1
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE
SECURITIES EXCHANGE ACT OF 1934
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement [ ] Confidential, for Use of the
Commission Only (as permitted by
Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to 14a-11(c) or Rule 14a-12
CASE CORPORATION
- - --------------------------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)
- - --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if Other Than the Registrant
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and
0-11.
(1) Title of each class of securities to which transaction applies:
- - --------------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
- - --------------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee
is calculated and state how it was determined):
- - --------------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
- - --------------------------------------------------------------------------------
(5) Total fee paid:
- - --------------------------------------------------------------------------------
[ ] Fee paid previously with preliminary materials:
- - --------------------------------------------------------------------------------
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number, or
the form or schedule and the date of its filing.
(1) Amount previously paid:
- - --------------------------------------------------------------------------------
(2) Form, Schedule or Registration Statement no.:
- - --------------------------------------------------------------------------------
(3) Filing Party:
- - --------------------------------------------------------------------------------
(4) Date Filed:
- - --------------------------------------------------------------------------------
2
CASE CORPORATION LOGO
CASE CORPORATION
700 STATE STREET
RACINE, WISCONSIN 53404
April 20, 1999
Dear Stockholder:
You are cordially invited to attend the 1999 Annual Meeting of Stockholders
which will begin at 9:00 a.m. on Wednesday, May 12, 1999. The meeting will be
held at the Roma Lodge, 7130 Spring Street, Racine, Wisconsin. The formal Notice
of Meeting and Proxy Statement containing further information about the meeting
are on the following pages.
The primary business of the meeting will be to elect directors for the coming
year, and to approve the Case Corporation Employee Stock Purchase Plan as
amended and the selection of independent public accountants. In addition, we
will review our 1998 results and look ahead at 1999.
During 1998, we reached record sales of construction equipment and grew the
serviced portfolio of our financial services business to an all-time high of
$6.8 billion. However, in the face of an industry-wide downturn in the
agricultural equipment market in the second half of the year, we took a number
of actions on a proactive basis including lower equipment production, a global
headcount reduction program, and lower growth-related spending. The accompanying
copy of our 1998 Annual Report gives a more complete picture of the year. We are
successfully managing through this cyclical change in the agricultural equipment
market and have entered 1999 confident that we have taken steps to maximize our
performance under current conditions. As a result, we are in an excellent
position to show rapid improvement when the market rebounds.
Your vote at the meeting is important no matter how many shares you own. This
year, stockholders of record will have a choice of designating a proxy to vote
their shares over the Internet, by telephone, or by signing and dating the
enclosed Proxy/Voting Instruction Card and returning it in the accompanying
envelope. Page 1 of the Proxy Statement provides more information on which
voting method may be available to you. Regardless of the voting method you
choose, you are encouraged to vote promptly and to specify your choices on
matters to be voted upon. It is not necessary to specify any choice if you wish
to vote in accordance with the recommendations of the Board of Directors. I hope
that you will be able to attend the meeting. If you do, you may vote your stock
in person even though you have previously designated a proxy.
If you have any questions about the matters being voted upon or require
assistance in completing your Proxy/ Voting Instruction Card, contact Bryan
Kneeland in Investor Relations at 414/636-5390.
Very truly yours,
ROSSO SIG
Jean-Pierre Rosso
Chairman and Chief Executive Officer
3
CASE CORPORATION LOGO
CASE CORPORATION
700 State Street
Racine, Wisconsin 53404
(414) 636-6011
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
MAY 12, 1999
To the Stockholders of Case Corporation:
The Annual Meeting of Stockholders of Case Corporation will be held at the
Roma Lodge, 7130 Spring Street, Racine, Wisconsin, on Wednesday, May 12, 1999,
at 9:00 a.m., local time, for the purpose of considering and voting upon:
- The election of a Board of Directors to serve until the next Annual
Meeting and until their successors are elected and have qualified,
- The Case Corporation Employee Stock Purchase Plan as amended,
- The appointment of Arthur Andersen LLP as independent public accountants
for the year 1999, and
- Such other matters as may properly come before the Annual Meeting.
The close of business on March 26, 1999, has been fixed as the record date
for determination of common stockholders entitled to notice of and to vote at
the Annual Meeting. A list of these stockholders will be maintained and open for
examination by any stockholder, for any purpose germane to the Annual Meeting,
during regular business hours at the above address of Case for ten days prior to
the meeting.
By order of the Board of Directors
RICHARD S. BRENNAN
Secretary
Racine, Wisconsin
April 20, 1999
4
PROXY STATEMENT
TABLE OF CONTENTS
PAGE
----
GENERAL INFORMATION......................................... 1
ELECTION OF DIRECTORS....................................... 1
Nominees for Election to the Board of Directors........ 1
The Board of Directors and Its Committees.............. 4
Compensation of Directors.............................. 5
STOCK OWNERSHIP............................................. 7
Directors and Executive Officers....................... 7
Other Stock Ownership.................................. 8
Section 16(a) Beneficial Ownership Reporting
Compliance............................................ 9
EXECUTIVE OFFICER COMPENSATION.............................. 10
Summary Compensation Table............................. 10
Option Grants in 1998.................................. 11
Aggregated Option Exercises in 1998 and Year-End Option
Values................................................ 11
Employment Contracts, Termination of Employment and
Change-in-Control Arrangements........................ 12
Compensation Committee Report on Executive
Compensation.......................................... 13
Compensation Committee Interlocks and Insider
Participation......................................... 16
STOCK PRICE PERFORMANCE GRAPH............................... 17
CERTAIN RELATIONSHIPS AND TRANSACTIONS...................... 17
APPROVAL OF THE EMPLOYEE STOCK PURCHASE PLAN................ 18
Plan Summary........................................... 18
U.S. Tax Effects....................................... 18
Plan Benefits.......................................... 19
APPROVAL OF APPOINTMENT OF INDEPENDENT PUBLIC ACCOUNTANTS... 19
OTHER MATTERS............................................... 19
Voting of Shares....................................... 19
Proxy Solicitation Expense............................. 20
Stockholder Proposals.................................. 20
Director Nominations................................... 21
EXHIBIT A -- CASE CORPORATION EMPLOYEE STOCK PURCHASE
PLAN...................................................... A-1
5
CASE CORPORATION LOGO
CASE CORPORATION
700 State Street
Racine, Wisconsin 53404
(414) 636-6011
PROXY STATEMENT
ANNUAL MEETING OF STOCKHOLDERS TO BE HELD MAY 12, 1999
---------------------------------
GENERAL INFORMATION
This Proxy Statement is furnished in connection with the solicitation by
the Board of Directors of Case Corporation of proxies for use at the 1999 Annual
Meeting of Stockholders of Case to be held on May 12, 1999 and any adjournments
thereof. Case will send the Proxy Statement and accompanying Proxy/Voting
Instruction Card on or about April 20, 1999 to common stockholders of record.
You will be entitled to notice of and to vote at the Annual Meeting only if
you are a common stockholder of record on Case's books at the close of business
on March 26, 1999. These stockholders will be entitled to one vote per share.
There were 74,324,072 shares of common stock of Case outstanding at the close of
business on the record date. The presence in person or by proxy of the holders
of shares of common stock representing a majority of all outstanding shares of
common stock entitled to vote will constitute a quorum. Inspectors of election
appointed for the Annual Meeting will tabulate votes cast in person or by proxy
and determine whether a quorum is present.
Starting this year, stockholders of record may designate a proxy to vote
their shares of common stock at the Annual Meeting by using the Internet,
calling a toll-free telephone number or, if they prefer, by signing and mailing
the enclosed proxy card as they have done in the past. If you are a stockholder
of record and wish to designate your proxy by using the Internet or by
telephone, refer to the instructions set forth on the enclosed proxy card. If
your shares of common stock are held in "street name" by a broker, bank or other
nominee, you will receive instructions from them about how to have your shares
voted.
-----------------------------------
ELECTION OF DIRECTORS
NOMINEES FOR ELECTION TO THE BOARD OF DIRECTORS
The Board of Directors has fixed the number of directors to be elected at
eight, each of whom is to serve for a term to expire at the 2000 Annual Meeting
of Stockholders and until a successor is duly elected and qualified. Mr. Thomas
N. Urban, a director of Case since August 1995, retired from Case's Board on
July 10, 1998. Unless authority is withheld in accordance with instructions on
the proxy card, the persons named as proxies in the proxy card, or their
substitutes, will vote for the following nominees for director, each of whom has
been designated as such by the Board of Directors. If, for any reason not
presently known, any of the nominees is not available for election, a proxy may
be voted for another person selected by the Board of Directors or the size of
the Board of Directors may be reduced. Holders of the proxies may also vote for
fewer than eight nominees if, in the judgment of the
1
6
proxy holders, such action is necessary or desirable. Directors are elected by
the affirmative vote of the holders of a plurality of the shares present, in
person or by proxy, and authorized to vote on the matter, with the result that
votes withheld will not affect the outcome of an election.
The following information, including age and principal occupation for the
last five years, has been furnished by the respective nominees. All of the
following nominees are presently serving as members of Case's Board of
Directors.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE
FOR THE FOLLOWING NOMINEES:
Pei-Yuan Chia PEI-YUAN CHIA DIRECTOR
SINCE 1997
60, served as Vice Chairman of Citicorp, a global financial
services company, and its principal subsidiary, Citibank,
N.A., between 1994 and 1996, where he headed its global
consumer business since 1992 and had added responsibility as
the senior customer and government contact for Asia. Mr.
Chia became a director of Citicorp and Citibank in 1993,
retiring from those directorates and his Vice Chairman
positions in 1996. Mr. Chia is also a director of American
International Group, Inc. and Baxter International Inc.
Ronald E. Goldsberry RONALD E. GOLDSBERRY DIRECTOR
SINCE 1998
56, Vice President of Global Service Business Strategy of
the Ford Motor Company, a global manufacturer and marketer
of automobiles, trucks and related parts and accessories,
since January 1999. He previously served Ford as Vice
President and General Manager of Ford Customer Service
Division from 1994 to 1998 and as Executive Director of
Sales and Service Strategies from 1990 to 1994. Dr.
Goldsberry is also a director of UNUM Corporation.
Jeffery T. Grade JEFFERY T. GRADE DIRECTOR
SINCE 1995
55, Chairman and Chief Executive Officer of Harnischfeger
Industries, Inc., a manufacturer of mining equipment and
paper-making machinery, since 1993. He previously served as
President and Chief Executive Officer of Harnischfeger from
1992 to 1993 and President and Chief Operating Officer from
1986 to 1992. In addition to Harnischfeger, Mr. Grade is
also a director of L.G. & E. Energy Corp.
Thomas R. Hodgson THOMAS R. HODGSON DIRECTOR
SINCE 1997
57, served as President and Chief Operating Officer of
Abbott Laboratories, a global diversified health care
products company, between 1990 and 1998. He joined Abbott in
1972, becoming Executive Vice President and a director in
1985, retiring from that directorate and from his position
as President and Chief Operating Officer in 1998. Mr.
Hodgson is also a director of The St. Paul Companies, Inc.
2
7
Katherine M. Hudson KATHERINE M. HUDSON DIRECTOR
SINCE 1996
52, President and Chief Executive Officer of Brady
Corporation, a manufacturer of coated films and industrial
products, since January 1994. Prior to assuming her position
with that company, she was Vice President and General
Manager of the Professional, Printing and Publishing Imaging
Division of Eastman Kodak Company, which is engaged
primarily in developing, manufacturing, and marketing
consumer and commercial imaging products, since 1991, and
Chief Information Officer of that company from 1988 through
1991. In addition to Brady, Ms. Hudson is also a director of
Honeywell Inc.
Gerald Rosenfeld GERALD ROSENFELD DIRECTOR
SINCE 1994
52, Managing Member of G Rosenfeld & Co LLC, a management,
strategy and investment consulting firm, since November
1998. Prior thereto, he was Senior Managing Director of
NationsBanc Montgomery Securities LLC from April to November
1998, a Managing Director and head of Investment Banking of
Lazard Freres & Co. LLC from 1992 to April 1998, and a
Managing Director and Group Head at Bankers Trust Securities
Inc. from 1988 to 1992, each of these entities being
investment banking firms.
Jean-Pierre Rosso JEAN-PIERRE ROSSO DIRECTOR
SINCE 1994
58, Chairman and Chief Executive Officer of Case since
October 1997. Prior thereto, he served as its Chairman,
President and Chief Executive Officer since March 1996, and
as its President and Chief Executive Officer from April
1994, when he joined Case. Prior to April 1994, Mr. Rosso
was President of the Home and Building Control business of
Honeywell Inc., a producer of advanced technology products,
since 1992 and served as President of that company's
European operations from 1987 through 1991. He is a member
of The Business Roundtable. Mr. Rosso is also a director of
ADC Telecommunications, Inc., Crown Cork & Seal Company,
Inc., Medtronic, Inc. and Ryerson Tull, Inc.
Theodore R. Tetzlaff THEODORE R. TETZLAFF DIRECTOR
Photo SINCE 1994
55, Partner in the law firm of Jenner & Block, Chicago,
since 1976 and Chairman of its Executive Committee and
Operations & Finance Committee since July 1997. Mr. Tetzlaff
is also General Counsel of Tenneco Inc., serving in that
capacity since July 1992. He was formerly Vice President,
Legal and External Affairs, of Cummins Engine Company, Inc.
from 1980 to 1982. Mr. Tetzlaff is also a director of
Continental Materials Corp. and a Commissioner of the Public
Building Commission of Chicago.
3
8
THE BOARD OF DIRECTORS AND ITS COMMITTEES
DIRECTOR OVERSIGHT
Case is governed by a Board of Directors. The directors discharge their
responsibilities at Board and director committee meetings, and through telephone
contact and other communications with each other and with the Chairman and Chief
Executive Officer and other members of management regarding the business of
Case.
During 1998, the Board of Directors held eight meetings. Each director
attended 75% or more of the aggregate meetings of the Board of Directors, and of
the committees of the Board to which the director was assigned, during the time
the director served.
There are five standing committees of the Board of Directors, including the
Finance Committee and the Public Issues Committee which were established by
action of the Board on May 13, 1998. The committees have the following members
and the responsibilities described below.
AUDIT COMMITTEE
Ms. Hudson and Messrs. Goldsberry and Tetzlaff serve as members of the
Audit Committee. Ms. Hudson acts as Chairperson of the Committee. The Committee
met three times during 1998 and has the responsibility, among other things, to:
- recommend the selection of Case's independent public accountants,
- review and approve the scope of the independent public accountants' audit
activity and extent of non-audit services,
- review with management and the independent public accountants the adequacy
of Case's basic accounting system and the effectiveness of Case's internal
audit plan and activities,
- review with management and the independent public accountants Case's
financial statements which are the subject of the independent public
accountants' certification,
- exercise general oversight over Case's financial reporting process,
- review litigation and other legal matters that may affect Case's financial
condition, and
- monitor compliance with Case's corporate policies.
COMPENSATION COMMITTEE
Messrs. Rosenfeld, Chia, Grade and Hodgson serve as members of the
Compensation Committee. Mr. Rosenfeld acts as Chairperson of the Committee. The
Compensation Committee met four times during 1998 and has the responsibility,
among other things, to:
- establish the salary rates of executive officers of Case,
- examine periodically the compensation structure of Case,
- administer the incentive and deferred compensation plans of Case, and
- make recommendations to the Board of Directors concerning long-term plans
for executive compensation.
A subcommittee of the Compensation Committee, the Equity Committee,
comprised of Messrs. Chia, Grade and Hodgson, has the responsibility of making
stock option grants, stock awards and other equity-based awards pursuant to
Case's Equity Incentive Plan to officers of Case who are subject to Section 16
of the Securities Exchange Act of 1934. The Equity Committee met twice during
1998.
FINANCE COMMITTEE
Messrs. Grade, Chia and Rosenfeld serve as members of the Finance
Committee. Mr. Grade acts as Chairperson of the Committee. The Finance Committee
met twice during 1998 and has the responsibility, among other things, to review
and make recommendations to the Board of Directors of Case on major transactions
or programs involving a proposed:
- acquisition, joint venture or divestiture,
- capital investment,
- short-term or long-term financing, including the public offering or private
placement of debt securities, and
- sale, repurchase or split of equity securities.
NOMINATING COMMITTEE
Mr. Hodgson and Ms. Hudson serve as members of the Nominating Committee.
Mr. Hodgson acts as Chairperson of the Committee. The Nomi-
4
9
nating Committee met three times during 1998 and has the responsibility, among
other things, to:
- identify, with the direct input of the Chairman and Chief Executive Officer,
possible candidates to serve as non-employee directors of Case in accordance
with the guidelines and criteria set forth in Case's Corporate Governance
Guidelines,
- aid in attracting qualified candidates to serve as non-employee directors,
- assess the Board's performance annually as provided in the Guidelines, and
- review, assess and make recommendations to the Board regarding the size and
composition of the Board.
PUBLIC ISSUES COMMITTEE
Ms. Hudson and Messrs. Goldsberry and Tetzlaff serve as members of the
Public Issues Committee. Ms. Hudson acts as Chairperson of the Committee. The
Public Issues Committee met once during 1998 and has the responsibility, among
other things, to review and report to the Board of Directors of Case on:
- public policy issues which could significantly affect (a) the operations of
Case or (b) the related interests of its stockholders, employees or
customers, or the communities where Case is located, and
- policies, practices and programs of Case pertaining to such issues.
-------------------------------------------------
COMPENSATION OF DIRECTORS
Directors who are salaried officers of Case or of any of its subsidiaries
do not receive any compensation for service as a director or a member of any
committee of the Board of Directors.
ATTENDANCE FEES
Each outside director is paid an attendance fee of $1,000, plus expenses,
for each meeting of the Board of Directors and each committee meeting attended.
OUTSIDE DIRECTORS' EQUITY COMPENSATION PLAN
Pursuant to the Outside Directors' Equity Compensation Plan, outside
directors are each paid an annual retainer fee of $28,000 (payable all in common
stock or, if elected by the director, up to $14,000 in cash with the remainder
in common stock). In addition, each outside director who serves as a committee
chair (except for the Public Issues Committee) is paid an annual committee chair
fee of $4,000 (payable all in common stock or, if elected by the director, up to
$2,000 in cash with the remainder in common stock), per committee chair held.
Annual retainer fees and committee chair fees are paid on a quarterly basis on
the last day of each plan year quarter. Any individual becoming or ceasing to be
a director between annual meetings of stockholders will be paid these retainer
fees and committee chair fees, if any, on a pro rata basis.
Outside directors may elect to defer all or a portion of their annual
retainer fees and committee chair fees otherwise payable to them in common
stock. If a director makes a deferral election, a number of stock equivalent
units will be credited to the director's deferred compensation account. The
number of stock equivalent units credited will be determined by dividing the
amount of fees that would have been paid to the director in common stock but for
the deferral election, by the fair market value of a share of common stock on
the date such fees would otherwise have been paid to the director. Additional
stock units will be credited to directors' accounts to reflect dividends paid on
common stock. The amount of such additional units will be determined by
multiplying the number of stock units credited to a director's account as of the
record date for the dividend by the amount of the dividend paid on a share of
common stock and dividing that product by the fair market value of a share of
common stock on the record date. Dividends for the portion of the 1998 plan year
beginning prior to January 1, 1999 were credited as of January 1, 1999. Case
will distribute the deferred amounts in a lump sum, in shares of common stock,
at the time the director terminates service as a director. The directors will
have no voting rights with respect to stock equivalent units credited to their
accounts.
Outside directors may also elect to forego payment of all or any portion of
the fees otherwise payable in common stock or in cash to the director on or
after January 1, 1999 and to instead receive an option to purchase shares of
common stock at a purchase price per share equal to the fair market
5
10
value of common stock on the date the fees would otherwise have been paid to the
director. The number of shares subject to the option granted pursuant to a
director's election will be equal to the amount of the fees that the director
elected to forego, multiplied by four and divided by the fair market value of a
share of common stock on the date the fees would otherwise have been paid to the
director.
On the date of each annual meeting of stockholders, each outside director
receives an option to purchase 1,500 shares (3,000 shares beginning with the
1999 Annual Meeting) of common stock at a purchase price per share equal to the
fair market value of common stock on the date of grant. Any individual becoming
a director between annual meetings of stockholders will receive an option to
purchase a pro rata number of shares of common stock, based on the date of such
appointment, with an exercise price equal to the fair market value of common
stock on the date of such appointment.
Options granted to the directors as described above will remain in effect
for ten years after the date of grant (or, if earlier, six months after the date
an individual ceases to be an outside director) and become exercisable three
years after the date of grant (or, if earlier, in the case of options which have
been outstanding for at least six months, on the date the individual ceases to
be an outside director, unless such individual has been removed by the
stockholders for cause); provided, however, that Elective Options will be
immediately exercisable upon grant but any shares purchased upon exercise of an
Elective Option may not be sold until six months after the grant date of the
Elective Option. If a director ceases to serve in such capacity because of death
or disability, then the options granted to that director will automatically vest
(to the extent not already vested) and become exercisable for a six-month
period. Upon a change-in-control of Case, all stock options will vest (to the
extent not already vested) and will remain exercisable for a six-month period
following the change-in-control.
Upon exercise of an option granted under the plan, a director who delivers
shares of common stock to pay the option exercise price will be granted, upon
such delivery and without any further action by the Board of Directors or
Compensation Committee, an additional option (a "Reload Stock Option") to
purchase the number of shares so delivered upon exercise. The Reload Stock
Options are granted at fair market value on the grant date, become exercisable
six months from the grant date and expire coincident with the options they
replace. All other terms of the Reload Stock Option are the same as those that
apply to the original option to which it relates. Directors are limited to one
Reload Stock Option in any 12 month period and a maximum of five Reload Stock
Options with respect to any option granted. No Reload Stock Option will be
granted within six months prior to the scheduled expiration date of the option
to which it relates.
6
11
------------------------------
STOCK OWNERSHIP
DIRECTORS AND EXECUTIVE OFFICERS
The following table shows the number of shares of common stock and
Cumulative Convertible Second Preferred Stock of Case beneficially owned as of
March 31, 1999, with sole voting and investment power except as indicated, and
the number of performance share units held by each director and executive
officer whose name is set forth in the Summary Compensation Table herein, and
all directors and executive officers as a group. As of March 31, 1999, no
director or executive officer owned any of Case's Series A Cumulative
Convertible Preferred Stock.
NUMBER OF SHARES AND
NATURE OF BENEFICIAL OWNERSHIP
- - -----------------------------------------------------------------------------------------------------
CUMULATIVE NUMBER OF
COMMON CONVERTIBLE SECOND PERFORMANCE SHARE
STOCK(1) PREFERRED STOCK(2) UNITS HELD(3)
- - -----------------------------------------------------------------------------------------------------
DIRECTORS
Pei-yuan Chia......................... 4,911 -- --
Ronald E. Goldsberry.................. 3,414 -- --
Jeffery T. Grade...................... 4,455 -- --
Thomas R. Hodgson..................... 6,118 -- --
Katherine M. Hudson................... 14,039 -- --
Gerald Rosenfeld...................... 7,344 -- --
Jean-Pierre Rosso..................... 647,755 20,500 137,000
Theodore R. Tetzlaff.................. 7,782 -- --
EXECUTIVE OFFICERS
Steven G. Lamb........................ 297,682 5,000 95,000
Theodore R. French.................... 234,824 4,000 73,000
Richard M. Christman.................. 162,915 3,000 18,000
Richard S. Brennan.................... 34,000 -- --
All directors and executive officers
as a group........................... 1,425,239 32,500 323,000
- - -----------------------------------------------------------------------------------------------------
(1) Excludes shares of common stock into which Case's Cumulative Convertible
Second Preferred Stock (described below) may currently be converted.
Includes shares of common stock with respect to which directors and
executive officers have the right to acquire beneficial ownership through
the exercise of stock options which are vested or will become vested
within 60 days of March 31, 1999 under Case's Equity Incentive Plan or its
Outside Directors' Equity Compensation Plan as follows: Mr. Brennan:
30,000 shares; Mr. Chia: 1,414 shares; Mr. Christman: 129,432 shares; Mr.
French: 140,100 shares; Dr. Goldsberry: 1,414 shares; Mr. Grade: 3,616
shares; Mr. Hodgson: 1,616 shares; Ms. Hudson: 2,783 shares; Mr. Lamb:
172,432 shares; Mr. Rosenfeld: 3,616 shares; Mr. Rosso: 436,410 shares;
Mr. Tetzlaff: 3,414 shares; and all directors and executive officers as a
group: 926,247 shares. Shares of common stock reported as beneficially
owned by Mr. Christman include 52,197 shares of common stock as to which
he shares beneficial ownership. The percent of the class of common stock
owned by each director and executive officer was less than 1%, and the
percent owned by all directors and executive officers as a group was 1.9%.
(2) These non-voting shares, each of which is convertible into 2.2883 shares
of common stock, are held under Case's Equity Incentive Plan. Messrs.
Rosso, Lamb, French, Christman and all directors and executive officers as
a group own 54.7%, 13.3%, 10.7%, 8.0% and 86.7%, respectively, of Case's
Cumulative Convertible Second Preferred Stock.
(3) The performance share units are referred to in footnote (3) to the Summary
Compensation Table on page 10 hereof. Messrs. Rosso, Lamb, French and
Christman and all directors and executive officers as a group hold 28.8%,
20.0%, 15.3%, 3.8% and 67.8% respectively, of Case's performance share
units.
7
12
OTHER STOCK OWNERSHIP
At March 31, 1999, the only persons known by Case to be beneficial owners
of five percent or more of shares of common stock are listed below. Persons
sharing beneficial ownership of some or all of the same securities are shown in
italics below the primary reporting person and share the same address except as
indicated. The footnote following each primary reporting person's name explains
any such shared beneficial ownership.
NAME AND ADDRESS OF NUMBER OF SHARES PERCENT OF
BENEFICIAL OWNER BENEFICIALLY OWNED CLASS
- - -------------------------------------------------------------------------------------------------
Brandes Investment Partners, L.P.(1)....................... 4,323,655 5.9%
12750 High Bluff Drive
San Diego, CA 92130
Brandes Investment Partners, Inc...................... 4,323,655 5.9%
Brandes Holdings, L.P................................. 4,323,655 5.9%
Charles H. Brandes.................................... 4,323,655 5.9%
Glenn R. Carlson...................................... 4,323,655 5.9%
Jeffrey A. Busby...................................... 4,323,655 5.9%
- - -------------------------------------------------------------------------------------------------
FMR Corp.(2)............................................... 5,049,446 6.93%
82 Devonshire Street
Boston, MA 02109
Edward C. Johnson 3d.................................. 5,049,446 6.93%
Abigail Johnson....................................... 5,049,446 6.93%
Fidelity Management & Research Company................ 4,938,900 6.78%
Fidelity Magellan Fund................................ 4,140,000 5.68%
- - -------------------------------------------------------------------------------------------------
Morgan Stanley Dean Witter & Co.(3)........................ 7,886,852 10.83%
1585 Broadway
New York, NY 10036
Miller Anderson & Sherrerd, LLP....................... 6,460,655 8.87%
1 Tower Bridge, Suite 1100
West Conshohocken, PA 19428
- - -------------------------------------------------------------------------------------------------
Wellington Management Company, LLP(4)...................... 7,415,900 10.18%
75 State Street
Boston, MA 02109
Vanguard Windsor Funds................................ 7,415,000 10.18%
P.O. Box 2600
Valley Forge, PA 19482
- - --------------------------------------------------------------------------------
(1) These entities and individuals reported shared voting and investment power
as to these shares on a Schedule 13G dated February 11, 1999, containing
information as of December 31, 1998.
(2) FMR Corp. reported aggregate sole voting power as to 87,646 shares and,
together with Edward C. Johnson 3d and Abigail Johnson, sole investment
power as to 5,049,446 shares on a Schedule 13G dated February 12, 1999,
containing information as of December 31, 1998. Fidelity Management &
Research Company is a wholly-owned subsidiary of FMR Corp. and an
investment advisor to Fidelity Magellan Fund and other investment
companies.
(3) Morgan Stanley Dean Witter & Co. reported shared voting power as to
6,835,989 shares and shared investment power as to 7,886,852 shares, and
its wholly-owned subsidiary, Miller Anderson & Sherrerd, LLP reported
shared voting power as to 5,582,155 of these shares and shared investment
power as to 6,460,655 of these shares, on a Schedule 13G dated February 5,
1999, containing information as of December 31, 1998.
(4) Wellington Management Company, LLP reported shared voting power as to 900
shares and shared investment power as to 7,415,900 shares owned by its
clients, including Vanguard Windsor Funds, on a Schedule 13G dated
December 31, 1998, containing information as of December 31, 1998.
Vanguard Windsor Funds reported sole voting power and shared investment
power of 7,415,000 of those shares, on a Schedule 13G dated February 10,
1999, containing information as of December 31, 1998.
8
13
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 requires Case's
officers and directors, and persons who own more than ten percent of a
registered class of Case's equity securities, to file reports of securities
ownership and changes in such ownership with the Securities and Exchange
Commission. Officers, directors and greater-than-ten-percent shareholders also
are required by rules promulgated by the SEC to furnish Case with copies of all
Section 16(a) forms they file. Based solely on a review of the copies of Section
16(a) forms furnished to Case, and certain written representations received by
Case from reporting persons indicating that no other reports were required, Case
knows of no reporting persons who failed to file Section 16(a) forms on a timely
basis for 1998.
9
14
----------------------------------------------
EXECUTIVE OFFICER COMPENSATION
SUMMARY COMPENSATION TABLE
The following table sets forth the remuneration for the years indicated
paid by Case for services rendered by its Chairman and Chief Executive Officer
and each of its four other most highly compensated executive officers who served
during 1998.
LONG-TERM
ANNUAL COMPENSATION COMPENSATION AWARDS
OTHER RESTRICTED SECURITIES
NAME AND ANNUAL STOCK UNDERLYING ALL OTHER
PRINCIPAL POSITION YEAR SALARY BONUS(1) COMPENSATION(2) AWARDS($)(3) OPTIONS(#) COMPENSATION(4)
- - -------------------------------
Jean-Pierre Rosso............. 1998 $850,008 $ -- $100,666 $2,608,125 390,000 $163,980
Chairman and Chief 1997 800,004 1,210,539 133,447 -- 221,310 145,605
Executive Officer 1996 700,008 1,283,333 81,974 1,337,500 75,000 81,067
Steven G. Lamb................ 1998 560,004 -- 71,878 1,805,625 270,000 78,955
President and Chief 1997 515,004 677,280 188,307 -- 150,000 80,289
Operating Officer 1996 439,375 466,667 474,116 535,000 20,000 15,450
Theodore R. French............ 1998 440,004 -- 59,474 1,404,375 210,000 55,523
President, Financial 1997 391,252 416,788 51,792 -- 120,000 53,890
Services, and Chief 1996 314,500 320,000 110,024 535,000 15,000 14,056
Financial Officer
Richard M. Christman.......... 1998 285,000 -- 18,752 401,250 50,000 71,164
Senior Vice President 1997 300,000(5) 196,648 46,670 -- 30,000 115,054
1996 259,008 169,125 33,581 171,200 6,800 36,176
Richard S. Brennan............ 1998 335,000 -- -- 40,125 6,000 --
General Counsel 1997 320,000 130,000 -- -- 3,000 --
and Secretary 1996 309,000 100,000 -- 53,500 3,000 --
- - --------------------------------------------------------------------------------
(1) Includes the value of shares received pursuant to a program which permits
participants to exchange part or all of their annual cash bonus for shares
of common stock equal in value to 133 1/3% of the foregone cash award.
Shares awarded under such program for 1997 were subject to a forfeiture
provision and a restriction on disposition for twelve months, and for 1996
were subject to a restriction on disposition for six months. Pursuant to
the program, Messrs. Rosso, Lamb, French and Christman exchanged $520,000,
$510,000, $50,000 and $61,600 of cash bonus, respectively, in 1997, and
exchanged $550,000, $200,000, $60,000 and $12,375 of cash bonus,
respectively, in 1996.
(2) Includes (a) during 1998: for Mr. Rosso, $30,655 in family benefits; (b)
during 1997: for Mr. Rosso, $35,534 in family benefits; and (c) during
1996: for Mr. Rosso, $25,379 in family benefits; for Mr. Lamb, $161,494 in
relocation expenses; and for Mr. French, $55,329 in relocation expenses.
(3) The amounts disclosed are based on the closing price per share of common
stock on the date of the grant. Dividends will be paid on all restricted
shares. During 1998 Messrs. Rosso, Lamb, French, Christman and Brennan
were awarded 130,000, 90,000, 70,000, 20,000 and 2,000 shares of
restricted common stock, respectively, that vest in increments of 20% on
each of the first five anniversaries of the grant date. Messrs. Rosso,
Lamb, French, Christman and Brennan held 312,000, 205,000, 163,000,
44,400, and 3,000 unvested restricted shares and performance share units
(issued in 1997 and not included in this table) at December 31, 1998,
valued at $6,804,720, $4,471,050, $3,555,030, $968,364 and $65,430
respectively, based on the closing price of $21.81 per share for common
stock on such date (as reported on the New York Stock Exchange Composite
Tape).
(4) Includes amounts contributed or deferred pursuant to Case's ERISA Excess
Plan and/or Retirement Savings Plan during 1998 for the accounts of
Messrs. Rosso, Lamb, French and Christman of $132,230, $70,747, $49,297
and $59,177, respectively; amounts imputed as income for federal income
tax purposes under Case's group life insurance plan during 1998 for
Messrs. Rosso, Lamb, French and Christman of $26,343, $6,176, $4,836 and
$1,315, respectively; and interest accrued on deferred compensation during
1998 for Messrs. Rosso, Lamb, French and Christman of $5,407, $2,032,
$1,390 and $10,672, respectively.
(5) Includes a one-time cash payment of $30,000, with a gross-up for tax
purposes, received by Mr. Christman pursuant to Case's revised policy on
automobiles provided to its employees.
10
15
OPTION GRANTS IN 1998
The following table sets forth the number of shares of common stock subject
to stock options that were granted during 1998 to the persons named in the
Summary Compensation Table, and the potential realizable value of such options
assuming a 5% and 10% compounded appreciation in the market value of common
stock over the term of the option grants.
POTENTIAL REALIZABLE
VALUE AT ASSUMED
NUMBER OF % OF TOTAL ANNUAL RATES OF STOCK
SHARES OPTIONS PRICE APPRECIATION FOR
UNDERLYING GRANTED TO EXERCISE OR OPTION TERM(3)
OPTIONS EMPLOYEES BASE PRICE EXPIRATION -------------------------
NAME GRANTED(1) IN 1998 PER SHARE(2) DATE 5% 10%
- - ---------------------------------------------------------------------------------------------------------------------
Jean-Pierre Rosso 390,000 14.8% $19.7813 10/16/08 $4,851,726 $12,295,225
Steven G. Lamb 270,000 10.2% 19.7813 10/16/08 3,358,887 8,512,079
Theodore R. French 210,000 8.0% 19.7813 10/16/08 2,612,468 6,620,506
Richard M. Christman 50,000 1.9% 19.7813 10/16/08 622,016 1,576,311
Richard S. Brennan 6,000 0.2% 19.7813 10/16/08 74,642 189,157
- - --------------------------------------------------------------------------------
(1) Consists of nonqualified stock options for common stock granted under
Case's Equity Incentive Plan that become exercisable in increments of 20%
on each of the first five anniversaries following the grant date.
Exercisability may be accelerated upon death, retirement at age 65 or
older, or total disability if such event occurs at least six months after
the grant date. Under certain circumstances, the options may become
exercisable upon a Change-in-Control of Case. The nonqualified stock
options provide that a grantee who delivers shares of common stock to pay
the option exercise price will be granted an additional Reload Stock
Option to purchase the number of shares so delivered at fair market value
on the grant date, becoming exercisable six months from the grant date and
expiring coincident with the options they replace. Grantees are limited to
two Reload Stock Options in any calendar year and a total of ten Reload
Stock Options.
(2) All options were granted at fair market value on the date of grant.
(3) The dollar amounts under these columns are the result of calculations for
the period from the date of grant to the expiration of the option at the
assumed 5% and 10% annual appreciation rates set by the SEC and,
therefore, are not intended to forecast possible future appreciation, if
any, in the price of common stock. No gain to the optionee is possible
without a price increase in the shares underlying the respective options.
To realize the potential values set forth in the 5% and 10% columns of
this table, the per share market price of common stock would be 63% and
159%, respectively, above the exercise price of the options.
AGGREGATED OPTION EXERCISES IN 1998 AND YEAR-END OPTION VALUES
The following table sets forth the shares of common stock acquired and the
value realized on the exercise of options during 1998 and the number and value
of unexercised stock options for common stock held, as of December 31, 1998, by
the persons named in the Summary Compensation Table.
NUMBER OF
SHARES NUMBER OF SHARES VALUE OF UNEXERCISED
ACQUIRED ON VALUE UNDERLYING UNEXERCISED IN-THE-MONEY OPTIONS
OPTIONS HELD AT HELD AT
DECEMBER 31, 1998 DECEMBER 31, 1998*
---------
NAME EXERCISE REALIZED EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- - -------------------------------------------------------------------------------------------------------------------
Jean-Pierre Rosso -- $ -- 436,410 625,000 $ 619,019 $ 792,188
Steven G. Lamb 30,000 1,274,990 172,432 426,668 273,394 548,438
Theodore R. French 40,000 1,844,615 140,100 335,000 215,581 426,563
Richard M. Christman 50,000 2,314,870 129,432 82,268 105,269 101,563
Richard S. Brennan -- -- 30,000 10,000 -- 12,188
- - --------------------------------------------------------------------------------
* Based on the closing stock price for common stock on December 31, 1998 of
$21.81 per share.
11
16
EMPLOYMENT CONTRACTS, TERMINATION OF EMPLOYMENT AND CHANGE-IN-CONTROL
ARRANGEMENTS
During 1997, Case and Mr. Rosso amended and restated his employment
agreement. The principal provisions of the amended and restated employment
agreement included: (1) a base annual salary for 1997 of $800,000, subject to
future increases as approved by the Compensation Committee; (2) an annual target
bonus of not less than base annual salary; (3) an annual target value of stock
awards aggregating not less than $1 million; (4) non-cash compensation and
qualified/welfare benefits generally provided to Case's senior executive
officers, financial and estate planning benefits, reimbursement for certain
educational expenses of his children and a country club membership; (5) pension
benefits equal to (a) the amount that would have been payable to Mr. Rosso under
certain pension plans of his former employer had his employment with his former
employer continued until his separation from service with Case, reduced by the
actuarial equivalent of the retirement benefits payable to Mr. Rosso under (b)
those pension plans of his former employer and (c) the Case pension plans, which
benefits, payable at Mr. Rosso's normal retirement age in the form of an annual
benefit, would be approximately $581,000; and (6) severance benefits of two
times his base salary if his employment is terminated, other than for death,
disability or the gross neglect of his duties. If Mr. Rosso resigns voluntarily
or retires, he will not be entitled to the severance benefits unless he
voluntarily terminates after: (1) there is a material reduction or material
adverse alteration in the nature of his position, responsibilities or
authorities (including the failure to elect and continue to elect Mr. Rosso to
Case's Board of Directors); (2) there is a material reduction in his
compensation or benefits; (3) he becomes the holder of a lesser office or title;
or (4) his job is relocated to a location which is more than 50 miles from
Case's present location. If he receives severance, Case will continue to provide
him with all the same benefits as in effect prior to termination, his stock
options (including options of Tenneco Inc., the former parent of Case) will vest
on the date of termination, and he will be paid the value of any restricted
stock (including Tenneco restricted stock) which he forfeits. In addition, the
severance benefit will be included in calculating his minimum pension
guarantees. The employment agreement also provides that if any options
(including Tenneco options) granted to Mr. Rosso are forfeited upon termination
of his employment with Case, he will receive from Case a payment equal to the
amount by which the fair market value of common stock exceeds the exercise price
of such forfeited options. On December 10, 1997, Case's Board of Directors
approved an increase in Mr. Rosso's base annual salary to $850,000 effective
January 1, 1998. On December 9, 1998, Case's Board of Directors approved an
increase in Mr. Rosso's base annual salary to $890,000 effective January 1,
1999. On March 5, 1997, the Board authorized the establishment of a trust, the
assets of which will be subject to Case's general creditors, for the purpose of
assisting Case in meeting certain unfunded obligations of Case, including the
minimum pension guarantee under Mr. Rosso's employment agreement and certain
other obligations under Case's Deferred Compensation Plan.
Case has also entered into Change-in-Control Agreements with Messrs. Rosso,
Lamb, French and Christman. The agreements will provide severance benefits if
the executive's employment is terminated by Case for any reason other than cause
or by the executive for "good reason" within 12 months following a Potential
Change-in-Control or within 36 months following a Change-in-Control (within 24
months for Christman), as each such term is defined below. In addition, the
agreements provide severance benefits if the executive voluntarily terminates
employment during the 90-day period commencing on the first anniversary of a
Change-in-Control. Upon an eligible termination of employment, the executive is
entitled to a lump sum cash payment equal to three times (two times for Mr.
Christman) his annual base salary, plus an amount equal to three times (two
times for Mr. Christman) the greatest of (1) his bonus for the preceding year,
(2) the target bonus for the year of termination, or (3) the bonus which would
otherwise be payable to the executive for the year of termination, plus an
amount equal to three times (two times for Mr. Christman) the amount of Case's
contribution to the Case Corporation Retirement Savings Plan for the calendar
year preceding the year of termination. The executive is also entitled to 36
months (24 months for Mr. Christman) of continuing medical insurance, disability
income protection, life insurance coverage and death benefits, and perquisites.
The agreements also provide that vesting of all stock awards will accelerate
upon a Change-in-Control. If such acceleration is not permitted under the terms
of the plans pursuant to which such stock awards were made, and the executive
forfeits the award following the Change-in-Control, the executive will receive
the value of the
12
17
forfeited award in cash. If payments under the agreements would cause the
executive to be subject to excise taxes under Section 4999 of the Internal
Revenue Code, the executive will be entitled to an additional payment from Case
in the amount of such excise taxes, plus an amount equal to any taxes arising by
reason of the additional payment. Mr. Rosso will also be entitled to an
additional three years of service in determining the minimum pension guarantee
provided under his employment agreement. To the extent that Mr. Rosso receives
severance benefits under this agreement, such benefits will be in lieu of the
severance benefits otherwise payable under Mr. Rosso's employment agreement.
Generally, for purposes of these agreements, a "Change-in-Control" will be
deemed to occur (1) upon the acquisition of 25% or more of Case's voting power
or outstanding stock by any party (other than certain related parties), (2) upon
a tender offer pursuant to which the person making the offer owns or has
accepted for payment 25% or more of the total voting power of Case's stock, or
three business days before any such 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, 50% or more of such total voting power when the
offer terminates, (3) if Case's stockholders approve a merger or consolidation
of Case with any other company (unless Case's voting stock continues to
represent more than 70% of the combined voting power of Case's or the surviving
entity's voting stock, or Case's directors continue to constitute at least 50%
of the directors of the surviving entity immediately after the merger or
consolidation), or (4) if during any consecutive two-year period, the Board
consists of a majority of directors whose nomination for election was not
approved by at least two-thirds of the directors then in office who were
directors at the beginning of the two-year period or whose nomination was so
approved. A "Potential Change-in-Control" will be deemed to occur if (1) any
person who is the beneficial owner of 9.5% or more of the voting power of Case's
outstanding securities increases its beneficial ownership by 5% or more of the
voting power of Case's outstanding securities over the percentage owned on the
agreement date, (2) a tender offer is made for 25% or more of the total voting
power of Case's stock, (3) any person makes a solicitation of proxies for the
election of directors who have not been recommended by Case, (4) Case enters
into negotiations with respect to a transaction which would upon consummation
constitute a Change-in-Control, or (5) the Board adopts a resolution to the
effect that a Potential Change-in-Control has occurred for purposes of these
agreements.
An executive may terminate employment for "good reason" if (1) there is a
significant change in the nature or scope of his duties or a breach by Case of
any other provision of these agreements, (2) his office is relocated to a
location which is more than 50 miles from the location of his present office,
(3) the executive reasonably determines that, as a result of the
Change-in-Control and circumstances thereafter significantly affecting his
position, he is unable to exercise the authorities, power, function or duties
associated with his position prior to the Change-in-Control or Potential
Change-in-Control, as applicable, or (4) Case fails to obtain a satisfactory
agreement from any successor to assume and perform these agreements.
-------------------------------------------------
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The Compensation Committee of the Board of Directors is responsible for
developing and implementing executive compensation policies and programs that
support Case's primary objective of long-term maximization of stockholder value.
The Compensation Committee is comprised of four outside directors who are also
strongly committed to implementing and administering Case's executive
compensation programs in an effective manner.
GOVERNING PRINCIPLES
In overseeing Case's executive remuneration programs, the Compensation
Committee bases the programs on several principles, as set forth below.
- Place High Portion at Risk -- Case's executive compensation programs are
strongly linked to measured financial performance and place a significant
portion of compensation at risk. Approximately three-fourths of executives'
total compensation is at risk in the form of incentive compensation tied to
performance.
- Emphasize Stockholder Value Objective -- The majority of at risk
compensation is comprised of long-term, equity-based programs which serve as
the cornerstone of Case's executive compensation program. Consistent with
this principle, an executive's net worth depends heavily on appreciation in
the value of Case common stock
13
18
over the long term. Also, executives are required to own stock valued at
one-half to four times base salary, depending on responsibility level.
- Pay Competitively for Results -- The compensation offered by Case is
designed to be competitive with other manufacturing companies, as well as
high-performing companies. Long-term incentive opportunities are emphasized
which reinforce stockholder value creation and a high performance culture.
- Develop and Retain Leadership -- To assist the Board of Directors in
identifying and retaining key leadership, the Compensation Committee also
works to identify knowledgeable executives who demonstrate the ability to
deliver results that increase stockholder value. Continued development and
retention of current and future leadership is an integral part of the
overall corporate compensation strategy.
Executive compensation is also based on performance against non-financial
objectives. Executives are expected to uphold the fundamental principles
embodied in Case's Strategic Framework and its Statement of Business Conduct.
These principles primarily include a commitment to integrity, development of a
diverse organization, customer focus and continuous quality improvement. In
upholding these non-financial objectives, executives not only contribute to
their own success, but also to the success of Case's business, employees,
stockholders, and the communities in which those individuals live and work.
COMPENSATION OVERVIEW AND COMPONENTS
In determining the amount of compensation for the Chief Executive Officer
and other executives, the Compensation Committee reviews detailed competitive
compensation information provided by independent consultants specializing in
executive compensation. This includes comprehensive surveys for two Comparator
Groups, the Peer Group and High Performing Group, as well as specific
information for key direct competitors. The Peer Group consists of 22
manufacturing companies with median (50th percentile) annual revenues
approximately equal to Case. These companies were chosen because they operate in
a business similar to Case and compete for similar types of executives. The High
Performing Group consisted of 23 manufacturing companies with a history of
strong financial performance.
The survey data above is supplemented with other data sources to assist
with the verification of results and benchmarking of best practices. Some of the
companies that comprise the above Comparator Groups are included in the
published industry index in the Stock Performance Graph included in this Proxy
Statement. The Compensation Committee believes Case's competitors for executive
talent extend beyond the companies included in the published industry index
established for comparing stockholder returns.
The key elements of Case's executive compensation programs are base salary,
annual incentives and long-term incentives. Each is addressed separately below.
BASE SALARIES
Base salary levels are established annually based on a review of salary
levels for executives in the external benchmarks described above. Case attempts
to establish base salaries at the median of the Peer Group. Since Case's initial
public offering of its common stock in 1994, overall competitiveness for a
sample of executive positions has grown close to the median.
Annual increases to base salaries result generally from an individual
executive performing in accordance with Case's Performance Alignment Process, as
well as market movements and changes in individual responsibility. The
Performance Alignment Process establishes individual work assignments, detailed
goals and priorities, and expected leadership behaviors that contribute directly
to the achievement of Case's strategic business plan and annual operating plan.
The average merit increase made in January 1999 for executives was 3.8%, which
was consistent with a normal range of expected industry practice.
ANNUAL INCENTIVES
The Compensation Committee administers the Executive Compensation Plan,
which awards annual performance-based compensation in relation to the
achievement of targeted corporate financial performance goals established at the
beginning of the year. For 1998, the goals were based on the achievement of
Corporate Economic Value Added (EVA) and, at the Business Unit level, EVA,
operating income and return on net assets (RONA). EVA is defined as net
operating earnings after taxes, less the cost of capital. The resulting target
bonus levels are intended to provide the opportunity to earn
14
19
annual cash pay in the mid-range of the Peer Group, provided performance is at
an expected level. Individual bonuses may be above or below this level,
depending upon performance.
The minimum performance levels set by the Compensation Committee for 1998
were not met at the Corporate level due to a combination of adverse external
factors including, among others, continuing global economic turmoil and an
abrupt downturn in commodity prices in the North American agricultural equipment
market. As a result, no bonuses were earned at the Corporate level, which is
consistent with Case's philosophy of placing a high portion of compensation at
risk, emphasizing stockholder value creation and paying competitively for
results. At the Business Unit level, partial bonuses were paid to the extent
performance goals established at the beginning of 1998 were achieved.
LONG-TERM INCENTIVES
Long-term stock-based incentives comprise the largest portion of the value
of an executive's total compensation package and serve as the cornerstone of
Case's executive compensation program. Long-term incentives align executive
interests with those of stockholders, encourage retention of experienced
personnel and create appropriate incentives to maximize stockholder value
consistent with the dynamic business environment in which Case operates, as well
as to support the Compensation Committee's objective of developing and retaining
leadership, a variety of long-term incentives are used.
Factors considered in determining actual individual award levels include an
executive's level of responsibility, salary, historical award data, individual
performance, career potential, common stock ownership position and compensation
practices at comparator companies. The targeted amount of annual long-term
incentives awarded by Case to its executives is at the median of the Peer Group
with individual award guidelines structured to provide 75th percentile or higher
awards to high performing and/or high potential executives.
In 1998, executive officers received awards of stock options and restricted
stock. These awards were intended to support the focus on stockholder value,
retain key executives critical to Case's future success and assist in executing
strategic initiatives. Both types of awards vest over five years in equal annual
installments starting one year from the date of grant. The stock option grants
were made at fair market value on the date of grant approval and have a ten-year
term. The stock options have value only if Case's common stock price appreciates
in value from the date the options are granted.
STOCK OWNERSHIP
As mentioned in the Governing Principles earlier, the Compensation
Committee believes that tying the interests of executives to those of the
stockholders results in enhanced stockholder value. In keeping with this
principle, the Compensation Committee has established common stock ownership
guidelines that require each executive officer to retain a multiple of their
base salary in shares of common stock. Higher levels of management employees are
required to maintain a larger multiple. Executive officers were required to own
50% of their specified multiple by December 1997 and 75% by December 1998 and
are required to own 100% by December 1999. The Compensation Committee
periodically reviews the guidelines for appropriateness relative to external
considerations, as well as current ownership levels relative to the guidelines.
CHIEF EXECUTIVE OFFICER COMPENSATION
Mr. Rosso's compensation was determined consistent with the principles laid
out above. His base salary was $850,000 in 1998. While no bonus was paid to him
for 1998 as explained above, the Compensation Committee believes that Mr. Rosso
provided excellent and proactive leadership during the most difficult of
economic times. Mr. Rosso's stock option and restricted stock grants for 1998 as
previously described are designed to provide him with an additional incentive to
enhance stockholder value and continue to effectively lead the Corporation.
In order to encourage continued common stock ownership by Case's Chief
Executive Officer, Mr. Rosso's stock ownership multiple is equal to four times
his base salary. The amount of common stock Mr. Rosso beneficially owns far
exceeds his current target.
POLICY WITH RESPECT TO THE $1 MILLION DEDUCTION LIMIT
Section 162(m) of the Code limits Case's deduction for compensation paid to
its Chief Executive Officer and four other most highly compensated executive
officers to $1 million unless certain requirements are met. The policy of Case
and the Board Committees having compensation responsibilities is to establish
and maintain a compensation
15
20
program which will optimize the deductibility of compensation. Case, however,
reserves the right to authorize compensation which may not, in a specific case,
be fully deductible by Case to recognize individual achievement or to assure
payment of compensation which is competitive in the marketplace.
CONCLUSION
The Compensation Committee believes these executive compensation policies
and practices effectively serve the interest of stockholders and Case. The
various compensation programs offered are believed to be appropriately balanced
to provide increased motivation for executive officers to continue to contribute
to Case's overall future success and increase the value of Case for its
stockholders' benefit.
We will continue to monitor the effectiveness of Case's total compensation
program to meet the ongoing needs of Case.
Compensation Committee
Gerald Rosenfeld, Chairperson
Pei-yuan Chia
Jeffery T. Grade
Thomas R. Hodgson
-------------------------------------------------
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
From January 1, 1998 to May 13, 1998, Case's Compensation Committee of the
Board of Directors consisted of Messrs. Grade, Hodgson, Rosenfeld and Tetzlaff.
On the latter date, Mr. Tetzlaff was assigned to another committee and Mr. Chia
became a member of Case's Compensation Committee. None of Messrs. Chia, Grade,
Hodgson, Rosenfeld or Tetzlaff was or has been an officer or employee of Case or
any of its subsidiaries.
Except as set forth below, there were no interlocks or insider
participation with other companies within the meaning of the SEC's proxy rules
during 1998.
During 1998, Case and its subsidiaries engaged the law firm of Jenner &
Block for legal services. Mr. Tetzlaff, a director of Case, is a partner of
Jenner & Block. Case intends to engage Jenner & Block for similar services
during 1999. Pursuant to an agreement with Case, Mr. Tetzlaff has agreed to
devote whatever time is necessary to attend to his responsibilities as a
director of Case and will not receive from Jenner & Block any part of the fees
paid by Case to that firm during the period he serves as a director.
During 1998, Case and its subsidiaries engaged the services of the
investment banking firm of NationsBanc Montgomery Securities LLC. Mr. Rosenfeld,
a director of Case, was a Senior Managing Director of NationsBanc during 1998.
Case may engage NationsBanc or its affiliates for similar services during 1999.
All the transactions discussed above involving Messrs. Tetzlaff and
Rosenfeld were in the ordinary course of business.
16
21
------------------------------------------------
STOCK PRICE PERFORMANCE GRAPH
Case was first listed on the New York Stock Exchange on June 24, 1994 and
on the Chicago Stock Exchange on August 2, 1994 following an initial public
offering of Case's common stock.
The following performance graph compares changes, for the periods
indicated, in the Cumulative Total Return on an investment in common stock with
the Standard & Poor's 500 Stock Index (the "S&P 500") and the Standard & Poor's
Machinery (Diversified) Stock Index (the "S&P Machinery Index").
The comparison reflects the investment of $100 on June 30, 1994, and the
reinvestment of dividends, in each of common stock, the S&P 500 and the S&P
Machinery Index. "Cumulative Total Return" on a share of common stock, the S&P
500 and the S&P Machinery Index is measured by dividing (1) the sum of (a) the
cumulative amount of dividends for the period of June 30, 1994 through December
31, 1998 (assuming the reinvestment of dividends over such period), and (b) the
difference between the price of a share of common stock, the S&P 500 and the S&P
Machinery Index, respectively, at June 30, 1994, and each fiscal-year-end date
through December 31, 1998, by (2) the price of a share of common stock, the S&P
500 and the S&P Machinery Index, respectively, at June 30, 1994.
The stock price performance shown on this graph is not necessarily
indicative of the future stock price performance of common stock.
S&P MACHINERY INDEX S&P 500 CASE
------------------- ------- ----
6/30/94 100 100 100
12/30/94 103 105 114
12/29/95 127 144 245
12/31/96 158 177 293
12/31/97 202 236 326
12/31/98 154 304 118
--------------------------------------------------------
CERTAIN RELATIONSHIPS AND TRANSACTIONS
In July 1995, Case extended to Mr. Lamb, the President and Chief Operating
Officer of Case, an interest-free loan of $150,000 for the purchase of his
residence upon returning to the United States from an overseas assignment. The
loan is payable in ten equal installments, beginning on December 31, 1995, and
ending on December 31, 2004. The amount presently outstanding under this loan is
$90,000. In March 1996, Case extended to Mr. French, the President, Financial
Services, and Chief Financial Officer of Case, a $150,000 credit facility on the
same terms for the purchase of a residence. The amount presently outstanding
under this facility is $105,000.
Mr. Brennan, the General Counsel and Secretary of Case, is also a partner
of Mayer, Brown & Platt, and is compensated under an arrangement whereby any
salary and bonus paid by Case is paid to him by Case through that law firm. The
compensation for Mr. Brennan reflected in the Summary Compensation Table
represents the amount paid by Case to Mayer, Brown & Platt in 1998 for Mr.
Brennan's services. Case and its subsidiaries engaged Mayer, Brown & Platt for
legal services during 1998, and Case and its subsidiaries intend to retain such
firm for similar services during 1999. In 1998, the amount paid or accrued by
Case to Mayer, Brown & Platt was approximately $7.6 million for legal fees and
expenses, not including the compensation paid to Mr. Brennan reflected in the
Summary Compensation Table. Pursuant to an agreement with Case, Mr. Brennan will
not receive from Mayer, Brown & Platt any part of the fees paid by Case to that
firm during the period he serves as General Counsel and Secretary.
17
22
-------------------------------------------------------------------
APPROVAL OF THE EMPLOYEE STOCK PURCHASE PLAN
PLAN SUMMARY
The following summary of the Case Corporation Employee Stock Purchase Plan
is qualified in its entirety by the full text of the Plan, which is set forth in
Exhibit A.
The Plan was first established on February 1, 1995, has been amended
periodically since that time, and was amended and restated in its entirety as of
January 1, 1999 to: (1) extend the termination date of the Plan by one year to
December 31, 2000, (2) increase the number of shares available for purchase
under the Plan from 1,400,000 to 3,400,000, (3) modify the groups of employees
who are eligible to participate in the Plan and (4) to change the first purchase
date in 1999 from March 31 to June 30. The Plan has been approved by Case's
Board of Directors and was previously approved by the Case stockholders. As of
January 1, 1999, 44,979 shares remained available for purchase under the Plan
prior to its amendment. If shareholders approve the amended Plan, 2,044,979
shares will be available for 1999 and 2000. The Plan is intended to qualify
under Section 423 of the Internal Revenue Code, which requires that stockholders
approve any amendment which increases the number of shares available for
issuance under the plan or which modifies the group of eligible employees. As a
result, the Board of Directors is submitting the amended Plan for the approval
of the stockholders. No shares may be purchased under the Plan after December
31, 1998 unless the amended Plan is approved by stockholders.
As amended, all active employees of Case and its participating subsidiaries
are eligible to participate in the Plan. A participating subsidiary is any
corporation designated by Case in which Case has, directly or indirectly, at
least a 50% ownership interest. Eligible employees elect to participate in the
Plan during annual offering periods by authorizing payroll deductions of at
least $10 per month and no more than $21,250 per year subject to certain other
limitations imposed by the Code. Generally, offering periods under the Plan
commence on January 1 and end the following December 31. At the last business
day of each calendar quarter during the offering period (an "exercise date"),
the participant's accumulated payroll deductions as of that date are used to
purchase shares of common stock. The purchase price per share is equal to the
lower of (1) 85% of the fair market value of a share of common stock as of the
first business day of the offering period, or (2) 85% of the fair market value
of a share of common stock on the exercise date, but not less than par value.
Participants may withdraw from the Plan at any time during the offering
period by voluntarily discontinuing their payroll deductions, subject to a ten
Business day notice requirement. If the participant withdraws, the participant
may not recommence participation in the Plan until the beginning of the next
offering period. A participant may increase or decrease (except to zero) the
amount of his payroll deductions only as of the first day of an offering period.
Participation is automatically terminated upon a participant's termination of
employment for any reason. Upon a voluntary withdrawal from the Plan, or
termination of employment, all accumulated payroll deductions will be used to
purchase whole shares of common stock as of the exercise date next following the
withdrawal or termination. Any amount not used to purchase whole shares will be
returned to the participant in cash. If the stockholders do not approve the Plan
as requested, the Plan will automatically terminate and all accumulated payroll
deductions will be returned to participants.
U.S. TAX EFFECTS
A participant will not recognize taxable income upon either the grant or
exercise of the right to purchase shares under the Plan. If shares acquired
under the Plan are sold or disposed of (including by way of gift), or if the
participant dies while owning the shares, at least two years after the date the
right to purchase such shares was granted, and at least one year after the
shares were transferred to the participant, the lesser of (1) the excess of the
fair market value of the shares at the time of such disposition over the
purchase price, or (2) the excess of the fair market value of the shares at the
date of grant over an amount equal to what the purchase price would have been if
it had been computed as of the date of grant, will be treated as ordinary income
to the participant. Any further gain or disposition will be treated as long-term
capital gain and any loss will be treated as a capital loss.
If shares are sold or disposed of (other than on account of the
participant's death) before the expiration of the holding period described
above, the excess of the fair market value of the shares on the exercise date
over the purchase price will be treated as ordinary compensation income to the
participant.
18
23
This excess will constitute ordinary compensation income in the year of sale or
other disposition even if no gain is realized on the sale or a gratuitous
transfer of the shares is made. The balance of any gain will be treated as a
capital gain and will be treated as a long-term capital gain if the shares have
been held more than one year.
There will be no federal income tax consequences to Case when it grants
rights to purchase shares under the Plan or when those rights are exercised. If,
however, a participant disposes of stock acquired under the Plan before the
expiration of the holding period described above, generally Case will be
entitled to a deduction in the year of such disposition equal to the amount of
ordinary income recognized by the participant. Case will pay the brokerage fees
incurred in one sale each calendar year of shares of common stock if such shares
have been held for at least two years from the date of grant. Participants who
sell shares held for less than two years that were purchased under the Plan, or
who make more than one sale under the Plan in one calendar year, are responsible
for any brokerage costs incurred in such sale.
PLAN BENEFITS
Estimates of benefits under the Plan cannot be made because they will
depend upon the decision of an eligible employee to participate and the price of
Case's common stock on the first business day and each exercise date of the
offering period. The closing price of Case's common stock on March 31, 1999, as
reported on the New York Stock Exchange Composite Tape, was $25.375 per share.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR
APPROVAL OF THE CASE CORPORATION EMPLOYEE STOCK PURCHASE PLAN
- - --------------------------------------------------------------------------------
APPROVAL OF APPOINTMENT OF INDEPENDENT PUBLIC ACCOUNTANTS
Upon recommendation of the Audit Committee of the Board of Directors, the
Board of Directors has appointed Arthur Andersen LLP as independent public
accountants for Case to examine its consolidated financial statements for the
calendar year 1999 and has determined that it would be desirable to request that
the stockholders approve such appointment.
Representatives of Arthur Andersen LLP will be present at the Annual
Meeting and will have the opportunity to make a statement if they desire to do
so. They will also be available to respond to appropriate questions.
If the appointment of Arthur Andersen LLP is not approved, then the Audit
Committee and the Board of Directors will consider such a vote as advice to
select other independent accountants for 2000, rather than 1999, because of the
difficulty and expense involved in changing independent accountants on short
notice.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR
THE APPOINTMENT OF ARTHUR ANDERSEN LLP AS INDEPENDENT PUBLIC ACCOUNTANTS
---------------------------
OTHER MATTERS
VOTING OF SHARES
The Board of Directors is not aware of any other matters that may properly
come before the Annual Meeting. However, should any such matters come before the
Annual Meeting, it is the intention of the persons named as proxies to vote all
shares represented by proxy (unless otherwise directed by stockholders) in
accordance with their judgment on such matters pursuant to discretionary
authority granted in the proxy.
Shares represented by proxy will be voted on the proposals referred to on
the proxy, and presented at the Annual Meeting, in accordance with the
stockholder's specifications marked thereon. Stockholders are encouraged to
specify
19
24
their choices on matters to be voted upon. If no
specification is made with respect to any such proposal, shares represented by
proxy will be voted as to such proposal in accordance with the recommendation of
the Board of Directors set forth above in this Proxy Statement. A proxy may be
revoked at any time before it is voted at the meeting by voting in person or by
delivering a later dated proxy (including by Internet or telephone) or a written
notice of revocation to the Secretary of Case so as to be received by the
Secretary prior to the vote.
Case's By-Laws require that the holders of record of a majority in voting
power of the outstanding shares entitled to vote at the Annual Meeting of
Stockholders be present, in person or by proxy, to establish a quorum. Shares
abstaining with regard to a matter to be presented to the stockholders
constitute part of the quorum present with respect to such matter. However,
shares for which voting power has been withheld, such as broker non-votes, do
not constitute part of the quorum present with respect to such matter.
Consequently, the number of shares representing the quorum present for the
meeting may be greater than the shares present for action on a particular
proposal. If a quorum is present, abstentions and broker non-votes will have no
effect on the outcome of the election of directors since directors are elected
by a plurality of the votes cast. However, approval of the appointment of Case's
independent public accountants and the Employee Stock Purchase Plan will require
the affirmative vote of the holders of shares of common stock representing more
than 50% of the voting power of shares represented at the meeting in person or
by proxy and entitled to vote on the matter. As a result shares which abstain
from voting will count as votes against such appointment and the Employee Stock
Purchase Plan and broker non-votes will have no effect on the outcome.
-------------------------------------------------
PROXY SOLICITATION EXPENSE
The cost of solicitation of proxies will be borne by Case. Solicitation
will be made by mail, and may be made by directors, officers and employees,
personally or by telephone or telegram. Proxy cards and material also will be
distributed to beneficial owners of stock through brokers, custodians, nominees
and other like parties, and Case expects to reimburse such parties for their
charges and expenses. Georgeson & Co. Inc., New York, New York, has been
retained to assist Case in the solicitation of proxies at a fee estimated not to
exceed $7,000.
-------------------------------------------------
STOCKHOLDER PROPOSALS
Stockholder proposals must be received by Case by December 22, 1999 and
must otherwise comply with the rules of the SEC to be included in Case's Proxy
Statement and form of proxy for Case's 2000 Annual Meeting of Stockholders.
Stockholder proposals not included in the Proxy Statement must comply with
the advance notice procedure set forth in Case's By-Laws to be properly
considered at an annual meeting of stockholders. This procedure requires that
such proposals be submitted in writing to the Secretary of Case, at the
principal executive offices of Case, (1) not less than 90 days nor more than 120
days prior to the first anniversary of the preceding year's annual meeting, or
(2) not less than 45 days nor more than 75 days prior to the first anniversary
of the date on which Case first mailed its proxy materials for the preceding
year's annual meeting, whichever period occurs first. For the 2000 annual
meeting, this would require that notices be received no earlier than January 13,
2000 and no later than March 6, 2000. However, if the date of the annual meeting
is more than 30 days before or more than 60 days after such anniversary date,
notice by the stockholder to be timely must be so delivered not earlier than 120
days prior to such annual meeting and not later than the later of the 90th day
prior to such annual meeting or the 10th day following the day on which public
announcement of the date of such meeting is first made by Case.
20
25
DIRECTOR NOMINATIONS
A stockholder may recommend to the Nominating Committee of the Board of
Directors persons as potential nominees for director by submitting the names of
those persons in writing to the Secretary of Case.
A stockholder may directly nominate persons for election to the Board of
Directors if the stockholder submits such nomination, together with related
information required by Case's By-Laws, in writing to the Secretary of Case at
the principal executive offices of Case in the same manner as for stockholder
proposals, not included in the Proxy Statement, as described above.
By order of the Board of Directors
RICHARD S. BRENNAN
Secretary
Racine, Wisconsin
April 20, 1999
21
26
EXHIBIT A
CASE CORPORATION EMPLOYEE STOCK PURCHASE PLAN
(As Amended and Restated as of January 1, 1999,
Subject to the Approval of Stockholders at the 1999 Annual Meeting)
The Case Corporation Employee Stock Purchase Plan (the "Plan") has been
established by Case Corporation to provide Eligible Employees (as defined in
Section 1) of Case Corporation, a Delaware corporation (the "Corporation"), and
its Participating Subsidiaries (as defined in Section 1) an opportunity to
purchase shares of Common Stock of the Corporation ("Common Stock") on the terms
and conditions set forth below. This amendment and restatement of the Plan is
effective January 1, 1999, subject to approval of the Corporation's stockholders
as described herein.
1. DEFINITIONS. For purposes of the Plan, the following capitalized terms
shall have the meaning indicated.
(a) Base Pay means, for each participating employee, the regular
compensation and commissions earned during each payroll period, before any
deductions or withholding, but excluding overtime pay, bonuses amounts paid as
reimbursements of expenses and other additional compensation, under rules
uniformly applied to all participating employees.
(b) Business Day means any day on which the New York Stock Exchange
("NYSE") is open for business.
(c) Code means the Internal Revenue Code of 1986, as amended.
(d) Committee means the Compensation Committee of the Board of Directors of
the Corporation.
(e) Eligible Employees means those employees of the Corporation and its
Participating Subsidiaries who are eligible to participate in the Plan pursuant
to Section 3.
(f) Exercise Date means the last Business Day of each calendar quarter;
provided, however, that the last Business Day of the calendar quarter ending on
March 31, 1999 shall not be an Exercise Date under the Plan.
(g) Exercise Price means the lesser of (i) 85% of the Fair Market Value of
a share of the Common Stock on the Grant Date for the calendar year in which the
Exercise Date falls, or (ii) 85% of the Fair Market Value of such share on the
Exercise Date, but not less than par value.
(h) Fair Market Value as of any date means the average of the high and low
sales price per share of the Common Stock as quoted on the NYSE Composite
Transactions tape for that date.
(i) Grant Date means the first Business Day of each calendar year.
(j) Offering Period means the twelve-month period beginning on January 1 of
a particular calendar year and ending on December 31 of such calendar year.
(k) Participating Subsidiary means any Subsidiary which, with the consent
of the Corporation, participates in the Plan. Participating Subsidiaries as of
the Effective Date are set forth in Appendix A hereto.
(l) Plan Account means an account maintained by the Corporation or its
designated recordkeeper for each Eligible Employee who participates in the Plan
to which payroll deductions are credited, against which funds used to purchase
shares of Common Stock are charged and to which shares of Common Stock purchased
are credited, all as described herein.
(m) Subsidiaries means those corporations (other than the Corporation) in
which the Corporation has, either directly or indirectly, at least a 50 percent
ownership interest and which constitute subsidiaries of the Corporation within
the meaning of section 424(f) of the Code.
Any numbers preceded herein by the symbol "$" shall be references to U.S.
dollars. For non-U.S. participants, any applicable dollar limits specified
hereunder in U.S. dollars shall be converted to local currency denominations
based on the exchange rates in effect on the first day of each Plan Year.
2. STOCK SUBJECT TO THE PLAN. The Corporation shall make available
3,400,000 shares of its Common Stock for purchase under the Plan, which shares
may be authorized but unissued shares or treasury shares.
A-1
27
3. ELIGIBLE EMPLOYEES. All active employees of the Corporation or any of
its Participating Subsidiaries shall be eligible to participate in the Plan.
4. PARTICIPATION IN THE PLAN. (a) An Eligible Employee may participate in
the Plan by filing an election (an "Election") with the Corporation, or its
designated recordkeeper, in accordance with uniform and nondiscriminatory rules
established from time to time by the Corporation, which Election authorizes
payroll deductions from the employee's Base Pay. Such deductions shall commence
with the first pay period in the Offering Period beginning after such form is
filed and recorded with the Corporation or its designated recordkeeper and shall
continue until the employee terminates participation in the Plan or the Plan is
terminated. An Eligible Employee may participate in the Plan only through
payroll deductions. Other contributions will not be accepted.
(b) No employee shall be granted an option under the Plan to purchase
shares of Common Stock on any Grant Date (as described in Section 8(a)) if such
employee, immediately after the option is granted, owns stock possessing 5% or
more of the total combined voting power or value of all classes of stock of the
Corporation or any Subsidiary. For purposes of this paragraph, the rules of
section 424(d) if the Code shall apply in determining the stock ownership of an
individual, and stock which the employee may purchase under outstanding options
(whether or not granted pursuant to this Plan) shall be treated as stock owned
by the employee.
(c) No employee will be granted an option under the Plan pursuant to
Section 8(a) to the extent such option would permit the employee's right to
purchase Common Stock under the Plan (and all other employee stock purchase
plans of the Corporation and its Subsidiaries) to accrue at a rate that exceeds
$25,000 in Fair Market Value of the Common Stock (determined as of the Grant
Date) for the Offering Period. This paragraph shall be interpreted in accordance
with section 423(b)(8) of the Code.
5. PAYROLL DEDUCTIONS. Payroll deductions shall be made from the Base Pay
paid to each participating employee for each payroll period in such amounts as
the participating employee shall authorize in his or her Election. The minimum
payroll deduction shall be $10 per month and the maximum payroll deduction shall
be $21,250 per calendar year. Should a participating employee's Base Pay be
insufficient in any pay period to allow the entire payroll deduction
contemplated under the Plan, no deduction will be made for such pay period.
Payroll deductions will resume with the next pay period in which the
participating employee has Base Pay sufficient to allow for the deductions.
Payroll deductions under the Plan shall be made in any pay period only after
other withholdings, deductions, garnishments and the like have been made, and
only if the remaining Base Pay is sufficient to allow the entire payroll
deduction contemplated.
6. CHANGES IN THE PAYROLL DEDUCTIONS. Subject to the minimum and maximum
deductions set forth in Section 5, a participating employee may change the
amount of his or her payroll deduction for an Offering Period by filing a new
Election with the Corporation or its designated recordkeeper between October 1
and November 15 (or such other period authorized by the Committee, but ending,
in no event, later than December 31) of the year prior to the Offering Period
for which the change is to be effective. Except as set forth in Section 7, other
changes shall not be allowed during an Offering Period.
7. TERMINATION OF PARTICIPATION IN PLAN. A participating employee, at any
time and for any reason, may voluntarily terminate participation in the Plan by
written notification of withdrawal delivered to the appropriate payroll office
at least 10 Business Days before the next pay period. An employee's
participation in the Plan shall be terminated upon termination of his or her
employment with the Corporation and its Participating Subsidiaries for any
reason. In the event a participating employee's participation in the Plan is
voluntarily or involuntarily terminated, payroll deductions shall cease;
provided, however, that any payroll deductions credited to such employee's Plan
Account shall be used to purchase shares of Common Stock on the next Exercise
Date. An employee whose participation in the Plan has terminated may not rejoin
the Plan until the next Offering Period following the date of such termination.
Notwithstanding the foregoing or any other provision of the Plan, if the Plan,
as amended and restated effective as of January 1, 1999, is not approved by the
Corporation's stockholders at the 1999 regular annual meeting, the Plan shall
automatically terminate and all funds then held in participants' Plan Accounts
under the Plan shall be returned to the participants, without earnings, as soon
as practicable thereafter.
A-2
28
8. PURCHASE OF SHARES. (a) On each Grant Date, each participating employee
shall be deemed to have been granted an option to purchase shares of Common
Stock as provided in this Section 8.
(b) On each Exercise Date, each participating employee shall be deemed to
have exercised his or her option granted pursuant to Section 8(a). On each
Exercise Date, the Corporation shall apply the funds credited to each
participating employee's Plan Account to the purchase (without commissions or
fees) of that number of shares of Common Stock determined by dividing the
Exercise Price into the balance in the employee's Plan Account on the Exercise
Date.
(c) As soon as practicable after each Exercise Date, a statement shall be
delivered to each participating employee which shall include the number of
shares of Common Stock purchased on the Exercise Date on behalf of such employee
under the Plan.
(d) When requested, a stock certificate for whole shares of Common Stock in
a participating employee's Plan Account purchased pursuant to the Plan shall be
issued in the name of the participating employee, or if so specified in the
participating employee's Election, in the employee's name and the name of
another person as joint tenants with right of survivorship or as tenants in
common. A cash payment shall be made for any fraction of a share in such Plan
Account, if necessary to close the Plan Account.
9. RIGHTS AS A STOCKHOLDER. As of the Exercise Date, a participating
employee shall be treated as record owner of his or her shares purchased
pursuant to the Plan.
10. RIGHTS NOT TRANSFERABLE. Rights under the Plan are not transferable by
a participating employee other than by will or the laws of descent and
distribution, and are exercisable during the employee's lifetime only by the
employee or by the employee's guardian or legal representative. No rights or
payroll deductions of a participating employee under the Plan shall be subject
to execution, attachment, levy, garnishment or similar process.
11. SALE OF SHARES. The Corporation shall pay the brokerage costs incurred
in one sale each calendar year of shares of Common Stock for any Plan
participant purchased under the Plan, provided that such shares are held for at
least two years from the Grant Date for such shares, and such shares of Common
Stock are sold by the Corporation's Transfer Agent Should a participating
employee choose to sell such shares purchased under the Plan within two years
from the Grant Date, such employee shall be responsible for any brokerage costs
incurred in such sale. Sales requested by a participating employee shall occur
as soon as administratively feasible after the receipt of such request, but
neither the Committee nor the Corporation nor any Subsidiary shall be liable for
any delay in the execution of such request.
12. APPLICATION OF FUNDS. All funds of participating employees received or
held by the Corporation under the Plan before purchase of the shares of Common
Stock may be held in bank accounts of the Corporation.
13. ADJUSTMENTS IN CASE OF CHANGES AFFECTING SHARES. In the event of
subdivision or consolidation of outstanding shares of Common Stock, or the
payment of a stock dividend, the number of shares approved for the Plan shall be
increased or decreased proportionately, and such other adjustment be made as may
be deemed equitable by the Committee. In the event of any other change affecting
the Common Stock, such adjustment shall be made as shall be deemed equitable by
the Committee to give proper effect to such event.
14. ADMINISTRATION OF PLAN. The Plan shall be administered by the
Committee. The Committee shall have authority to make rules and regulations for
the administration of the Plan, and its interpretations and decisions with
regard to the Plan and such rules and regulations shall be final and conclusive.
It is intended that the Plan shall at all times meet the requirements of section
423 of the Code, and the Committee shall, to the extent possible, interpret the
provisions of the Plan so as to carry out such intent.
15. AMENDMENTS TO PLAN. The Board of Directors of the Corporation, at any
time, or from time to time, may amend suspend, or terminate the Plan, provided,
however, that, (a) other than as provided in Section 13 or 16(b), no amendment
shall be made increasing or decreasing the number of shares authorized for
issuance under the Plan, and (b) except to conform the Plan to the requirements
of the Code, no amendment shall be made (i) changing the formula for determining
the Exercise Price per share, (ii) withdrawing the administration of the Plan
from the Committee, (iii) affecting the rights of participating employees to
purchase
A-3
29
stock on an Exercise Date with funds already credited to Plan Accounts, or (iv)
which would cause the Plan not to meet the requirements of section 423(b) of the
Code. Notwithstanding the foregoing or any other provision of the Plan, no
amendment shall be made to the Plan without approval of the Corporation's
stockholders if stockholder approval would be required for such amendment under
section 423 of the Code.
16. EFFECTIVE DATE, SUSPENSION AND TERMINATION OF PLAN.
(a) The Plan, as amended and restated, shall become effective as of January
1, 1999. It has been adopted by the Board of Directors of the Corporation;
provided, however, that no shares shall be purchased pursuant to the Plan after
December 31, 1998 unless and until the Plan is approved by the stockholders of
the Corporation.
(b) The Plan shall terminate upon the earliest of (a) the termination of
the Plan by the Board of Directors of the Corporation, (b) December 31, 2000,
(c) when no more shares remain to be purchased under the Plan, or (d) the date
specified in Section 7. The Board of Directors of the Corporation may terminate
the Plan at any time; provided, however, that if such termination occurs
effective other than as of an Exercise Date, all amounts then credited to
Participants' Plan Accounts shall be returned to them, without earnings, as soon
as practicable after such termination unless, in connection with such
termination, the Board declares the termination date to be an Exercise Date. If,
on an Exercise Date, participating employees in the aggregate have options to
purchase more shares of Common Stock than are then available for purchase under
the Plan, each participating employee shall be eligible to purchase a reduced
number of shares of Common Stock on a pro rata basis and any excess payroll
deductions shall be returned to such employees, all as provided by uniform rules
and regulations adopted by the Committee.
17. COST. All costs and expenses incurred in administering the Plan shall
be paid by the Corporation, except that any brokerage fees or certificate costs
incurred in the sale of the shares of Common Stock by any participating employee
shall be handled in accordance with Section 8 and Section 11 of the Plan.
18. GOVERNMENTAL REGULATIONS. The Corporation's obligation to sell and
deliver its Common Stock pursuant to the Plan is subject to the approval of any
governmental authority required in connection with the authorization, issuance
or sale of such stock.
19. APPLICABLE LAW. This Plan shall be interpreted under the laws of the
State of Delaware, unless preempted by federal law. This Plan is not subject to
the Employee Retirement Income Security Act of 1974, as amended, but is intended
to comply with Section 423 of the Code. Any provisions required to be set forth
in this Plan by such section 423 of the Code are hereby included as fully as if
set forth in the Plan in full.
20. EFFECT ON EMPLOYMENT. The provisions of this Plan shall not affect the
right of the Corporation or any Subsidiary or any participating employee to
terminate his or her employment with the Corporation or Subsidiary.
21. WITHHOLDING. The Corporation reserves the right to withhold from
Common Stock or cash distributed to a participating employee under the Plan any
amounts which it is required by law to withhold.
Appendix A
PARTICIPATING SUBSIDIARIES
Case Canada Corporation
Case Corporation Pty Ltd
A-4
30
NOTICE OF ANNUAL MEETING
AND
PROXY STATEMENT
ANNUAL MEETING
OF STOCKHOLDERS
MAY 12, 1999
CASE CORPORATION
700 STATE STREET, RACINE, WISCONSIN 53404
CASE LOGO
(LOGO) PRINTED ON RECYCLED PAPER
31
Case Corporation
[CASE LOGO]
1999 Annual Meeting of Stockholders
Proxy/Voting Instruction Card
The undersigned hereby appoints Jean-Pierre Rosso, Richard S. Brennan, and
Kevin J. Hallagan, and any of them, with full power of substitution, as
Proxies to vote, as directed on the reverse side of this card, or, if not so
directed, in accordance with the Board of Directors' recommendations, all
shares of Case Corporation held of record by the undersigned at the close of
business on March 26, 1999 and entitled to vote at the Annual Meeting of
Stockholders of Case Corporation to be held at the Roma Lodge, 7130 Spring
Street, Racine, Wisconsin, at 9:00 a.m., Racine time, on May 12, 1999, or at
any adjournment thereof, and to vote, in their discretion, upon such other
matters as may properly come before the Annual Meeting.
Director Nominees:
1 Pei-yuan Chia 4 Thomas R. Hodgson 7 Jean-Pierre Rosso
2 Ronald E. Goldsberry 5 Katherine M. Hudson 8 Theodore R. Tetzlaff
3 Jeffery T. Grade 6 Gerald Rosenfeld
This card also constitutes directions to the Trustee of the Case Corporation
Retirement Savings Plan by participants in such plan.
[SEE REVERSE SIDE]
- - --------------------------------------------------------------------------------
- FOLD AND DETACH HERE IF YOU ARE RETURNING YOUR VOTED PROXY CARD BY MAIL -
- - --------------------------------------------------------------------------------
[CASE LOGO] THIS IS YOUR PROXY.
YOUR VOTE IS IMPORTANT.
FOR ASSISTANCE IN THESE AREAS:
- - - DIVIDEND CHECKS--ADDRESS CHANGES--LEGAL TRANSFERS
- - - CONSOLIDATION OF ACCOUNTS--ELIMINATE MULTIPLE ACCOUNTS FOR ONE HOLDER AND
CERTAIN DUPLICATE STOCKHOLDER MAILINGS GOING TO ONE ADDRESS. (Dividend checks,
annual reports and proxy materials would continue to be mailed to each
stockholder.)
JUST CALL OUR TRANSFER AGENT'S TELEPHONE RESPONSE CENTER:
(800) 519-3111 OR (201) 324-1225
OR WRITE TO:
FIRST CHICAGO TRUST COMPANY, A DIVISION OF EQUISERVE
P.O. BOX 2500
JERSEY CITY, NEW JERSEY 07303-2500
32
PLEASE MARK YOUR
/X/ VOTES AS IN THIS
EXAMPLE.
This Proxy is solicited by the Board of Directors. When properly executed, it will be voted in the manner directed.
If no direction is given, this Proxy will be voted FOR all of the Board of Directors' nominees and FOR proposals 2 and 3.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR ITS NOMINEES AND FOR PROPOSALS 2 AND 3.
FOR WITHHELD FOR AGAINST ABSTAIN
1. Election of [ ] [ ] 2. Approval of [ ] [ ] [ ] 4. In the Discretion of the
Directors Employee Stock Proxies named herein, the
(see reverse) Purchase Plan Proxies are authorized to vote
upon other matters as may
properly come before the
meeting.
FOR all nominees except:
3. Approval of Arthur [ ] [ ] [ ]
Andersen LLP as
______________________________________ Independent Public
Accountants
The signer hereby revokes all Proxies heretofore given by the
signer to vote at said meeting or any adjournments thereof.
NOTE: Please sign exactly as name appears hereon. Joint
owners should each sign. When signing as attorney,
executor, administrator, trustee or guardian, please
give full title as such.
___________________________________________________________
___________________________________________________________
SIGNATURE DATE
- - -|------------------------------------------------------------------------------------------------------------------------------|---
- FOLD AND DETACH HERE IF YOU ARE RETURNING YOUR VOTED PROXY CARD BY MAIL -
[CASE LOGO]
Dear Stockholder:
Case encourages you to take advantage of new and convenient ways by which you
can vote your shares. You can vote your shares electronically through the
internet or the telephone. This eliminates the need to return the Proxy/Voting
Instruction Card.
TO VOTE OVER THE INTERNET:
- Log on to the internet and go to the Web site http://www.vote-by-net.com
TO VOTE OVER THE TELEPHONE:
- On a touch-tone telephone call 1-800-OK2-VOTE (1-800-652-8683) 24 hours a
day, 7 days a week
- Non-U.S. stockholders should call 1-201-324-0377
To vote your shares electronically you will be asked to use your voter control
number (including # symbols) exactly as printed in the box above, just below the
perforation.
Your electronic vote authorizes the named proxies in the same manner as if you
marked, signed, dated and returned the Proxy/Voting Instruction Card.
If you choose to vote your shares electronically, there is no need for you to
mail back your Proxy/Voting Instruction Card.
YOUR VOTE IS IMPORTANT. THANK YOU FOR VOTING.
33
CASE CORPORATION LOGO
CASE CORPORATION
700 STATE STREET
RACINE, WISCONSIN 53404
(414) 636-6011
April 20, 1999
Dear Retirement Savings Plan Participant:
Case Corporation's 1999 Annual Meeting of Stockholders will be held on May 12 in
Racine, Wisconsin. The close of business on March 26 has been fixed as the
record date for the determination of common stockholders entitled to notice of
and to vote at the meeting.
Enclosed for your information are the materials that have been sent to record
stockholders in connection with the meeting, including a Proxy/Voting
Instruction Card. As in past years, you and other participants in the Retirement
Savings Plan are being given an opportunity to direct the trustee of that plan
how to vote the shares allocated to your Retirement Savings Plan account and at
the same time to vote other shares of stock that you own. The card breaks the
number of shares of common stock on the record date into four categories. The
card uses the category "Common" for any shares of common stock owned outright.
That category excludes restricted shares awarded and held under the Equity
Incentive Plan, and shares allocated to Employee Stock Purchase Plan or
Retirement Savings Plan accounts. The next category "REST" pertains to
restricted shares awarded under the Equity Incentive Plan which have not yet
vested. The last two categories, "ESPP" and "RSP," respectively cover shares in
Employee Stock Purchase Plan and Retirement Savings Plan accounts.
Your Proxy/Voting Instruction Card will only show the categories in which you
have shares. You may sign and return the card in the enclosed envelope or follow
the instructions on the card to take advantage of the Internet or telephone
voting methods offered for the first time this year. Whichever voting method you
choose, you are directing the persons named as proxies to vote your shares of
common stock in the "Common," "REST," and "ESPP" categories in the manner
specified on the card. You are also directing the trustee of the Retirement
Savings Plan to have your shares in the "RSP" category voted in the same manner.
If you do not give any voting instructions, the trustee of the Retirement
Savings Plan will vote the shares in your account in accordance with the
requirements of the plan, which may or may not reflect your views. In that
event, the proxies cannot vote your other shares.
YOUR VOTE IS IMPORTANT. PLEASE INDICATE YOUR VOTING INSTRUCTIONS AT YOUR
EARLIEST OPPORTUNITY.
Very truly yours,
R.S. BRENNAN
Richard S. Brennan
General Counsel and Secretary