 10 ceases.
Subsequent to termination of the Plan, the Company may
institute, at any time, a comparable replacement plan providing benefits,
security and a guarantee to all Executives not less than the benefits, security
and guarantee previously provided by the Plan, in which event the Rabbi Trust
may recover the Corporate Capital Interest upon institution of the replacement
plan, and the guarantee previously provided under Section 8 of the Plan and
surviving the prior termination shall be void and of no further force and
effect.
In the event the Company does not institute a comparable
replacement plan, as previously defined, the guarantee provided in Section 8
shall survive termination of the Plan.
Following termination of the Plan and recovery of the
Corporate Capital Interest, the Executive or his designee will thereafter have
the option of surrendering his share of the Insurance Policy for its remaining
cash value or making Annual Premium payments, if required, directly to the
Insurance Company in order to maintain the Insurance Policy.
The Company may amend the Plan at any time, provided that no
amendment shall reduce or eliminate the obligation of the Rabbi Trust to make
payments of the guarantee of benefits as described in the Plan, and that any
amendment to reduce or eliminate the obligation to provide the Security Fund
shall be prospective in application only. No amendment shall reduce the
benefits in effect for Executives before the amendment without the prior
written consent of the Executives affected by the amendment whose Scheduled
Death Benefit Amounts in the aggregate represent at least 51% of the total
amount of Scheduled Death Benefit Amounts then provided to them. Amendments to
the Plan shall be made by a written instrument signed by the Plan
Administrator. The Plan Administrator will inform Executives affected by the
amendment in writing of the amendment to the Plan.
13. Termination of Employment
If the Executive's employment is terminated for any reason
other than death or Retirement, and the Executive's termination is not in
connection with a Change in Control of the Company, the Rabbi Trust will
withdraw the Corporate Capital Interest and terminate the Assignment. The
Executive or his designee may thereafter maintain the Insurance Policy by
assuming responsibility for paying Annual Premiums. If the Executive or his
designee elects to maintain the Insurance Policy, he will deal directly with
the Insurance Company. Thereafter, neither the Company nor the Rabbi Trust
shall have further responsibility to such Executive for any of the benefits or
the guarantee of benefits provided under the Plan.
If the employment of an Executive is terminated in connection
with a Change in Control of the Company, Annual Premiums will be paid by the
Rabbi Trust to the extent of the Security Fund as provided in Section 11.
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14. Disability
If the Executive becomes disabled and, as a result, becomes
eligible for benefits from the CBI Long-Term Disability Plan, the Executive
will be treated as being actively employed for purposes of this Plan and
subject to the terms of this Plan. If an Executive who is receiving benefits
from the CBI Long Term Disability Plan retires under the CBI Pension Plan, the
Executive will be deemed retired for purposes of this Plan.
15. Underwriting
In order to participate in the Plan and be issued an Insurance
Policy under the Plan, the Executive will be required to provide medical
evidence of insurability satisfactory to the Insurance Company. This medical
evidence will include taking a physical examination.
If the Insurance Company, based upon the medical evidence
obtained, issues an Insurance Policy on the Executive's life that will require
the payment of an Extra Premium, the Rabbi Trust will pay that portion of the
Extra Premium that does not exceed 40% of the Basic Annual Premium. The
Executives affected by the requirement for an Extra Premium will be so
notified.
If the cost of the Extra Premium exceeds 40% of the Basic
Annual Premium, the following three (3) options will be available to the
Executive or his designee:
- Pay that portion of the Extra Premium that
exceeds 40% of the Basic Annual Premium in
order to maintain an Insurance Policy that
will provide the Scheduled Death Benefit
Amount;
- Accept a Death Benefit equal to the amount of
Death Benefit the Basic Annual Premium and
that portion of the Extra Premium that does
not exceed 40% of the Basic Annual Premium
would purchase (herein the "Reduced Death
Benefit"). If the Executive elects to accept
a Reduced Death Benefit, the obligation to
provide the Scheduled Death Benefit Amount
and the guarantee under Section 8 shall be
limited to the amount of the Reduced Death
Benefit; or
- Remain a participant in the CBI Group Life
Insurance Plan, and not participate in the
Plan.
If the Insurance Company determines that the Executive is
uninsurable, the Executive will remain a participant in the CBI Group Life
Insurance Plan, and will not be a participant in this Plan.
Benefit changes brought about by changes in Salary will be
handled as follows:
- Except as provided below, adjustments will be
made to the Scheduled Death Benefit Amount
provided by the Insurance Policy at the same
time
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that the Salary change is effective and,
in general, these adjustments will not require
medical evidence.
- Where any Salary increase in any calendar
year causes an increase in the Scheduled
Death Benefit Amount in excess of 8%, medical
evidence of insurability may be required for
the portion of the Scheduled Death Benefit
Amount increase exceeding 8%. If an
Executive is found uninsurable based on
medical evidence for the portion of the
Scheduled Death Benefit Amount increase
exceeding 8%, the Scheduled Death Benefit
Amount increase for that year will be limited
to that amount not exceeding 8%.
If the Insurance Company determines that an
Extra Premium will be required on the
Scheduled Death Benefit Amount increase, the
Rabbi Trust will pay that portion of the
Extra Premium that does not exceed 40% of the
Basic Annual Premium applicable to the
increase in Scheduled Death Benefit Amount.
If the Extra Premium exceeds 40% of the Basic
Annual Premium required for the Scheduled
Death Benefit Amount increase, the options
set forth previously in this Section will be
available to the Executive.
16. Enrollment Procedures
To participate in the Plan, the Executive must:
- Sign a Plan Participation Form.
- Designate who will apply for and be the owner
of the Insurance Policy to be issued, if
other than the Executive.
- Complete any required Insurance Company
applications and cooperate in providing the
Insurance Company with medical evidence of
insurability.
- Designate a Beneficiary under the Insurance
Policy.
- Sign an Assignment Form.
17. Plan Administration
Unless otherwise designated in writing by the CBI Industries,
Inc. Vice President of Administration, the Plan Administrator ("Plan
Administrator") will be the CBI Industries, Inc. Director of Human Resources,
800 Jorie Boulevard, Oak Brook, IL 60521-2268, (708) 572-7000, who shall have
control over the administration and interpretation of the Plan. To the extent
not limited otherwise in this Plan, the Plan Administrator shall have full and
absolute discretion to construe, interpret and apply the terms of the Plan, and
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decisions of the Plan Administrator shall be final and binding on all parties
to the fullest extent permitted by law. The Plan Administrator will have all
power needed to carry out his duties, and as he deems necessary or advisable,
may adopt rules and regulations relating to the Plan, may delegate
administrative responsibilities to advisors or other persons, and may rely on
information or opinions of legal counsel or experts.
The Insurance Company under the Plan is Northwestern Mutual
Life Insurance Company, 720 E. Wisconsin Avenue, Milwaukee, WI 53202, (414)
299-1444, unless such other Insurance Company is selected by the Company. The
Insurance Company shall be responsible for all matters relating to any
Insurance Policy.
The trustee of the Rabbi Trust is the Gary-Wheaton Bank, 120
East Wesley, Wheaton, IL 60187, (708) 665-2600.
18. Claims Procedure
For all benefits to be paid by the Insurance Policy, the
claims procedure will be the claims procedure established by the Insurance
Company. In any other case, a written claim must be filed with the Plan
Administrator or the Trustee of the Rabbi Trust. The Plan Administrator or the
Trustee of the Rabbi Trust, as applicable, will fully and fairly review all
claims and provide a final written decision within sixty (60) days of the date
the claim is received by the Plan Administrator or the Trustee.
The Plan Administrator is designated as the agent to receive
service of legal process on behalf of the Plan.
19. No Relation Between Plan and Continued
Employment
--------------------------------------
Nothing in this Plan and/or any actions taken under it shall
be construed or interpreted as a contract of employment giving the Executive a
right to be retained as an employee of the Company for any period of time, or
to restrict the right of the Company or the Executive to terminate employment
at any time for any reason, or to give the Executive a right to continued
employment in a capacity eligible to participate in the Plan.
20. Rules of Construction
As used in this Plan and where appropriate, the singular shall
include the plural, and vice versa, and the masculine shall include the
feminine, and vice versa.
21. Statement of ERISA Rights
Executives are entitled to certain rights and protection under
the Employee Retirement Income Security Act of 1974 ("ERISA"). ERISA imposes
duties upon the people who are responsible for the operation of the Plan. The
people who operate the Plan, called "fiduciaries" of the Plan, have a duty to
do so prudently and in the interest of Executives
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and their beneficiaries and designees. The Company may not fire or otherwise
discriminate against the Executive in any way to prevent him from obtaining Plan
benefits to which he is entitled or from exercising his rights under ERISA. If
a claim for a benefit is denied in whole or in part, the Executive must receive
a written explanation of the reason for the denial. The Executive has the right
to have the Plan reviewed and his claim reconsidered. Under ERISA, there are
steps to enforce the above rights. For instance, if a claim for benefits is
denied or ignored, in whole or in part, the Executive may file suit in a state
or federal court. If it should happen that Plan fiduciaries misuse the Plan's
money, or if the Executive is discriminated against for asserting his rights, he
may seek assistance from the U.S. Department of Labor, or may file suit in a
federal court. The court will decide who should pay court costs and legal fees,
for example, if it finds that the Executive's claim is frivolous. If there are
any questions about this statement or the Executive's rights under ERISA,
contact the Plan Administrator or the nearest Area Office of the U.S.
Labor-Management Service Administration, Department of Labor.
22. Controlling Law
To the extent not controlled by federal law, the Plan shall be
interpreted according to the laws of the State of Illinois.
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CBI EXECUTIVE LIFE INSURANCE PLAN
APPENDIX A
Your Scheduled Death Benefit Amount under the Plan as of December 1, 1992, is:
Scheduled Death Benefit Amount
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Pre-Retirement 4 x Salary at Date of Death
Post-Retirement 2 x Salary at Date of Retirement
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APPENDIX B
NOW, THEREFORE, in consideration of the premises and the
mutual agreements herein set forth, the parties hereby agree as follows:
Section 1. Certain Definitions. For purposes of this
Agreement, the following terms have the meanings indicated:
1.1 "Acquiring Person" shall mean any Person (as such
term is hereinafter defined) who or which, together with all Affiliates (as
such term is hereinafter defined) and Associates (as such term is hereinafter
defined) of such Person, shall be the Beneficial Owner (as such term is
hereinafter defined) of 20% or more of the shares of Common Stock then
outstanding, but shall not include an Exempt Person (as such term is
hereinafter defined). Notwithstanding the foregoing, no Person shall become an
"Acquiring Person" as the result of an acquisition of shares of Common Stock by
the Company which, by reducing the number of shares outstanding, increases the
proportionate number of shares beneficially owned by such Person to 20% or more
of the Common Stock of the Company then outstanding; provided, however, that if
a Person (other than an Exempt Person) shall become the Beneficial Owner of 20%
or more of the shares of Common Stock of the Company then outstanding by reason
of share purchases by the Company and shall, after such share purchases by the
Company, become the Beneficial Owner of any additional shares of Common Stock
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of the Company, then such Person shall be deemed to be an "Acquiring Person".
1.2 "Acquisition Event" shall mean a Subsection 11.1(b) Event
(as such term is hereinafter defined) or any event described in subsection 13.1
hereof.
1.3 "Adjustment Shares" shall have the meaning set forth in
subsection 11.1(b).
1.4 "Affiliate" and "Associate" shall have the respective
meanings ascribed to such terms in Rule 12b-2 of the General Rules and
Regulations under the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), as in effect on the date of this Agreement.
1.5 A Person shall be deemed the "Beneficial Owner" of, and
shall be deemed to "beneficially own," any securities:
(a) which such Person or any of such Person's Affiliates or
Associates beneficially owns, directly or indirectly;
(b) which such Person or any of such Person's Affiliates or
Associates has (i) the right to acquire (whether such right is
exercisable immediately or only after the
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States of New York or Illinois are authorized or
obligated by law or executive order to close.
1.7 "Close of business" on any given date shall mean 5:00
P.M., New York City time, on such date; provided, however, that if such date is
not a Business Day it shall mean 5:00 P.M., New York City time, on the next
succeeding Business Day.
1.8 "Common Stock" when used with reference to the Company
shall mean the common stock, $2.50 par value per share, of the Company.
"Common Stock" when used with reference to any Person other than the Company
which is organized in corporate form shall mean the capital stock or other
equity security with the greatest voting power of such Person. "Common Stock"
when used with reference to any Person which is not organized in corporate form
shall mean units of beneficial interest which represent the right to
participate in profits, losses, deductions and credits of such Person and which
shall be entitled to exercise the greatest voting power per unit of such
Person.
1.9 "Common Stock equivalents" shall have the meaning set
forth in subsection 11.1(c) hereof.
1.10 "Continuing Director" shall mean any member of the
Board, while such person is a member of the Board, who
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is not an Acquiring Person, or an Affiliate or Associate of an Acquiring Person,
or a representative of an Acquiring Person or of any such Affiliate or
Associate, and was a member of the Board prior to the date of this Agreement. A
"Continuing Director" shall also mean any person who subsequently becomes a
member of the Board, while such person is a member of the Board, who is not an
Acquiring Person, or an Affiliate or Associate of an Acquiring Person, or a
representative of an Acquiring Person or of any such Affiliate or Associate, if
(a) such person's nomination for election or election to the Board is
recommended or approved by resolution of a majority of the Continuing Directors
or (b) such person is included as a nominee in a proxy statement of the Company
distributed when a majority of the Board consists of Continuing Directors.
1.11 "Current Market Price" shall have the meaning set forth
in subsection 11.4 hereof.
1.12 "Current Value" shall have the meaning set forth in
subsection 11.1(c) hereof.
1.13 "Distribution Date" shall have the meaning set forth in
subsection 3.1 hereof.
1.14 "equivalent preferred stock" shall have the meaning set
forth in subsection 11.2 hereof.
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BACKGROUND
Amendment of the Company's Shareholders' Rights Plan on
December 20, 1994 has caused there to be certain inconsistencies in the
language of the CBI Executive Life Insurance Plan, CBI Industries, Inc.
Supplemental Survivors' Benefit, Executive Life Insurance and Benefit
Restoration Trust (the Rabbi trust) and certain Executive Termination
Agreements. It is recommended that the Board adopt the following resolutions
in order to amend the documents related to the foregoing in order to correct
such inconsistencies.
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RESOLVED, that the definition of "Change in Control" set forth
in Section 4 of the CBI Executive Life Insurance Plan is hereby amended to read
as follows:
"Change in Control" shall mean the occurrence at any time of
any of the following events:
(a) An "Acquiring Person" (as defined below) has become
such; or
(b) "Continuing Directors" (as defined below) cease to
comprise a majority of the Board of Directors of the
Company.
For purposes of this definition, the terms "Acquiring Person"
and "Continuing Directors" shall have the same meaning as
ascribed to such terms in the Amendment and Restatement dated
as of August 8, 1989, of Rights Agreement dated as of March 4,
1986, between the Company and First Chicago Trust Company
of New York, as Rights Agent, as has been or may be amended
from time to time; and that the Plan Administrator is
authorized to take such actions as necessary to implement said
amendment to the CBI Executive Life Insurance Plan, including
but not limited to informing executives who participate in
said plan in writing of the aforementioned amendment.
FURTHER RESOLVED, that Section 5.3 of the CBI Industries, Inc.
Supplemental Survivors' Benefit, Executive Life Insurance and Benefit
Restoration Trust is hereby amended to read as follows:
5.3 AMENDMENT OF TRUST PRIOR TO CHANGE IN CONTROL.
Notwithstanding Section 5.1, CBI may amend (but not revoke)
this
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Trust Agreement prior to a Change in Control (as defined
below) with respect to Participants, Designees, Beneficiaries
and the Trustee without limitation and in any manner and
effective as of any date, including a retroactive effective
date, by delivery to the Trustee of a written notice executed
by CBI of the substance and effective date of such amendment,
accompanied by the written certification of the Secretary of
CBI that no Change in Control has occurred; provided that no
amendment may have the effect of revoking the Trust by
returning to CBI or diverting to others any of the Trust Fund
before all payment of benefits and premiums have been made to
or for the benefit of Participants and their Designees and
Beneficiaries pursuant to the terms of the Plan(s), except as
provided in Section 1.3; and, provided further, that no
amendment shall enlarge the duties or responsibilities of the
Trustee without its written consent. For purposes of this
Section 5.3, the term "Change in Control" shall mean the
occurrence at any time of any of the following events:
(a) An "Acquiring Person" (as defined below) has become
such; or
(b) "Continuing Directors" (as defined below) cease to
comprise a majority of the Board of Directors of CBI.
For purposes of this Section 5.3, the terms "Acquiring Person"
and "Continuing Directors" shall have the respective meaning as
ascribed to such terms in that certain Amendment and
Restatement dated as of August 8, 1989, of Rights Agreement
dated as of March 4, 1986, between CBI and First Chicago Trust
Company of New York, as Rights Agent, as has been or may be
amended from time to time. If a Change in Control occurs, CBI
shall within five (5) days notify the Trustee in writing of
that fact and the date thereof, and CBI shall upon the written
request of the Trustee and may at any other time in its
discretion notify the Trustee in writing whether a Change in
Control is expected to occur; provided, however, that
the Trustee shall have sole discretion to determine for
purposes of this Trust Agreement whether a Change in Control
has actually occurred, and such determination shall be
conclusive and binding on all parties hereto.
FURTHER RESOLVED, that Section 2 of each Executive Termination
Agreement entered into between the Corporation and an executive of the
Corporation is hereby amended to read as follows:
2. Change in Control. The term "Change in Control"
shall mean the occurrence at any time of any of the following
events:
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(a) An "Acquiring Person" (as defined below) has become
such; or
(b) "Continuing Directors" (as defined below) cease to
comprise a majority of the Board of Directors of CBI.
For purposes of this Agreement, the terms "Acquiring Person"
and "Continuing Directors" shall have the same meaning as
ascribed to such terms in that certain Amendment and
Restatement dated as of August 8, 1989, of Rights Agreement
dated as of March 4, 1986, between CBI and First Chicago Trust
Company of New York, as Rights Agent, as has been or may be
amended from time to time.
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