<PAGE>
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 10-Q
[X]QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE
ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED JUNE 30, 1996
OR
[_]TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
EXCHANGE ACT OF 1934
COMMISSION FILE NUMBER 1-13098
----------------
CASE CORPORATION
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
DELAWARE 76-0433811
(STATE OF INCORPORATION) (I.R.S. EMPLOYER IDENTIFICATION NO.)
700 STATE STREET, RACINE, WI 53404
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES INCLUDING ZIP CODE)
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (414) 636-6011
----------------
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports) and (2) has been subject to such
filing requirements for the past 90 days. YES [X] NO [_]
Indicate the number of shares outstanding of each of the issuer's classes of
common stock as of the latest practicable date.
Common Stock, par value $0.01 per share: 72,537,702 shares outstanding as of
June 30, 1996.
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<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Part I--Financial Information
Case Corporation and Consolidated Subsidiaries--
Balance Sheets........................................................ 2
Statements of Income.................................................. 3
Statements of Cash Flows.............................................. 5
Statements of Changes in Stockholders' Equity......................... 6
Notes to Financial Statements......................................... 7
Management's Discussion and Analysis of Financial Condition and
Results of Operations................................................ 13
Part II--Other Information
Item 1. Legal Proceedings............................................... 20
Item 2. Changes in Securities........................................... *
Item 3. Defaults Upon Senior Securities................................. *
Item 4. Submission of Matters to a Vote of Security Holders............. 20
Item 5. Other Information............................................... *
Item 6. Exhibits and Reports on Form 8-K................................ 20
</TABLE>
- --------
*No response to this item is included herein for the reason that it is
inapplicable or the answer to such item is negative.
1
<PAGE>
PART I
FINANCIAL INFORMATION
CASE CORPORATION AND CONSOLIDATED SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS AS OF JUNE 30, 1996, AND DECEMBER 31, 1995
(IN MILLIONS, EXCEPT SHARE DATA)
(UNAUDITED)
<TABLE>
<CAPTION>
CONSOLIDATED CASE INDUSTRIAL CASE CREDIT
--------------------- --------------------- ---------------------
JUNE 30, DECEMBER 31, JUNE 30, DECEMBER 31, JUNE 30, DECEMBER 31,
1996 1995 1996 1995 1996 1995
-------- ------------ -------- ------------ -------- ------------
<S> <C> <C> <C> <C> <C> <C>
ASSETS
Current Assets:
Cash and cash
equivalents........... $ 96 $ 132 $ 81 $ 117 $ 15 $ 15
Accounts and notes
receivable:
Trade.................. 1,837 1,504 1,545 1,323 292 181
Affiliates............. -- -- 2 -- 11 16
Other.................. 99 55 34 18 65 37
Inventories............ 1,058 901 1,058 901 -- --
Deferred income taxes.. 201 200 185 185 16 15
Prepayments and other.. 64 60 64 57 -- 3
------ ------ ------ ------ ------ ------
Total current assets. 3,355 2,852 2,969 2,601 399 267
------ ------ ------ ------ ------ ------
Long-Term Receivables... 1,205 1,244 262 395 927 835
Other Assets:
Investments in joint
ventures.............. 67 65 67 65 -- --
Investment in Case
Credit................ -- -- 220 193 -- --
Goodwill and
intangibles........... 229 176 229 176 -- --
Other.................. 158 176 163 139 12 51
------ ------ ------ ------ ------ ------
Total other assets... 454 417 679 573 12 51
------ ------ ------ ------ ------ ------
Property, Plant and
Equipment, at cost..... 1,968 1,970 1,966 1,970 2 --
Accumulated
depreciation.......... (1,019) (1,014) (1,018) (1,014) (1) --
------ ------ ------ ------ ------ ------
Net property, plant and
equipment.............. 949 956 948 956 1 --
------ ------ ------ ------ ------ ------
Total................ $5,963 $5,469 $4,858 $4,525 $1,339 $1,153
====== ====== ====== ====== ====== ======
LIABILITIES AND EQUITY
Current Liabilities:
Current maturities of
long-term debt........ $ 45 $ 47 $ 45 $ 47 $ -- $ --
Short-term debt........ 1,015 1,005 232 97 785 908
Accounts payable....... 568 533 566 533 14 16
Restructuring
liability............. 61 97 61 97 -- --
Other accrued
liabilities........... 794 784 752 748 42 36
------ ------ ------ ------ ------ ------
Total current
liabilities......... 2,483 2,466 1,656 1,522 841 960
------ ------ ------ ------ ------ ------
Long-Term Debt.......... 1,157 889 879 889 278 --
Other Liabilities:
Pension benefits....... 129 134 129 134 -- --
Other postretirement
benefits.............. 108 98 108 98 -- --
Other postemployment
benefits.............. 39 40 39 40 -- --
Restructuring
liability............. 202 210 202 210 -- --
Other.................. 45 35 45 35 -- --
------ ------ ------ ------ ------ ------
Total other
liabilities......... 523 517 523 517 -- --
------ ------ ------ ------ ------ ------
Commitments and
Contingencies
Minority Interest....... 1 -- 1 -- -- --
Preferred Stock with
Mandatory Redemption
Provisions............. 77 77 77 77 -- --
Stockholders' Equity:
Common Stock, $0.01 par
value; authorized
200,000,000 shares,
issued 72,575,093,
outstanding
72,537,702............ 1 1 1 1 -- --
Paid-in capital........ 1,204 1,154 1,204 1,154 199 199
Cumulative translation
adjustment............ (23) (21) (23) (21) (6) (8)
Unearned compensation
on restricted stock... (9) (10) (9) (10) -- --
Pension liability
adjustment............ (2) (2) (2) (2) -- --
Retained earnings...... 552 399 552 399 27 2
Treasury stock, 37,391
shares, at cost....... (1) (1) (1) (1) -- --
------ ------ ------ ------ ------ ------
Total stockholders'
equity.............. 1,722 1,520 1,722 1,520 220 193
------ ------ ------ ------ ------ ------
Total................ $5,963 $5,469 $4,858 $4,525 $1,339 $1,153
====== ====== ====== ====== ====== ======
</TABLE>
The accompanying notes to financial statements are an integral part of these
Balance Sheets.
Reference is made to Note 1 for definitions of "Case Industrial" and "Case
Credit."
2
<PAGE>
CASE CORPORATION AND CONSOLIDATED SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 1996, AND 1995
(IN MILLIONS EXCEPT PER SHARE DATA)
(UNAUDITED)
<TABLE>
<CAPTION>
CONSOLIDATED
--------------------------------------
THREE MONTHS ENDED SIX MONTHS ENDED
JUNE 30, JUNE 30,
------------------- ------------------
1996 1995 1996 1995
--------- --------- -------- --------
<S> <C> <C> <C> <C>
Revenues:
Net sales............................. $ 1,398 $ 1,377 $ 2,503 $ 2,518
Interest income and other............. 68 41 134 78
--------- --------- -------- --------
1,466 1,418 2,637 2,596
Costs and Expenses:
Cost of goods sold.................... 1,052 1,042 1,896 1,918
Selling, general and administrative... 140 138 259 271
Research, development and engineering. 46 38 91 73
Interest expense...................... 38 47 78 90
Other, net............................ 12 17 16 20
--------- --------- -------- --------
Income before taxes and cumulative
effect of changes in accounting
principles and extraordinary loss..... 178 136 297 224
Income tax provision................... 68 26 112 44
--------- --------- -------- --------
Income before cumulative effect of
changes in accounting principles and
extraordinary loss.................... 110 110 185 180
Equity in income--Case Credit.......... -- -- -- --
--------- --------- -------- --------
Income before cumulative effect of
changes in accounting principles and
extraordinary loss.................... 110 110 185 180
Cumulative effect of changes in
accounting principles................. -- -- -- (9)
Extraordinary loss..................... -- -- (22) --
--------- --------- -------- --------
Net income............................. $ 110 $ 110 $ 163 $ 171
========= ========= ======== ========
Preferred stock dividends.............. 1 1 3 3
--------- --------- -------- --------
Net income to common................... $ 109 $ 109 $ 160 $ 168
========= ========= ======== ========
Per share data:
Primary earnings per share of common
stock................................ $ 1.47 $ 1.53 $ 2.17 $ 2.36
========= ========= ======== ========
Fully diluted earnings per share of
common stock......................... $ 1.42 $ 1.46 $ 2.11 $ 2.28
========= ========= ======== ========
</TABLE>
The accompanying notes to financial statements are an integral part of these
Statements of Income.
Reference is made to Note 1 for definitions of "Case Industrial" and "Case
Credit."
3
<PAGE>
<TABLE>
<CAPTION>
CASE INDUSTRIAL CASE CREDIT
- ------------------------------------ --------------------------------------
THREE MONTHS ENDED SIX MONTHS ENDED THREE MONTHS ENDED SIX MONTHS ENDED
JUNE 30, JUNE 30, JUNE 30, JUNE 30,
- ----------------- ---------------- ------------------ ----------------
1996 1995 1996 1995 1996 1995 1996 1995
------ ------ ------ ------ ------ ------ ------ ------
<C> <C> <C> <C> <C> <C> <C>
$1,398 $1,377 $2,503 $2,518 $ -- $ -- $ -- $ --
17 14 33 29 59 59 125 110
------ ------ ------ ------ ------ ------ ------ ------
1,415 1,391 2,536 2,547 59 59 125 110
1,052 1,042 1,896 1,918 -- -- -- --
142 165 270 321 5 4 12 10
46 38 91 73 -- -- -- --
25 38 48 72 14 9 31 19
7 16 11 19 5 1 5 1
------ ------ ------ ------ ------ ------ ------ ------
143 92 220 144 35 45 77 80
52 6 80 9 16 21 32 35
------ ------ ------ ------ ------ ------ ------ ------
91 86 140 135 19 24 45 45
19 24 45 45 -- -- -- --
------ ------ ------ ------ ------ ------ ------ ------
110 110 185 180 19 24 45 45
-- -- -- (9) -- -- -- --
-- -- (22) -- -- -- -- --
------ ------ ------ ------ ------ ------ ------ ------
$ 110 $ 110 $ 163 $ 171 $ 19 $ 24 $ 45 $ 45
====== ====== ====== ====== ====== ====== ====== ======
</TABLE>
4
<PAGE>
CASE CORPORATION AND CONSOLIDATED SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE SIX MONTHS ENDED JUNE 30, 1996, AND 1995
(IN MILLIONS)
(UNAUDITED)
<TABLE>
<CAPTION>
CONSOLIDATED CASE INDUSTRIAL CASE CREDIT
---------------- ---------------- ----------------
SIX MONTHS SIX MONTHS SIX MONTHS
ENDED JUNE 30, ENDED JUNE 30, ENDED JUNE 30,
---------------- ---------------- ----------------
1996 1995 1996 1995 1996 1995
------- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C>
Operating activities:
Net income............ $ 163 $ 171 $ 163 $ 171 $ 45 $ 45
Adjustments to
reconcile net income
to net cash provided
(used) by
operating
activities--
Depreciation and
amortization....... 70 62 63 62 7 --
Deferred income tax
expense............ (5) (69) (5) (70) -- 1
(Gain) loss on
disposal of fixed
assets............. 3 (1) 3 (1) -- --
Extraordinary loss,
after tax.......... 22 -- 22 -- -- --
Cumulative effect of
changes in
accounting
principles......... -- 9 -- 9 -- --
Cash paid for
restructuring...... (32) (17) (32) (17) -- --
Undistributed
earnings of
unconsolidated
subsidiaries....... (3) -- (30) -- -- --
Changes in
components of
working capital--
(Increase)
decrease in
receivables...... (376) (329) (236) (301) (137) (26)
(Increase)
decrease in
inventories...... (139) (144) (139) (144) -- --
(Increase)
decrease in
prepayments and
other current
assets........... (4) (10) (6) (10) 2 --
Increase
(decrease) in
payables......... 85 40 82 39 -- --
Increase
(decrease) in
accrued
liabilities...... 15 92 10 87 5 5
(Increase) decrease
in long-term notes
receivable......... 88 212 136 265 (46) (51)
Increase (decrease)
in other
liabilities........ 11 7 11 7 -- --
Other, net.......... (12) 9 (10) 18 (2) (7)
------- ------- ------- ------- ------- -------
Net cash provided
(used) by
operating
activities...... (114) 32 32 115 (126) (33)
------- ------- ------- ------- ------- -------
Investing activities:
Proceeds from sale of
businesses and
assets............... 7 9 7 9 -- --
Expenditures for
property, plant and
equipment............ (56) (23) (54) (23) (2) --
Acquisitions and
investments.......... (71) -- (71) -- -- --
Other, net............ -- 9 -- 9 -- --
------- ------- ------- ------- ------- -------
Net cash provided
(used) by
investing
activities...... (120) (5) (118) (5) (2) --
------- ------- ------- ------- ------- -------
Financing activities:
Proceeds from issuance
of common stock...... 39 -- 39 -- -- --
Proceeds from issuance
of long-term debt.... 500 -- 300 -- 200 --
Payment of long-term
debt................. (356) (325) (356) (325) -- --
Net increase
(decrease) in short-
term debt............ 25 333 77 242 (52) 91
Dividends paid (common
and preferred)....... (10) (10) (10) (10) (20) (43)
Other, net............ -- (5) -- (7) -- (5)
------- ------- ------- ------- ------- -------
Net cash provided
(used) by
financing
activities...... 198 (7) 50 (100) 128 43
------- ------- ------- ------- ------- -------
Effect of foreign
exchange rate changes
on cash and cash
equivalents........... -- 1 -- 1 -- --
Increase (decrease) in
cash and cash
equivalents........... (36) 21 (36) 11 -- 10
Cash and cash
equivalents, beginning
of period............. 132 68 117 64 15 4
------- ------- ------- ------- ------- -------
Cash and cash
equivalents, end of
period................ $ 96 $ 89 $ 81 $ 75 $ 15 $ 14
======= ======= ======= ======= ======= =======
Cash paid during the
period for interest... $ 77 $ 84 $ 52 $ 66 $ 25 $ 18
======= ======= ======= ======= ======= =======
Cash paid during the
period for taxes...... $ 91 $ 96 $ 55 $ 67 $ 36 $ 29
======= ======= ======= ======= ======= =======
</TABLE>
The accompanying notes to financial statements are an integral part of these
Statements of Cash Flows.
Reference is made to Note 1 for definitions of "Case Industrial" and "Case
Credit."
5
<PAGE>
CASE CORPORATION AND CONSOLIDATED SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
(IN MILLIONS)
(UNAUDITED)
<TABLE>
<CAPTION>
CUMULATIVE PENSION
COMMON PAID-IN TRANSLATION UNEARNED LIABILITY RETAINED TREASURY
STOCK CAPITAL ADJUSTMENT COMPENSATION ADJUSTMENT EARNINGS STOCK TOTAL
------ ------- ----------- ------------ ---------- -------- -------- ------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Balance, December 31,
1994................... $ 1 $1,128 $(22) $(7) $(2) $ 83 $-- $1,181
Net income............. -- -- -- -- -- 337 -- 337
Dividends declared..... -- -- -- -- -- (21) -- (21)
Translation adjustment. -- -- 1 -- -- -- -- 1
Capital contributions
on stock issuance..... -- 20 -- -- -- -- -- 20
Recognition of
compensation on
restricted stock...... -- -- -- 3 -- -- -- 3
Issuance of restricted
stock................. -- 6 -- (6) -- -- -- --
Acquisition of treasury
stock................. -- -- -- -- -- -- (1) (1)
--- ------ ---- --- --- ---- --- ------
Balance, December 31,
1995................... 1 1,154 (21) (10) (2) 399 (1) 1,520
Net income............. -- -- -- -- -- 163 -- 163
Dividends declared..... -- -- -- -- -- (10) -- (10)
Translation adjustment. -- -- (2) -- -- -- -- (2)
Capital contributions
on stock issuance..... -- 50 -- -- -- -- -- 50
Recognition of
compensation on
restricted stock...... -- -- -- 1 -- -- -- 1
--- ------ ---- --- --- ---- --- ------
Balance, June 30, 1996.. $ 1 $1,204 $(23) $(9) $(2) $552 $(1) $1,722
=== ====== ==== === === ==== === ======
</TABLE>
The accompanying notes to financial statements are an integral part of
these Statements of Changes in Stockholders' Equity.
6
<PAGE>
CASE CORPORATION AND CONSOLIDATED SUBSIDIARIES
NOTES TO FINANCIAL STATEMENTS
(1) BASIS OF PRESENTATION
The accompanying financial statements reflect the consolidated results of
Case Corporation ("Case" or the "Company") and also include, on a separate and
supplemental basis, the combination of Case's industrial companies and credit
companies as follows:
Case Industrial --
The financial information captioned "Case Industrial"
reflects the consolidation of all majority-owned subsidiaries
except for the wholly owned retail credit subsidiaries. The
credit operations are included on an equity basis.
Case Credit -- The financial information captioned "Case Credit" reflects
Case's wholly owned retail credit subsidiaries.
All significant intercompany transactions, including activity within and
between Case Industrial and Case Credit, have been eliminated.
In the opinion of management, the accompanying unaudited financial
statements of Case Corporation and Consolidated Subsidiaries contain all
adjustments which are of a normal recurring nature necessary to present fairly
the financial position as of June 30, 1996, and the results of operations,
changes in stockholders' equity and cash flows for the periods indicated.
Interim financial results are not necessarily indicative of operating results
for an entire year.
Certain reclassifications have been made to conform the prior years'
financial statements to the 1996 presentation.
(2) ASSET-BACKED SECURITIZATIONS
Case Credit sold $771 million and $795 million of retail notes in the six
months ended June 30, 1996 and June 30, 1995, respectively, to limited-purpose
business trusts organized by Case in the United States and Canada. These
trusts were formed for the purpose of purchasing receivables from Case Credit
and the receivables served as collateral for the issuance of asset-backed
securities to outside investors. The proceeds from the sale of retail notes
were used to repay outstanding debt and to finance additional receivables.
7
<PAGE>
CASE CORPORATION AND CONSOLIDATED SUBSIDIARIES
NOTES TO FINANCIAL STATEMENTS--(CONTINUED)
(3) LONG-TERM DEBT
A summary of long-term debt is set forth in the following table (in
millions):
<TABLE>
<CAPTION>
JUNE 30, DECEMBER 31,
1996 1995
-------- ------------
<S> <C> <C>
Case Industrial
Case Corporation
Senior subordinated notes, interest rate of 10.5%,
retired January 1996.................................. $ -- $ 277
Term loan, payable on various dates through 2000,
average interest
rates of 6.0% and 6.4%, respectively.................. 288 324
Notes, payable in 2005, interest rate of 7.25%......... 298 298
Notes, payable in 2016, interest rate of 7.25%......... 300 --
Case France S.A.
Notes, payable on various dates through 2000, interest
rate of 4.5%.......................................... 28 33
Other debt............................................... 10 4
------ ------
924 936
Less-current maturities.................................. (45) (47)
------ ------
Total long-term debt--Case Industrial................ $ 879 $ 889
------ ------
Case Credit
Case Credit Corporation
Notes, payable in 2003, interest rate of 6.125%........ $ 200 $ --
Case Credit Australia Pty Limited
Long-term portion of borrowings on a line of credit,
average interest
rate of 7.6%.......................................... 78 --
------ ------
Total long-term debt--Case Credit.................... $ 278 $ --
------ ------
Total long-term debt................................. $1,157 $ 889
====== ======
</TABLE>
In the first quarter of 1996, the Company sold $300 million aggregate
principal amount of its 7 1/4% unsecured and unsubordinated notes due 2016
pursuant to a shelf registration statement filed with the Securities and
Exchange Commission in June 1995. The net proceeds from the offering, together
with cash and additional borrowings under the Company's credit facilities,
were used to exercise the Company's option to repurchase for cash all of the
Company's 10 1/2% Senior Subordinated Notes and pay accrued interest thereon.
The Company incurred an extraordinary charge of $22 million after tax in the
first quarter of 1996 as a result of the repurchase.
In the first quarter of 1996, Case Credit sold $200 million aggregate
principal amount of its 6 1/8% unsecured and unsubordinated notes due 2003
pursuant to a $300 million shelf registration statement filed with the
Securities and Exchange Commission in December 1995. The net proceeds from the
offering were used to repay indebtedness and finance Case Credit's growing
portfolio of receivables. The Company has guaranteed the obligations of Case
Credit under these notes and the Company will be released from its obligations
under the guarantee if, among other conditions, Case Credit debt guaranteed by
the Company falls below $100 million.
(4) INCOME TAXES
On a consolidated basis, the Company's effective tax rate for the first six
months of 1996 of 38% was slightly higher than the U.S. statutory tax rate of
35% primarily due to state income taxes and foreign income
8
<PAGE>
CASE CORPORATION AND CONSOLIDATED SUBSIDIARIES
NOTES TO FINANCIAL STATEMENTS--(CONTINUED)
taxed at different rates partially offset by a reduction in the tax valuation
reserve in certain foreign jurisdictions. In the first six months of 1995, the
effective tax rate of 20% was lower than the U.S. statutory tax rate primarily
due to a reduction in the tax valuation reserve.
(5) ACQUISITION OF BUSINESSES
During the first quarter of 1996, the Company acquired Concord Inc., a
manufacturer of air drills based in Fargo, North Dakota, with annual sales of
approximately $25 million. In the second quarter of 1996, the Company's
Australian subsidiary completed the acquisition of Austoft Holdings Limited
("Austoft"), the world's largest manufacturer of sugar cane harvesting
equipment. Austoft is based in Bundaberg, Queensland, Australia, and had sales
of approximately $74 million for the fiscal year ended June 30, 1996. Also in
the second quarter, the Company reached an agreement to acquire 75% of Steyr
Landmaschinentechnik GmbH ("Steyr"), an Austrian tractor manufacturer. Steyr
is based in St. Valentin, Austria, and had revenues of approximately $176
million in 1995.
(6) STOCKHOLDERS' EQUITY
On March 15, 1996, the Board of Directors of the Company, adopted
resolutions increasing the number of shares of common stock reserved for
issuance under the following benefit plans:
<TABLE>
<CAPTION>
ADDITIONAL
PLAN NAME SHARES AUTHORIZED
--------- -----------------
<S> <C>
Equity Incentive Plan ("EIP").............................. 2,500,000
Employee Stock Purchase Plan ("ESPP")...................... 1,000,000
Retirement Savings Plan.................................... 4,000,000
</TABLE>
At that time, the Board of Directors also adopted resolutions reserving for
the first time 100,000 shares of common stock for issuance under the Outside
Directors' Equity Compensation Plan ("ECP").
The resolutions required stockholder approval of the EIP, the ESPP and the
ECP, and such approval was obtained at the Company's 1996 Annual Meeting held
on May 15, 1996.
The shares reserved for issuance under these plans will be issued
periodically over the next several years.
(7) COMMITMENTS AND CONTINGENCIES
Environmental matters
Expenditures for ongoing compliance with environmental regulations that
relate to current operations are expensed or capitalized as appropriate.
Expenditures that relate to an existing condition caused by past operations
and which do not contribute to current or future revenue generation are
expensed. Liabilities are recorded when environmental assessments indicate
that remedial efforts are probable and the costs can be reasonably estimated.
Estimates of the liability are based upon currently available facts, existing
technology and presently enacted laws and regulations. All available evidence
is considered, including prior experience in remediation of contaminated
sites, other parties' share of liability at waste sites and their ability to
pay and data concerning the waste sites released by the U.S. Environmental
Protection Agency or other organizations. These liabilities are included in
the accompanying Balance Sheets at their undiscounted amounts. Recoveries are
evaluated separately from the liability and, if appropriate, are recorded
separately from the associated liability in the accompanying Balance Sheets.
9
<PAGE>
CASE CORPORATION AND CONSOLIDATED SUBSIDIARIES
NOTES TO FINANCIAL STATEMENTS--(CONTINUED)
Case has received and from time to time receives inquiries and/or notices of
potential liability at multiple sites that are the subject of remedial
activities under Federal or state environmental laws and Case may be required
to share in the cost of clean-up. Case is also involved in remediating a
number of other sites, including certain of its currently and formerly
operated facilities or those assumed through corporate acquisitions. Based
upon information currently available, management is of the opinion that any
such potential liability or remediation costs will not have a material adverse
effect on Case's financial position or results of operations.
Product and general liability
Product and general liability claims against Case arise from time to time in
the ordinary course of business. There is an inherent uncertainty as to the
eventual resolution of unsettled claims. However, in the opinion of
management, any losses with respect to existing claims will not have a
material adverse effect on Case's financial position or results of operations.
Legal matters
On May 22, 1996, Case entered into a plea agreement with the United States
Government as a result of a three-count criminal information filed in the
United States District Court for the Eastern District of Wisconsin
(Milwaukee). The first count charged a violation of the International
Emergency Economic Powers Act ("IEEPA") due to the involvement of four Case
employees in the 1991 sales by Case's French affiliate, Case Poclain, of
French-built excavators to a South Korean company for use in Libya; the second
count charged a separate IEEPA violation premised on the 1986 and 1987 sales
by Case's U.K. affiliate, J. I. Case Europe Limited, of U.S.-origin parts to
British and Korean companies for use in Libya; the final count charged a
violation of the Export Administration Act as a result of Case's mislabeling
of parts shipments to a Syrian dealer from 1988 to 1991.
The plea agreement which was accepted by the U.S. District Court was a
global settlement. It resolved all issues of an administrative, civil and
criminal nature existing between Case and the United States Departments of
Justice, Treasury and Commerce. Pursuant to the plea agreement, Case paid a
penalty totaling $2 million.
This resolution of the matter did not affect Case's export privileges, nor
did it disqualify Case or any of its affiliates as a government contractor.
The incidents that led to the charges were isolated and occurred more than
five years ago. Upon notification in 1991 that these events took place, Case
took immediate steps to respond. Case instituted and has in place a variety of
compliance programs designed to prevent a recurrence of such violations in the
future.
In March 1990, Lupia Beteiligungs GmbH ("Lupia"), a subsidiary of Deutsche
Bank AG, purchased from Universaltrac Beteiligungs GmbH ("Universaltrac"), a
Case subsidiary, all of Case's 50% ownership interest in Intertractor Viehmann
GmbH ("Intertractor"), a German producer of crawler tractor undercarriage
parts. In November 1992, Lupia demanded rescission of the sale and asserted
that Intertractor's 1989 financial statements and its projections for fiscal
year 1990 fraudulently misstated Intertractor's earning capacity. Lupia also
claimed damages for transaction costs related to the sale, for losses
sustained by Intertractor after the sale and for restructuring charges
incurred to mitigate Intertractor's losses. The total amount claimed by Lupia
was approximately DM 220 million, or $149 million.
Lupia asserted similar claims against the former owners of the other 50%
interest in Intertractor, Thyssen Industrie Aktiengesellschaft ("Thyssen") and
Gebruder Kulenkampff Handelsgesellschaft mbH & Co. Kommanditgesellschaft
("GK"). On or about September 29, 1994, Lupia filed suit in Germany against
Thyssen and GK on the grounds of fraud and breach of contract. Lupia's claims
against Thyssen and GK arise out of essentially the same facts as Lupia's
claim against Universaltrac. However, neither the Company nor Universaltrac
was named in the litigation.
10
<PAGE>
CASE CORPORATION AND CONSOLIDATED SUBSIDIARIES
NOTES TO FINANCIAL STATEMENTS--(CONTINUED)
On or about June 14, 1995, the District Court dismissed Lupia's suit against
Thyssen and GK without hearing evidence. Lupia appealed and on May 3, 1996,
the Court of Appeals issued a written judgment dismissing Lupia's appeal.
Lupia did not appeal to the German Supreme Court. The judgment of the Court of
Appeals is therefore final and binding as between Lupia and the defendants.
Although the judgment is not binding as between Lupia and Universaltrac, the
Company believes it is unlikely that Lupia will sue Universaltrac on what
would be essentially the same grounds as those already rejected by both the
District Court and the Court of Appeals. The Company also believes that if
such a suit were filed, the outcome would be the same as in Lupia's suit
against Thyssen and GK.
The Company understands that the public prosecutor in Germany, at, the
Company believes, the instigation of Lupia, has undertaken a criminal fraud
investigation of Intertractor's former general managers in connection with the
sale. Both the District Court and Court of Appeals held, however, that the
former general managers were not agents of the defendants in connection with
the sale. The Company therefore believes that the criminal investigation
likely presents no risk of liability to Universaltrac or the Company.
The Company has agreed to indemnify Tenneco Inc. against any losses it or
its subsidiaries may incur as a result of Lupia's demand. In light of the
decisions of the District Court and the Court of Appeals, however, the Company
believes that Lupia's claim presents no risk of liability to Tenneco or the
Company.
Case is party to various legal proceedings arising from its operations, the
most common of which involve product liability claims, disputes with dealers
and employment matters. Management is of the opinion that the outcome of these
proceedings, individually and in the aggregate, will not have a material
adverse effect on Case's financial position or results of operations.
11
<PAGE>
CASE CORPORATION AND CONSOLIDATED SUBSIDIARIES
NOTES TO FINANCIAL STATEMENTS--(CONTINUED)
(8) EARNINGS PER SHARE OF COMMON STOCK
<TABLE>
<CAPTION>
THREE
MONTHS SIX MONTHS
ENDED ENDED
JUNE 30, JUNE 30,
----------- --------------
1996 1995 1996 1995
----- ----- ------ ------
<S> <C> <C> <C> <C>
Earnings per average share of Common Stock (shares
in millions):
Primary
Net earnings after preferred stock dividends and
before cumulative effect of changes in
accounting principles and extraordinary loss.... $1.47 $1.53 $ 2.47 $ 2.49
Cumulative effect of changes in accounting
principles...................................... -- -- -- (0.13)
Extraordinary loss............................... -- -- (0.30) --
----- ----- ------ ------
Net earnings per share of common stock........... $1.47 $1.53 $ 2.17 $ 2.36
===== ===== ====== ======
Average common and common equivalent shares
outstanding..................................... 74 71 74 71
Fully Diluted
Net earnings before cumulative effect of changes
in accounting principles and extraordinary loss. $1.42 $1.46 $ 2.40 $ 2.40
Cumulative effect of changes in accounting
principles...................................... -- -- -- (0.12)
Extraordinary loss............................... -- -- (0.29) --
----- ----- ------ ------
Net earnings per share of common stock........... $1.42 $1.46 $ 2.11 $ 2.28
===== ===== ====== ======
Average common and common equivalent shares
outstanding..................................... 77 75 77 75
</TABLE>
12
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
ANALYSIS OF RESULTS OF OPERATIONS
Second Quarter 1996 vs. Second Quarter 1995
EARNINGS
The Company recorded net income of $110 million in each of the second
quarters of 1996 and 1995. Primary earnings per share for the second quarter
of 1996 was $1.47 per share compared to $1.53 per share in the same quarter of
1995. The 4% per share decrease is due to an increase in the number of common
shares outstanding.
The Company's industrial operations recorded income before equity income of
Case Credit of $91 million in the second quarter of 1996, increasing 6% from
the $86 million reported in the second quarter of 1995. On a pretax basis, the
Company's industrial earnings increased $51 million to $143 million in the
second quarter of 1996 from $92 million in the second quarter of 1995. The
industrial effective income tax rate increased from 7% in the second quarter
of 1995 to 36% in the second quarter of 1996, resulting from a reversal of the
tax valuation reserve in 1995. Case Credit recorded $19 million in net income
in the second quarter of 1996, $5 million less than net income of $24 million
in the second quarter of 1995. This decrease was primarily due to the timing
of asset-backed securitization transactions and the amount of prefunding on
such transactions.
Case's operating earnings for the second quarter of 1996 were $187 million,
versus $154 million for the same period in 1995. Case defines operating
earnings as industrial earnings before interest, taxes, changes in accounting
principles and extraordinary loss, including the income of Case Credit on an
equity basis. Case's earnings improvement resulted from significantly higher
price realization; improved manufacturing performance and restructuring-
related savings; lower industrial selling, general and administrative
expenses; higher interest income; and a favorable foreign exchange impact.
These improvements were partially offset by inflationary cost increases,
higher research and development spending, and lower earnings at Case Credit.
A reconciliation of the Company's industrial net income to operating
earnings is as follows (in millions):
<TABLE>
<CAPTION>
CASE
INDUSTRIAL
-----------
THREE
MONTHS
ENDED
JUNE 30,
-----------
1996 1995
----- -----
<S> <C> <C>
Income before cumulative effect of changes in accounting
principles and extraordinary loss.......................... $110 $110
Income tax provision........................................ 52 6
Interest expense............................................ 25 38
----- -----
Operating earnings...................................... $187 $154
===== =====
</TABLE>
REVENUES
On a consolidated basis, worldwide revenues increased $48 million in the
second quarter of 1996 to $1,466 million compared to $1,418 million in the
second quarter of 1995. Net sales of equipment and parts increased $21 million
to $1,398 million. The increase in net sales is comprised of a 2% increase in
volume and a 3% improvement in price realization, partially offset by a 3%
decrease resulting from the divestiture of company-owned retail stores and the
sale of Viscosity Oil in 1995. Consolidated interest income and other revenue
increased $27 million in the second quarter of 1996 to $68 million. This
reflects higher revenues on Case Credit, primarily related to higher finance
income earned on retail notes and leases, and asset-backed securitization
transactions.
13
<PAGE>
In North America, second quarter net sales of construction equipment to
dealers increased slightly, while net sales of agricultural equipment
decreased 14% as compared to the second quarter of 1995. Net sales for the
quarter were affected by the year-over-year impact of selling company-owned
retail stores, the sale of Viscosity Oil in 1995, and the Company's progress
in implementing its supply chain management initiative. This initiative has
allowed the Company to underproduce relative to worldwide retail demand, and
thereby reduce field inventories. This planned action will continue to have a
significant impact in the third quarter and will allow the Company to generate
substantial cash flow in the second half of 1996. Retail unit sales (sales by
Case dealers to retail customers) of agricultural and construction equipment
in North America improved significantly over the second quarter of 1995.
In Europe, net sales of agricultural equipment to dealers in the second
quarter of 1996 decreased 8% and net sales of construction equipment decreased
20%, as compared to the same period in 1995, largely due to the year-over-year
impact of the change in exchange rates. The decrease in agricultural equipment
sales was also driven by a decrease in sales of tractors with less than 120
horsepower, partially offset by an increase in sales of combines. The decrease
in sales of construction equipment also reflects the continued weakness of the
European construction equipment market, particularly in France and Germany.
In Case's other international markets, sales of equipment in the second
quarter of 1996 nearly doubled. The increase in agricultural equipment sales
resulted from significant increases in sales of 120-plus horsepower tractors,
four-wheel drive tractors, combines and cotton pickers. Sales in the Asia
Pacific region were particularly strong due to improved crop prices and
favorable weather conditions. The increase in construction equipment sales was
primarily due to increases in loader/backhoe sales in the Asia Pacific region,
along with improvements in the Brazilian economy from the severe weakness
experienced in the second half of 1995. The Company experienced increases in
retail unit sales in most product lines during the second quarter of 1996.
COSTS AND EXPENSES
Cost of goods sold for the industrial operations increased $10 million to
$1,052 million in the second quarter of 1996 as compared to the same quarter
in 1995. Cost of goods sold as a percentage of net sales decreased to 75.3% in
the second quarter of 1996 from 75.7% in the second quarter of 1995. This
decrease reflects pricing actions and cost improvement initiatives. These
improvements were partially offset by inflationary cost increases and the
impact of the sale of company-owned retail stores.
Selling, general and administrative expenses for the industrial operations
decreased $23 million in the second quarter of 1996 to $142 million. As a
percentage of net sales, selling, general and administrative expenses
decreased to 10.2% in the second quarter of 1996 as compared to 12.0% in the
second quarter of 1995. This decrease reflects lower retail selling expenses
as a result of restructuring-related sales of company-owned retail stores and
decreased expenses related to low-rate and other sales financing programs.
Case Industrial makes payments to Case Credit in an amount equal to the
difference between the rate actually paid by retail customers and the interest
rate charged by Case Credit.
Research, development and engineering expenses increased 21% to $46 million
in the second quarter of 1996 as compared to the same quarter in 1995. The
increased expenditures primarily related to new product development.
Interest expense for Case's industrial operations was $25 million in the
second quarter of 1996, $13 million lower than the same quarter of 1995. The
decreased interest expense was primarily due to lower debt levels during the
second quarter of 1996 as compared to the second quarter of 1995, and
strategic refinancing actions taken in the second half of 1995 and the first
half of 1996.
The consolidated income tax provision for the second quarter of 1996 was 38%
as compared to 19% in the second quarter of 1995. The 1996 effective income
tax rate was slightly higher than the U.S. statutory rate of 35% primarily due
to state income taxes and foreign income taxed at different rates partially
offset by a reversal
14
<PAGE>
of the tax valuation reserve in certain foreign jurisdictions. The income tax
rate in 1995 was significantly lower than the U.S. statutory rate due
primarily to reductions in the tax valuation reserve in 1995 that resulted
from income generated in certain tax jurisdictions.
CREDIT OPERATIONS
Case Credit recorded net income of $19 million in the second quarter of
1996, versus $24 million in the second quarter of 1995. Revenues were level at
$59 million in the second quarters of 1996 and 1995. Case Credit experienced
higher finance income on retail notes and leases during the second quarter of
1996 as compared to the second quarter of 1995, offset by lower payments from
Case Industrial for low rate financing programs.
Interest expense for the second quarter of 1996 was $14 million versus $9
million in the second quarter of 1995. This increase is due to higher overall
debt levels to support the increase in Case Credit's portfolio of receivables.
Case Credit's serviced portfolio increased 18% to $4.0 billion. New
equipment acquisitions in the second quarter of 1996 were up 14% versus the
comparable period last year. Portfolio losses for the total serviced portfolio
were $0.7 million versus $1.1 million during the second quarter of 1995. This
represents a loss to liquidation ratio of 0.15% in the second quarter of 1996
versus 0.32% in the second quarter of 1995.
Six months 1996 vs. Six months 1995
EARNINGS
The Company recorded income before cumulative effect of changes in
accounting principles and extraordinary loss of $185 million in the first six
months of 1996. This represents a $5 million improvement from income of $180
million in the first six months of 1995. Primary earnings per share before
accounting changes and extraordinary loss for the first six months of 1996 was
$2.47 per share compared to $2.49 per share in the first six months of 1995.
The decrease in earnings per share is due to an increase in the number of
common shares outstanding.
Net income in the first six months of 1996 was $163 million, with primary
earnings per share of $2.17, versus net income and primary earnings per share
of $171 million and $2.36, respectively, in the first six months of 1995. In
January 1996, the Company repurchased for cash all of its 10 1/2% Senior
Subordinated Notes. As a result of the repurchase, the Company recorded an
extraordinary loss of $22 million, after tax. Effective January 1, 1995, Case
adopted Statement of Financial Accounting Standards ("SFAS") No. 106,
"Employers' Accounting for Postretirement Benefits other than Pensions," for
its non-U.S. plans. The cumulative effect of adopting this standard was to
decrease net income by $9 million, after tax, in the first six months of 1995.
The Company's industrial operations recorded income before cumulative effect
of changes in accounting principles, extraordinary loss and equity income of
Case Credit of $140 million in the first six months of 1996 compared to $135
million in the same period of 1995. On a pretax basis, the Company's
industrial earnings increased $76 million to $220 million in the first six
months of 1996 from $144 million in the first six months of 1995. The
industrial effective income tax rate increased from 6% in the first six months
of 1995 to 36% in the first six months of 1996 resulting from a reversal of
the tax valuation reserve in 1995. Case Credit recorded $45 million in net
income in the first six months of 1996 and 1995.
Case's operating earnings for the first six months of 1996 were $313
million, versus $261 million for the same period in 1995. Case defines
operating earnings as industrial earnings before interest, taxes, changes in
accounting principles and extraordinary loss, including the income of Case
Credit on an equity basis. Case's earnings improvement resulted from
significantly higher price realization; improved manufacturing performance and
restructuring-related savings; lower industrial selling, general and
administrative expenses; and a favorable
15
<PAGE>
foreign exchange impact. These improvements were partially offset by
inflationary cost increases, higher research and development spending, and
lower sales volumes.
A reconciliation of the Company's industrial net income to operating
earnings is as follows (in millions):
<TABLE>
<CAPTION>
CASE
INDUSTRIAL
-----------
SIX MONTHS
ENDED
JUNE 30,
-----------
1996 1995
----- -----
<S> <C> <C>
Income before cumulative effect of changes in accounting
principles and extraordinary loss.......................... $185 $180
Income tax provision........................................ 80 9
Interest expense............................................ 48 72
----- -----
Operating earnings...................................... $313 $261
===== =====
</TABLE>
REVENUES
On a consolidated basis, worldwide revenues increased $41 million in the
first six months of 1996 to $2,637 million. Net sales of equipment and parts
decreased $15 million to $2,503 million. This decrease in net sales is
comprised of a 2% decrease resulting from the divestiture of company-owned
retail stores and the sale of Viscosity Oil in 1995, and a 1% decrease related
to foreign exchange partially offset by a 3% improvement in price realization.
Consolidated interest income and other revenue increased $56 million in the
first six months of 1996 to $134 million. This reflects higher revenues on
Case Credit, primarily related to higher finance income earned on retail notes
and leases and asset-backed securitization transactions.
In North America, net sales of construction equipment to dealers increased
4%, while net sales of agricultural equipment decreased 20%, from the first
six months of 1995. Net sales for the period were affected by the year-over-
year impact of selling company-owned retail stores, the sale of Viscosity Oil
in 1995, and the Company's supply chain management initiative. This initiative
has allowed the Company to underproduce relative to worldwide retail demand,
and thereby reduce field inventories. This planned action will continue to
have a significant impact in the third quarter and will allow the Company to
generate substantial cash flow in the second half of 1996. Retail unit sales
of agricultural and construction equipment in North America improved
significantly over the first six months of 1995.
In Europe, net sales of agricultural equipment in the first six months of
1996 increased 5% while net sales of construction equipment decreased 19%, as
compared to the same period in 1995. Sales of both agricultural and
construction equipment were negatively impacted by the year-over-year change
in exchange rates. The overall net increase in agricultural equipment sales
was driven by 120-plus horsepower tractors and combines. The decrease in
construction equipment sales also reflects the continued weakness of the
European construction equipment market, particularly in France and Germany.
In Case's other international markets, sales of agricultural equipment in
the first six months of 1996 more than doubled, and sales of construction
equipment increased significantly as compared to the first six months of 1995.
The increase in agricultural equipment sales resulted from significant
increases in sales of 120-plus horsepower tractors, four-wheel drive tractors,
combines and cotton pickers. Sales in the Asia Pacific region were
particularly strong due to improved crop prices and favorable weather
conditions. The increase in construction equipment sales was primarily due to
increases in loader/backhoe sales in the Asia Pacific region, along with
improvements in the Brazilian economy from the severe weakness in the second
half of 1995. The Company experienced increases in retail unit sales in most
product lines during the first six months of 1996.
16
<PAGE>
COSTS AND EXPENSES
Cost of goods sold for the industrial operations decreased $22 million to
$1,896 million in the first six months of 1996 as compared to the same period
in 1995. Cost of goods sold as a percentage of net sales decreased to 75.7% in
the first six months of 1996 from 76.2% in the first six months of 1995. This
decrease reflects pricing actions and cost improvement initiatives, partially
offset by inflationary cost increases and the impact of the sale of company-
owned retail stores.
Selling, general and administrative expenses for the industrial operations
decreased $51 million in the first six months of 1996 to $270 million. As a
percentage of net sales, selling, general and administrative expenses
decreased to 10.8% in the first six months of 1996 as compared to 12.7% in the
first six months of 1995. This decrease reflects lower retail selling expenses
as a result of restructuring-related sales of company-owned retail stores and
decreased expenses related to low-rate and other sales financing programs.
Case Industrial makes payments to Case Credit in an amount equal to the
difference between the interest rate actually paid by retail customers and the
interest rate charged by Case Credit.
Research, development and engineering expenses increased 25% to $91 million
in the first six months of 1996 as compared to the same period in 1995. The
increased expenditures primarily related to new product development.
Interest expense for Case's industrial operations was $48 million for the
first six months of 1996, $24 million lower than the same period of 1995. The
decreased interest expense was due to lower debt levels during the first six
months of 1996 as compared to the first six months of 1995, and to strategic
refinancing actions.
The consolidated income tax provision for the first six months of 1996 was
38% as compared to 20% in the first six months of 1995. The 1996 effective
income tax rate was slightly higher than the U.S. statutory rate of 35%
primarily due to state income taxes and foreign income taxed at different
rates partially offset by a reversal of the tax valuation reserve in certain
foreign jurisdictions. The income tax rate in 1995 was significantly lower
than the U.S. statutory rate primarily due to reductions in the tax valuation
reserve in 1995 that resulted from income generated in certain tax
jurisdictions.
RESTRUCTURING PROGRAM
During the second quarter of 1996, restructuring-related actions included
the divestiture of 15 company-owned retail stores, for a total of 28
divestitures in the first half of 1996. The Vierzon, France, manufacturing
facility was closed during the first six months of 1996 and loader/backhoe
production was transferred to the Crepy, France, facility. Regional North
American depots are supplying component parts to dealers that were previously
supplied by the Racine, Wisconsin, parts depot. The Company previously
announced its intention to close the Racine parts depot during 1996.
CREDIT OPERATIONS
Case Credit recorded net income of $45 million in the first six months of
1996, versus $45 million in the first six months of 1995. Revenues were $125
million in the first six months of 1996 and $110 million in the first six
months of 1995. Case Credit earned higher finance income on retail notes and
leases during the first six months of 1996 as compared to the first six months
of 1995, offset by lower payments from Case Industrial for low rate financing
programs.
Interest expense for the first six months of 1996 was $31 million versus $19
million in the first six months of 1995. This increase is primarily due to
higher overall debt levels to support the increase in Case Credit's portfolio
of receivables.
Case Credit's serviced portfolio increased 18% to $4 billion. New equipment
acquisitions in the first six months of 1996 were up 14% versus the comparable
period last year. Portfolio losses for the total serviced
17
<PAGE>
portfolio were $1.4 million versus $1.3 million during the first six months of
1995. This represents a loss to liquidation ratio of 0.15% in the first six
months of 1996 versus 0.17% in the first six months of 1995.
LIQUIDITY AND CAPITAL RESOURCES
The discussion of liquidity and capital resources focuses on the balance
sheets and statements of cash flows. Case's industrial operations are capital
intensive and subject to seasonal variations in financing requirements for
dealer receivables and inventories. Whenever necessary, funds provided from
operations are supplemented from external sources.
Cash used by operating activities was $114 million in the first six months
of 1996. Cash provided by the industrial operations was $32 million, versus
$115 million for the same period in 1995. The cash generated in both 1996 and
1995 resulted from operating income, and increases in payables and accrued
liabilities, partially offset by increases in inventory and wholesale
receivables. In addition, the first six months of 1995 included the impact of
the sale of $400 million of wholesale receivables to a revolving asset-backed
securitization facility. Cash used by Case Credit was $126 million in the
first six months of 1996, versus $33 million for the first six months of 1995.
In both periods cash was used to increase acquisitions of retail receivables
and leases.
During the first six months of 1996, the Company completed two strategic
acquisitions resulting in $71 million of investment including $15 million of
non-cash consideration. In January, the Company acquired Concord, Inc.
("Concord"), a manufacturer of air drills based in Fargo, North Dakota, with
annual sales of approximately $25 million. In the second quarter, the
Company's Australian subsidiary completed the acquisition of Austoft Holdings
Limited ("Austoft") of Australia, the world's largest manufacturer of sugar
cane harvesting equipment. Austoft had sales of approximately $74 million for
the fiscal year ended June 30, 1996.
The Company issued common stock in conjunction with the purchase of Concord,
and also issued 566,100 shares in conjunction with an over-allotment option
exercised by the underwriters of a 15.2 million share offering of Case shares
held by Tenneco Inc. The Company received approximately $30 million in
proceeds from the exercise of the over-allotment options, which were offered
at $53.75 per share. The equity offering fully divested Tenneco of its
holdings in Case. In addition, common stock was issued in conjunction with
various employee benefit plans and the exercise of stock options.
The Company received proceeds from the issuance of long-term debt of $500
million during the first six months of 1996. In January, the Company issued
$300 million aggregate principal amount of 7 1/4% unsecured and unsubordinated
notes due 2016. In February, Case Credit issued $200 million aggregate
principal amount of its 6 1/8% unsecured and unsubordinated notes due 2003
pursuant to a $300 million shelf registration statement filed with the
Securities and Exchange Commission in 1995. The net proceeds from the offering
were used to repay indebtedness and finance Case Credit's growing portfolio of
receivables.
The Company repaid $356 million of long-term debt during the first six
months of 1996. The proceeds from the $300 million note offering, together
with cash and additional borrowings under the Company's credit facilities were
used to exercise the Company's option to repurchase for cash all of the
Company's 10 1/2% Senior Subordinated Notes and to pay accrued interest
thereon. As a result of this repurchase, the Company recorded an extraordinary
after tax charge of $22 million.
Total debt at June 30, 1996, was $2,217 million, $1,063 million of which
related to Case Credit. The consolidated debt to capitalization ratio, defined
as total debt divided by the sum of total debt, stockholders' equity and
preferred stock with mandatory redemption provisions, was 55.2% at June 30,
1996, and the Company's industrial debt to capitalization ratio was 39.1%. The
consolidated and industrial ratios at December 31, 1995 were 54.9% and 39.3%,
respectively.
18
<PAGE>
FUTURE LIQUIDITY AND CAPITAL RESOURCES
The Company has various sources of future liquidity: the asset-backed
securitization markets, public debt offerings and other available lines of
credit. In addition, the Company has a $400 million private, revolving
wholesale receivable asset-backed securitization facility that can be utilized
to periodically sell wholesale (dealer) receivables to third party investors.
Also, the Company anticipates that it will continue to pool retail receivables
and issue asset-backed securities in the United States and Canada depending
upon the availability of the asset-backed securities market. Case Credit may
also issue additional debt securities of up to $100 million aggregate
principal amount under the registration statement previously mentioned.
In the first six months of 1996, the Company reached an agreement to acquire
75% of Steyr Landmaschinentechnik GmbH ("Steyr"), an Austrian tractor
manufacturer. Steyr is based in St. Valentin, Austria, and had revenues of
approximately $176 million in 1995. It is anticipated that this acquisition
will be completed in the third quarter.
OUTLOOK
Strong fundamentals are expected to continue to drive growth in Case's
markets during 1996.
Low carryover stocks of grains, smaller than expected harvests and poor
planting conditions in some parts of the world, together with continued growth
in food demand, have fueled the rise in agricultural commodity prices to
record levels. This is expected to keep demand for agricultural equipment
strong for the foreseeable future in virtually all parts of the world.
The North American market for light-to-medium construction equipment is
expected to be stable to improving, due to a sustained housing market. In
addition, growth in other secondary markets, such as waste management and
materials handling, is adding to demand for Case products. In Europe, the
Company believes the construction market could continue to experience
significant weakness, particularly in France and Germany, if lower interest
rates do not generate economic growth. In Case's other markets outside of
western Europe and North America, the Company expects generally favorable
conditions.
The information included in this outlook section is forward looking and
involves risks and uncertainties that could significantly impact expected
results. The Company's outlook is predominantly based on its interpretation of
what it considers key economic assumptions. Crop production and commodity
prices are strongly affected by weather and can fluctuate significantly.
Housing starts and other construction activity are sensitive to interest
rates, government spending and general economic conditions. Some of the other
significant factors for the company include foreign currency movements,
political uncertainty and civil unrest in various areas of the world, pricing,
product initiatives and other actions taken by competitors, disruptions in
production capacity, excess inventory levels, the effect of changes in laws
and regulations including government subsidies and international trade
regulations, changes in environmental laws, employee relations and other
factors.
19
<PAGE>
PART II
OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
For a description of legal proceedings to which the Company is party, see
footnote 7 of this Form 10-Q.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
The Annual Meeting of Stockholders of the Company was held on May 15, 1996.
At the meeting, stockholders voted upon (i) the election of a Board of
Directors to serve until the 1997 Annual Meeting of Stockholders and until
their successors are elected and have qualified, (ii) three benefit plans and
(iii) the appointment of Arthur Andersen LLP as independent public accountants
for the year 1996. Proxies for the meeting were solicited pursuant to
Regulation 14 under the Securities Exchange Act of 1934. There were 60,639,804
shares of common stock present at the meeting in person or by proxy, each such
share being entitled to one vote on each matter being voted upon.
There was no solicitation in opposition to management's nominees for
director as listed in the proxy statement for the meeting and all such
nominees were elected by the following vote:
<TABLE>
<CAPTION>
VOTES
NOMINEE VOTES FOR WITHHELD
------- ---------- ----------
<S> <C> <C>
Mark Andrews....................................... 49,727,712 10,912,092
Jeffery T. Grade................................... 49,935,673 10,704,131
Katherine M. Hudson................................ 49,926,942 10,712,862
Dana G. Mead....................................... 49,711,749 10,928,055
Gerald Rosenfeld................................... 49,761,133 10,878,671
Jean-Pierre Rosso.................................. 49,765,692 10,874,112
Theodore R. Tetzlaff............................... 49,741,966 10,897,838
Thomas N. Urban.................................... 49,938,855 10,700,949
</TABLE>
The three benefit plans were each approved by the following vote:
<TABLE>
<CAPTION>
VOTES
PLAN VOTES FOR AGAINST ABSTENTIONS
---- ---------- ---------- -----------
<S> <C> <C> <C>
Equity Incentive Plan.................. 44,501,571 16,033,395 104,838
Employee Stock Purchase Plan........... 59,975,489 580,852 83,463
Outside Directors' Equity Compensation
Plan.................................. 50,941,713 9,567,792 130,299
</TABLE>
The appointment of Arthur Andersen LLP as independent public accountants was
approved by the following vote:
<TABLE>
<CAPTION>
VOTES FOR VOTES
--------- AGAINST ABSTENTIONS
------- -----------
<S> <C> <C>
60,534,779 45,847 59,178
</TABLE>
There were no broker non-votes on any of the aforementioned matters at the
meeting.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits.
A list of the exhibits included as part of this Form 10-Q is set forth in
the Index to Exhibits that immediately precedes such exhibits, which is
incorporated herein by reference.
(b) Reports on Form 8-K.
The Company did not file any Current Reports on Form 8-K during the second
quarter ended June 30, 1996.
20
<PAGE>
SIGNATURE
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES EXCHANGE ACT OF 1934, THE
REGISTRANT HAS DULY CAUSED THIS REPORT TO BE SIGNED ON ITS BEHALF BY THE
UNDERSIGNED THEREUNTO DULY AUTHORIZED.
Case Corporation
/s/ Theodore R. French
By___________________________________
Theodore R. French
Senior Vice President and
Chief Financial Officer
(Principal Financial Officer
and authorized signatory
for Case Corporation)
Date: August 9, 1996
21
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
SEQUENTIAL
EXHIBIT PAGE
NUMBER DESCRIPTION OF EXHIBITS NUMBER
------- ----------------------- ----------
<C> <S> <C>
4(a) The Company hereby agrees to furnish to the Securities
and Exchange Commission, upon its request, the
instruments with respect to its guaranty of certain
indebtedness issued by its subsidiaries, which
indebtedness does not exceed 10% of the Company's total
consolidated assets.
4(b) Third Amendment, dated as of May 17, 1996, to the Second
Amended and Restated Revolving Credit and Term Loan
Agreement dated as of September 15, 1995, among Case
Corporation, Case Canada Corporation Corporation Case
Canada, the lenders parties thereto, the Co-Agents named
therein, Royal Bank of Canada, as Canadian Administrative
Agent, and Chemical Bank, as U.S. Administrative Agent.
10(a) Case Equipment Corporation Equity Incentive Plan (as
amended and restated on March 15, 1996), as approved by
stockholders on May 15, 1996.
10(b) Case Corporation Outside Directors' Equity Incentive Plan
(as amended and restated effective January 1, 1996), as
approved by stockholders on May 15, 1996.
11 Computation of Earnings Per Share of Common Stock. 23
12 Computation of Ratio of Earnings to Fixed Charges and 24
Preferred Dividends.
27 Financial Data Schedule
</TABLE>
22
<PAGE>
EXHIBIT 11
CASE CORPORATION AND CONSOLIDATED SUBSIDIARIES
COMPUTATION OF EARNINGS PER SHARE OF COMMON STOCK
(IN MILLIONS EXCEPT SHARE AMOUNTS)
(UNAUDITED)
<TABLE>
<CAPTION>
THREE MONTHS SIX MONTHS
ENDED ENDED
JUNE 30, JUNE 30,
1996 1996
------------ ----------
<S> <C> <C>
Computations for Statements of Income
Primary earnings per share of common stock (average
shares outstanding):
Income before cumulative effect of changes in
accounting principles and extraordinary loss..... $ 110 $ 185
Extraordinary loss................................ -- (22)
---------- ----------
Net income........................................ 110 163
Preferred stock dividends......................... 1 3
---------- ----------
Net income to common.............................. $ 109 $ 160
========== ==========
Average shares of common stock outstanding........ 72,002,505 71,650,424
Incremental common shares applicable to restricted
common stock based on the common stock daily
average market price during the period........... 196,026 184,969
Incremental common shares applicable to common
stock options based on the common stock daily
average market price during the period........... 1,771,917 1,779,076
---------- ----------
Average common stock, as adjusted................. 73,970,448 73,614,469
========== ==========
Earnings per share of common stock (including
common stock equivalents):
Net income after preferred stock dividends and
before cumulative effect of changes in
accounting principles and extraordinary loss... $ 1.47 $ 2.47
Extraordinary loss................................ -- (0.30)
---------- ----------
Net earnings per share of common stock............ $ 1.47 $ 2.17
========== ==========
Fully diluted earnings per share of common stock:
Average shares of common stock outstanding........ 72,002,505 71,650,424
Incremental common shares applicable to restricted
common stock based on the more dilutive of the
common stock ending or daily average market price
during the period................................ 205,028 204,602
Incremental common shares applicable to common
stock options based on the more dilutive of the
common stock ending or average market price
during the period................................ 1,771,866 1,779,000
Average common shares issuable assuming conversion
of the Series A Cumulative Convertible Preferred
Stock and the Cumulative Convertible Second
Preferred Stock.................................. 3,488,711 3,488,711
---------- ----------
Average common shares assuming full dilution...... 77,468,110 77,122,737
========== ==========
Fully diluted earnings per average share of common
stock, assuming conversion of all applicable
securities:
Net income before extraordinary loss............ $ 1.42 $ 2.40
Extraordinary loss.............................. -- (0.29)
---------- ----------
Net earnings per share of common stock.......... $ 1.42 $ 2.11
========== ==========
</TABLE>
23
<PAGE>
EXHIBIT 12
CASE CORPORATION AND CONSOLIDATED SUBSIDIARIES
COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
AND PREFERRED DIVIDENDS
(DOLLARS IN MILLIONS)
(UNAUDITED)
<TABLE>
<CAPTION>
SIX MONTHS
ENDED
JUNE 30, 1996
-------------
<S> <C>
Net Income........................................................ $ 163
Add:
Interest expense................................................ 78
Amortization of capitalized debt expense........................ 3
Portion of rentals representative of interest factor............ 7
Income tax expense and other taxes on income.................... 112
Fixed charges of unconsolidated subsidiaries.................... 2
Extraordinary loss.............................................. 22
-----
Earnings as defined........................................... $ 387
=====
Interest expense.................................................. $ 78
Amortization of capitalized debt expense.......................... 3
Portion of rentals representative of interest factor.............. 7
Fixed charges of unconsolidated subsidiaries...................... 2
-----
Fixed charges as defined...................................... $ 90
=====
Preferred Dividends:
Amount declared................................................. $ 3
Gross-up to pre-tax based on 38% effective rate................. $ 5
Ratio of earnings to fixed charges and preferred dividends........ 4.07x
=====
</TABLE>
24
<PAGE>
Exhibit 4(b)
CREDIT AGREEMENT DATED AS OF SEPTEMBER 15, 1995
THIRD AMENDMENT DATED AS OF MAY 17, 1996
<TABLE>
<CAPTION>
SIGNATURE
REVOLVING TOTAL PAGE
INSTITUTION CREDIT TERM LOAN COMMITMENTS RECEIVED
<S> <C> <C> <C> <C>
Chemical Bank - U.S. Administrative Agent $ 60,082,367.58 $ 5,894,562.52 $ 65,976,930.10 Yes
ABN AMRO $ 7,147,371.48 $ 2,421,679.59 $ 9,569,051.07 Yes
Arab Banking Corporation $ 0.00 $ 4,314,769.24 $ 4,314,769.24 Yes
Australia-New Zealand Bank $ 4,137,931.03 $ 1,487,851.47 $ 5,625,782.50 Yes
Bank of America Illinois $ 8,426,098.23 $ 12,793,307.12 $ 21,219,405.35 Yes
Bank of America National Trust and Savings Association $ 35,580,045.48 $ 11,776,848.27 $ 47,356,893.75 Yes
Bank Austria $ 4,913,635.42 $ 12,069,091.66 $ 16,982,727.08 Yes
Bank of Hawaii $ 2,758,620.69 $ 991,900.97 $ 3,750,521.66 Yes
Bank of Montreal $ 31,135,601.03 $ 5,245,335.24 $ 36,380,936.27 Yes
Bank of New York $ 35,580,045.48 $ 4,163,768.66 $ 39,743,814.14 Yes
Bank of Nova Scotia $ 47,867,074.42 $ 3,467,767.21 $ 51,334,841.63 Yes
Bank of Scotland $ 5,000,000.00 $ 0.00 $ 5,000,000.00 Yes
Bank Polska $ 0.00 $ 5,337,107.70 $ 5,337,107.70 Yes
Banque Francaise Du Commerce $ 0.00 $ 7,901,210.26 $ 7,901,210.26 Yes
C.M. Life Insurance Co. $ 0.00 $ 1,466,283.96 $ 1,466,283.96
Canadian Imperial Bank of Commerce $ 23,293,016.54 $ 0.00 $ 23,293,016.54 Yes
Chase Manhattan $ 42,500,428.14 $ 1,438,256.39 $ 43,938,684.53 Yes
Chiao Tung Bank Co., Ltd. Taipei $ 4,444,444.45 $ 1,598,062.68 $ 6,042,507.13 Yes
Chuo Trust & Banking $ 0.00 $ 2,876,512.83 $ 2,876,512.83 Yes
Citibank $ 35,580,045.48 $ 0.00 $ 35,580,045.48 Yes
Commerzbank $ 25,235,217.89 $ 518,899.64 $ 25,754,117.53 Yes
Credit Agricole $ 6,671,267.54 $ 4,072,878.79 $ 10,744,146.33 Yes
Credit Lyonnais $ 35,580,045.48 $ 7,097,811.73 $ 42,677,857.21 Yes
Credit Suisse $ 29,946,242.66 $ 4,572,027.80 $ 34,518,270.46 Yes
Dai-Ichi Kangyo $ 5,000,000.00 $ 2,876,512.83 $ 7,876,512.83 Yes
Deutsche Bank AG $ 13,793,103.45 $ 4,959,504.86 $ 18,752,608.31 Yes
Farm Credit Services Midlands FLCA $ 13,220,338.98 $ 7,150,653.34 $ 20,370,992.32 Yes
Farm Credit Services Midlands PCA $ 2,203,389.83 $ 1,191,775.56 $ 3,395,165.39 Yes
First National Bank of Chicago $ 11,553,818.79 $ 1,934,377.10 $ 13,488,195.89 Yes
Fuji Bank, Limited $ 13,342,535.08 $ 4,797,496.65 $ 18,140,031.73 Yes
Heritage Bank $ 5,000,000.00 $ 0.00 $ 5,000,000.00 Yes
Industrial Bank of Japan $ 7,147,371.48 $ 2,421,679.59 $ 9,569,051.07 Yes
LTCB Trust Company $ 40,953,082.78 $ 10,463,757.98 $ 51,416,840.76 Yes
Manufacturers Bank $ 0.00 $ 1,438,256.41 $ 1,438,256.41
Massachusetts Mutual Life Insurance Company $ 0.00 $ 598,904.72 $ 598,904.72 Yes
The Bank of Tokyo-Mitsubishi, Limited $ 6,671,267.54 $ 2,398,748.33 $ 9,070,015.87
Mitsui Trust & Banking $ 11,267,606.00 $ 4,051,426.40 $ 15,319,032.40 Yes
Morgan Guaranty $ 28,913,378.48 $ 14,674,104.05 $ 43,587,482.53 Yes
National Australia Bank $ 20,689,655.17 $ 7,448,275.87 $ 28,137,931.04 Yes
NationsBank $ 35,580,046.48 $ 12,793,307.12 $ 48,373,353.60 Yes
Norddeutsche Landesbank GZ $ 7,117,537.72 $ 2,562,277.58 $ 9,679,815.30 Yes
Northern Trust $ 6,671,267.54 $ 2,398,748.33 $ 9,070,015.87 Yes
Prospect Street Senior Portfolio $ 0.00 $ 4,027,117.96 $ 4,027,117.96 Yes
P.T. Bank Negara Indonesia $ 0.00 $ 6,819,011.20 $ 6,819,011.20 Yes
Rabobank $ 0.00 $ 7,375,673.90 $ 7,375,673.90 Yes
Royal Bank of Canada -- Canadian Administrative Agent $ 21,992,996.15 $ 716,609.87 $ 22,709,606.02 Yes
Sanwa Bank $ 13,342,535.08 $ 17,304,076.26 $ 30,646,611.34 Yes
Societe Generale $ 7,147,371.48 $ 2,421,679.59 $ 9,569,051.07 Yes
Sumitomo Bank, Limited $ 6,666,667.00 $ 2,397,093.92 $ 9,063,760.92 Yes
Sumitomo Trust & Banking $ 15,592,203.89 $ 5,609,403.00 $ 21,201,606.89 Yes
Tokai Bank $ 10,344,827.59 $ 3,724,137.93 $ 14,068,965.52 Yes
Toronto Dominion Bank $ 35,580,045.48 $ 12,793,307.12 $ 48,373,352.60 Yes
Union Bank $ 5,633,802.82 $ 5,516,995.31 $ 11,150,798.13 Yes
United Jersey Bank $ 0.00 $ 2,876,512.83 $ 2,876,512.83 Yes
Van Kampen Merritt Prime Rate Income Trust $ 0.00 $ 20,250,322.45 $ 20,250,322.45 Yes
Westdeutsche Landesbank $ 0.00 $ 7,375,673.89 $ 7,375,673.89 Yes
Yasuda Trust $ 8,695,652.17 $ 3,126,644.37 $ 11,822,296.54 Yes
--------------------------------------------------------
TOTAL $800,000,000.00 $288,000,000.05 $1,088,000,000.05
========================================================
</TABLE>
<TABLE>
<CAPTION>
CANADIAN SIGNATURE
RECEIVED APPROVAL
INSTITUTION IF APPLICABLE COUNT COMMENTS
<S> <C> <C> <C>
Chemical Bank - U.S. Administrative Agent Yes 6.0641%
ABN AMRO NA 0.8795%
Arab Banking Corporation NA 0.3966%
Australia-New Zealand Bank NA 0.5171%
Bank of America Illinois NA 1.9503%
Bank of America National Trust and Savings Association Yes 4.3527%
Bank Austria NA 1.5609%
Bank of Hawaii NA 0.3447%
Bank of Montreal Yes 3.3438%
Bank of New York NA 3.6529%
Bank of Nova Scotia 4.7183%
Bank of Scotland NA 0.4596%
Bank Polska NA 0.4905%
Banque Francaise Du Commerce NA 0.7262%
C.M. Life Insurance Co. NA 0.0000%
Canadian Imperial Bank of Commerce Yes 2.1409%
Chase Manhattan NA 4.0385%
Chiao Tung Bank Co., Ltd. Taipei NA 0.5554%
Chuo Trust & Banking NA 0.2644%
Citibank Yes 3.2702%
Commerzbank NA 2.3671%
Credit Agricole NA 0.9875%
Credit Lyonnais NA 3.9226%
Credit Suisse NA 3.1726%
Dai-Ichi Kangyo NA 0.7239%
Deutsche Bank AG Yes 1.7236%
Farm Credit Services Midlands FLCA NA 1.8723%
Farm Credit Services Midlands PCA NA 0.3121%
First National Bank of Chicago NA 1.2397%
Fuji Bank, Limited NA 1.6673%
Heritage Bank NA 0.4596%
Industrial Bank of Japan NA 0.8795%
LTCB Trust Company NA 4.7258%
Manufacturers Bank NA 0.0000%
Massachusetts Mutual Life Insurance Company NA 0.0550%
The Bank of Tokyo-Mitsubishi, Limited NA 0.8336%
Mitsui Trust & Banking NA 1.4080%
Morgan Guaranty 4.0062%
National Australia Bank NA 2.5862%
NationsBank NA 4.4461%
Norddeutsche Landesbank GZ NA 0.8897%
Northern Trust NA 0.8336%
Prospect Street Senior Portfolio NA 0.3701%
P.T. Bank Negara Indonesia NA 0.6267%
Rabobank NA 0.6779%
Royal Bank of Canada -- Canadian Administrative Agent Yes 2.0873%
Sanwa Bank NA 2.8168%
Societe Generale NA 0.8795%
Sumitomo Bank, Limited NA 0.8331%
Sumitomo Trust & Banking NA 1.9487%
Tokai Bank NA 1.2931%
Toronto Dominion Bank Yes 4.4461%
Union Bank NA 1.0249%
United Jersey Bank NA 0.2644%
Van Kampen Merritt Prime Rate Income Trust NA 1.8612%
Westdeutsche Landesbank NA 0.6779%
Yasuda Trust NA 1.0866%
----------
TOTAL 99.7330%
==========
</TABLE>
<PAGE>
THIRD AGREEMENT
THIRD AMENDMENT, dated as of May 17, 1996 (this "Third Amendment"), to
the Second Amended and Restated Revolving Credit and Term Loan Agreement, dated
as of September 15, 1995 (as amended to the date hereof, the "Credit
Agreement"), among CASE CORPORATION, a Delaware corporation (the "U.S.
Borrower"), CASE CANADA CORPORATION/CORPORATION CASE CANADA, a company organized
under the laws of the province of Ontario, Canada (the "Canadian Borrower"; and,
with the U.S. Borrower, collectively, the "Borrowers"), the several banks and
other financial institutions from time to time parties thereto (the "Lenders"),
the co-agents named therein, ROYAL BANK OF CANADA, a Canadian chartered bank
(the "Canadian Administrative Agent") and CHEMICAL BANK, a New York banking
corporation (the "U.S. Administrative Agent"), as administrative agents for the
Lenders; unless otherwise defined herein capitalized terms used herein have the
meanings ascribed thereto in the Credit Agreement.
W I T N E S S E T H :
WHEREAS, the Borrowers have requested that the Credit Agreement be
amended upon the terms and conditions set forth herein; and
WHEREAS, subject to the terms and conditions set forth herein, the
Lenders and the Administrative Agents have agreed to such amendments;
NOW, THEREFORE, in consideration of the premises and mutual agreements
contained herein, the parties hereto agree as follows:
1. Amendments of Subsection 10.7. Subsection 10.7 of the Credit
Agreement is hereby amended by:
(a) deleting the word "and" at the end of paragraph (e) thereof;
(b) inserting the following in proper alphabetical order:
"(f) Investments by Case Credit or any of its Subsidiaries; and";
(c) renumbering paragraph (f) thereof as paragraph (g); and
(d) substituting for the parenthetical in current paragraph (f) thereof
the following:
"(excluding Investments permitted under paragraphs (a) through (f)
above)".
<PAGE>
2
2. Effectiveness. This Third Amendment shall become effective on and
as of the date on which the U.S. Administrative Agent receives counterparts of
this Third Amendment executed and delivered by duly authorized officers of each
Borrower, each Administrative Agent and the Majority Lenders.
3. Effect on Loan Documents. Except as expressly amended hereby, all
of the provisions, covenants, terms and conditions of the Credit Agreement and
the other Loan Documents shall continue to be, and shall remain, in full force
and effect in accordance with their respective terms.
4. GOVERNING LAW. THIS THIRD AMENDMENT SHALL BE GOVERNED BY, AND
CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW
YORK.
5. Counterparts. This Third Amendment may be executed by one or more
parties to this Third Amendment on any number of separate counterparts, and all
of said counterparts taken together shall be deemed to constitute one and the
same instrument.
<PAGE>
3
IN WITNESS WHEREOF, the parties hereto have caused this Third Amendment to
be duly executed and delivered by their proper and duly authorized officers of
the day and year first above written.
CASE CORPORATION
By: /s/ Benson K. Woo
--------------------------------------
Title: Vice President & Treasurer
CASE CANADA CORPORATION/CORPORATION
CASE CANADA
By: /s/ Benson K. Woo
--------------------------------------
Title: Treasurer
CHEMICAL BANK, as Administrative
Agent and a U.S. Lender
By:
--------------------------------------
Title:
Chemical BANK OF CANADA, as a
Canadian Lender
By:
--------------------------------------
Title:
Royal BANK OF CANADA, as a Canadian
Administrative Agent, a U.S. Lender
and a Canadian Lender
By:
--------------------------------------
Title:
<PAGE>
3
IN WITNESS WHEREOF, the parties hereto have caused this Third Amendment to
be duly executed and delivered by their proper and duly authorized officers of
the day and year first above written.
CASE CORPORATION
By:
--------------------------------------
Title:
CASE CANADA CORPORATION/CORPORATION
CASE CANADA
By:
--------------------------------------
Title:
CHEMICAL BANK, as Administrative
Agent and a U.S. Lender
By: /s/ Edward Devine
--------------------------------------
Title: Managing Director
CHEMICAL BANK OF CANADA, as a
Canadian Lender
By:
--------------------------------------
Title:
ROYAL BANK OF CANADA, as a Canadian
Administrative Agent, a U.S. Lender
and a Canadian Lender
By:
--------------------------------------
Title:
<PAGE>
3
IN WITNESS WHEREOF, the parties hereto have caused this third Amendment to
be duly executed and delivered by their proper and duly authorized officers as
of the day and year first above written.
CASE CORPORATION
By:
---------------------------------------
Title:
CASE CANADA CORPORATION/CORPORATION
CASE CANADA
By:
---------------------------------------
Title:
CHEMICAL BANK, as Administrative
Agent and a U.S. Lender
By:
---------------------------------------
Title:
CHEMICAL BANK OF CANADA, as a
Canadian Lender
By: /s/ OWEN ROBERTS
---------------------------------------
Title: Owen Roberts, Vice President
ROYAL BANK OF CANADA, as a Canadian
Administrative Agent, a U.S.
Lender and a Canadian Lender
By:
---------------------------------------
Title:
<PAGE>
3
IN WITNESS WHEREOF, the parties hereto have caused this third Amendment to
be duly executed and delivered by their proper and duly authorized officers as
of the day and year first above written.
CASE CORPORATION
By:
---------------------------------------
Title:
CASE CANADA CORPORATION/CORPORATION
CASE CANADA
By:
---------------------------------------
Title:
CHEMICAL BANK, as Administrative
Agent and a U.S. Lender
By:
---------------------------------------
Title:
CHEMICAL BANK OF CANADA, as a
Canadian Lender
By:
---------------------------------------
Title:
ROYAL BANK OF CANADA, as a Canadian
Administrative Agent, a U.S.
Lender and a Canadian Lender
By: /s/ PRESTON D. JONES
---------------------------------------
Title: Senior Manager
Corporate Banking
<PAGE>
4
ABN ARMO Bank, N.V., as a U.S. Lender
By:/s/ DAVID C. SAGERS
---------------------------------------
Title: VICE PRESIDENT
By:/s/ THOMAS M. TOERPE
---------------------------------------
Title: Vice President
ARAB BANKING CORPORATION, as a U.S. Lender
By:
---------------------------------------
Title:
AUSTRALIA AND NEW ZEALAND BANKING
GROUP LIMITED as a U.S. Lender
By:
---------------------------------------
Title:
BANK OF AMERICA CANADA, as a
Canadian Lender
By:
---------------------------------------
Title:
BANK OF AMERICA ILLINOIS, as a
Co-Agent and a U.S. Lender
By:
---------------------------------------
Title:
BANK OF AMERICA NATIONAL TRUST AND
SAVINGS ASSOCIATION, as a
Co-Agent and a U.S. Lender
By:
---------------------------------------
Title:
<PAGE>
4
ABN ARMO Bank, N.V., as a U.S. Lender
By:
---------------------------------------
Title:
By:
---------------------------------------
Title:
ARAB BANKING CORPORATION, as a U.S. Lender
By: /s/ Sheldon Tilney
---------------------------------------
Title: Deputy General Manager
AUSTRALIA AND NEW ZEALAND BANKING
GROUP LIMITED, as a U.S. Lender
By:
---------------------------------------
Title:
BANK OF AMERICA CANADA, as a
Canadian Lender
By:
---------------------------------------
Title:
BANK OF AMERICA ILLINOIS, as a
Co-Agent and a U.S. Lender
By:
---------------------------------------
Title:
BANK OF AMERICA NATIONAL TRUST AND
SAVINGS ASSOCIATION, as a
Co-Agent and a U.S. Lender
By:
---------------------------------------
Title:
<PAGE>
4
ABN AMRO Bank, N.V., as a U.S.
Lender
By:
---------------------------------------
Title:
By:
---------------------------------------
Title:
ARAB BANKING CORPORATION, as a
U.S. Lender
By:
---------------------------------------
Title:
AUSTRALIA AND NEW ZEALAND BANKING
GROUP LIMITED, as a U.S. Lender
By: /s/ ?????
---------------------------------------
Title: First Vice President
BANK OF AMERICA CANADA, as a
Canadian Lender
By:
---------------------------------------
Title:
BANK OF AMERICA ILLINOIS, as a
Co-Agent and a U.S. Lender
By:
---------------------------------------
Title:
BANK OF AMERICA NATIONAL TRUST AND
SAVINGS ASSOCIATION, as a
Co-Agent and a U.S. Lender
By:
---------------------------------------
Title:
<PAGE>
4
ABN AMRO Bank, N.V., as a U.S.
Lender
By:
---------------------------------------
Title:
By:
---------------------------------------
Title:
ARAB BANKING CORPORATION, as a
U.S. Lender
By:
---------------------------------------
Title:
AUSTRALIA AND NEW ZEALAND BANKING
GROUP LIMITED, as a U.S. Lender
By:
---------------------------------------
Title:
BANK OF AMERICA CANADA, as a
Canadian Lender
By: /s/ Doug Linkletter
--------------------------------------
Title: Vice President
BANK OF AMERICA ILLINOIS, as a
Co-Agent and a U.S. Lender
By:
---------------------------------------
Title:
BANK OF AMERICA NATIONAL TRUST AND
SAVINGS ASSOCIATION, as a
Co-Agent and a U.S. Lender
By:
---------------------------------------
Title:
<PAGE>
4
ABN AMRO Bank, N.V., as a U.S.
Lender
By:
---------------------------------------
Title:
By:
---------------------------------------
Title:
ARAB BANKING CORPORATION, as a
U.S. Lender
By:
---------------------------------------
Title:
AUSTRALIA AND NEW ZEALAND BANKING
GROUP LIMITED, as a U.S. Lender
By:
---------------------------------------
Title:
BANK OF AMERICA CANADA, as a
Canadian Lender
By:
---------------------------------------
Title:
BANK OF AMERICA ILLINOIS, as a
Co-Agent and a U.S. Lender
By: /s/ Claire Liu
---------------------------------------
Title: Vice President
BANK OF AMERICA NATIONAL TRUST AND
SAVINGS ASSOCIATION, as a
Co-Agent and a U.S. Lender
By: /s/ Claire Liu
---------------------------------------
Title: Vice President
<PAGE>
5
BANK OF HAWAII, as a U.S. Lender
By: /s/ Donna Parker
---------------------------------------
Title: Asst. Vice President
BANK OF MONTREAL, as a Co-Agent,
a U.S. Lender and a Canadian
Lender
By:
---------------------------------------
Title:
THE BANK OF NEW YORK, as a Co-Agent
and a U.S. Lender
By:
---------------------------------------
Title:
THE BANK OF NOVA SCOTIA, as a
Co-Agent, a U.S. Lender and a
Canadian Lender
By:
---------------------------------------
Title:
By:
---------------------------------------
Title:
THE BANK OF SCOTLAND, as a
U.S. Lender
By:
---------------------------------------
Title:
BANK POLSKA KASA OPIEKI S.A., as a
U.S. Lender
By:
---------------------------------------
Title:
<PAGE>
5
BANK OF HAWAII, as a U.S. Lender
By:
---------------------------------------
Title:
BANK OF MONTREAL, as a Co-Agent,
a U.S. Lender and a Canadian
Lender
By: /s/ Marc R. Heyden
---------------------------------------
Marc R. Heyden
Title: Director
THE BANK OF NEW YORK, as a Co-Agent
and a U.S. Lender
By:
---------------------------------------
Title:
THE BANK OF NOVA SCOTIA, as a
Co-Agent, a U.S. Lender and a
Canadian Lender
By:
---------------------------------------
Title:
By:
---------------------------------------
Title:
THE BANK OF SCOTLAND, as a
U.S. Lender
By:
---------------------------------------
Title:
BANK POLSKA KASA OPIEKI S.A., as a
U.S. Lender
By:
---------------------------------------
Title:
<PAGE>
5
BANK OF HAWAII, as a U.S. Lender
By:
---------------------------------------
Title:
BANK OF MONTREAL, as a Co-Agent,
a U.S. Lender and a Canadian
Lender
By:
---------------------------------------
Title:
THE BANK OF NEW YORK, as a Co-Agent
and a U.S. Lender
By: /s/ Sarah Powell-Goldman
---------------------------------------
Title: Assistant Vice President
THE BANK OF NOVA SCOTIA, as a
Co-Agent, a U.S. Lender and a
Canadian Lender
By:
---------------------------------------
Title:
By:
---------------------------------------
Title:
THE BANK OF SCOTLAND, as a
U.S. Lender
By:
---------------------------------------
Title:
BANK POLSKA KASA OPIEKI S.A., as a
U.S. Lender
By:
---------------------------------------
Title:
<PAGE>
5
BANK OF HAWAII, as a U.S. Lender
By:
---------------------------------------
Title:
BANK OF MONTREAL, as a Co-Agent,
a U.S. Lender and a Canadian
Lender
By:
---------------------------------------
Title:
THE BANK OF NEW YORK, as a Co-Agent
and a U.S. Lender
By:
---------------------------------------
Title:
THE BANK OF NOVA SCOTIA, as a
Co-Agent, a U.S. Lender
By: /s/ F.C.H. Ashby
---------------------------------------
Title: F.C.H. Ashby
Senior Manager Loan Operations
THE BANK OF SCOTLAND, as a
U.S. Lender
By:
---------------------------------------
Title:
BANK POLSKA KASA OPIEKI S.A., as a
U.S. Lender
By:
---------------------------------------
Title:
<PAGE>
5
BANK OF HAWAII, as a U.S. Lender
By:
---------------------------------------
Title:
BANK OF MONTREAL, as a Co-Agent,
a U.S. Lender and a Canadian
Lender
By:
---------------------------------------
Title:
THE BANK OF NEW YORK, as a Co-Agent
and a U.S. Lender
By:
---------------------------------------
Title:
THE BANK OF NOVA SCOTIA, as a
Co-Agent, a U.S. Lender and a
Canadian Lender
By:
---------------------------------------
Title:
By:
---------------------------------------
Title:
THE BANK OF SCOTLAND, as a
U.S. Lender
By: /s/ Catherine M. Oniffrey
---------------------------------------
Catherine M. Oniffrey
Title: Vice President
Bank of Scotland
BANK POLSKA KASA OPIEKI S.A., as a
U.S. Lender
By:
---------------------------------------
Title:
<PAGE>
5
BANK OF HAWAII, as a U.S. Lender
By:
---------------------------------------
Title:
BANK OF MONTREAL, as a Co-Agent,
a U.S. Lender and a Canadian
Lender
By:
---------------------------------------
Title:
THE BANK OF NEW YORK, as a Co-Agent
and a U.S. Lender
By:
---------------------------------------
Title:
THE BANK OF NOVA SCOTIA, as a
Co-Agent, a U.S. Lender and a
Canadian Lender
By:
---------------------------------------
Title:
By:
---------------------------------------
Title:
THE BANK OF SCOTLAND, as a
U.S. Lender
By:
---------------------------------------
Title:
BANK POLSKA KASA OPIEKI S.A., as a
U.S. Lender
By: /s/ ?????
---------------------------------------
Title: Vice President
<PAGE>
6
By: /s/ Mark A. Harrington
---------------------------------------
Mark A. Harrington
Title: Vice President &
Regional Manager
BANQUE FRANCAISE DU COMMERCE
EXTERIEUR, as a U.S. Lender
By: /s/ David H. Lerner
---------------------------------------
David H. Lerner
Title: Vice President
C.M. LIFE INSURANCE CO., as a U.S.
Lender
By:
---------------------------------------
Title:
CANADIAN IMPERIAL BANK OF COMMERCE
as a Co-Agent, a U.S. Lender
and a Canadian Lender
By:
---------------------------------------
Title:
THE CHASE MANHATTAN BANK N.A., as a
Co-Agent and a U.S. Lender
By:
---------------------------------------
Title:
CHIAO TUNG BANKING COMPANY,
LIMITED, NEW YORK AGENCY, as a
U.S. Lender
By:
---------------------------------------
Title:
THE CHUO TRUST & BANKING CO.,
LIMITED NEW YORK AGENCY, as a
U.S. Lender
By:
---------------------------------------
Title:
<PAGE>
6
BANQUE FRANCAISE DU COMMERCE
EXTERIEUR, as a U.S. Lender
By:
---------------------------------------
Title:
C.M. LIFE INSURANCE CO., as a U.S.
Lender
By:
---------------------------------------
Title:
CANADIAN IMPERIAL BANK OF COMMERCE
as a Co-Agent, a U.S. Lender
and a Canadian Lender
By: /s/ Gary C. Gaskill
---------------------------------------
Gary C. Gaskill
Title: Authorized Signatory
THE CHASE MANHATTAN BANK N.A., as a
Co-Agent and a U.S. Lender
By:
---------------------------------------
Title:
CHIAO TUNG BANKING COMPANY,
LIMITED, NEW YORK AGENCY, as a
U.S. Lender
By:
---------------------------------------
Title:
THE CHUO TRUST & BANKING CO.,
LIMITED NEW YORK AGENCY, as a
U.S. Lender
By:
---------------------------------------
Title:
<PAGE>
6
BANQUE FRANCAISE DU COMMERCE
EXTERIEUR, as a U.S. Lender
By:
---------------------------------------
Title:
C.M. LIFE INSURANCE CO., as a U.S.
Lender
By:
---------------------------------------
Title:
CANADIAN IMPERIAL BANK OF COMMERCE,
as a Co-Agent, a U.S. Lender
and a Canadian Lender
By:
---------------------------------------
Title:
THE CHASE MANHATTAN BANK N.A., as a
Co-Agent and a U.S. Lender
By: /s/ Carol A. Ulmer
---------------------------------------
Title: Vice President
CHIAO TUNG BANKING COMPANY,
LIMITED, NEW YORK AGENCY, as a
U.S. Lender
By:
---------------------------------------
Title:
THE CHUO TRUST & BANKING CO.,
LIMITED, NEW YORK AGENCY, as a
U.S. Lender
By:
---------------------------------------
Title:
<PAGE>
6
BANQUE FRANCAISE DU COMMERCE
EXTERIEUR, as a U.S. Lender
By:
---------------------------------------
Title:
C.M. LIFE INSURANCE CO., as a U.S.
Lender
By:
---------------------------------------
Title:
CANADIAN IMPERIAL BANK OF COMMERCE,
as a Co-Agent, a U.S. Lender
and a Canadian Lender
By:
---------------------------------------
Title:
THE CHASE MANHATTAN BANK N.A., as a
Co-Agent and a U.S. Lender
By:
---------------------------------------
Title:
CHIAO TUNG BANKING COMPANY,
LIMITED, NEW YORK AGENCY, as a
U.S. Lender
By: /s/ Peter L.Y. Tseng
---------------------------------------
Title: Senior Vice President &
General Manager
THE CHUO TRUST & BANKING CO.,
LIMITED, NEW YORK AGENCY, as a
U.S. Lender
By:
---------------------------------------
Title:
<PAGE>
6
BANQUE FRANCAISE DU COMMERCE
EXTERIEUR, as a U.S. Lender
By:
---------------------------------
Title:
C.M. LIFE INSURANCE CO., as a U.S.
Lender
By:
---------------------------------
Title:
CANADIAN IMPERIAL BANK OF COMMERCE,
as a Co-Agent, a U.S. Lender
and a Canadian Lender
By:
---------------------------------
Title:
THE CHASE MANHATTAN BANK N.A., as a
Co-Agent and a U.S. Lender
By:
---------------------------------
Title:
CHIAO TUNG BANKING COMPANY,
LIMITED, NEW YORK AGENCY, as a
U.S. Lender
By:
---------------------------------
Title:
THE CHUO TRUST & BANKING CO.,
LIMITED, NEW YORK AGENCY, as a
U.S. Lender
By: /s/ S. Teruyama
---------------------------------
Title: Deputy General Manager
<PAGE>
7
CITIBANK CANADA, as a Canadian
Lender
By:/s/ Roderick J. Smith
--------------------------------------
Title: RODERICK J. SMITH, VP
CITIBANK, N.A. as a Co-Agent and a
U.S. Lender
By:
-------------------------------------
Title:
COMMERZBANK AKTIENGESELLSCHAFT,
CHICAGO BRANCH, as a Co-Agent
and a U.S. Lender
By:
--------------------------------------
Title:
By:
--------------------------------------
Title:
COOPERATIEVE CENTRALE RAIFFEISEN-
BOERENLEENBANK B.A., as a U.S.
Lender
By:
--------------------------------------
Title:
CREDIT AGRICOLE, as a U.S. Lender
By:
--------------------------------------
Title:
CREDIT AGRICOLE, as a U.S. Lender
By:
--------------------------------------
Title:
CREDIT LYONNAIS NEW YORK BRANCH,
as a Co-Agent and a U.S. Lender
By:
--------------------------------------
Title:
<PAGE>
7
CITIBANK CANADA, as a Canadian
Lender
By:
----------------------------------
Title:
CITIBANK, N.A. as a Co-Agent and a
U.S. Lender
By:/s/ Marjorie Futornick
----------------------------------
Title: Marjorie Futornick
Vice President
COMMERZBANK AKTIENCESELLSCHAFT,
CHICAGO BRANCH, as a Co-Agent
and a U.S. Lender
By:
----------------------------------
Title:
By:
----------------------------------
Title:
COOPERATIEVE CENTRALE RAIFFEISEN-
BOERENLEENBANK B.A., as a U.S.
Lender
By:
----------------------------------
Title:
CREDIT AGRICOLE, as a U.S. Lender
By:
----------------------------------
Title:
CREDIT LYONNAIS NEW YORK BRANCH,
as a Co-Agent and a U.S. Lender
By:
----------------------------------
Title:
<PAGE>
7
CITIBANK CANADA, as a Canadian
Lender
By:
---------------------------------------
Title:
Citibank, N.A. as a Co-Agent and a
U.S. Lender
By:
---------------------------------------
Title:
COMMERZBANK AKTIENGESELLSCHAFT,
CHICAGO BRANCH, as a Co-Agent
and a U.S. Lender
By: /s/ Paul Karlin
---------------------------------------
Title: Paul Karlin, Assistant Cashier
By: /s/ Helmut R. Tollner
--------------------------------------
Title: ????
Executive Vice President
COOPERATIEVE CENTRALE RAIFFEISEN-
BOERENLEEBANK B.A., as a U.S.
Lender
By:
---------------------------------------
Title:
CREDIT AGRICOLE, as a U.S. Lender
By:
---------------------------------------
Title:
CREDIT LYONNAIS NEW YORK BRANCH,
as a Co-Agent and a U.S. Lender
By:
---------------------------------------
Title:
<PAGE>
7
CITIBANK CANADA, as a Canadian
Lender
By:
----------------------------------------
Title:
Citibank, N.A. as a Co-Agent and a
U.S. Lender
By:
----------------------------------------
Title:
COMMERZBANK AKTIENGESELLSCHAFT,
CHICAGO BRANCH, as a Co-Agent
and a U.S. Lender
By:
---------------------------------------
Title:
By:
---------------------------------------
Title:
COOPERATIEVE CENTRALE RAIFFEISEN-
BOERENLEEBANK B.A., as a U.S.
Lender
By: /s/ Elizabeth L. Hand /s/ Ian Peace
----------------------------------------
Title: Vice President Vice President &
Manager
CREDIT AGRICOLE, as a U.S. Lender
By:
----------------------------------------
Title:
CREDIT LYONNAIS NEW YORK BRANCH,
as a Co-Agent and a U.S. Lender
By:
----------------------------------------
Title:
<PAGE>
7
CITIBANK CANADA, as a Canadian
Lender
By:
---------------------------------------
Title:
Citibank, N.A. as a Co-Agent and a
U.S. Lender
By:
---------------------------------------
Title:
COMMERZBANK AKTIENGESELLSCHAFT,
CHICAGO BRANCH, as a Co-Agent
and a U.S. Lender
By:
--------------------------------------
Title:
By:
--------------------------------------
Title:
COOPERATIEVE CENTRALE RAIFFEISEN-
BOERENLEENBANK B.A., as a U.S.
Lender
By:
---------------------------------------
Title:
CREDIT AGRICOLE, as a U.S. Lender
By: /s/ Dean Balice
---------------------------------------
Title: Senior Vice President
Branch Manager
CREDIT LYONNAIS NEW YORK BRANCH,
as a Co-Agent and a U.S. Lender
By:
---------------------------------------
Title:
<PAGE>
7
CITIBANK CANADA, as a CANADIAN
Lender
By:
---------------------------------------
Title:
CITIBANK, N.A. as a Co-Agent and a
U.S. Lender
By:
---------------------------------------
Title:
COMMERZBANK AKTIENGESELLSCHAFT,
CHICAGO BRANCH, as a Co-Agent
and a U.S. Lender
By:
---------------------------------------
Title:
By:
---------------------------------------
Title:
COOPERATIVE CENTRALE RAIFFEISEN-
BOERENLEENBANK B.A., as a U.S.
Lender
By:
---------------------------------------
Title:
CREDIT AGRICOLE, as a U.S. Lender
By:
---------------------------------------
Title:
CREDIT LYONNAIS NEW YORK BRANCH,
as a Co-Agent and a U.S. Lender
By: /s/ ????
---------------------------------------
Title: SUP
<PAGE>
8
CREDIT SUISSE, as a Co-Agent and
a U.S. Lender
By: /s/ JAN KOPOL
---------------------------------------
Title: MEMBER OF SENIOR MANAGEMENT
By: /s/ KRISTINN R. KRISTINSSON
---------------------------------------
Title: ASSOCIATE
DAI-ICHI KANGYO, as a U.S. Lender
By:
---------------------------------------
Title:
DEUTSCHE BANK AG NEW YORK AND/OR
GRAND CAYMAN ISLANDS BRANCHES,
as a U.S. Lender
By:
---------------------------------------
Title:
By:
---------------------------------------
Title:
DEUTSCHE BANK CANADA, as a
Canadian Lender
By:
---------------------------------------
Title:
By:
---------------------------------------
Title:
FARM CREDIT SERVICES OF THE
MIDLANDS FLCA, as a U.S. Lender
By:
---------------------------------------
Title:
<PAGE>
8
CREDIT SUISSE, as a Co-Agent and
a U.S. Lender
By:
----------------------------------------
Title:
By:
---------------------------------------
Title:
DAI-ICHI KANGYO, as a U.S. Lender
By: /s/ Mitsuaki Yaamasaki
---------------------------------------
Title: A.V.P.
DEUTSCHE BANK AG NEW YORK AND/OR
GRAND CAYMAN ISLANDS BRANCHES,
as a U.S. Lender
By:
---------------------------------------
Title:
By:
---------------------------------------
Title:
DEUTSCHE BANK CANADA, as a
Canadian Lender
By:
---------------------------------------
Title:
By:
---------------------------------------
Title:
FARM CREDIT SERVICES OF THE
MIDLANDS FLCA, as a U.S. Lender
By:
---------------------------------------
Title:
<PAGE>
8
CREDIT SUISSE, as a Co-Agent and
a U.S. Lender
By:
----------------------------------------
Title:
By:
---------------------------------------
Title:
DAI-ICHI KANGYO, as a U.S. Lender
By:
---------------------------------------
Title:
DEUTSCHE BANK AG NEW YORK AND/OR
GRAND CAYMAN ISLANDS BRANCHES,
as a U.S. Lender
By: /s/ Krys Szrenski
---------------------------------------
Title: Vice President
By:
---------------------------------------
Title:
DEUTSCHE BANK CANADA, as a
Canadian Lender
By:
---------------------------------------
Title:
By:
---------------------------------------
Title:
FARM CREDIT SERVICES OF THE
MIDLANDS FLCA, as a U.S. Lender
By:
---------------------------------------
Title:
<PAGE>
8
CREDIT SUISSE, as a Co-Agent and
a U.S. Lender
By:
---------------------------------------
Title:
By:
---------------------------------------
Title:
DAI-ICUI KANGYO, as a U.S. Lender
By:
---------------------------------------
Title:
DEUTSCHE BANK AG NEW YORK AND/OR
GRAND CAYMAN ISLANDS BRANCHES,
as a U.S. Lender
By:
---------------------------------------
Title:
By:
---------------------------------------
Title:
DEUTSCHE BANK CANADA, as a
Canadian Lender
By: /s/ Geoffrey Scott
---------------------------------------
Title: Vice President
By: /s/ Gregory Kucik
---------------------------------------
Title: Assistant Vice President
FARM CREDIT SERVICES OF THE
MIDLANDS FLCA, as a U.S. Lender
By:
---------------------------------------
Title:
<PAGE>
8
CREDIT SUISSE, as a Co-Agent and
as a U.S. Lender
By:
--------------------------------------
Title:
By:
--------------------------------------
Title:
DAI-ICHI KANGYO, as a U.S. Lender
By:
--------------------------------------
Title:
DEUTSCHE BANK AG NEW YORK AND/OR
GRAND CAYMAN ISLANDS BRANCHES,
as a U.S. Lender
By:
--------------------------------------
Title:
By:
--------------------------------------
Title:
DEUTSCHE BANK CANADA, as a Canadian Lender
By:
--------------------------------------
Title:
By:
--------------------------------------
Title:
FARM CREDIT SERVICES OF THE
MIDLANDS FLCA, as a U.S. Lender
By: /s/ Gene W. Selk
--------------------------------------
Title: Senior Vice President
<PAGE>
9
FARM CREDIT SERVICES OF THE
MIDLANDS PCA, as a U.S. Lender
By: /s/ Gene W. Selk
---------------------------------------
Title: Senior Vice President
THE FIRST NATIONAL BANK OF CHICAGO,
as a Co-Agent and a U.S. Lender
By:
---------------------------------------
Title:
By:
---------------------------------------
Title:
THE FUJI BANK, LIMITED, HOUSTON
AGENCY, as a U.S. Lender
By:
---------------------------------------
Title:
HERITAGE BANK AND TRUST, as a U.S. Lender
By:
---------------------------------------
Title:
INDUSTRIAL BANK OF JAPAN, LIMITED
CHICAGO BRANCH, as a U.S. Lender
By:
---------------------------------------
Title:
LTCB TRUST COMPANY
as a Co-Agent and a U.S. Lender
By:
---------------------------------------
Title:
<PAGE>
9
FARM CREDIT SERVICES OF THE
MIDLANDS PCA, as a U.S. Lender
By:
---------------------------------------
Title:
THE FIRST NATIONAL BANK OF CHICAGO,
as a Co-Agent and a U.S. Lender
By: /s/ Sal Fall Paglione
---------------------------------------
Title: As Authorized Agent
By: /s/ Sal Fall Paglione
---------------------------------------
Title: As Authorized Agent
THE FUJI BANK, LIMITED, HOUSTON
AGENCY, as a U.S. Lender
By:
---------------------------------------
Title:
HERITAGE BANK AND TRUST, as a U.S. Lender
By:
---------------------------------------
Title:
INDUSTRIAL BANK OF JAPAN, LIMITED
CHICAGO BRANCH, as a U.S. Lender
By:
---------------------------------------
Title:
LTCB TRUST COMPANY
as a Co-Agent and a U.S. Lender
By:
---------------------------------------
Title:
<PAGE>
9
FARM CREDIT SERVICES OF THE
MIDLANDS PCA, as a U.S. Lender
By:
---------------------------------------
Title:
THE FIRST NATIONAL BANK OF CHICAGO,
as a Co-Agent and a U.S. Lender
By:
---------------------------------------
Title:
By:
---------------------------------------
Title:
THE FUJI BANK, LIMITED, HOUSTON
AGENCY, as a U.S. Lender
By: /s/ Peter L. Chinnici
---------------------------------------
Peter L. Chinnici
Title: Joint General Manager
HERITAGE BANK AND TRUST, as a U.S. Lender
By:
---------------------------------------
Title:
INDUSTRIAL BANK OF JAPAN, LIMITED
CHICAGO BRANCH, as a U.S. Lender
By:
---------------------------------------
Title:
LTCB TRUST COMPANY
as a Co-Agent and a U.S. Lender
By:
---------------------------------------
Title:
<PAGE>
9
FARM CREDIT SERVICES OF THE
MIDLANDS PCA, as a U.S. Lender
By:
---------------------------------------
Title:
THE FIRST NATIONAL BANK OF CHICAGO,
as a Co-Agent and a U.S. Lender
By:
---------------------------------------
Title:
By:
---------------------------------------
Title:
THE FUJI BANK, LIMITED, HOUSTON
AGENCY, as a U.S. Lender
By:
---------------------------------------
Title:
HERITAGE BANK AND TRUST, as a U.S. Lender
By: /s/ Susan P. Jensen
---------------------------------------
Title: Vice President
INDUSTRIAL BANK OF JAPAN, LIMITED
CHICAGO BRANCH, as a U.S. Lender
By:
---------------------------------------
Title:
LTCB TRUST COMPANY
as a Co-Agent and a U.S. Lender
By:
---------------------------------------
Title:
<PAGE>
9
FARM CREDIT SERVICES OF THE
MIDLANDS PCA, as a U.S. Lender
By:
---------------------------------------
Title:
THE FIRST NATIONAL BANK OF CHICAGO,
as a Co-Agent and a U.S. Lender
By:
---------------------------------------
Title:
By:
---------------------------------------
Title:
THE FUJI BANK, LIMITED, HOUSTON
AGENCY, as a U.S. Lender
By:
---------------------------------------
Title:
HERITAGE BANK AND TRUST, as a U.S. Lender
By:
---------------------------------------
Title:
INDUSTRIAL BANK OF JAPAN, LIMITED
CHICAGO BRANCH, as a U.S. Lender
By: /s/ Hiroaki Nakamura
---------------------------------------
Title: Joint General Manager
LTCB TRUST COMPANY
as a Co-Agent and a U.S. Lender
By:
---------------------------------------
Title:
<PAGE>
9
FARM CREDIT SERVICES OF THE
MIDLANDS PCA, as a U.S. Lender
By:
---------------------------------------
Title:
THE FIRST NATIONAL BANK OF CHICAGO,
as a Co-Agent and a U.S. Lender
By:
---------------------------------------
Title:
By:
---------------------------------------
Title:
THE FUJI BANK, LIMITED, HOUSTON
AGENCY, as a U.S. Lender
By:
---------------------------------------
Title:
HERITAGE BANK AND TRUST, as a U.S. Lender
By:
---------------------------------------
Title:
INDUSTRIAL BANK OF JAPAN, LIMITED
CHICAGO BRANCH, as a U.S. Lender
By:
---------------------------------------
Title:
LTCB TRUST COMPANY
as a Co-Agent and a U.S. Lender
By: /s/ John J Sullivan
---------------------------------------
Title: Executive Vice President
<PAGE>
10
MANUFACTURERS BANK, as a U.S.
Lender
By:
---------------------------------------
Title:
MASSACHUSETTS MUTUAL LIFE INSURANCE
COMPANY, as a U.S. Lender
By: /s/ Thomas Li
---------------------------------------
Title: Managing Director
THE MITSUBISHI BANK, LIMITED, as a
U.S. Lender
By:
---------------------------------------
Title:
MITSUI TRUST & BANKING CO., LTD
NEW YORK BRANCH, as a U.S. Lender
By:
---------------------------------------
Title:
J.P. MORGAN BANK OF CANADA, as a
Canadian Lender
By:
---------------------------------------
Title:
MORGAN GUARANTY TRUST COMPANY OF
NEW YORK, as Co-Agent and as a
U.S. Lender
By:
---------------------------------------
Title:
<PAGE>
10
MANUFACTURERS BANK, as a U.S.
Lender
By:
----------------------------------
Title:
MASSACHUSETTS MUTUAL LIFE INSURANCE
COMPANY, as a U.S. Lender
By:
----------------------------------
Title:
THE BANK OF TOKYO-MITSUBISHI,
LIMITED, CHICAGO BRANCH, as a
U.S. Lender
By: /s/ Wayne Yamanaka
----------------------------------
Title: DEPUTY GENERAL MANAGER
MITSUI TRUST & BANKING CO., LTD.
NEW YORK BRANCH, as a U.S. Lender
By:
----------------------------------
Title:
J.P. MORGAN BANK OF CANADA, as a
Canadian Lender
By:
----------------------------------
Title:
MORGAN GUARANTY TRUST COMPANY OF
NEW YORK, as Co-Agent and as a
U.S. Lender
By:
----------------------------------
Title:
<PAGE>
10
MANUFACTURERS BANK, as a U.S. Lender
By:
---------------------------------------
Title:
MASSACHUSETTS MUTUAL LIFE INSURANCE
COMPANY, as a U.S. Lender
By:
---------------------------------------
Title:
THE MITSUBISHI BANK, LIMITED, as a
U.S. Lender
By:
---------------------------------------
Title:
MITSUI TRUST & BANKING CO., LTD.
NEW YORK BRANCH, as a U.S. Lender
By: /s/Shigeru Tsujimoto
---------------------------------------
Title: Senior Vice President & Manager
Corporate Finance
J.P. MORGAN BANK OF CANADA, as a
Canadian Lender
By:
---------------------------------------
Title:
MORGAN GUARANTY TRUST COMPANY OF
NEW YORK, as Co-Agent and as a
U.S. Lender
By:
---------------------------------------
Title:
<PAGE>
10
MANUFACTURERS BANK, as a U.S.
Lender
By:
--------------------------------
Title:
MASSACHUSETTS MUTUAL LIFE INSURANCE
COMPANY, as a U.S. Lender
By:
--------------------------------
Title:
THE MITSUBISHI BANK, LIMITED, as a
U.S. Lender
By:
--------------------------------
Title:
MITSUI TRUST & BANKING CO., LTD.
NEW YORK BRANCH, as a U.S. Lender
By:
--------------------------------
Title:
J.P. MORGAN BANK OF CANADA, as a
Canadian Lender
By:
--------------------------------
Title:
MORGAN GUARANTY TRUST COMPANY OF
NEW YORK, as Co-Agent and as a
U.S. Lender
By: /s/ Douglas A. Cruikshank
--------------------------------
Title: DOUGLAS A. CRUIKSHANK
Vice President
<PAGE>
NATIONAL AUSTRALIA BANK LIMITED, as
a U.S. Lender A.C.N. 004041937
By: Susan C. Julien
--------------------------------
Title: Vice President
NATIONSBANK OF TEXAS, N.A. as a
Co-Agent and a U.S. Lender
By:
--------------------------------
Title:
NORDDEUTSCHE LANDESBANK
GIROZENTRALE, as a U.S. Lender
By:
--------------------------------
Title:
THE NORTHERN TRUST COMPANY,
as a U.S. Lender
By:
--------------------------------
Title:
PT. BANK NEGARA INDONESIA,
(PERSERO) as a U.S. Lender
By:
--------------------------------
Title:
PROSPECT STREET SENIOR PORTFOLIO,
L.P., as a U.S. Lender
By:
--------------------------------
Title:
<PAGE>
11
NATIONAL AUSTRALIA BANK LIMITED, as
a U.S. Lender
By:
----------------------------------
Title:
NATIONSBANK OF TEXAS, N.A. as a
Co-Agent and a U.S. Lender
By: /s/ Percy W. Bercer
----------------------------------
Title: Senior Vice President
NORDDEUTSCHE LANDESBANK
GIROZENTRALE, as a U.S. Lender
By:
----------------------------------
Title:
THE NORTHERN TRUST COMPANY,
as a U.S. Lender
By:
----------------------------------
Title:
PT. BANK NEGARA INDONESIA,
(PERSERO) as a U.S. Lender
By:
----------------------------------
Title:
PROSPECT STREET SENIOR PORTFOLIO,
L.P., as a U.S. Lender
By:
----------------------------------
Title:
<PAGE>
11
NATIONAL AUSTRALIA BANK LIMITED, as
a U.S. Lender
By:
---------------------------------------
Title:
NATIONSBANK OF TEXAS, N.A. as a
Co-Agent and a U.S. Lender
By:
---------------------------------------
Title:
NORDDEUTSCHE LANDESBANK
GIROZENTRALE, as a U.S. Lender
By: /s/Stephen K. Hunter
---------------------------------------
Title: Senior Vice President
By: /s/ Raimund Ferley
---------------------------------------
Title: Vice President
THE NORTHERN TRUST COMPANY,
as a U.S. Lender
By:
---------------------------------------
Title:
PT. BANK NEGARA INDONESIA,
(PERSERO) as a U.S. Lender
By:
---------------------------------------
Title:
PROSPECT STREET SENIOR PORTFOLIO,
L.P., as a U.S. Lender
By:
---------------------------------------
Title:
<PAGE>
11
NATIONAL AUSTRALIA BANK LIMITED, as
a U.S. Lender
By:
---------------------------------------
Title:
NATIONSBANK OF TEXAS, N.A. as a
Co-Agent and a U.S. Lender
By:
---------------------------------------
Title:
NORDDEUTSCHE LANDESBANK
GIROZENTRALE, as a U.S. Lender
By:
---------------------------------------
Title:
THE NORTHERN TRUST COMPANY,
as a U.S. Lender
By: Julie J. Wigdale
---------------------------------------
Title: Vice President
PT. BANK NEGARA INDONESIA,
(PERSERO) as a U.S. Lender
By:
---------------------------------------
Title:
PROSPECT STREET SENIOR PORTFOLIO,
L.P., as a U.S. Lender
By:
---------------------------------------
Title:
<PAGE>
11
NATIONAL AUSTRALIA BANK LIMITED, as
a U.S. Lender
By:
---------------------------------------
Title:
NATIONSBANK OF TEXAS, N.A. as a
Co-Agent and a U.S. Lender
By:
---------------------------------------
Title:
NORDDEUTSCHE LANDESBANK
GIROZENTRALE, as a U.S. Lender
By:
---------------------------------------
Title:
THE NORTHERN TRUST COMPANY,
as a U.S. Lender
By:
---------------------------------------
Title:
PT. BANK NEGARA INDONESIA,
(PERSERO) as a U.S. Lender
By: /s/Dewa Suthapa
---------------------------------------
Title: General Manager
PROSPECT STREET SENIOR PORTFOLIO,
L.P., as a U.S. Lender
By:
---------------------------------------
Title:
<PAGE>
11
NATIONAL AUSTRALIA BANK LIMITED, as
a U.S. Lender
By:
---------------------------------------
Title:
NATIONSBANK OF TEXAS, N.A. as a
Co-Agent and a U.S. Lender
By:
---------------------------------------
Title:
NORDDEUTSCHE LANDESBANK
GIROZENTRALE, as a U.S. Lender
By:
---------------------------------------
Title:
THE NORTHERN TRUST COMPANY,
as a U.S. Lender
By:
---------------------------------------
Title:
PT. BANK NEGARA INDONESIA,
(PERSERO) as a U.S. Lender
By:
---------------------------------------
Title:
PROSPECT STREET SENIOR PORTFOLIO,
L.P., as a U.S. Lender
By: /s/ Preston I. Carnes, Jr.
---------------------------------------
Title: Vice President
<PAGE>
12
THE SANWAN BANK, LIMITED, CHICAGO
BRANCH, as a U.S. Lender
By: /s/ Gordon R. Holtly
---------------------------------------
Title: Vice President & Manager
SOCIETE GENERALE, as a U.S. Lender
By:
---------------------------------------
Title:
SUMITOMO BANK, LIMITED, CHICAGO
BRANCH, as a U.S. Lender
By:
---------------------------------------
Title:
SUMITOMO TRUST & BANKING CO., LTD.
NEW YORK BRANCH, as a U.S. Lender
By:
---------------------------------------
Title:
THE TOKAI BANK, LIMITED - CHICAGO
BRANCH, as a U.S. Lender
By:
---------------------------------------
Title: General Manager
THE TORONTO-DOMINION BANK, as a Co-
Agent, a U.S. Lender and a
Canadian Lender
By:
---------------------------------------
Title:
<PAGE>
12
THE SANWA BANK, LIMITED, CHICAGO
BRANCH, as a U.S. Lender
By:
---------------------------------------
Title:
SOCIETE GENERALE, as a U.S. Lender
By: /s/Seth Asofsky
---------------------------------------
Title: Vice President
SUMITOMO BANK, LIMITED, CHICAGO
BRANCH, as a U.S. Lender
By:
---------------------------------------
Title:
SUMITOMO TRUST & BANKING CO., LTD.
NEW YORK BRANCH, as a U.S. Lender
By:
---------------------------------------
Title:
THE TOKAI BANK, LIMITED - CHICAGO
BRANCH, as a U.S. Lender
By:
---------------------------------------
Title:
THE TORONTO-DOMINION BANK, as a Co-
Agent, a U.S. Lender and a
Canadian Lender
By:
---------------------------------------
Title:
<PAGE>
12
THE SANWA BANK, LIMITED, CHICAGO
BRANCH, as a U.S. Lender
By:
---------------------------------------
Title:
SOCIETE GENERALE, as a U.S. Lender
By:
---------------------------------------
Title:
SUMITOMO BANK, LIMITED, CHICAGO
BRANCH, as a U.S. Lender
By: /s/ A. Jwam
---------------------------------------
Title: Joint General Manager
SUMITOMO TRUST & BANKING CO., LTD.
NEW YORK BRANCH, as a U.S. Lender
By:
---------------------------------------
Title:
THE TOKAI BANK, LIMITED - CHICAGO
BRANCH, as a U.S. Lender
By:
---------------------------------------
Title:
THE TORONTO-DOMINION BANK, as a Co-
Agent, a U.S. Lender and a
Canadian Lender
By:
---------------------------------------
Title:
<PAGE>
12
THE SANWA BANK, LIMITED, CHICAGO
BRANCH, as a U.S. Lender
By:
---------------------------------------
Title:
SOCIETE GENERALE, as a U.S. Lender
By:
---------------------------------------
Title:
SUMITOMO BANK, LIMITED, CHICAGO
BRANCH, as a U.S. Lender
By:
---------------------------------------
Title:
SUMITOMO TRUST & BANKING CO., LTD.
NEW YORK BRANCH, as a U.S. Lender
By: /s/Suraj Bhatia
---------------------------------------
Title: Senior Vice President
THE TOKAI BANK, LIMITED - CHICAGO
BRANCH, as a U.S. Lender
By:
---------------------------------------
Title:
THE TORONTO-DOMINION BANK, as a Co-
Agent, a U.S. Lender and a
Canadian Lender
By:
---------------------------------------
Title:
<PAGE>
12
THE SANWA BANK, LIMITED, CHICAGO
BRANCH, as a U.S. Lender
By:
---------------------------------------
Title:
SOCIETE GENERALE, as a U.S. Lender
By:
---------------------------------------
Title:
SUMITOMO BANK, LIMITED, CHICAGO
BRANCH, as a U.S. Lender
By:
---------------------------------------
Title:
SUMITOMO TRUST & BANKING CO., LTD.
NEW YORK BRANCH, as a U.S. Lender
By:
---------------------------------------
Title:
THE TOKAI BANK, LIMITED - CHICAGO
BRANCH, as a U.S. Lender
By: /s/Hiroshi Tanaka
---------------------------------------
Title: General Manager
THE TORONTO-DOMINION BANK, as a Co-
Agent, a U.S. Lender and a
Canadian Lender
By:
---------------------------------------
Title:
<PAGE>
12
THE SANWA BANK, LIMITED, CHICAGO
BRANCH, as a U.S. Lender
By:
---------------------------------------
Title:
SOCIETE GENERALE, as a U.S. Lender
By:
---------------------------------------
Title:
SUMITOMO BANK, LIMITED, CHICAGO
BRANCH, as a U.S. Lender
By:
---------------------------------------
Title:
SUMITOMO TRUST & BANKING CO., LTD.
NEW YORK BRANCH, as a U.S. Lender
By:
---------------------------------------
Title:
THE TOKAI BANK, LIMITED - CHICAGO
BRANCH, as a U.S. Lender
By:
---------------------------------------
Title:
THE TORONTO-DOMINION BANK, as a Co-
Agent, a U.S. Lender and a
Canadian Lender
By: /s/Kimberly Burleson
---------------------------------------
Title: MGR. CR ADMIN.
<PAGE>
13
UNION BANK, A DIVISION OF UNION BANK OF
CALIFORNIA, N.A.
as a U.S. Lender
By: /s/ John P. Baier
---------------------------------------
Title: Vice President
UNITED JERSEY BANK, as a U.S.
Lender
By:
---------------------------------------
Title:
VAN KAMPEN MERRITT PRIME RATE
INCOME TRUST, as a U.S. Lender
By:
---------------------------------------
Title:
WESTDEUTSCHE LANDESBANK
GIROZENTRALE NEW YORK BRANCH as a
U.S. Lender
By:
---------------------------------------
Title:
THE YASUDA TRUST & BANKING CO.,
LTD., as a U.S. Lender
By:
---------------------------------------
Title:
BANK AUSTRIA AKTIENGESELLSCHAFT, as
a U.S. Lender
By:
---------------------------------------
Title:
<PAGE>
United Jersey Bank
Large Corporate Group
512 Township Line Road
Suite 280
Blue Bell, PA 19422
Fax # (215) 619-4820
DATE: 5/13/96
---------------------------------------------------
TO: John McShane
---------------------------------------------------
COMPANY: Simpson
---------------------------------------------------
DEPARTMENT:
---------------------------------------------------
TELEPHONE:
---------------------------------------------------
FROM: Chris Annas
---------------------------------------------------
MESSAGE:
---------------------------------------------------
You will receive 1 pages in addition to this page.
---
- -------------------------------------------------------------------------------
CONFIDENTIALITY NOTE:
The information in this facsimile message is legally privileged and confidential
information intended only for the use of the individual or entity named above.
If the reader of this message is not the intended recipient, you are hereby
notified that any dissemination, distribution or copy of this telecopy is
strictly prohibited. If you have received this telecopy in error, please
immediately notify us by telephone and return the original message to us at the
address above via the United States Postal Service. Thank you.
- --------------------------------------------------------------------------------
--------------------------------------
13
UNION BANK, as a U.S. Lender
By:
-----------------------------------
Title:
UNITED JERSEY BANK, as a U.S. Lender
By:/s/ Christopher J. Annas
-----------------------------------
Title: Vice President
VAN KAMPEN MERRITT PRIME RATE
INCOME TRUST, as a U.S. Lender
By:
-----------------------------------
Title:
WESTDEUTSCHE LANDESBANK
GIROZENTRALE NEW YORK BRANCH as a
U.S. Lender
By:
-----------------------------------
Title:
THE YASUDA TRUST & BANKING CO.,
LTD., as a U.S. Lender
By:
-----------------------------------
Title:
BANK AUSTRIA AKTIENGESELLSCHAFT, as
a U.S. Lender
By:
-----------------------------------
Title:
Deliver to: 00753 - MCSHANE, JOHN B
<PAGE>
13
UNION BANK, as a U.S. Lender
By:
-----------------------------------
Title:
UNITED JERSEY BANK, as a U.S. Lender
By:
-----------------------------------
Title: VAN KAMPEN AMERICAN CAPITAL
PRIME RATE INCOME TRUST
VAN KAMPEN MERRITT
PRIME RATE INCOME TRUST, as a U.S.
Lender
By: /s/ Jeffrey W. Maillet
-----------------------------------
Title: Sr. Vice Pres., Portfolio Mgr.
WESTDEUTSCHE LANDESBANK
GIROZENTRALE NEW YORK BRANCH as a
U.S. Lender
By:
-----------------------------------
Title:
THE YASUDA TRUST & BANKING CO.,
LTD., as a U.S. Lender
By:
-----------------------------------
Title:
BANK AUSTRIA AKTIENCESELLSCHAFT, as
a U.S. Lender
By:
-----------------------------------
Title:
<PAGE>
13
UNION BANK, as a U.S. Lender
By:
-----------------------------------
Title:
UNITED JERSEY BANK, as a U.S. Lender
By:
-----------------------------------
Title:
VAN KAMPEN MERRITT PRIME RATE
INCOME TRUST, as a U.S. Lender
By:
-----------------------------------
Title:
WESTDEUTSCHE LANDESBANK
GIROZENTRALE NEW YORK BRANCH as a
U.S. Lender
By:
-----------------------------------
Title:
THE YASUDA TRUST & BANKING CO.
LTD., as a Lender
By: Joseph C. Meek
-----------------------------------
Title: Asst Vice President & Manager
BANK AUSTRIA AKTIENGESELLSCHAFT, as
a U.S. Lender
By:
-----------------------------------
Title:
<PAGE>
13
UNION BANK, as a U.S. Lender
By:
-----------------------------------
Title:
UNITED JERSEY BANK, as a U.S. Lender
By:
-----------------------------------
Title:
VAN KAMPEN MERRITT PRIME RATE
INCOME TRUST, as a U.S. Lender
By:
-----------------------------------
Title:
WESTDEUTSCHE LANDESBANK
GIROZENTRALE NEW YORK BRANCH as a
U.S. Lender
By:
-----------------------------------
Title: V.P.
THE YASUDA TRUST & BANKING CO.
LTD., as a Lender
By:
-----------------------------------
Title:
BANK AUSTRIA AKTIENGESELLSCHAFT, as
a U.S. Lender
By: /s/ Jeanine Ball
-----------------------------------
Title: Assistant Vice President
<PAGE>
13
UNION BANK, as a U.S. Lender
By:
-----------------------------------
Title:
UNITED JERSEY BANK, as a U.S. Lender
By:
-----------------------------------
Title:
VAN KAMPEN MERRITT PRIME RATE
INCOME TRUST, as a U.S. Lender
By:
-----------------------------------
Title:
WESTDEUTSCHE LANDESBANK
GIROZENTRALE NEW YORK BRANCH as a
U.S. Lender
By:
-----------------------------------
Title:
THE YASUDA TRUST & BANKING CO.
LTD., as a Lender
By:
-----------------------------------
Title:
BANK AUSTRIA AKTIENGESELLSCHAFT, as
a U.S. Lender
By:
-----------------------------------
Title:AVP VP
<PAGE>
Exhibit 10(a)
CASE EQUIPMENT CORPORATION EQUITY INCENTIVE PLAN
(As amended, March 15, 1996)
1. Purpose
The purpose of the Plan is to promote the long-term success of the Case
Companies for the benefit of the Company's shareholders by encouraging its
officers and key employees to have meaningful investments in the Company so
that, as stockholders themselves, those individuals will be more likely to
represent the views and interests of other stockholders and by providing
incentives to such officers and key employees for continued service. The Company
believes that the possibility of participation under the Plan will provide this
group of officers and employees an incentive to perform more effectively and
will assist the Company and the Case Companies in attracting and retaining
people of outstanding training, experience and ability.
2. Definitions
"Authorized Plan Shares" shall mean the shares of capital stock of the
Company available for issuance under the Plan as set forth in Section 6(a).
"Award" means an award or grant made to a Participant under Section 8.
"Award Agreement" means the agreement provided in connection with an Award
under Section 12.
"Award Date" means the date that an Award is made, as specified in an Award
Agreement.
"Board of Directors" means the Board of Directors of the Company.
"Case Company" means the Company, any stock corporation of which a majority
of the capital stock generally entitled to vote for directors is owned directly
or indirectly by the Company, and any other company designated as such by the
Committee, but only during the period of such ownership or designation.
"Code" means the Internal Revenue Code of 1986, as amended, or any
successor legislation.
"Company" means Case Equipment Corporation, a Delaware corporation.
<PAGE>
"Committee" means the Compensation Committee of the Board of Directors, or
any sub-committee thereof, or any successor committee thereto.
"Common Stock" means the Company's common stock, par value $0.01 per share.
"Covered Employees" shall have the meaning specified in Section 162(m)(3)
of the Code.
"Dividend Equivalent" means an amount equal to the amount of the cash
dividends that are declared and become payable after the Award Date for the
Award to which it relates and on or before the Settlement Date for such Award.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Fair Market Value" on any date means the average of the highest and the
lowest sales prices of a share of Common Stock on the Composite Tape for such
date, as reported by the National Quotation Bureau Incorporated; provided that
if (i) no sales of Common Stock are included on the Composite Tape for such
date, or (ii) in the opinion of the Committee, the sales of Common Stock on such
date are insufficient to constitute a representative market, then the Fair
Market Value of a share of Common Stock on such date shall be deemed to be the
average of the highest and lowest prices of a share of Common Stock as reported
on said Composite Tape for the next preceding day on which (x) sales of Common
Stock are included and (y) the circumstances described in clause (ii) do not
exist.
"ISO" means any Stock Option designated in an Award Agreement as an
"Incentive Stock Option" within the meaning of Section 422 of the Code.
"Non-Qualified Stock Option" means any Stock Option that is not an ISO.
"Option Price" means the purchase price of one share of Common Stock under
a Stock Option.
"Participant" means an employee or officer of a Case Company who has been
selected by the Committee to receive an Award under the Plan.
"Performance Unit" means an Award denominated in cash, the amount of which
may be based on performance of the Participant or of Case Corporation or of any
subsidiary or division thereof.
"Plan" means this Case Equipment Corporation Equity Incentive Plan, as
amended from time to time.
"Reload Stock Option" means a Stock Option (i) that is awarded, either
automatically in accordance with the terms of an Award Agreement in which one or
more other Awards are made
-2-
<PAGE>
or by separate Award, upon the exercise of a Stock Option granted under this
Plan or otherwise where the option price is paid by the option holder by
delivery of shares of Common Stock on the Settlement Date for such exercise and
(ii) that entitles such holder to purchase the number of shares so delivered for
an Option Price equal to the Fair Market Value of a share of Common Stock on
such Settlement Date.
"Restricted Stock" means shares of Common Stock subject to restrictions and
conditions pursuant to Section 8(c).
"Rule 16b-3" means Regulation (S) 240.16b-3 of the rules and regulations of
the Securities and Exchange Commission promulgated under the Exchange Act, as
such Rule became effective May 1, 1991, as it may be amended after December 8,
1993.
"Second Preferred Stock" shall mean the Cumulative Convertible Second
Preferred Stock of the Company, par value $0.01 per share.
"Settlement Date" means, (i) with respect to any Stock Option that has been
exercised in whole or in part, the date or dates upon which shares of Common
Stock are to be delivered to the Participant and the Option Price therefor paid,
(ii) with respect to any SARs that have been exercised, the date or dates upon
which a cash payment is to be made to the Participant, or in the case of SARs
that are to be settled in shares of Common Stock, the date or dates upon which
such shares are to be delivered to the Participant, (iii) with respect to
Performance Units, the date or dates upon which cash or shares of Common Stock
are to be delivered to the Participant, (iv) with respect to Dividend
Equivalents, the date upon which payment thereof is to be made, and (v) with
respect to Stock Equivalent Units, the date upon which payment thereof is to be
made, in each case determined in accordance with the terms of the Award
Agreement under which any such Award was made.
"Stock Appreciation Right" or "SAR" means an Award that entitles the
Participant to receive on the Settlement Date an amount equal to the excess of
(i) the Fair Market Value of a share of Common Stock on the date of
exercise of the SAR over
(ii) the Fair Market Value of one share of Common Stock on the Award Date
or any other higher amount specified in the Award Agreement.
"Stock Equivalent Unit" means an Award that entitles the Participant to
receive on the Settlement Date an amount equal to the Fair Market Value of one
share of Common Stock on such date.
"Stock Option" or "Option" means any right to purchase shares of Common
Stock (including a Reload Stock Option) awarded pursuant to Section 8(a).
-3-
<PAGE>
3. Term
The Plan shall be effective as of June 1, 1994, and shall remain in effect
through December 31, 2003. After termination of the Plan, no further Awards may
be granted other than Reload Stock Options granted in accordance with Award
Agreements existing as of December 31, 2003, but outstanding Awards shall remain
effective in accordance with their terms and the terms of the Plan.
4. Plan Administration
(a) The Committee shall be responsible for administering the Plan.
(i) Composition of the Committee. The Committee shall be comprised of two
or more members of the Board of Directors, all of whom shall be "disinterested
persons" as defined in Rule 16b-3.
(ii) Powers. The Committee shall have full and exclusive discretionary
power to interpret the Plan and to determine eligibility for benefits and to
adopt such rules, regulations and guidelines for administering the Plan as the
Committee may deem necessary or proper. Such power shall include, but not be
limited to, selecting Award recipients, establishing all Award terms and
conditions and, subject to Section 13, adopting modifications and amendments to
the Plan or any Award Agreement, including without limitation, any that are
necessary to comply with the laws of the countries in which the Company or its
affiliates operate; provided, however, no such modification or amendment shall
impair the rights of any Participant, without his consent, in any Award
previously granted under the Plan.
(iii) Delegation. The Committee may delegate to one or more of its members
or to one or more agents or advisors such non-discretionary administrative
duties as it may deem advisable, and the Committee or any person to whom it has
delegated duties as aforesaid may employ one or more persons to render advice
with respect to any responsibility the Committee or such person may have under
the Plan.
(b) The Committee may employ attorneys, consultants, accountants and other
persons, and the Committee, the Company and its officers and directors shall be
entitled to rely upon the advice, opinions or valuations of any such persons.
All actions taken and all interpretations and determinations made by the
Committee in good faith shall be final and binding upon the Participants, the
Company and all other interested persons. No member of the Committee shall be
personally liable for any action, determination, or interpretation made in good
faith with respect to the Plan or Awards, and all members of the Committee shall
be fully protected by the Company, to the fullest extent permitted by applicable
law, in respect of any such action, determination or interpretation.
5. Eligibility
-4-
<PAGE>
Awards will be limited to persons who are officers or employees of the Case
Companies. In determining the persons to whom Awards shall be made, the
Committee shall, in its discretion, take into account the nature of the person's
duties, past and potential contributions to the success of the Case Companies
and such other factors as the Committee shall deem relevant in connection with
accomplishing the purposes of the Plan. A director of the Company or a Case
Company who is not also an officer or employee shall not be eligible to receive
an Award. A person who has received an Award or Awards may receive an
additional Award or Awards. For purposes of this Section 5, the terms
"employee" and "officer" shall also include any former employee or former
officer of a Case Company eligible to receive a replacement award as
contemplated in the third sentence of Section 8.
6. Authorized Awards; Limitations
(a) Except for adjustments pursuant to Section 7, the maximum number of
shares of Common Stock that shall be available for issuance under the Plan shall
be 9,500,000 and the maximum number of shares of Second Preferred Stock that
shall be available for issuance under the Plan shall be 40,000.
(b) (i) Determinations as to the number of Authorized Plan Shares that
remain available for issuance under the Plan shall be made in accordance with
such rules or procedures as the Committee shall determine from time to time,
which shall be consistent with the requirements of Rule 16b-3 and such
interpretations thereof as have been made, or may be made from time to time, by
courts of competent jurisdiction or the Securities and Exchange Commission or
the staff of such Commission to the end that all persons subject to Section 16
of the Exchange Act shall be entitled to the fullest extent possible to the
exemption provided by Rule 16b-3.
(ii) If an Award expires unexercised or is forfeited, surrendered,
canceled, terminated or settled in cash in lieu of Common Stock, the shares of
Common Stock or Second Preferred Stock that were theretofore subject (or
potentially subject) to such Award may again be made subject to an Award
Agreement; provided, however, that any such shares subject to a forfeited Award
shall not again be made subject to an Award Agreement to Participants who are
subject to Section 16 of the Exchange Act if any Participant received, directly
or indirectly, any of the benefits of ownership of the securities of the Company
underlying such Award, including without limitation, the receipt of dividend
payments but excluding (i) the right to vote such shares and (ii) the
accumulation of dividends or Dividend Equivalents which also are forfeited.
(c) Common Stock and Second Preferred Stock that may be issued under the
Plan may be either authorized and unissued shares or issued shares that have
been reacquired by the Company and that are being held as treasury shares. No
fractional shares of Common Stock or Second Preferred Stock shall be issued
under the Plan; provided, however, that cash, in an amount equal to the Fair
Market Value of a fractional share of Common Stock or Second Preferred Stock as
of the Settlement Date of the Award, shall be paid in lieu of any fractional
-5-
<PAGE>
shares in the settlement of Awards payable in shares of Common Stock or Second
Preferred Stock.
(d) In no event shall the aggregate number of shares of Common Stock
underlying Options and SARs awarded to any one Participant during any four-
consecutive-year period exceed 1,000,000 shares.
7. Adjustments and Reorganization
The Committee may make such adjustments to Awards granted under the Plan
(including the terms, exercise price and otherwise) as it deems appropriate in
the event of changes that impact the Company, the Company's share price, or
share status, provided that any such actions are consistently and equitably
applied to all affected Participants; provided, however, that, notwithstanding
any other provisions hereof, insofar as any Award is subject to performance
goals established to qualify payments thereunder as "performance-based
compensation" as described in Section 162(m) of the Code, the Committee shall
have no power to adjust such Awards other than (i) negative discretion and (ii)
the power to adjust Awards for corporate transactions, in either case to the
extent permissible under regulations interpreting Code Section 162(m).
In the event of any merger, reorganization, consolidation,
recapitalization, separation, liquidation, stock dividend, extraordinary
dividend, spin-off, split-up, rights offering, share combination, or other
change in the corporate structure of the Company affecting the Common Stock, the
number and kind of shares that may be delivered under the Plan shall be subject
to such equitable adjustment as the Committee, in its sole discretion, may deem
appropriate in order to preserve the benefits or potential benefits to be made
available under the Plan, and the number and kind and price of shares subject to
outstanding Awards and any other terms of outstanding Awards 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 Awards.
8. Awards
The Committee shall determine the type and amount of any Award to be made
to any Participant; provided, however, that, except as provided in paragraph
(g), no Awards granted pursuant to this Plan shall vest in less than six months
after the date the Award is granted. Awards may be granted singly, in
combination, or in tandem. Awards may also be made in combination or in tandem
with, in replacement of, as alternatives to, or as the payment form for, grants
or rights under any other employee benefit or compensation plan of the Case
Companies, including any such employee benefit or compensation plan of any
acquired entity.
(a) Stock Options
-6-
<PAGE>
(i) Grants. Stock Options (including Reload Stock Options) granted under
this Plan may be any of the following:
(1) an ISO, or
(2) a Non-Qualified Stock Option.
The Committee may grant any Participant one or more ISOs, Non-Qualified
Stock Options, or both, in each case with or without SARs or Reload Stock
Options or any other form of Award. Stock Options granted pursuant to this Plan
shall be subject to such additional terms, conditions, or restrictions as may be
provided in the Award Agreement relating to such Stock Option.
(ii) Option Price. The Option Price of a Stock Option shall be not less
than 100% of the Fair Market Value of a share of Common Stock on the Award Date;
provided, however, that in the case of a Stock Option granted retroactively in
tandem with or as substitution for another Award, including for this purpose
substitution of an award designated in shares of Tenneco, Inc. common stock (a
"Tenneco Award"), the Option Price shall not be less than 100% of the Fair
Market Value of a share of Common Stock on the date of such other Award or, with
respect to a Tenneco Award, shall not be lower than the price that the Committee
determines necessary to preserve the value of the Tenneco Award on the date of
substitution; and provided further that in any case ISOs shall have a price
equal to 100% of the Fair Market Value of a share of Common Stock on the Award
Date.
(iii) ISOs. Anything in this Plan to the contrary notwithstanding, no
term of this Plan relating to ISOs shall be interpreted, amended or altered, nor
shall any discretion or authority awarded under the Plan be exercised, so as to
disqualify this Plan under Section 422 of the Code, or, without the consent of
the Participants affected, to disqualify any ISO under Section 422 of the Code.
An ISO shall not be granted to an individual who, on the date of grant,
owns stock possessing more than 10% of the total combined voting power of all
classes of stock of the employing Case Company or of its parent or any
subsidiary corporation.
The aggregate Fair Market Value, determined on the Award Date, of the
shares of Common Stock or other stock with respect to which one or more ISOs (or
other "incentive stock options," within the meaning of Subsection (b) of Section
422 of the Code, under all other stock option plans of the Participant's
employing Case Company and its parent and subsidiary corporations) granted on or
after January 1, 1987, that are exercisable for the first time by the
Participant during any particular calendar year shall not exceed the $100,000
limitation imposed by Section 422(d) of the Code.
-7-
<PAGE>
(iv) Manner of Payment of Option Price. The Option Price shall be paid in
full at the time of the exercise of the Stock Option and may be paid in any of
the following methods or combinations thereof;
(A) In the United States dollars in cash, check, bank draft or money
order payable to the order of the Company;
(B) By the delivery of shares of Common Stock having an aggregate
Fair Market Value on the date of such exercise equal to the Option Price;
(C) In any other manner that the Committee shall approve, including
without limitation, any arrangement that the Committee may establish to enable
Participants to simultaneously exercise Stock Options and sell the shares of
Common Stock acquired thereby and apply the proceeds to the payment of the
Option Price therefor.
(v) Reload Stock Options. The Committee may award Reload Stock Options to
any Participant either in combination with other Awards or in separate Award
Agreements that grant Reload Stock Options upon exercise of outstanding stock
options granted under this Plan or otherwise.
(b) Stock Appreciation Rights.
(i) Grants. The Committee may award any Participant SARs, which shall be
subject to such additional terms, conditions, or restrictions as may be provided
in the Award Agreement relating to such SAR Award, including any limits on
aggregate appreciation. SARs may be settled in Common Stock or cash or both.
(ii) Award Price. The Award Price per share of Common Stock of a SAR
shall be fixed in the Award Agreement and shall be not less than 100% of the
Fair Market Value of a share of Common Stock on the date of the Award; provided,
however, that in the case of a SAR awarded retroactively in tandem with or as a
substitution for another Award, the Award Price per share of a SAR shall be not
less than 100% of the Fair Market Value of a share of Common Stock on the date
of such other Award.
(iii)Distribution of SARs. SARs shall be exercisable in accordance with
the conditions and procedures set out in the Award Agreement relating to such
SAR Award.
(c) Restricted Stock. The Committee may award Restricted Stock to any
Participant. Awards of Restricted Stock shall be subject to such conditions and
restrictions as are established by the Committee and set forth in the Award
Agreement, which may include, but are not limited to, continued service with the
Company, achievement of specific business objectives, and other measurements of
individual or business unit or Company performance.
-8-
<PAGE>
In addition to Awards of Restricted Stock described in the preceding
paragraph, the Committee may make Awards of restricted Second Preferred Stock
("Restricted Preferred Stock"). All provisions of this Plan that apply to
Awards of Restricted Stock shall also apply to Awards of Restricted Preferred
Stock.
(d) Stock Equivalent Units. The Committee may award Stock Equivalent
Units to any Participant. All or part of any Stock Equivalent Units Award may
be subject to conditions and restrictions established by the Committee, and set
forth in the Award Agreement, which may include, but are not limited to,
continued service with the Company, achievement of specific business objectives,
and other measurements of individual or business unit or Company performance
that may include but shall not be limited to, earnings per share, net profits,
total shareholder return, cash flow, return on shareholders' equity, and
cumulative return on net assets employed.
(e) Dividend Equivalents. The Committee may provide in any Award
Agreement in which Stock Equivalent Units are awarded that such Stock Equivalent
Units may accrue Dividend Equivalents. In lieu of awarding Dividend
Equivalents, the Committee may provide for automatic awards of additional Stock
Equivalent Units on each date that cash dividends are paid on the Common Stock
in an amount equal to (i) the product of the dividend per share on the Common
Stock times the total number of Stock Equivalent Units then held by the
Participant, divided by (ii) the Fair Market Value of the Common Stock on the
dividend payment date.
(f) Performance Units. Performance Units shall be based on attainment
over a specified period of individual performance targets or on other parameters
that may include, but shall not be limited to, earnings per share, total
shareholder return, cash flow, return on shareholders' equity, and cumulative
return on net assets employed. Performance Units may be settled in Common Stock
or cash or both.
(g) The Committee may also, in its sole discretion, shorten or terminate
the restricted period of waive any other conditions for the lapse of
restrictions with respect to all or any portion of any Award. Notwithstanding
the foregoing, all restricted periods shall terminate and the Awards shall be
fully vested with respect to any Participant upon the Participant's (a)
retirement at age 65 or older, (b) with respect to the service recognition award
granted July 20, 1994, retirement at age 55 or older, (c) death, (d) Total
Disability, coincident with termination of employment with Case Companies;
provided that the application of this sentence shall not cause an Award to vest
in less than six months after the date the Award is granted. For purposes of
this Section 8:
"Total Disability" means the permanent inability of the Participant, which
is a result of accident or sickness, to perform such Participant's occupation or
employment for which the Participant is suited by reason of the Participant's
previous training, education and experience and which results in the termination
of the Participant's employment with any Case Company.
-9-
<PAGE>
(h) Change in Control. Notwithstanding the foregoing provisions of this
Section 8, to the extent provided by the Committee at the time of an Award or
thereafter, stock options and restricted stock awards which have been
outstanding for a period of at least six months shall become fully vested if the
Participant's employment is terminated by the Company for reasons other than
cause during the 24 month period following a Change in Control of the Company.
For purposes of this paragraph (h), the term "Change in Control" means a change
in the beneficial ownership of the Company's voting stock or a change in the
composition of the Company's Board of Directors which occurs as follows:
(i) any "person" (as such term is used in Section 13(d) and 14(d)(2) of
the Securities Exchange Act of 1934) other than:
(1) a trustee or other fiduciary of securities held under an employee
benefit plan of the Company;
(2) a corporation owned, directly or indirectly, by the
stockholders of the Company in substantially the same
proportions as their ownership of the Company; or
(3) with respect to any Participant, any person in which such
Participant has a substantial equity interest;
is or becomes a beneficial owner (as defined in Rule 13d-3
under the Securities Exchange Act of 1934), directly or
indirectly, of stock of the Company representing 25% or more of
the total voting power of the Company's then outstanding stock;
(ii) a tender offer is made for the stock of the Company by a person other than
a person described in subparagraph (i)(1), (2) or (3), and one of the
following occurs:
(1) the person making the offer owns or has accepted for payment stock of
the Company representing 25% or more of the total voting power of the
Company's stock; or
(2) three business days before the offer is to terminate (unless the offer
is withdrawn first) such person could own, by the terms of the offer
plus any shares owned by such person, stock representing 50% or more of
the total voting power of the Company's outstanding stock when the
offer terminates;
(iii) during any period of two consecutive years there shall cease to be a
majority of the Company's Board of Directors comprised as follows:
individuals who at the beginning of such period constitute the Board of
Directors and any new director(s) whose election by the Board of Directors
or nomination for election by the Company's stockholders was approved by a
vote of at least two-thirds (2/3) of the directors then still in office
who
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<PAGE>
either were directors at the beginning of the period or whose election
or nomination for election was previously so approved; or
(iv) the stockholders of the Company approve a merger or consolidation
of the Company with any other company other than:
(1) such a merger or consolidation which would result in
the Company's voting stock outstanding immediately
prior thereto continuing to represent (either by
remaining outstanding or by being converted into
voting stock of the surviving entity) more than 70%
of the combined voting power of the Company's or
such surviving entity's outstanding voting stock
immediately after such merger or consolidation; or
(2) such a merger or consolidation which would result in
the directors of the Company who were directors
immediately prior thereto continuing to constitute
at least 50% of the directors of the surviving
entity immediately after such merger or
consolidation.
For purposes of this paragraph (iv), "surviving entity" shall
mean only an entity in which all of the Company's stockholders
become stockholders by the terms of such merger or consolidation,
and the phrase "directors of the Company who were directors
immediately prior thereto" shall not include:
(1) any director of the Company who was designated by a
person who has entered into an agreement with the
Company to effect a transaction described in this
paragraph or in paragraph (i) next above; or
(2) any director who was not a director at the beginning
of the 24-consecutive-month period preceding the date
of such merger or consolidation
unless his election by the Board of Directors or nomination for
election by the Company's stockholders was approved by a vote of
at least two-thirds (2/3) of the directors then still in office
who were directors before the beginning of such period.
9. Dividends
The Committee may provide in the appropriate Award Agreement that dividends
on Restricted Stock may be paid currently in cash or credited to a Participant's
account for subsequent distribution as determined by the Committee. The Award
Agreement may provide for the reinvestment of dividends paid on Restricted Stock
in shares of Common Stock.
-11-
<PAGE>
10. Deferrals and Settlements
Settlement of Awards may be in the form of cash, Common Stock, other
Awards, or in combinations thereof as the Committee shall determine, and with
such other restrictions as it may impose. Subject to paragraph 4(a)(ii), the
Committee may also require or permit Participants to defer the issuance or
vesting of shares or the settlement of Awards under such rules and procedures as
it may establish under the Plan. The Committee may also provide that deferred
settlements include the payment of, or crediting of interest on, the deferral
amounts or the payment or crediting of Dividend Equivalents on deferred
settlements denominated in shares.
11. Transferability and Beneficiaries
No Awards under the Plan shall be assignable, alienable, saleable or
otherwise transferable other than by will or the laws of descent and
distribution, or pursuant to a qualified domestic relations order (as defined by
the Code) or Title I of the Employee Retirement Income Security Act or the rules
thereunder unless otherwise determined by the Committee.
12. Award Agreements
Awards under the Plan shall be evidenced by Award Agreements that set forth
the details, conditions and limitations for each Award, which may include the
term of an Award (except that (i) except as provided in Section 8(g), no Award
shall vest in less than six months after the date the Award is granted and (ii)
in no event shall the term of any ISO exceed a period of ten years from the date
of its grant), the provisions applicable in the event the Participant's
employment terminates, and the Company's authority to unilaterally or
bilaterally amend, modify, suspend, cancel or rescind any Award, subject to the
terms of the Plan.
13. Amendments: Compliance with Rule 16b-3
The Committee may suspend, terminate, or amend the Plan as it deems
necessary or appropriate to better achieve the purposes of the Plan, except
that, without the approval of the Company's shareholders, no such amendment
shall be made for which shareholder approval is necessary to comply with any
applicable tax or regulatory requirement, including for these purposes any
approval requirement which is a prerequisite for exemptive relief under Section
16(b) of the Exchange Act, and provided that no such suspension, termination or
amendment shall impair the rights of any Participant, without his consent, in
any Award previously granted under the Plan.
14. Tax Withholding
The Company shall have the right to (i) make deductions from any settlement
of an Award made under the Plan, including the delivery or vesting of shares, or
require shares or cash or both be withheld from any Award, in each case in an
amount sufficient to satisfy withholding
-12-
<PAGE>
of any federal, state or local taxes required by law, or (ii) take such other
action as may be necessary or appropriate to satisfy any such withholding
obligations. The Committee may determine the manner in which such tax
withholding may be satisfied, and may permit shares of Common Stock (rounded up
to the next whole number) to be used to satisfy required tax withholding based
on the Fair Market Value of any such shares of Common Stock, as of the
Settlement Date of the applicable Award.
15. Other Company Benefit and Compensation Programs
Unless otherwise specifically determined by the Committee, settlements of
Awards received by a Participant under the Plan shall not be deemed a part of
the Participant's regular, recurring compensation for purposes of calculating
payments or benefits from any Company benefit plan, severance program or
severance pay law of any country. Further, the Company may adopt other
compensation programs, plans or arrangements as it deems appropriate or
necessary.
16. Unfunded Plan
Unless otherwise determined by the Committee, the Plan shall be unfunded
and shall not create (or be construed to create) a trust or a separate fund or
funds. The Plan shall not establish any fiduciary relationship between the
Company and any Participant or other person. To the extent any person holds any
rights by virtue of a grant awarded under the Plan, such right (unless otherwise
determined by the Committee) shall be not greater than the right of an unsecured
general creditor of the Company.
17. Future Rights
No person shall have any claim or right to be granted an Award under the
Plan, and no Participant shall have any right under the Plan to be retained in
the employment of the Company or its affiliates.
18. Governing Law
The validity, construction and effect of the Plan, and any actions taken or
relating to the Plan, shall be determined in accordance with the laws of the
State of Delaware and applicable federal law.
19. Successors and Assigns
The Plan shall be binding on all successors and assigns of a Participant,
including, without limitation, the estate of such Participant and the executor,
administrator or trustee of such estate, or any receiver or trustee in
bankruptcy or representative of the Participant's creditors.
-13-
<PAGE>
20. Rights as a Shareholder
Except as otherwise provided in any Award Agreement, a Participant shall
have no rights as a shareholder of the Company until he or she becomes the
holder of record of Common Stock or Second Preferred Stock.
-14-
<PAGE>
Exhibit 10(b)
CASE CORPORATION
OUTSIDE DIRECTORS' EQUITY COMPENSATION PLAN
(As Amended and Restated Effective January 1, 1996)
This Outside Directors' Equity Compensation Plan (the "Plan") was
established by action of the Case Corporation (the "Company") Board of Directors
effective as of January 1, 1995. This amendment and restatement of the Plan
shall be effective January 1, 1996.
1. INTRODUCTION. The Plan is established to provide non-employee
directors of the Company with the following grants: (i) grants of Company common
stock representing directors' retainer fees and board committee chair fees
(collectively, the "Fees"); and (ii) an annual grant of options to purchase
Company common stock.
2. ELIGIBILITY. Each individual who is a member of the Board of Directors
of the Company and is not a salaried officer of the Company or of any of its
subsidiaries (an "Outside Director" or a "Participant") shall be eligible for
the grants described below.
3. STOCK GRANTS. As of the last day of each Plan Year Quarter (as
described below) commencing on or after the Company's 1996 annual meeting of
stockholders, each Outside Director shall be granted automatically a number of
shares (the "Shares") of Company common stock (the "Common Stock") equal in
value to 25% of the annual retainer fee, and if he or she is a committee chair
25% of the annual committee chair fee, each as listed in Appendix A, attached
hereto, as amended from time to time in accordance with the amendment procedures
of the Plan. The value of each Share (the "Fair Market Value") shall be
determined as of the last business day of the Plan Year Quarter for which it is
granted and shall be equal to the average of the highest and lowest sales price
of one share of Company common stock as reported on the New York Stock Exchange
Composite Transactions tape for such date. If the Outside Director is not a
member of the Board of Directors or a committee chair during an entire Plan Year
Quarter, the retainer and committee chair fees to which he or she is entitled as
well as his or her award of Shares for that Quarter shall be reduced, pro rata,
to reflect the portion of the Quarter in which he or she was not an Outside
Director or committee chair, as the case may be. An Outside Director shall be
entitled to a whole Share for any fractional Share to which he or she would
otherwise be entitled for any Plan Year Quarter under the foregoing provisions
of this Section 3.
The term "Plan Year" means the period beginning on the date of the Company's
annual meeting of stockholders and ending on the day immediately prior to the
first day of the following Plan Year. For any Plan Year, the first Plan Year
Quarter shall begin on the first day of the Plan Year, and shall end on the 90th
day of the Plan Year; the second Plan Year Quarter shall begin on the
<PAGE>
91st day of the Plan year, and shall end on the 180th day of the Plan Year; the
third Plan Year Quarter shall begin on the 181st day of the Plan Year, and shall
end on the 270th day of the Plan Year; and the fourth Plan Year Quarter shall
begin on the 271st day of the Plan Year, and shall end on the last day of the
Plan Year.
4. CASH ELECTION. At any time prior to the first day of a Plan Year, an
Outside Director may irrevocably elect, by filing a form with the Secretary of
the Company, to receive a portion of the Fees for such Plan Year in cash,
provided that an Outside Director may not elect to receive more than 50% of the
Fees in cash.
5. OPTION GRANTS.
a. Each individual who is an Outside Director on the date of the
1996 or any subsequent annual meeting of shareholders shall be
granted automatically as of that date an option to purchase that
number of shares of Company common stock listed in Appendix A
(the "Option Grant"), attached hereto as amended from time to
time in accordance with the amendment procedures of the Plan.
Each individual who becomes an Outside Director after the
Effective Date other than on the date of an annual meeting of
stockholders shall receive an Option Grant reduced pro rata to
reflect the portion of the Plan Year elapsed prior to the date on
which the individual first became an Outside Director, provided
that any fractional share resulting from such reduction shall be
rounded up to a whole share.
b. RELOAD STOCK OPTIONS. Reload Stock Options shall be awarded to
an Outside Director when and if he or she pays the Option Price
under an Option Grant, described above, by delivery of shares of
Common Stock on the Settlement date for such exercise. A Reload
Stock Option entitles its holder to purchase the number of shares
so delivered for an Option Price equal to the Fair Market Value
of a share of Common Stock on such Settlement Date. No more than
one Reload Stock Option shall be granted to an Outside Director
in any twelve-month period, the maximum number of Reload Stock
Options that may be granted to an Outside Director with respect
to any Option Grant is five, and no Reload Stock Options will be
issued within six months prior to the scheduled expiration date
of the Option Grant to which it relates. Notwithstanding the
above, no Reload Stock Option shall be granted unless the
recipient is an Outside Director of the Company at the time of
delivery of shares. Notwithstanding any other provision hereof,
a Reload Stock Option shall not become exercisable until six
months after its award date and its maximum term will terminate
at the time specified hereunder for the Option Grant to which it
relates.
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<PAGE>
6. TERMS OF OPTION GRANTS.
a. OPTION AGREEMENT. Each option shall be evidenced by a written
stock option agreement which shall be executed by the Outside
Director and the Company and which shall contain such terms and
conditions as are consistent with this Plan.
b. EXERCISE PRICE. The exercise price of the shares under the Option
Grant shall be 100% of the Fair Market Value of such shares on
the date the Option Grant is granted.
c. COMMENCEMENT OF EXERCISABILITY. Each Option Grant issued under
the Plan (either before or after its amendment and restatement)
shall become exercisable on the third anniversary of the grant
date or, if earlier, with respect to Option Grants that have been
outstanding at least six months, the date the individual ceases
to be an Outside Director for any reason other than removal for
cause by the Company's stockholders pursuant to section 141(k) of
the Delaware General Corporation Law.
d. TERM. The Option Grant shall terminate upon the earlier of (i)
ten years after the date of grant or (ii) six months after the
date an individual ceases to be an Outside Director.
e. DEATH OF OUTSIDE DIRECTOR. Notwithstanding (c) above, the Stock
Options that have been issued to an Outside Director whose Board
membership is terminated due to death shall be immediately
exercisable. Notwithstanding (d)(i) above, the Outside Director's
designated beneficiary or estate if no beneficiary has been
designated may exercise any Option Grants within the six-month
period following the death of the Outside Director.
f. TOTAL DISABILITY OF OUTSIDE DIRECTOR. Notwithstanding (c) and
(d)(i) above, the Stock Options that have been issued to an
Outside Director whose Board membership is terminated due to
Total Disability shall be immediately exercisable and shall
remain exercisable within the six-month period following the
Outside Director's Total Disability. For purposes of this
provision, Total Disability means the permanent inability (as
determined by the Outside Director's medical doctor) of the
Outside Director which is a result of accident or sickness, to
perform the duties of a director of the Company.
g. CHANGE OF CONTROL. Notwithstanding (c) and (d)(i) above, the
Stock Options that have been issued to an Outside Director shall
be immediately
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<PAGE>
exercisable and shall remain exercisable for a six-month period
if a Change of Control occurs. Notwithstanding the above, Stock
Options that are issued within six months of the date the Change
of Control occurs shall not be subject to this provision. For
purposes of this provision, "Change of Control" means a change in
the beneficial ownership of the Company's voting stock or a
change in the composition of the Company's Board of Directors
which occurs as follows:
(1) any "person" (as such term is used in Section 13(d) and
14(d)(2) of the Securities Exchange Act of 1934) other than:
(i) a trustee or other fiduciary of securities held under
an employee benefit plan of the Company;
(ii) a corporation owned, directly or indirectly, by the
stockholders of the Company in substantially the same
proportions as their ownership of the Company; or
(iii) with respect to any Participant, any person in which
such Participant has a substantial equity interest;
is or becomes a beneficial owner (as defined in Rule 13d-3
under the Securities Exchange Act of 1934), directly or
indirectly, of stock of the Company representing 25% or more
of the total voting power of the Company's then outstanding
stock;
(2) a tender offer is made for the stock of the Company by a
person other than a person described in subparagraph (1),
and one of the following occurs:
(i) the person making the offer owns or has accepted for
payment stock of the Company representing 25% or more
of the total voting power of the Company's stock; or
(ii) three business days before the offer is to terminate
(unless the offer is withdrawn first) such person could
own, by the terms of the offer plus any shares owned by
such person, stock representing 50% or more of the
total voting power of the Company's outstanding stock
when the offer terminates;
(3) during any period of two consecutive years there shall cease
to be a majority of the Company's Board of Directors
comprised as follows: individuals who at the beginning of
such period constitute
-4-
<PAGE>
the Board of Directors and any new director(s) whose
election by the Board of Directors or nomination for
election by the Company's stockholders was approved by a
vote of at least two-thirds (2/3) of the directors then
still in office who either were directors at the beginning
of the period or whose election or nomination for election
was previously so approved; or
(4) the stockholders of the Company approve a merger or
consolidation of the Company with any other company other
than:
(i) such a merger or consolidation which would result in
the Company's voting stock outstanding immediately
prior thereto continuing to represent (either by
remaining outstanding or by being converted into voting
stock of the surviving entity) more than 70% of the
combined voting power of the Company's or such
surviving entity's outstanding voting stock immediately
after such merger or consolidation; or
(ii) such a merger or consolidation which would result in
the directors of the Company who were directors
immediately prior thereto continuing to constitute at
least 50% of the directors of the surviving entity
immediately after such merger or consolidation.
For purposes of this paragraph (4), "surviving entity" shall
mean only an entity in which all of the Company's
stockholders become stockholders by the terms of such merger
or consolidation, and the phrase "directors of the Company
who were directors immediately prior thereto" shall not
include:
(A) any director of the Company who was designated by a
person who has entered into an agreement with the
Company to effect a transaction described in this
paragraph or in paragraph (1) next above; or
(B) any director who was not a director at the beginning of
the 24-consecutive-month period preceding the date of
such merger or consolidation;
unless his election by the Board of Directors or nomination
for election by the Company's stockholders was approved by a
vote of
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<PAGE>
at least two-thirds (2/3) of the directors then still in
office who were directors before the beginning of such
period;
provided, however, that in the event an Outside Director arranges
or solicits any of the transactions listed in (1), (2), (3), (4)
or (5), any such transaction shall not, for purposes of this
Plan, constitute a Change in Control as to such Outside Director.
7. MANNER OF PAYMENT OF OPTION PRICE. The Option Price shall be paid in
full at the time of the exercise of the Stock Option and may be paid in any of
the following methods or combinations thereof:
(1) In United States dollars, in cash, check, bank draft or money
order payable to the order of the Company;
(2) By the delivery of shares of Common Stock having an aggregate
Fair Market Value on the date of such exercise equal to the
Option Price;
(3) In any other manner that the Board shall approve, including
without limitation any arrangement that the Board may establish
to enable Participants to simultaneously exercise Stock Options
and sell the shares of Common Stock acquired thereby and apply
the proceeds to the payment of the Option Price therefor.
8. PLAN ADMINISTRATION. The Plan shall be administered by the
Compensation Committee of the Board of Directors (the "Committee").
9. SHARES SUBJECT TO PLAN. Subject to the provisions of Section 11,
commencing January 1, 1996, the number of shares of Common Stock for which
Shares and Options may be awarded under the Plan shall not exceed 100,000
shares. Shares issued under the Plan may be authorized but unissued shares or
treasury shares. If any shares are subject to an award under the Plan that
expires, is cancelled or is forfeited, such shares shall again become available
for issuance under the Plan.
10. ADJUSTMENTS AND REORGANIZATIONS. In the event of any merger,
reorganization, consolidation, recapitalization, separation. liquidation, stock
dividend, extraordinary dividend, spin-off, split-up, share combination, or
other change in the corporate structure of the Company affecting the Common
Stock, the number and kind of shares that may be delivered under the Plan shall
be subject to such equitable adjustment as the Committee, in its sole
discretion, may deem appropriate in order to preserve the benefits or potential
benefits to be made available under the Plan, and the number and kind and price
of shares subject to outstanding Option Grants, the option price and any other
terms of outstanding Option Grants or Stock Grants shall be subject to
-6-
<PAGE>
such equitable adjustment as the Committee, in its sole discretion, may deem
appropriate in order to prevent dilution or enlargement of outstanding Option
Grants or Stock Grants.
11. TRANSFERABILITY OF AWARDS. No awards under the Plan shall be
assignable, alienable, saleable or otherwise transferable other than by will or
the laws of descent and distribution or pursuant to a qualified domestic
relations order (as defined by the Code) or Title 1 of ERISA or the rules
thereunder.
12. NO RIGHT OF CONTINUED SERVICE. Participation in the Plan does not give
any Participant the right to be retained as a Director of the Company or any
right or claim to any benefit under the Plan unless such right or claim has
specifically accrued under the terms of the Plan.
13. GOVERNING LAW. The validity, construction and effect of the Plan, and
any actions taken or relating to the Plan, shall be determined in accordance
with the laws of the State of Delaware and applicable federal law.
14. SUCCESSORS AND ASSIGNS. The Plan shall be binding on all successors
and assigns of a Participant, including, without limitation, the estate of such
Participant and the executor, administrator or trustee of such estate, or any
receiver or trustee in bankruptcy or representative of the Participant's
creditors.
15. RIGHTS AS A SHAREHOLDER. Except as otherwise provided in any Award
Agreement, a Participant shall have no rights as a shareholder of the Company
until he or she becomes the holder of record of Common Stock.
16. AMENDMENT. The Plan and any attachments thereto may be amended by
action of the Board of Directors of the Company, except that, notwithstanding
anything to the contrary contained herein, the formula provisions in this Plan
may not be amended more than once every six months, other than to comport with
changes in the Internal Revenue Code, the Employee Retirement Income Security
Act, or the rules and regulations thereunder.
-7-
<PAGE>
APPENDIX A
(Effective for Plan Years commencing after January 1, 1996)
Annual Retainer fee: $24,000
Annual Committee chair fee: $ 4,000
Option grant: 1,000 shares
-8-
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>This schedule contains summary financial information extracted from Case
Corporation and Consolidated Subsidiaries financial data schedules and is
qualified in its entirety by reference to such financial statements.
</LEGEND>
<MULTIPLIER> 1,000,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> JUN-30-1996
<CASH> 96
<SECURITIES> 0
<RECEIVABLES> 1,936
<ALLOWANCES> 0
<INVENTORY> 1,058
<CURRENT-ASSETS> 3,355
<PP&E> 1,968
<DEPRECIATION> 1,019
<TOTAL-ASSETS> 5,963
<CURRENT-LIABILITIES> 2,483
<BONDS> 1,157
<COMMON> 1
77
0
<OTHER-SE> 1,721
<TOTAL-LIABILITY-AND-EQUITY> 5,963
<SALES> 2,503
<TOTAL-REVENUES> 2,637
<CGS> 1,896
<TOTAL-COSTS> 2,246
<OTHER-EXPENSES> 16
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 78
<INCOME-PRETAX> 297
<INCOME-TAX> 112
<INCOME-CONTINUING> 185
<DISCONTINUED> 0
<EXTRAORDINARY> 22
<CHANGES> 0
<NET-INCOME> 163
<EPS-PRIMARY> 2.17
<EPS-DILUTED> 2.11
</TABLE>
