Exhibit 10.3

 

Caterpillar Inc.

2006 Long-Term Incentive Plan

Restricted Stock Units

Chairman’s Award Program

 

If you were awarded restricted stock units (“RSUs”) on [INSERT DATE] (the “Grant
Date”), pursuant to the Caterpillar Inc. 2006 Long-Term Incentive Plan (the
“Plan”), this document specifies the material terms and provisions applicable to
your award (the “RSU Award”).

 

Vesting

The RSU Award is subject to a five-year vesting schedule. One-third of the RSU
Award will vest on the third anniversary of the Grant Date, the next third of
the RSU Award will vest on the fourth anniversary of the Grant Date, and the
final one-third of the RSU Award will vest on the fifth anniversary of the Grant
Date.  If you terminate employment for any reason other than disability, death
or in connection with a change of control (as described more fully below) prior
to the date the RSU Award becomes fully vested, the non-vested RSUs will be
forfeited.  For example, if you quit or retire after the third anniversary of
the Grant Date but prior to the fourth anniversary of the Grant Date, you will
forfeit two-thirds of the RSU Award.

 

Upon vesting, you will receive unrestricted shares of common stock of
Caterpillar Inc. (the “Company”) equal to the number of RSUs that vested, less
any shares withheld to satisfy any applicable income and payroll tax withholding
requirements.

 

Voting Rights

You are not entitled to any voting rights with respect to the RSUs.  When the
RSUs vest and shares are actually issued, you then will have the same voting
rights with respect to those shares as any other holder of common stock of the
Company.

 

Dividends and Other Distributions

You will not receive dividends or any other distributions (e.g., dividend
equivalents) with respect to the RSUs.  When the RSUs vest and shares are
actually issued, you then will have the same dividend rights with respect to
those shares as any other holder of common stock of the Company.

 

Termination of Employment

Your termination of employment with the Company and its subsidiaries will impact
the non-vested portion of the RSU Award as follows:

 

·                  Disability

If your employment with the Company and/or any subsidiary or affiliate
terminates by reason of disability, your non-vested RSUs will become fully
vested and shares of Company common stock will be issued to you as soon as
administratively feasible following: (1) the date the RSUs would have otherwise
vested had you remained employed (the “Vesting Date”); or (2) the date which is
six months following the date of your termination of employment (the “Six-Month
Date”), if the Six-Month Date is earlier than the Vesting Date.  In no event,
however, will the shares be issued later than March 15th of the calendar year
immediately following the calendar year during which the Vesting Date or the
Six-Month Date occurs, as applicable.

 

·                  Death

If your employment with the Company and/or any subsidiary or affiliate
terminates by reason of death, your RSU Award will become fully vested and
shares of Company common stock will be issued to your beneficiary or your estate
(as applicable), as soon as administratively feasible following the date of your
death but in no event later than March 15th of the calendar year immediately
following the calendar year during which your death occurs.

 

--------------------------------------------------------------------------------

 

·                  Change of Control

In the event that a change of control of the Company occurs and your employment
is terminated without cause or for good reason within 12 months of such change
of control, your non-vested RSUs will become fully vested and shares of Company
common stock will be issued to you as soon as administratively feasible
following: (1) the Vesting Date; or (2) the date which is six months following
the date of your termination of employment (the “Six-Month Date”), if the
Six-Month Date is earlier than the Vesting Date.  In no event, however, will the
shares be issued later than March 15th of the calendar year immediately
following the calendar year during which the Vesting Date or the Six-Month Date
occurs, as applicable.

 

·                  Other

If your employment with the Company and/or any subsidiary or affiliate
terminates for any reason other than disability, death or in connection with a
change of control, all non-vested RSUs with respect to this RSU Award will lapse
and shall be immediately forfeited.

 

Transferability of Award

Subject to certain exceptions set forth in the Plan, the RSU Award may not be
assigned, transferred, pledged or hypothecated in any way.  The RSU Award is not
subject to execution, attachment or similar process. Any attempt at such,
contrary to the provisions of the Plan, will be null and void and without
effect.  Note that once a RSU Award vests and shares of Company common stock are
actually issued, you will have the ability to transfer those shares.

 

Designation of Beneficiary

If you have not done so already, you are encouraged to designate a beneficiary
(or beneficiaries) to whom your benefits under the Plan will be paid upon your
death. If you do not designate a beneficiary, any benefits payable pursuant to
the Plan upon your death will be paid to your estate.

 

Administration of the Plan

The RSU Award shall at all times be subject to the terms and provisions of the
Plan and the Plan shall be administered in accordance with the terms of, and as
provided in, the Plan. In the event of conflict between the terms and provisions
of this document and the terms and provisions of the Plan, the provisions of the
Plan shall control.

 

Code Section 409A

It is intended that this RSU Award document and the administration of the RSU
award comply with Section 409A of the Internal Revenue Code of 1986, as amended,
and the Treasury Regulations promulgated and other official guidance issued
thereunder (“Code Section 409A”), to the extent applicable.  The Plan and this
RSU Award document shall be interpreted and construed on a basis consistent with
such intent.  Notwithstanding anything contained herein to the contrary, no
shares may be issued unless in compliance with Code Section 409A to the extent
that Code Section 409A applies.  The Company reserves the right (including the
right to delegate such right) to unilaterally amend this RSU Award document (and
thus the terms of the RSU Award) without your consent solely in order to
maintain an exclusion from the application of, or to maintain compliance with,
Code Section 409A.  Your acceptance of this RSU Award constitutes
acknowledgement and consent to such rights of the Company.

 

Tax Impact

Please refer to the Plan prospectus for a general description of the U.S.
federal tax consequences of an RSU Award. You may also wish to consult with your
personal tax advisor regarding how the RSU Award impacts your individual tax
situation.  Nothing contained in this RSU Award document or in the Plan
prospectus shall be construed as a guarantee of any particular tax effect for
any benefits or amounts deferred or paid pursuant to this RSU Award document.

 

2

--------------------------------------------------------------------------------

 

Compliance with Securities Laws

The Company will take steps required to achieve compliance with all applicable
U.S. federal and state securities laws (and others, including registration
requirements) and with the rules and practices of the stock exchanges upon which
the stock of the Company is listed. Provisions are made within the Plan covering
the effect of stock dividends, stock splits, changes in par value, changes in
kind of stock, sale, merger, recapitalization, reorganization, etc.

 

Effect on Other Benefits

The RSU Award is not intended to impact the coverage of or the amount of any
other employee benefit plans in which you participate that are sponsored by the
Company or any of its subsidiaries or affiliates.

 

Acceptance of Award

Your acceptance of this RSU Award constitutes acknowledgement and consent to the
terms of the RSU Award as described in this RSU Award document.

 

Further Information

For more detailed information about the Plan, please refer to the Plan
prospectus or the Plan itself. Copies of the prospectus and the Plan can be
obtained from the Executive Compensation intranet Web site at Cat@work under the
Compensation + Benefits tab. If you have any questions regarding your RSU Award,
please contact the Director of Compensation + Benefits.

 

3

--------------------------------------------------------------------------------