request for modification or rescission of that order in accordance with the procedures set forth in this section.

(b) Where to file. A request for modification or rescission may be filed with the Cost of Living Council, Washington, D.C. 20506.

(c) When to file. A request for modification or rescission shall be filed within 10 days of receipt of the order issued under § 130.96.

(d) Contents of request. A request for modification or rescission shall

(1) Be in writing and signed by the applicant;

(2) Be designated clearly as a request for modification or rescission;

(3) Identify the order which is the subject of the request;

(4) Point out the alleged error in the order;

(5) Contain a concise statement of the grounds for the request for modification or rescission and the requested relief;

(6) Be accompanied by briefs, if any; and

(7) Be marked on the outside of the envelope "Request for Modification or Rescission."

(e) Preliminary processing by the Council. (1) A request for modification or rescission of an order issued under § 130.96 will be considered by the Council only if it:

(i) Is made by a person to whom the order sought to be modified or rescinded was issued;

(ii) Is timely; and

(iii) Makes a prima facie showing of

error.

(2) The Council may summarily reject a request for modification or rescission which is not made by a person to whom the order was issued, or which is not timely filed, or which fails to make a prima facie showing of error.

(3) When the request for modification or rescission meets the requirements set forth in subparagraph (1)(i) of this paragraph, the Council on its own motion or for good cause shown may temporarily suspend the order appealed from and then proceed in accordance with § 130.96.

Subpart K-Reassertion of Mandatory Controls

§ 130.100 Purpose and scope.

This subpart describes the circumstances under which the Council may

reassert mandatory controls over an industry, sector of the economy, or a part thereof.

§ 130.101

Issuance of special rules.

Whenever the Council in the course of administering the Economic Stabilization Program determines that the goals of the program would be significantly advanced by reasserting controls over an industry, sector of the economy, or a part thereof, it may issue a special rule providing, on a prospective basis, for the stabilization of prices or wages and salaries, on a mandatory basis, in that industry, sector of the economy or part thereof.

§ 130.102 Public hearings.

If the Council determines that such action is necessary to further the goals of the Economic Stabilization Program, it may order public hearings with respect to special rules issued or to be issued pursuant to this subpart.

APPENDIX A-SPECIAL RULES REASSERTING
MANDATORY CONTROLS

Special Rule No. 1

1. Scope. This special rule issued in accordance with the provisions of 6 CFR 130.101 establishes mandatory rules governing price adjustments for the sale of crude petroleum and petroleum products.

2. Definitions.-"Base price" means:

(a) in the case of a product subject to a term limit pricing (TLP authorization on January 10, 1973, the highest price at or above which at least 10 percent of the product was priced by the seller in transactions with the class of purchasers concerned during the 30 days prior to January 10, 1973.

(b) in the case of a product (1) not subject to a TLP authorization on January 10, 1973, and which (ii) was purchased and resold without substantial change in form or quality, the price that could have been lawfully charged the class of purchasers concerned on each day since January 10, 1973, as if the pricing rule set forth in 6 CFR 300.13 and in effect on January 10, 1973, had not been superseded. Such products may be commingled with similar products manufactured by the firm if the firm is able to account for the amount of sales attributable to products which were purchased and resold without substantial change in form or quality in accordance with generally accepted accounting principles and its historical practices.

(c) in the case of any other product, including those commingled with products described in (b) the price determined under

the provisions of subpart F of 6 CFR part 300, which were in effect on January 10, 1973.

"Class of purchasers" means purchasers to whom a person has charged a comparable price for comparable property or service pursuant to a price distinction between those purchasers and other purchasers, where such price distinctions are based on a discount allowance, add-on, premium, or an extra based on a difference in volume, grade, quality, or location or type of purchaser, or a term or condition of sale or delivery.

"Control year" means the year beginning January 11, 1973, and ending January 10, 1974.

"Covered product" means any product described in Standard Industrial Classification Code 1311 (other than natural gas) or 2911. "Current sales at base price" means an amount equal to the sum of each base price of each product times the volume of each

Total revenues from covered

product sold to each class of purchasers since January 11, 1973.

"Deductible exchange revenues" means revenues derived from equal exchange of crude petroleum less revenues that would have been derived from those exchanges if the transactions had been made at base prices.

"Equal exchange of crude petroleum" means a consummated sale and reciprocal purchase of corresponding dollar value of crude petroleum.

"Weighted annual average price increase for the control year" for purposes of paragraph 4 means the total revenues derived from the sale of covered products since January 11, 1973, less deductible exchange revenues and less current sales at base price divided by current sales at base price multiplied by 100 and expressed as a percent. This computation may be illustrated by use of the following equation:

Deductible

exchange revenues

Current sales at base price

3. Applicability. This special rule applies to each firm which derives $250 million or more of its annual sales or revenues from the sale of covered products.

4. Pricing rules for covered products. (a) Except as otherwise provided in subparagraphs (b) and (c) of this paragraph, a firm to which this special rule applies may not increase the price for a covered product above its base price if the increase would result in a weighted annual average price increase for the control year for the firm's covered products of more than 1 percent above base prices.

(b) A firm may increase the price for a covered product above its base price resulting in a weighted annual average price increase for the control year for the firm's covered products of more than 1 percent above base prices but not more than 1.5 percent above base prices only to reflect increased costs incurred since March 6, 1973.

(c) A firm may increase the price for a covered product above its base price resulting in a weighted annual average price increase for the control year for the firm's covered products of more than 1.5 percent only if, in addition to meeting the cost justification requirements of subparagraph (b), (1) the firm's profit margin does not increase over that which prevailed during the base period as defined in Subpart L of 6 CFR, Part 130, and (ii) the firm prenotifies the Cost of Living Council of the increase and receives approval before implementing the increase.

5. Effect on term limit pricing authorizations. Term limit pricing authorizations ap

Weighted annual

average price increase for the control year

plicable to firms to which this special rule applies are hereby terminated effective March 6, 1973. In computing weighted annual average price increases for the control year, a firm shall include all price increases for covered products put into effect after January 10, 1973, pursuant to a TLP authorization. 6. Reporting requirements. Firms to which this special rule applies shall file the following reports with the Cost of Living Council on forms to be prescribed by the Council:

(a) Each firm shall file not later than March 30, 1973, a list of the base price, as defined in paragraph 2 of this special rule, for each of its covered products, and a calculation of its weighted average annual price increase for price increases in covered products implemented since January 10, 1973, and before March 6, 1973.

(b) Each firm shall file a monthly report not later than 30 days after the close of each calendar month commencing with March 1973, setting forth posted price movements, cost increases, and supply conditions.

(c) Each firm shall file a quarterly report, not later than 45 days after the close of each of its fiscal quarters, setting forth cost increases, profit margin, supply conditions, and a computation of its weighted average annual price increase for prices increased above base price as defined in paragraph 2 of this special rule.

[38 FR 6284, Mar. 8, 1973, as amended at 38 FR 6681, Mar. 12, 1973; 38 FR 12608, May 14, 1973]

APPENDIX B-GUIDANCE FOR REPLACEMENT, MODIFIED, AND NEW EXECUTIVE AND VARIABLE COMPENSATION PLANS

(1) General. The guidance set forth in this appendix should be used by employers subject to voluntary controls with respect to the implementation after January 10, 1973, of replacement, modified, or new executive and variable compensation plans, practices, or programs of the types covered in Subpart F of Part 201 of this title. For employers subject to voluntary controls, such implementation no longer requires prior approval. This appendix provides the principles, policies, and conditions that were used by the Pay Board in its consideration of such plans, practices, or programs submitted for approval during Phase II of the Economic Stabilization Program.

2. Replacement incentive compensation plans or practices. When an employer adopts a new incentive compensation plan or practice (other than a stock option plan) replacing such a plan or practice which has lapsed or terminated on account of the operation of time, the new plan or practice is not considered to increase wages and salaries if the aggregate amount of compensation attributable to the new plan or practice is not an increase over the aggregate amount which would have been granted under the replaced plan or practice had it not terminated. If the amount of compensation is increased over that attributable to the replaced plan or practice, the amount in excess should be treated as an increase in wages and salaries and should be apportioned to the appropriate employee units of the plan or practice participants in the manner provided in §§ 201.74 (c) (2) and 201.75 (c) (2) of Pay Board Regulations in effect on January 10, 1973.

3. Modified or revised incentive compensation plans or practices. When an employer modifies or revises an incentive compensation plan or practice (other than a stock option plan), the modification or revision is not considered to increase wages and salaries if the aggregate amount of compensation attributable to the modified or revised plan or practice is not an increase over the aggregate amount attributable to the plan or practice had it not been modified or revised. If the amount of compensation is increased over that attributable to the plan or practice prior to modification or revision, the amount in excess should be treated as an increase in wages and salaries and should be apportioned to the appropriate employee units of the plan or practice participants in the manner provided in §§ 201.74 (c) (2) and 201.75 (c) (2) of Pay Board Regulations in effect on January 10, 1973.

4. New incentive compensation plans or practices. When an employer adopts a new

incentive compensation plan or practice (other than a stock option plan) which is neither a replacement nor modification or revision of an existing plan or practice, the amount granted with respect to the first 12 months of the operation of the plan or practice should be treated as an increase in wages and salaries and should be apportioned to the appropriate employee units of the plan or practice participants as provided in §§ 201.74 (c) (2) and 201.75 (c) (2) of Pay Board Regulations in effect on January 10, 1973. The amount so granted with respect to the first 12-month period should (within the meaning of §§ 201.74(b) (4) and 201.75 (b) (4)) become the "base year amount" for such plan or practice in computing the "allowable amount" with respect to future plan years. Payments in subsequent plan years that exceed the "allowable amount" should also be considered an increase in wages and salaries.

5. Special rules for certain incentive compensation plans and practices. For purposes of paragraph 4 above, the amount of certain types of awards should be determined as follows

(a) For performance share awards. In an amount equal to the fair market value of the stock at the time of the award assuming attainment of at least 75 percent of the performance goal allocated over the performance period.

(b) For phantom stock awards. In an amount equal to 25 percent of the fair market value of an equivalent number of actual shares of the employer at the time of the award.

6. Replacement stock option plans. If an employer subject to voluntary compliance adopts a new stock option plan which meets the requirements of § 201.76(b) (1) (1) (a) through (d) of Pay Board Regulations in effect on January 10, 1973, and the new plan replaces a stock option plan which had met those requirements but which had lapsed

(a) On account of the operation of time, or (b) Because all of the authorized shares had been the subject of option grants, or

(c) Because the authorized shares available for award were insufficient to grant options covering the applicable aggregate share limitation; then

for purposes of determining the aggregate share limitation applicable to the new plan, the new plan and the replaced plan should be treated as a single plan. If such an employer adopts a new stock option plan described in § 201.76 (e) of Pay Board Regulations in effect on January 10, 1973, which replaces a prior plan that has lapsed or terminated, then the increases in wages and salaries attributable to grants and exercises of stock options under the replacement plan should be apportioned to the appropriate employee units of the plan

participants as provided in § 201.76 (e) (3) of such Pay Board Regulations.

7. Modified or revised stock option plans. If an employer modifies or revises a stock option plan which meets the requirements of § 201.76(b)(1)(i) (a) through (d) of Pay Board Regulations in effect on January 10, 1973, the aggregate shares to be granted under the modified or revised plan should not exceed the aggregate shares which would have been granted under the plan had it not been modified or revised. If such an employer modifies or revises a stock option plan described in § 201.76 (e) of such Pay Board Regulations, any increase in wages and salaries attributable to awards under such plan should be apportioned to the appropriate employee units of the plan participants as provided in § 201.76(e) (3) of such Pay Board Regulations.

8. New Stock option plans. If an employer adopts a new stock option plan which is neither a replacement nor a modification or revision and which meets the requirements of § 201.76(b)(1) (1) (a) through (d) of Pay Board Regulations in effect on January 10, 1973, the aggregate share limitation for the first fiscal year of operation should be 25 percent of the number of shares authorized for stock options at the time the plan was adopted. If such an employer adopts a new stock option plan described in § 201.76(e) of such Pay Board Regulations, the increase in wages and salaries attributable to the options granted or exercised under the new plan should be apportioned to the appropriate employee units of the plan participants as provided in § 201.76 (e) (3) of such Pay Board Regulations.

9. Replacement sales or commission plans or practices and certain incentive programs. When an employer adopts a new sales or commission plan or practice or a production incentive program (other than a program described in § 201.61 of Pay Board Regulations in effect on January 10, 1973) replacing such a plan, practice, or program, the payments under the new plan, practice, or program are not considered to increase wages and salaries if the aggregate amount of compensation attributable to the new plan, practice, or program (using the new formula or method for determining payments) is not an increase over that which would have been granted (using the old formula or method for determining payment) under the plan, practice, or program had it not been terminated. If the amount of compensation is increased solely due to the change in formula or method for determining payments over that attributable under the replaced plan,

practice, or program, the amount in excess should be treated as an increase in wages and salaries in the control year such amounts are paid, should be apportioned to the appropriate employee units of the plan, practice, or program participants as provided in § 201.77 (c) of such Pay Board Regulations, and should be included in the respective units' base compensation for subsequent control years.

10. Modified or revised sales or commission plans or practices and certain incentive programs. When an employer modifies or revises a sales or commission plan or practice or a production incentive program (other than a program described in § 201.61 of Pay Board Regulations in effect on January 10, 1973), the payments under the modification or revision are not considered to increase wages and salaries if the aggregate amount of compensation attributable to the modified or revised plan, practice, or program (using the modified formula or method for determining payments) is not an increase over that which would have been granted (using the old formula of method for determining payments) under the plan, practice, or program had it not been modified or revised. If the amount of compensation is increased solely due to the change in formula or method for determining payments over that attributable under the modified or revised plan, practice, or program, the amount in excess should be treated as an increase in wages and salaries in the control year such amounts are paid, should be apportioned to the appropriate employee units of the plan, practice, or program participants as provided in § 201.77 (c) of such Pay Board Regulations, and should be included in the respective units' base compensation for subsequent control years.

11. New sales or commission plans or practices and certain incentive programs. When an employer adopts a new sales or commission plan or practice or production incentive program (other than a program described in § 201.61 of Pay Board Regulations in effect on January 10, 1973) which is neither a replacement, nor modification or revision, of an existing plan, practice or program, the amount granted with respect to the new plan, practice, or program should be treated as an increase in wages and salaries in the control year such amounts are paid, should be apportioned to the appropriate employee units of the plan, practice, or program participants as provided in § 201.77 (c) of such Pay Board Regulations, and should be included in the respective units' base compensation for subsequent control years. [38 FR 6681, Mar. 12, 1973]