Exhibit 10.7
 
 
 
 
CATERPILLAR INC.
 
DIRECTORS’ CHARITABLE AWARD PROGRAM
 
(Amended and Restated effective as of April 1, 2008)
 
 
1.
PURPOSE OF THE PROGRAM

 
Under the Caterpillar Inc. Directors’ Charitable Award Program (the “Program”),
Caterpillar Inc. (the “Company”) will make a donation of up to $1,000,000 in
memory of each eligible Director.  The donation will be made by the Company, in
the Director’s name, in ten equal annual installments, with the first
installment to be made as soon as is practicable after the Director’s death.  Of
the total donation amount, 50% will be donated to one or more eligible
tax-exempt organizations (the “Donee(s)”) recommended by the Director, and the
remaining portion of the donation will be made to the Caterpillar Foundation
(the “Foundation”). The purpose of the Program is to acknowledge the service of
the Company’s Directors, recognize the interest of the Company and its Directors
in supporting worthy educational institutions and charitable organizations,
provide an additional means of support to the Foundation, and enhance the
Company’s Director benefit program so that the Company is able to continue to
attract and retain Directors of the highest caliber.
 
2.
ELIGIBILITY

 
All persons serving as Directors of the Company as of April 1, 1993 shall be
eligible to participate in the Program. All Directors who join the Company’s
Board of Directors after that date but before April 1, 2008 shall be immediately
eligible to participate in the Program upon election to the Board.  A Director
who joins the Board on or after April 1, 2008 shall not be eligible to
participate in the Program.
 
3.
DONATION AMOUNT

 
While serving as a Director, the donation amount for a Director will be
determined based on the Director’s months of Board service, in accordance with
the following schedule:
 
 
MONTHS OF SERVICE
 
RECOMMENDED CHARITY DONATION
 
FOUNDATION DONATION
0-11 months
 
$0
 
$0
12-23
 
100,000
 
100,000
24-35
 
200,000
 
200,000
36-47
 
300,000
 
300,000
48-59
 
400,000
 
400,000
60 or more
 
500,000
 
500,000
         

 
 
A Director will continue to be eligible to participate in the program after he
or she terminates Board service.  The total donation amount in effect on the
date a Director’s Board service terminates shall be continued based upon his or
her months of service on that date.  However, notwithstanding this schedule, a
Director will be treated as having served for 60 or more months if he or she
terminates Board service as a result of disability or mandatory retirement.
 
In determining a Director’s total donation amount, Board service prior to the
effective date of the Program (even if it is not continuous service) will be
counted.
 
4.
RECOMMENDATION OF DONATION

 
When a Director becomes eligible to participate in the Program, he or she shall
make a written recommendation to the Company, on a form approved by the Company
for this purpose, designating the Donee(s) which he or she intends to be the
recipient(s) of the Company donation to be made on his or her behalf. A Director
may revise or revoke any such recommendation prior to his or her death by
signing a new recommendation form and submitting it to the Company.  Each
eligible Director may choose one Donee to receive a Company donation of
$500,000, or up to five Donees to receive donations aggregating $500,000.  Each
recommended Donee must be recommended to receive a donation of at least
$100,000.
 
5.
TIMING AND PAYMENT OF DONATION

 
The donation made on a Director’s behalf will be made by the Company in ten
equal annual installments, with the first installment to be made as soon as is
practicable after the Director’s death.  The first five installments (the Donee
installments) will be donated to the Donee(s) recommended by the Director, and
the last five installments (the Foundation installments) will be donated to the
Foundation.  If a Director recommends more than one Donee to receive a donation,
each will receive a prorated portion of each Donee installment, unless otherwise
requested by the Director and approved by the Company.  If a Donee is not in
existence or is not an eligible tax-exempt organization at the time of payment,
then the portion otherwise payable to that Donee will instead be paid to the
other qualified Donees recommended by the Director in proportion to their
respective shares or, if none, to the Foundation.
 
6.
DONEES

 
In order to be eligible to receive a donation, a recommended organization must
be an educational institution or charitable organization described in Sections
170(b) and 2055(a) of the Internal Revenue Code, or any successor provision, and
must initially, and at the time a donation is to be made, qualify to receive
tax-deductible donations under the Internal Revenue Code. Also, the organization
must be reviewed and approved by the Vice President and Manager of the
Foundation.  An organization will be approved unless it is determined, in the
exercise of good faith judgment, that a donation to the organization would be
detrimental to the best interests of the Company.  Private foundations (except
for the Foundation) are not eligible to receive donations under the Program.
 
7.
FUNDING AND PROGRAM ASSETS

 
The Company may fund the Program or it may choose not to fund the Program.  If
the Company elects to fund the Program in any manner, neither the Directors nor
their recommended Donee(s) shall have any rights or interests in any assets of
the Company identified for such purpose.  Nothing contained in the Program shall
create, or be deemed to create, a trust, actual or constructive, for the benefit
of a Director or any Donee recommended by a Director to receive a donation, or
shall give, or be deemed to give, any Director or recommended Donee any personal
financial interest in or tax benefit from any assets of the Program or the
Company.  If the Company elects to fund the Program through life insurance
policies, a participating Director must cooperate and fulfill the enrollment
requirements necessary to obtain insurance on his or her life.
 
8.
AMENDMENT OR TERMINATION

 
The Board of Directors of the Company may, at any time, without the consent of
the Directors participating in the Program, amend, suspend, or terminate the
Program.
 
9.
ADMINISTRATION

 
The Program shall be administered by the Company. The Company shall have plenary
authority in its discretion, but subject to the provisions of the Program, to
prescribe, amend, and rescind rules, regulations and procedures relating to the
Program.  The Company shall have sole discretion to construe and interpret the
terms of the Program and to resolve all questions arising under the
Program.  The determinations of the Company on the foregoing matters shall be
conclusive and binding on all interested parties.
 
It is intended that the benefits under this Program do not result in taxable
compensation to any Director or provide for a deferral of compensation that is
subject to Section 409A of the Internal Revenue Code, or any successor
provision.
 
10.
GOVERNING LAW

 
The Program shall be construed and enforced according to the laws of the State
of Illinois, and all provisions thereof shall be administered according to the
laws of said State.
 
11.
EFFECTIVE DATE

 
The Program was originally effective as of April 1, 1993.  The effective date of
the amended and restated Program is April 1, 2008.  The recommendation of an
individual Director will be effective when he or she completes all enrollment
requirements.