Exhibit 10(b)
CASE CORPORATION
OUTSIDE DIRECTORS' EQUITY COMPENSATION PLAN
(As Amended and Restated Effective January 1, 1996)
This Outside Directors' Equity Compensation Plan (the "Plan") was
established by action of the Case Corporation (the "Company") Board of Directors
effective as of January 1, 1995. This amendment and restatement of the Plan
shall be effective January 1, 1996.
1. INTRODUCTION. The Plan is established to provide non-employee
directors of the Company with the following grants: (i) grants of Company common
stock representing directors' retainer fees and board committee chair fees
(collectively, the "Fees"); and (ii) an annual grant of options to purchase
Company common stock.
2. ELIGIBILITY. Each individual who is a member of the Board of Directors
of the Company and is not a salaried officer of the Company or of any of its
subsidiaries (an "Outside Director" or a "Participant") shall be eligible for
the grants described below.
3. STOCK GRANTS. As of the last day of each Plan Year Quarter (as
described below) commencing on or after the Company's 1996 annual meeting of
stockholders, each Outside Director shall be granted automatically a number of
shares (the "Shares") of Company common stock (the "Common Stock") equal in
value to 25% of the annual retainer fee, and if he or she is a committee chair
25% of the annual committee chair fee, each as listed in Appendix A, attached
hereto, as amended from time to time in accordance with the amendment procedures
of the Plan. The value of each Share (the "Fair Market Value") shall be
determined as of the last business day of the Plan Year Quarter for which it is
granted and shall be equal to the average of the highest and lowest sales price
of one share of Company common stock as reported on the New York Stock Exchange
Composite Transactions tape for such date. If the Outside Director is not a
member of the Board of Directors or a committee chair during an entire Plan Year
Quarter, the retainer and committee chair fees to which he or she is entitled as
well as his or her award of Shares for that Quarter shall be reduced, pro rata,
to reflect the portion of the Quarter in which he or she was not an Outside
Director or committee chair, as the case may be. An Outside Director shall be
entitled to a whole Share for any fractional Share to which he or she would
otherwise be entitled for any Plan Year Quarter under the foregoing provisions
of this Section 3.
The term "Plan Year" means the period beginning on the date of the Company's
annual meeting of stockholders and ending on the day immediately prior to the
first day of the following Plan Year. For any Plan Year, the first Plan Year
Quarter shall begin on the first day of the Plan Year, and shall end on the 90th
day of the Plan Year; the second Plan Year Quarter shall begin on the
91st day of the Plan year, and shall end on the 180th day of the Plan Year; the
third Plan Year Quarter shall begin on the 181st day of the Plan Year, and shall
end on the 270th day of the Plan Year; and the fourth Plan Year Quarter shall
begin on the 271st day of the Plan Year, and shall end on the last day of the
Plan Year.
4. CASH ELECTION. At any time prior to the first day of a Plan Year, an
Outside Director may irrevocably elect, by filing a form with the Secretary of
the Company, to receive a portion of the Fees for such Plan Year in cash,
provided that an Outside Director may not elect to receive more than 50% of the
Fees in cash.
5. OPTION GRANTS.
a. Each individual who is an Outside Director on the date of the
1996 or any subsequent annual meeting of shareholders shall be
granted automatically as of that date an option to purchase that
number of shares of Company common stock listed in Appendix A
(the "Option Grant"), attached hereto as amended from time to
time in accordance with the amendment procedures of the Plan.
Each individual who becomes an Outside Director after the
Effective Date other than on the date of an annual meeting of
stockholders shall receive an Option Grant reduced pro rata to
reflect the portion of the Plan Year elapsed prior to the date on
which the individual first became an Outside Director, provided
that any fractional share resulting from such reduction shall be
rounded up to a whole share.
b. RELOAD STOCK OPTIONS. Reload Stock Options shall be awarded to
an Outside Director when and if he or she pays the Option Price
under an Option Grant, described above, by delivery of shares of
Common Stock on the Settlement date for such exercise. A Reload
Stock Option entitles its holder to purchase the number of shares
so delivered for an Option Price equal to the Fair Market Value
of a share of Common Stock on such Settlement Date. No more than
one Reload Stock Option shall be granted to an Outside Director
in any twelve-month period, the maximum number of Reload Stock
Options that may be granted to an Outside Director with respect
to any Option Grant is five, and no Reload Stock Options will be
issued within six months prior to the scheduled expiration date
of the Option Grant to which it relates. Notwithstanding the
above, no Reload Stock Option shall be granted unless the
recipient is an Outside Director of the Company at the time of
delivery of shares. Notwithstanding any other provision hereof,
a Reload Stock Option shall not become exercisable until six
months after its award date and its maximum term will terminate
at the time specified hereunder for the Option Grant to which it
relates.
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6. TERMS OF OPTION GRANTS.
a. OPTION AGREEMENT. Each option shall be evidenced by a written
stock option agreement which shall be executed by the Outside
Director and the Company and which shall contain such terms and
conditions as are consistent with this Plan.
b. EXERCISE PRICE. The exercise price of the shares under the Option
Grant shall be 100% of the Fair Market Value of such shares on
the date the Option Grant is granted.
c. COMMENCEMENT OF EXERCISABILITY. Each Option Grant issued under
the Plan (either before or after its amendment and restatement)
shall become exercisable on the third anniversary of the grant
date or, if earlier, with respect to Option Grants that have been
outstanding at least six months, the date the individual ceases
to be an Outside Director for any reason other than removal for
cause by the Company's stockholders pursuant to section 141(k) of
the Delaware General Corporation Law.
d. TERM. The Option Grant shall terminate upon the earlier of (i)
ten years after the date of grant or (ii) six months after the
date an individual ceases to be an Outside Director.
e. DEATH OF OUTSIDE DIRECTOR. Notwithstanding (c) above, the Stock
Options that have been issued to an Outside Director whose Board
membership is terminated due to death shall be immediately
exercisable. Notwithstanding (d)(i) above, the Outside Director's
designated beneficiary or estate if no beneficiary has been
designated may exercise any Option Grants within the six-month
period following the death of the Outside Director.
f. TOTAL DISABILITY OF OUTSIDE DIRECTOR. Notwithstanding (c) and
(d)(i) above, the Stock Options that have been issued to an
Outside Director whose Board membership is terminated due to
Total Disability shall be immediately exercisable and shall
remain exercisable within the six-month period following the
Outside Director's Total Disability. For purposes of this
provision, Total Disability means the permanent inability (as
determined by the Outside Director's medical doctor) of the
Outside Director which is a result of accident or sickness, to
perform the duties of a director of the Company.
g. CHANGE OF CONTROL. Notwithstanding (c) and (d)(i) above, the
Stock Options that have been issued to an Outside Director shall
be immediately
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exercisable and shall remain exercisable for a six-month period
if a Change of Control occurs. Notwithstanding the above, Stock
Options that are issued within six months of the date the Change
of Control occurs shall not be subject to this provision. For
purposes of this provision, "Change of Control" means a change in
the beneficial ownership of the Company's voting stock or a
change in the composition of the Company's Board of Directors
which occurs as follows:
(1) any "person" (as such term is used in Section 13(d) and
14(d)(2) of the Securities Exchange Act of 1934) other than:
(i) a trustee or other fiduciary of securities held under
an employee benefit plan of the Company;
(ii) a corporation owned, directly or indirectly, by the
stockholders of the Company in substantially the same
proportions as their ownership of the Company; or
(iii) with respect to any Participant, any person in which
such Participant has a substantial equity interest;
is or becomes a beneficial owner (as defined in Rule 13d-3
under the Securities Exchange Act of 1934), directly or
indirectly, of stock of the Company representing 25% or more
of the total voting power of the Company's then outstanding
stock;
(2) a tender offer is made for the stock of the Company by a
person other than a person described in subparagraph (1),
and one of the following occurs:
(i) the person making the offer owns or has accepted for
payment stock of the Company representing 25% or more
of the total voting power of the Company's stock; or
(ii) three business days before the offer is to terminate
(unless the offer is withdrawn first) such person could
own, by the terms of the offer plus any shares owned by
such person, stock representing 50% or more of the
total voting power of the Company's outstanding stock
when the offer terminates;
(3) during any period of two consecutive years there shall cease
to be a majority of the Company's Board of Directors
comprised as follows: individuals who at the beginning of
such period constitute
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the Board of Directors and any new director(s) whose
election by the Board of Directors or nomination for
election by the Company's stockholders was approved by a
vote of at least two-thirds (2/3) of the directors then
still in office who either were directors at the beginning
of the period or whose election or nomination for election
was previously so approved; or
(4) the stockholders of the Company approve a merger or
consolidation of the Company with any other company other
than:
(i) such a merger or consolidation which would result in
the Company's voting stock outstanding immediately
prior thereto continuing to represent (either by
remaining outstanding or by being converted into voting
stock of the surviving entity) more than 70% of the
combined voting power of the Company's or such
surviving entity's outstanding voting stock immediately
after such merger or consolidation; or
(ii) such a merger or consolidation which would result in
the directors of the Company who were directors
immediately prior thereto continuing to constitute at
least 50% of the directors of the surviving entity
immediately after such merger or consolidation.
For purposes of this paragraph (4), "surviving entity" shall
mean only an entity in which all of the Company's
stockholders become stockholders by the terms of such merger
or consolidation, and the phrase "directors of the Company
who were directors immediately prior thereto" shall not
include:
(A) any director of the Company who was designated by a
person who has entered into an agreement with the
Company to effect a transaction described in this
paragraph or in paragraph (1) next above; or
(B) any director who was not a director at the beginning of
the 24-consecutive-month period preceding the date of
such merger or consolidation;
unless his election by the Board of Directors or nomination
for election by the Company's stockholders was approved by a
vote of
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at least two-thirds (2/3) of the directors then still in
office who were directors before the beginning of such
period;
provided, however, that in the event an Outside Director arranges
or solicits any of the transactions listed in (1), (2), (3), (4)
or (5), any such transaction shall not, for purposes of this
Plan, constitute a Change in Control as to such Outside Director.
7. MANNER OF PAYMENT OF OPTION PRICE. The Option Price shall be paid in
full at the time of the exercise of the Stock Option and may be paid in any of
the following methods or combinations thereof:
(1) In United States dollars, in cash, check, bank draft or money
order payable to the order of the Company;
(2) By the delivery of shares of Common Stock having an aggregate
Fair Market Value on the date of such exercise equal to the
Option Price;
(3) In any other manner that the Board shall approve, including
without limitation any arrangement that the Board may establish
to enable Participants to simultaneously exercise Stock Options
and sell the shares of Common Stock acquired thereby and apply
the proceeds to the payment of the Option Price therefor.
8. PLAN ADMINISTRATION. The Plan shall be administered by the
Compensation Committee of the Board of Directors (the "Committee").
9. SHARES SUBJECT TO PLAN. Subject to the provisions of Section 11,
commencing January 1, 1996, the number of shares of Common Stock for which
Shares and Options may be awarded under the Plan shall not exceed 100,000
shares. Shares issued under the Plan may be authorized but unissued shares or
treasury shares. If any shares are subject to an award under the Plan that
expires, is cancelled or is forfeited, such shares shall again become available
for issuance under the Plan.
10. ADJUSTMENTS AND REORGANIZATIONS. In the event of any merger,
reorganization, consolidation, recapitalization, separation. liquidation, stock
dividend, extraordinary dividend, spin-off, split-up, share combination, or
other change in the corporate structure of the Company affecting the Common
Stock, the number and kind of shares that may be delivered under the Plan shall
be subject to such equitable adjustment as the Committee, in its sole
discretion, may deem appropriate in order to preserve the benefits or potential
benefits to be made available under the Plan, and the number and kind and price
of shares subject to outstanding Option Grants, the option price and any other
terms of outstanding Option Grants or Stock Grants shall be subject to
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such equitable adjustment as the Committee, in its sole discretion, may deem
appropriate in order to prevent dilution or enlargement of outstanding Option
Grants or Stock Grants.
11. TRANSFERABILITY OF AWARDS. No awards under the Plan shall be
assignable, alienable, saleable or otherwise transferable other than by will or
the laws of descent and distribution or pursuant to a qualified domestic
relations order (as defined by the Code) or Title 1 of ERISA or the rules
thereunder.
12. NO RIGHT OF CONTINUED SERVICE. Participation in the Plan does not give
any Participant the right to be retained as a Director of the Company or any
right or claim to any benefit under the Plan unless such right or claim has
specifically accrued under the terms of the Plan.
13. GOVERNING LAW. The validity, construction and effect of the Plan, and
any actions taken or relating to the Plan, shall be determined in accordance
with the laws of the State of Delaware and applicable federal law.
14. SUCCESSORS AND ASSIGNS. The Plan shall be binding on all successors
and assigns of a Participant, including, without limitation, the estate of such
Participant and the executor, administrator or trustee of such estate, or any
receiver or trustee in bankruptcy or representative of the Participant's
creditors.
15. RIGHTS AS A SHAREHOLDER. Except as otherwise provided in any Award
Agreement, a Participant shall have no rights as a shareholder of the Company
until he or she becomes the holder of record of Common Stock.
16. AMENDMENT. The Plan and any attachments thereto may be amended by
action of the Board of Directors of the Company, except that, notwithstanding
anything to the contrary contained herein, the formula provisions in this Plan
may not be amended more than once every six months, other than to comport with
changes in the Internal Revenue Code, the Employee Retirement Income Security
Act, or the rules and regulations thereunder.
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APPENDIX A
(Effective for Plan Years commencing after January 1, 1996)
Annual Retainer fee: $24,000
Annual Committee chair fee: $ 4,000
Option grant: 1,000 shares
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