EXHIBIT 10(r)


 


FIFTH AMENDMENT OF CUMMINS
INC.


SUPPLEMENTAL LIFE INSURANCE AND DEFERRED
INCOME PLAN


 


Cummins Inc. (“Company”) has adopted this Fifth Amendment of Cummins
Inc. Supplemental Life Insurance and Deferred Income Plan (“Plan”), effective
as of January 1, 2006.


 


BACKGROUND


 


A.            The Company adopted
the Plan, effective as of January 1, 1997, and it has amended the Plan on four
occasions since that time.


 


B.            The Company wishes to
amend the Plan further as provided herein, effective January 1, 2006, for Plan
participants who terminate employment on or after that date.


 


Therefore, the Company amends the Plan as follows, effective January 1,
2006, with respect to participants who terminate employment with the Company
and its related entities on or after that date: 


 


AMENDMENT


 


1. Section 1.10 is amended to read as follows:


 


“Average
Covered Compensation” means the average of Covered Compensation earned by an
Executive for the five consecutive years in the Executive’s ten years of
employment immediately preceding his or her termination of employment with the
Company during which his or her Covered Compensation is the highest.


 


2. Section  5.1 is
amended to read as follows:


 


An Executive
with at least 10 years of Service who terminates employment with the Company on
or after attainment of age 60 shall receive from the Trustee, beginning as of
the first day of the month following the Executive’s termination of employment,
in monthly installments, a Supplemental Life Annuity retirement benefit in an
annual amount equal to:


 


(a) 2% of the
Executive’s Average Covered Compensation times years of Service not exceeding
20 years; plus


 


(b) 1% of the
Executive’s Average Covered Compensation times a maximum of 10 years of Service
in excess of 20 years; plus


 

















 


(c) In the
case of an Executive who is among the two most highly compensated Executives of
the Company at the time of termination of employment, an additional 10% of
Average Covered Compensation; minus


 


(d) The
Executive’s annual benefit, payable in monthly installments, in the form of a
life annuity form the Cash Balance Plan and from the Excess Benefit Plan, if
any.


 


3. Section 5.4
is amended to read as follows:


 


If an
Executive with at least 10 years of Service terminates employment with the
Company on or after age 55 but prior to attainment of age 60, the Executive
shall be entitled to receive early retirement benefits under the Plan equal to
the benefits otherwise payable under Section 5.1, reduced by 1/3
of 1% for each full month that benefits commence before the Executive’s 60th
birthday. No reduction in benefits shall be made, however, with respect to (i)
a person who was an Executive on December 31, 2005, whose total age and years
of Service on the date of termination of employment equals or exceeds 80, or
(ii) a participant in the Prior Program whose Service on the date of
termination of employment equals or exceeds 30 years.


 


To document
the Company’s adoption of this Fifth Amendment of Cummins Inc. Supplemental
Life Insurance and Deferred Income Plan, the undersigned duly authorized
officer of the Company has signed below on this 24th day of February,
2006.


 


	
   

  	
  CUMMINS INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Jill E. Cook

  	
   

  
	
   

  	
   

  	
      Vice President –

  
	
   

  	
   

  	
      Human Resources