EXHIBIT 10(h)
Case Corporation
Outside Directors' Equity Compensation Plan
(As Amended and Restated Effective as of January 1, 1999)
This Outside Directors' Equity Compensation Plan (the "Plan") was
established by action of the Case Corporation (the "Corporation") Board of
Directors (the "Board") effective as of January 1, 1995. This amendment and
restatement of the Plan shall be effective as of January 1, 1999.
1. Introduction. The Plan is established to provide non-employee
directors of the Corporation with (i) grants of Corporation common stock
representing directors' retainer fees and board committee chair fees
(collectively, the "Fees"); (ii) an annual grant of options to purchase shares
("Shares") of common stock of the Corporation ("Common Stock"); (iii) an
opportunity to defer all or a portion of their Fees otherwise payable in Common
Stock; and (iv) an opportunity to convert all or a portion of their Fees into
stock options.
2. Eligibility. Each individual who is a member of the Board and is
not a salaried officer of the Corporation or of any of its subsidiaries (an
"Outside Director" or a "Participant") shall be eligible to receive grants of
awards under the Plan and to defer all or a portion of his or her Fees, all as
described below.
3. Stock Grants. Subject to the terms and conditions of the Plan,
as of the last day of each Plan Year Quarter (as described below), each Outside
Director shall be granted automatically a number of Shares of 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 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 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. For purposes of the Plan, the term "Plan Year" means the period
beginning on the date of the Corporation'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. Subject to the terms and conditions of the Plan, 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 Corporation (the
"Secretary"), 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 for such Plan Year in cash. Notwithstanding the foregoing provisions of
this Section 4, an individual who becomes an Outside Director after the first
day of a Plan Year may irrevocably elect, by filing a form with the Secretary
prior to the date on which he or she first becomes an Outside Director, to
receive a portion of the Fees for the remainder of the Plan Year in which he
first becomes an Outside Director in cash, up to a maximum of 50% of such Fees
for the remainder of the Plan Year.
5. Options. Subject to the terms and conditions of the Plan, each
Outside Director will be awarded stock options under the Plan in accordance with
the following:
(a) Automatic Option Grants. Each individual who is an Outside Director
on the date of the annual meeting of the Corporation's stockholders
shall be granted automatically as of that date an option to purchase
that number of Shares of Common Stock listed in Appendix A (the
"Automatic 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 other than on the date of
an annual meeting of Corporation's stockholders shall receive an
Automatic 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) Elective Option Grants. For the period beginning on January 1, 1999
and ending on the last day of the 1998 Plan Year and for any Plan Year
beginning thereafter, each Outside Director, by filing a written
"Option Election" with the Secretary in such form as the Secretary may
from time to time require, may elect to forego payment of all or any
portion of the Fees otherwise payable to him or her during such period
or for any such Plan Year, as applicable, and to instead receive, as
of each date on which such Fees would otherwise have been paid to him
or her (each an "Elective Grant Date"), an option to purchase that
number of
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Shares of Common Stock equal to the quotient (rounded to the nearest
whole number of Shares) of (1) divided by (2) where:
(1) is the product of the amount of the Fees that would otherwise
have been paid to the Outside Director on the applicable Elective
Grant Date which are subject to his or her Option Election,
multiplied by four; and
(2) is the Fair Market Value of a Share of Common Stock on the
applicable Elective Grant Date.
Each option granted pursuant to this paragraph (b) shall be referred to
herein as an "Elective Option Grant" and, where appropriate, will be
referred to collectively with an Automatic Option Grant as an "Option
Grant". An Outside Director's Option Election shall be effective with
respect to Fees otherwise payable to him or her for services rendered after
the last day of the Plan Year in which such election is filed with the
Secretary; provided, however, that:
(A) each Outside Director may make an Option Election with respect to
Fees payable during the period beginning on January 1, 1999 and
ending on the last day of the 1998 Plan Year in accordance with
such uniform and nondiscriminatory rules established by the
Committee;
(B) if an individual becomes an Outside Director on or after the
first day of a Plan Year and files an Option Election with the
Secretary prior to the date on which he or she first becomes an
Outside Director, his or her Option Election shall be effective
with respect to Fees otherwise payable to him or her for services
rendered on and after the day on which he or she first becomes an
Outside Director; and
(C) by notice filed with the Secretary, an Outside Director may
terminate or modify any Option Election as to Fees payable for
services rendered after the last day of the Plan Year in which
such notice is filed with the Secretary.
(c) 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
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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 Corporation 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.
For purposes of the Plan, Automatic Option Grants, Elective Option Grants and
Reload Stock Options are sometimes referred to herein collectively as "Stock
Options".
6. Terms of Option Grants.
(a) Option Agreement. Each Stock Option shall be evidenced by a written
stock option agreement which shall be executed by the Outside Director
and the Corporation and which shall contain such terms and conditions
as are consistent with this Plan.
(b) Exercise price. The exercise price of the Shares under an Option
Grant shall be 100% of the Fair Market Value of such Shares on the
date the Option Grant is made.
(c) Commencement of Exercisability. Each Automatic Option Grant made
under the Plan shall become exercisable on the third anniversary of
the grant date or, if earlier, with respect to Automatic 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 Corporation's stockholders pursuant to
Section 141(k) of the Delaware General Corporation Law. Each Elective
Option Grant shall be immediately exercisable upon grant but Shares
purchased upon an Elective Option Grant may not be sold until the date
which is at least six months after the date such Elective Option Grant
is made.
(d) Term. Each 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 paragraph 6(c) above, the
Automatic Option Grants and Reload Stock Options that have been
awarded to an Outside Director whose Board membership is terminated
due to death shall be immediately exercisable. Notwithstanding
paragraph (d) above, the Outside Director's designated beneficiary or
estate if no beneficiary has been designated
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may exercise any Stock Options within the six-month period following
the death of the Outside Director.
(f) Total Disability of Outside Director. Notwithstanding paragraphs 6(c)
or 6(d) above, the Automatic Option Grants and Reload Stock Options
that have been awarded to an Outside Director whose Board membership
is terminated due to Total Disability shall be immediately exercisable
and all Stock Options shall remain exercisable within the six-month
period following the Outside Director's termination for 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 Corporation.
(g) Change of Control. Notwithstanding paragraphs 6(c) or 6(d) above, the
Automatic Option Grants and Reload Stock Options that have been
awarded to an Outside Director shall be immediately exercisable and
all Stock Options shall remain exercisable for a six-month period if a
Change of Control occurs. Notwithstanding the above, Stock Options
that are awarded 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 Corporation's voting stock or a change in the
composition of the Board 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 Corporation;
(ii) a corporation owned, directly or indirectly, by the
stockholders of the Corporation in substantially the same
proportions as their ownership of the Corporation; 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 Corporation representing 25% or more of the total
voting power of the Corporation's then outstanding stock;
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(2) a tender offer is made for the stock of the Corporation by a
person other than a person described in subparagraph 6(g)(1), and
one of the following occurs:
(i) the person making the offer owns or has accepted for payment
stock of the Corporation representing 25% or more of the
total voting power of the Corporation'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 Corporation's outstanding stock when the offer
terminates;
(3) during any period of two consecutive years there shall cease to
be a majority of the Board comprised as follows: individuals who
at the beginning of such period constitute the Board and any new
director(s) whose election by the Board or nomination for
election by the Corporation'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 Corporation approve a merger or
consolidation of the Corporation with any other company other
than:
(i) such a merger or consolidation which would result in the
Corporation'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 Corporation'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 Corporation 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 subparagraph 6(g)(4), "surviving entity"
shall mean only an entity in which all of the Corporation's
stockholders become stockholders by the terms of such merger or
consolidation, and the phrase
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"directors of the Corporation who were directors immediately
prior thereto" shall not include:
(A) any director of the Corporation who was designated by a
person who has entered into an agreement with the
Corporation to effect a transaction described in this
subparagraph 6(g)(4) or in subparagraph 6(g)(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 or her election by the Board or nomination for
election by the Corporation's stockholders was approved by a
vote of 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 subparagraphs 6(g)(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 any Stock Option and may be paid in any of
the following methods or combinations thereof:
(a) in United States dollars, in cash, check, bank draft or money order
payable to the order of the Corporation;
(b) 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;
or
(c) 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. Deferred Compensation.
(a) Deferral of Compensation. Subject to the terms and conditions of the
Plan, each Outside Director, by filing a written "Deferral Election"
with the Secretary in such form as the Secretary may from time to time
require, may elect to defer until
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the Distribution Date (as defined below) the receipt of all or any
portion of the Fees that are otherwise payable to him or her in the
form of Common Stock ("Eligible Deferral Amounts"). For purposes of
the Plan, an Outside Director's "Distribution Date" shall be the date
on which the Outside Director ceases to be a director of the
Corporation for any reason. An Outside Director's Deferral Election
shall be effective with respect to Eligible Deferral Amounts otherwise
payable to him or her for services rendered after the last day of the
Plan Year in which such election is filed with the Secretary;
provided, however, that:
(1) if an individual becomes an Outside Director on or after the
first day of a Plan Year and files a Deferral Election with the
Secretary prior to the date on which he or she first becomes an
Outside Director, his or her Deferral Election shall be effective
with respect to Eligible Deferral Amounts otherwise payable to
him or her for services rendered on and after the day on which he
or she first becomes an Outside Director; and
(2) by notice filed with the Secretary and subject to the provisions
of paragraph 5(b)(A), an Outside Director may terminate or modify
any Deferral Election as to Eligible Deferral Amounts payable for
services rendered after the last day of the Plan Year in which
such notice is filed with the Secretary.
(b) Crediting and Adjustment of Deferred Amounts. The amount of any
Eligible Deferral Amounts deferred pursuant to an Outside Director's
Deferral Election in accordance with paragraph 8(a) ("Deferred
Compensation") shall be credited to a bookkeeping account maintained
by the Corporation in the name of the Outside Director (the "Deferred
Compensation Account"). An Outside Director's Deferred Compensation
Account shall be adjusted as follows:
(1) as of any date on which Eligible Deferral Amounts would have been
payable to the Outside Director in Common Stock but for his or
her Deferral Election, the Outside Director's Deferred
Compensation Account shall be credited with that number of stock
units ("Stock Units") equal to the number of Shares of Common
Stock to which he or she would have been entitled as of the
applicable date;
(2) as of the date on which Shares of Common Stock are distributed in
accordance with paragraph 8(c) or 8(d) below, the Outside
Director's Deferred Compensation Account shall be charged with an
equal number of Stock Units;
(3) as of January 1, 1999, the Outside Director's Deferred
Compensation Account shall be credited with that number of
additional Stock Units which is equal to the sum of the numbers
obtained by (i) multiplying the
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number of Stock Units credited to the Outside Director's Deferred
Compensation Account as of each record date for any dividend paid
on Common Stock during the period commencing on the first day of
the Plan Year beginning in 1998 and ending on December 31, 1998,
by (ii) the amount of the cash dividend or the fair market value
(as determined by the Committee) of any dividend in kind payable
on a share of Common Stock as of the applicable record date, and
(iii) dividing that product by the Fair Market Value of a share
of Common Stock on the applicable record date; and
(3) as of the record date for any dividend paid on Common Stock on or
after January 1, 1999, the Outside Director's Deferred
Compensation Account shall be credited with that number of
additional Stock Units which is equal to the number obtained by
(i) multiplying the number of Stock Units then credited to the
Outside Director's Deferred Compensation Account by (ii) the
amount of the cash dividend or the fair market value (as
determined by the Committee) of any dividend in kind payable on a
share of Common Stock, and (iii) dividing that product by the
then Fair Market Value of a share of Common Stock.
(c) Payment of Deferred Compensation Account. Except as otherwise
provided in paragraph 8(d), as soon as practicable after an Outside
Director's Distribution Date, the balance then credited to his or her
Deferred Compensation Account shall be distributed to the Outside
Director in a single sum in whole Shares of Common Stock, with the
number of Shares of Common Stock to be distributed equal to the number
of Stock Units credited to the Outside Director's Deferred
Compensation Account as of the Distribution Date.
(d) Payments in the Event of Death. If an Outside Director's Distribution
Date occurs on account of his or her death, the balance then credited
to his or her Deferred Compensation Account shall be distributed to
the Outside Director's Beneficiary (as described below), as soon as
practicable after his or her death, in a single sum in whole Shares of
Common Stock, with the number of Shares of Common Stock to be
distributed equal to the number of Stock Units credited to the Outside
Director's Deferred Compensation Account as of the date of his or her
death. For purposes of this Section 8, an Outside Director's
"Beneficiary" is the person or persons the Outside Director
designates, which designation shall be in writing, signed by the
Outside Director and filed with the Secretary prior to the Outside
Director's death. A Beneficiary designation shall be effective when
filed with the Secretary in accordance with the preceding sentence. If
more than one Beneficiary has been designated, the balance in the
Outside Director's Deferred Compensation Account shall be distributed
to each such Beneficiary per capita
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unless the Outside Director specifies otherwise. In the absence of a
Beneficiary designation or if no Beneficiary survives the Outside
Director, the Beneficiary shall be the Outside Director's estate.
9. Plan Administration. The Plan shall be administered by the
Compensation Committee of the Board (the "Committee").
10. Shares Subject to Plan. Subject to the provisions of Section 11, 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.
11. 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 Corporation 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 Stock Options, the option price and any other
terms of outstanding Stock Options or Stock Grants and the number of Stock Units
held under any Deferred Compensation Account shall be subject to such equitable
adjustment as the Committee, in its sole discretion, may deem appropriate in
order to prevent dilution or enlargement of outstanding Stock Options or Stock
Grants or the balance of any Deferred Compensation Account.
12. 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.
13. No Right of Continued Service. Participation in the Plan does not
give any Participant the right to be retained as a director of the Corporation
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.
14. 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.
15. 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,
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administrator or trustee of such estate, or any receiver or trustee in
bankruptcy or representative of the Participant's creditors.
16. Rights as a Shareholder. Except as otherwise provided in any Award
Agreement, a Participant shall have no rights as a stockholder of the
Corporation until he or she becomes the holder of record of Common Stock.
17. Amendment. The Plan and any attachments thereto may be amended by
action of the Board.
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Appendix A
(Effective for Plan Years commencing after January 1, 1999)
Annual Retainer fee $28,000
Annual Committee chair fee (except for Public Issues Committee): $ 4,000
Automatic Option Grant: 3,000 Shares