Exhibit 4.2
CNH Global N.V.
Outside Directors' Compensation Plan
(As Amended and Restated on April 18, 2000)
This Outside Directors' Compensation Plan (the "Plan") has
been established by action of the CNH Global N.V. of Amsterdam, the
Netherlands (the "Company") Board of Directors (the "Board") effective
as of the date the Plan is approved by the Board.
1. Introduction. The purpose of the Plan is to provide for
(i) the payment of the annual retainer fee and committee chair fee
(collectively, the "Annual Fees") to independent outside members of
the Board ("Outside Directors") in the form of common shares of the
Company ("Common Shares"); (ii) an annual grant of options to purchase
Common Shares; and (iii) an opportunity to convert all or a portion of
their Annual Fees into stock options.
2. Eligibility. Subject to the terms and conditions of the
Plan, each Outside Director shall be a participant in the Plan. Each
Outside Director shall be entitled to receive Annual Fees and meeting
fees as determined by the Chairman of the Board in accordance with
Article 12 of the Company's Articles of Association, which Annual Fees
and meeting fees, as in effect from time to time, shall be reflected
on Appendix A, attached hereto.
3. Stock Grants. Subject to the terms and conditions of the
Plan, including Sections 4 and 5 hereof, the Annual Fees payable to an
Outside Director shall be paid in accordance with this Section 3. As
of (i) February 29, 2000, (ii) the day immediately preceding the date
of the 2000 Annual General Meeting of the Company's shareholders, and
(iii) the last day of each Plan Year Quarter (as described below)
thereafter, each Outside Director shall be granted automatically a
number of Common Shares equal in value to 25% of the annual retainer
fee, and if he or she is a committee chair 25% of the annual committee
chair fee, each as listed in Appendix A, attached hereto, as amended
from time to time in accordance with the amendment procedures of the
Plan.
(a) Fair Market Value. The value of each Common Share (the
"Fair Market Value") shall be determined as of the last
business day of the Plan Year Quarter for which it is
granted and shall be equal to the average of the
highest and lowest sales price a Common Share on the
Composite Tape for such date as reported by the
National Quotations Bureau Incorporated; provided that,
if no sales of Common Shares are included on the
Composite Tape for such date, the Fair Market Value of
a share of Common Shares on such date shall be deemed
to be the average of the highest and lowest
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prices of a Common Share as reported on said Composite
Tape for the next preceding day on which sales of
Common Shares are included.
(b) Proration For Partial Services. If the Outside Director
is not a member of the Board or a committee chair
during an entire Plan Year Quarter, the retainer and
committee chair fees to which he or she is entitled as
well as his or her award of Shares for that Quarter
shall be reduced, pro rata, to reflect the portion of
the Quarter in which he or she was not an Outside
Director or committee chair, as the case may be.
(c) Fractional Shares. An Outside Director shall be
entitled to a whole Share for any fractional Share to
which he or she would otherwise be entitled for any
Plan Year Quarter under the foregoing provisions of
this Section 3.
(d) Plan Year. For purposes of the Plan, the term "Plan
Year" means the period beginning on the date of the
Company's Annual General Meeting of shareholders and
ending on the day immediately prior to the first day of
the following Plan Year. For any Plan Year, the first
Plan Year Quarter shall begin on the first day of the
Plan Year, and shall end on the 90th day of the Plan
Year; the second Plan Year Quarter shall begin on the
91st day of the Plan Year, and shall end on the 180th
day of the Plan Year; the third Plan Year Quarter shall
begin on the 181st day of the Plan Year, and shall end
on the 270th day of the Plan Year; and the fourth Plan
Year Quarter shall begin on the 271st day of the Plan
Year, and shall end on the last day of the Plan Year.
4. Cash Election. Subject to the terms and conditions of the
Plan, an Outside Director may irrevocably elect, by filing a form with
the Secretary of the Company (the "Secretary") in such form as the
Secretary may from time to time require, to receive a portion of his
or her Annual Fees for any Plan Year in cash, provided that an Outside
Director may not elect to receive more than 50% of the Annual Fees in
cash. For the Plan Year ending in 2000, any such election must be
filed prior to February 29, 2000. For any Plan Year thereafter, such
election must be filed prior to the first day of such Plan Year.
Notwithstanding the foregoing provisions of this Section 4, an
individual who becomes an Outside Director after the first day of a
Plan Year may irrevocably elect, by filing a form with the Secretary
in such form as the Secretary may from time to time require prior to
the date on which he or she first becomes an Outside Director, to
receive a portion of his or her Annual Fees for the remainder of the
Plan Year in which he or she first becomes an Outside Director in
cash, up to a maximum of 50% of such Annual Fees for the remainder of
the Plan Year.
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5. Options. Subject to the terms and conditions of the Plan,
each Outside Director will be awarded stock options under the Plan in
accordance with the following:
(a) Automatic Option Grants. Each individual who is an
Outside Director on the date the Plan is approved by
the Board shall be granted automatically as of that
date an option to acquire 3,750 Common Shares.
Thereafter, each individual who is an Outside Director
on the date of the Annual General Meeting of the
Company's shareholders shall be granted automatically
as of that date an option to purchase that number of
Common Shares listed in Appendix A (the "Automatic
Option Grant"), attached hereto as amended from time to
time in accordance with the amendment procedures of the
Plan. Each individual who becomes an Outside Director
other than on the date of an Annual General Meeting of
the Company's shareholders shall receive an Automatic
Option Grant reduced pro rata to reflect the portion of
the Plan Year elapsed prior to the date on which the
individual first became an Outside Director, provided
that any fractional share resulting from such reduction
shall be rounded up to a whole share.
(b) Elective Option Grants. For the period beginning on the
date the Plan is approved by the Board and ending on
the last day of the Plan Year ending in the year 2000
and for any Plan Year beginning thereafter, each
Outside Director, by filing a written "Option Election"
with the Secretary in such form as the Secretary may
from time to time require, may elect to forego payment
of all or any portion of the Annual Fees otherwise
payable to him or her during such period or for any
such Plan Year, as applicable, and to instead receive,
as of each date on which such Annual Fees would
otherwise have been paid to him or her (each an
"Elective Grant Date"), an option to purchase that
number of Common Shares equal to the quotient (rounded
to the nearest whole number of shares) of (1) divided
by (2) where:
(1) is the product of the amount of the Annual Fees
that would otherwise have been paid to the
Outside Director on the applicable Elective Grant
Date which are subject to his or her Option
Election, multiplied by four; and
(2) is the Fair Market Value of a Common Share on the
applicable Elective Grant Date.
Each option granted pursuant to this paragraph (b) shall be
referred to herein as an "Elective Option Grant" and, where
appropriate, will be referred to collectively with an
Automatic Option Grant as an "Option
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Grant". An Outside Director's Option Election shall be
effective with respect to Annual Fees otherwise payable to
him or her for services rendered after the last day of the
Plan Year in which such election is filed with the Secretary;
provided, however, that:
(A) each Outside Director may make an Option Election
prior to February 29, 2000 with respect to Annual
Fees payable during the period beginning on the
date the Plan is approved by the Board and ending
on the last day of the Plan Year ending in the
year 2000;
(B) if an individual becomes an Outside Director on
or after the first day of a Plan Year and files
an Option Election with the Secretary prior to
the date on which he or she first becomes an
Outside Director, his or her Option Election
shall be effective with respect to Annual Fees
otherwise payable to him or her for services
rendered on and after the day on which he or she
first becomes an Outside Director; and
(C) by notice filed with the Secretary, an Outside
Director may terminate or modify any Option
Election as to Annual Fees payable for services
rendered after the last day of the Plan Year in
which such notice is filed with the Secretary.
(c) Reload Stock Options. "Reload Stock Options" shall be
awarded to an Outside Director when and if he or she
pays the Option Price under an Option Grant, described
above, by delivery of Common Shares on the settlement
date for such exercise. A Reload Stock Option entitles
its holder to purchase the number of Common Shares so
delivered for an Option Price equal to the Fair Market
Value of a share of Common Stock on such settlement
date. No more than one Reload Stock Option shall be
granted to an Outside Director in any twelve-month
period, the maximum number of Reload Stock Options that
may be granted to an Outside Director with respect to
any Option Grant is five, and no Reload Stock Options
will be issued within six months prior to the scheduled
expiration date of the Option Grant to which it
relates. Notwithstanding the above, no Reload Stock
Option shall be granted unless the recipient is an
Outside Director of the Company at the time of delivery
of Common Shares. Notwithstanding any other provision
hereof, a Reload Stock Option shall not become
exercisable until six months after its award date and
its maximum term will terminate at the time specified
hereunder for the Option Grant to which it relates.
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For purposes of the Plan, Automatic Option Grants, Elective Option
Grants and Reload Stock Options are sometimes referred to herein
collectively as "Stock Options".
6. Terms of Option Grants.
(a) Option Agreement. Each Stock Option shall be evidenced
by a written stock option agreement which shall be
executed by the Outside Director and the Company and
which shall contain such terms and conditions as are
consistent with this Plan.
(b) Exercise price. The exercise price for a Common Share
under an Option Grant shall be 100% of the Fair Market
Value of Common Share on the date the Option Grant is
made.
(c) Commencement of Exercisability. Each Automatic Option
Grant made under the Plan shall become exercisable on
the third anniversary of the grant date or, if earlier,
with respect to Automatic Option Grants that have been
outstanding at least six months, the date the
individual ceases to be an Outside Director for any
reason other than removal for cause by the Company's
shareholders. Each Elective Option Grant shall be
immediately exercisable upon grant but Common Shares
purchased upon exercise of an Elective Option Grant may
not be sold until the date which is at least six months
after the date such Elective Option Grant is made.
(d) Term. Each Option Grant shall terminate upon the
earlier of (i) ten years after the date of grant or
(ii) six months after the date an individual ceases to
be an Outside Director.
(e) Death of Outside Director. Notwithstanding paragraph
6(c) above, the Automatic Option Grants and Reload
Stock Options that have been awarded to an Outside
Director whose Board membership is terminated due to
death shall be immediately exercisable. Notwithstanding
paragraph (d) above, the Outside Director's designated
beneficiary or estate if no beneficiary has been
designated may exercise any Stock Options within the
six-month period following the death of the Outside
Director.
(f) Total Disability of Outside Director. Notwithstanding
paragraphs 6(c) or 6(d) above, the Automatic Option
Grants and Reload Stock Options that have been awarded
to an Outside Director whose Board membership is
terminated due to Total Disability shall be immediately
exercisable and all Stock Options shall remain
exercisable within the six-month period following the
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Outside Director's termination for Total Disability.
For purposes of this provision, "Total Disability"
means the permanent inability (as determined by the
Outside Director's medical doctor) of the Outside
Director which is a result of accident or sickness, to
perform the duties of a director of the Company.
(g) Change of Control. Notwithstanding paragraphs 6(c) or
6(d) above, the Automatic Option Grants and Reload
Stock Options that have been awarded to an Outside
Director shall be immediately exercisable and all Stock
Options shall remain exercisable for a six-month period
if a change of control (as determined by the Board of
Directors) of the Company or of the majority
shareholder of the Company occurs. Notwithstanding the
above, Stock Options that are awarded within six months
of the date the change of control occurs shall not be
subject to this provision.
7. Manner of Payment of Option Price. The Option Price shall
be paid in full at the time of the exercise of any Stock Option and
may be paid in any of the following methods or combinations thereof:
(a) in United States dollars, in cash, check, bank draft or
money order payable to the order of the Company;
(b) by the tendering, either by actual delivery or by
attestation, Common Shares acceptable to the Board (but
excluding any shares acquired from the Company unless
such shares were acquired and vested more than six
months prior to the date tendered under this clause
(b)) having an aggregate Fair Market Value on the date
of such exercise equal to the Option Price; or
(c) in any other manner that the Board shall approve,
including without limitation any arrangement that the
Board may establish to enable Outside Directors to
simultaneously exercise Stock Options and sell the
Common Shares acquired thereby and apply the proceeds
to the payment of the Option Price therefor.
8. Plan Administration. The Plan shall be administered by the
Nominating and Compensation Committee of the Board (the "Committee").
9. Shares Subject to Plan. Subject to the provisions of
Section 10, the number of Common Shares which may be subject to awards
under the Plan shall not exceed 1,000,000 shares. Common Shares issued
under the Plan may be authorized but unissued shares or treasury
shares. If any Shares are subject to an award under the Plan that
expires, is cancelled or is forfeited,
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such Common Shares shall again become available for issuance under the
Plan.
10. Adjustments and Reorganizations. In the event of any
merger, reorganization, consolidation, recapitalization, separation,
liquidation, stock dividend, extraordinary dividend, spin-off,
split-up, share combination, or other change in the corporate
structure of the Company affecting the Common Shares, the number and
kind of shares that may be delivered under the Plan shall be subject
to such equitable adjustment as the Committee, in its sole discretion,
may deem appropriate in order to preserve the benefits or potential
benefits to be made available under the Plan, and the number and kind
and price of shares subject to outstanding Stock Options and the
option price and any other terms of outstanding Stock Options or Stock
Grants shall be subject to such equitable adjustment as the Committee,
in its sole discretion, may deem appropriate in order to prevent
dilution or enlargement of outstanding Stock Options or Stock Grants.
11. Transferability of Awards. No awards under the Plan shall
be assignable, alienable, saleable or otherwise transferable other
than by will or the laws of descent.
12. No Right of Continued Service. Participation in the Plan
does not give any director the right to be retained as a director of
the Company or any right or claim to any benefit under the Plan unless
such right or claim has specifically accrued under the terms of the
Plan.
13. Governing Law. The validity, construction and effect of
the Plan, and any actions taken or relating to the Plan, shall be
determined in accordance with the laws of the State of Delaware,
U.S.A.
14. Successors and Assigns. The Plan shall be binding on all
successors and assigns of an Outside Director, including, without
limitation, the estate of such director and the executor,
administrator or trustee of such estate, or any receiver or trustee in
bankruptcy or representative of the director's creditors.
15. Rights as a Shareholder. A director shall have no rights
as a shareholder of the Company with respect to shares awarded under
the Plan or subject to options awarded under the Plan until he or she
becomes the holder of record of Common Shares.
16. Amendment. The Plan and any attachments thereto may be
amended by action of the Board.
17. General Restrictions. Notwithstanding any other provision
of the Plan, the Company shall have no liability to deliver any Common
Shares under
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the Plan unless such delivery or distribution would comply with all
applicable laws (including, without limitation, the requirements of
the United States Securities Act of 1933), and are authorized for
listing on any securities exchange on which the Common Shares of the
Company are listed. To the extent that the Plan provides for the
issuance of Common Shares, the issuance may be effected on a
non-certificated basis, to the extent not prohibited by applicable law
or the applicable rules of any stock exchange on which the Common
Shares of the Company are listed.
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Appendix A
(Effective as of the date the Plan is approved by the Board)
Annual Retainer fee: $35,000
Annual Committee Chair fee: $ 5,000
Board or Committee meeting fee: $ 1,250*
Automatic Option Grant: 7,500 Shares
For the Plan Year ending in the year 2000, eligible directors
will be entitled to 50% of the Annual Retainer Fee and Annual
Committee Chair Fee. The fees are payable in two equal installments,
one as of February 29, 2000 and the other as of the day immediately
preceding the date of the 2000 Annual General Meeting of the Company's
shareholders.
* Payable only in cash for each meeting attended.
CNH Global N.V. Outside Directors' Compensation Plan
April 18, 2000
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