Exhibit
10.(d)


 


CUMMINS INC. SUPPLEMENTAL 

LIFE INSURANCE AND DEFERRED INCOME PLAN


 


 


Restated
as of January 1, 2008


 

















 


TABLE OF CONTENTS


 


	
  ARTICLE I RESTATEMENT AND PURPOSE

  	
  1

  
	
   

  	
   

  
	
  Section 1.01 History and
  Restatement

  	
  1

  
	
  Section 1.02 Application of
  Restatement

  	
  1

  
	
  Section 1.03 Purpose

  	
  1

  
	
  Section 1.04 Grantor Trust

  	
  1

  
	
   

  	
   

  
	
  ARTICLE II DEFINITIONS AND INTERPRETATION

  	
  1

  
	
   

  	
   

  
	
  Section 2.01 Definitions

  	
  1

  
	
  Section 2.02 Rules of
  Interpretation

  	
  7

  
	
   

  	
   

  
	
  ARTICLE III PARTICIPATION

  	
  7

  
	
   

  	
   

  
	
  ARTICLE IV INSURANCE POLICIES

  	
  7

  
	
   

  	
   

  
	
  Section 4.01 Purchase of
  Insurance Policies

  	
  7

  
	
  Section 4.02 Premium
  Payments

  	
  8

  
	
   

  	
   

  
	
  ARTICLE V DEATH BENEFITS

  	
  8

  
	
   

  	
   

  
	
  ARTICLE VI RETIREMENT BENEFITS

  	
  8

  
	
   

  	
   

  
	
  Section 6.01 General
  Provisions

  	
  8

  
	
  Section 6.02 Normal
  Retirement Benefit

  	
  8

  
	
  Section 6.03 Early
  Retirement

  	
  9

  
	
  Section 6.04 Deferred Vested
  Benefit

  	
  10

  
	
  Section 6.05 Survivor
  Benefit

  	
  10

  
	
  Section 6.06 Distribution of
  Small Benefits

  	
  10

  
	
  Section 6.07 Delay in
  Payment for Specified Employees

  	
  11

  
	
  Section 6.08 Designating a
  Beneficiary

  	
  11

  
	
   

  	
   

  
	
  ARTICLE VII VESTED BENEFITS

  	
  11

  
	
   

  	
   

  
	
  ARTICLE VIII ACCELERATED PAYMENT UPON CHANGE OF CONTROL

  	
  11

  
	
   

  	
   

  
	
  ARTICLE IX ADMINISTRATION OF PLAN

  	
  12

  
	
   

  	
   

  
	
  Section 9.01 Powers and
  Responsibilities of the Administrator

  	
  12

  
	
  Section 9.02 Indemnification

  	
  12

  
	
  Section 9.03 Claims and
  Claims Review Procedure

  	
  13

  
	
   

  	
   

  
	
  ARTICLE X GROSS-UP PAYMENTS

  	
  14

  
	
   

  	
   

  
	
  ARTICLE XI PRESERVATION OF ACCRUED BENEFITS

  	
  15

  



 

















 


	
  ARTICLE XII AMENDMENT AND TERMINATION

  	
  15

  
	
   

  	
   

  
	
  ARTICLE XIII MISCELLANEOUS

  	
  15

  
	
   

  	
   

  
	
  Section 13.01 Obligations of
  Employer

  	
  15

  
	
  Section 13.02 Employment
  Rights

  	
  16

  
	
  Section 13.03 Non-Alienation

  	
  16

  
	
  Section 13.04 Tax
  Withholding

  	
  16

  
	
  Section 13.05 Other Plans

  	
  16

  
	
  Section 13.06 Liability of
  Affiliated Employers

  	
  16

  
	
   

  	
   

  
	
  APPENDIX
  A

  	
  A-1

  



 

















 


ARTICLE I

RESTATEMENT AND PURPOSE


 


Section 1.01                            History and Restatement.  Cummins Inc. (“Company”) established the
predecessor of the Cummins Inc. Supplemental Life Insurance and Deferred Income
Plan, effective January 1, 1986 (“Prior Program”).  Effective January 1, 1997, the Company
restated the Prior Program in its entirety, naming it the “Cummins Engine
Company, Inc. Supplemental Life Insurance and Deferred Income Plan.”  The Company has amended the Plan on several
occasions since that time.  The Company
most recently restated the Plan, effective January 1, 2005, to comply with
the requirements of Code Section 409A and the guidance thereunder.  By this restatement, which is generally
effective as of January 1, 2008, the Company amends the Plan to comply
with the requirements of the final regulations under Code Section 409A.


 


Section 1.02                            Application of Restatement.  This restatement of the Plan is effective as
of January 1, 2008, with respect to any amounts accrued or Vested under
the Plan after 2004.  It does not apply
to any amount that was accrued and Vested as of December 31, 2004 (“Grandfathered
Amount”), and Grandfathered Amounts shall continue to be governed by the terms
and conditions of the Plan without regard to this restatement; provided,
however, the individual entitled by receive benefits following an Executive’s
death that occurs on or after January 1, 2008, shall be determined
pursuant to this restatement.


 


Section 1.03                            Purpose.  The purpose
of the Plan is to provide (i) increased protection and liquidity for a
select group of management or highly compensated employees of the Company and
their families and (ii) a competitive retirement program for such
employees that is integrated with the Pension Plan and the Excess Benefit
Retirement Plan.  The Company intends for
the retirement benefits portion of the Plan to qualify as an unfunded
arrangement maintained primarily for the purpose of providing deferred
compensation for a select group of management or highly compensated employees
within the meaning of ERISA Sections 201, 301, and 401.  The Company also intends for the Plan to satisfy
the applicable requirements of Code Section 409A.


 


Section 1.04                            Grantor Trust.  The Company
has established a grantor trust to hold assets for the provision of certain
benefits under the Plan as well as other Employer benefits.  Assets of the Trust are subject to the claims
of the Employer’s general creditors.


 


ARTICLE II

DEFINITIONS AND INTERPRETATION


 


Section 2.01                            Definitions.  When the first
letter of a word or phrase is capitalized herein, the word or phrase shall have
the meaning specified below:


 


(a)                                  “Administrator”
means the Company’s Benefits Policy Committee or such other person that the
Board designates as Administrator.  To
the extent that the Administrator delegates a duty of responsibility to an
agent, the term “Administrator” shall include such agent.


 





















 


(b)                                 “Affiliated
Employer” means (i) a member of a controlled group of corporations (as
defined in Code Section 414(b)) of which the Company is a member or (ii) an
unincorporated trade or business under common control (as defined in Code Section 414(c))
with the Company.


 


(c)                                  “Affirmation of
Domestic Partnership” means an Applicable Form for affirming the
relationship between a Participant and his Domestic Partner.


 


(d)                                 “Alternate
Payee” has the meaning set out in ERISA Section 206(d)(3)(K).


 


(e)                                  “Annuity
Starting Date” means the date as of which a benefit under the Plan is to
commence or be paid (if payable as a lump sum).


 


(f)                                    “Applicable
Form” means a form provided by the Administrator for making an election or
designation under the Plan.  To the
extent permitted by the Administrator, an Applicable Form may be provided
and/or an election or designation made electronically.


 


(g)                                 “Average
Covered Compensation” means as follows:


 


(1)                                  For benefits
with an Annuity Starting Date after 2005, the average annualized Covered
Compensation paid to the Executive during the 60 consecutive calendar months
(of the 120 consecutive calendar months ending with the month in which the
Executive’s Termination of Employment occurs) in which the Covered Compensation
paid to the Executive is highest. 
Notwithstanding the preceding sentence, if the Executive Terminates
Employment after a Change of Control, and his Covered Compensation includes
base salary and bonus payments paid to him pursuant to the Executive Retention
Plan following his Termination of Employment, the 120-month period referred to
above shall be the 120 consecutive month period ending on the last day of the
month for which such payments are payable under the Executive Retention Plan,
if the determination of Average Covered Compensation over such period would
provide a greater benefit to the Executive hereunder.  If the Executive does not receive Covered
Compensation for a period of at least 60 months, his Average Covered
Compensation shall be determined based on the months in which he receives
Covered Compensation.


 


(2)                                  For benefits
having an Annuity Starting Date in 2005, the meaning specified by the Plan, as
in effect immediately before this restatement.


 


(h)                                 “Beneficiary”
means the person or entity entitled to receive an Executive’s death benefits
payable under the policies described in Article IV and Vested Survivor
Benefit, if any, remaining after the Executive’s death.  An Executive’s Beneficiary shall be
determined as provided in Section 6.08.


 


(i)                                     “Benefit Claim”
means a request or claim for a benefit under the Plan, including a claim for
greater benefits than have been paid.


 


2

















 


(j)                                     “Board” or “Board
of Directors” means the Company’s Board of Directors or, where the context so
permits, its designee.


 


(k)                                  “Change of
Control” means the occurrence of any of the following:


 


(1)                                  there shall be
consummated (A) any consolidation or merger of the Company in which the
Company is not the continuing or surviving corporation or pursuant to which
shares of the Company’s common stock would be converted in whole or in part
into cash or other securities or property, other than a merger of the Company
in which the holders of the Company’s common stock immediately before the
merger have substantially the same proportionate ownership of common stock of
the surviving corporation immediately after the merger, or (B) any sale,
lease, exchange or transfer (in one transaction or a series of related
transactions) of all or substantially all of the assets of the Company, or


 


(2)                                  the liquidation
or dissolution of the Company, or


 


(3)                                  any ‘person’
(as such term is used in Sections 13(d)(3) and 14(d)(2) of the
Securities Exchange Act of 1934, as amended (‘the Exchange Act’)), other than
the Company or a subsidiary thereof or any employee benefit plan sponsored by
the Company or a subsidiary thereof or a corporation owned, directly or
indirectly, by the shareholders of the Company in substantially the same
proportions as their ownership of stock of the Company, shall become the
beneficial owners (within the meaning of Rule 13d-3 under the Exchange
Act) of securities of the Company representing 30% or more of the combined
voting power of the Company’s then outstanding securities ordinarily (and apart
from rights accruing in special circumstances) having the right to vote in the
election of directors, as a result of a tender or exchange offer, open market
purchases, privately negotiated purchases, or otherwise, or


 


(4)                                  at any time
during a period of two consecutive years, individuals who at the beginning of
such period constituted the Board of Directors shall cease for any reason to
constitute at least a majority thereof, unless the election or the nomination
for election by the Company’s stockholders of each new director during such
two-year period was approved by a vote of at least two-thirds (2/3) of the
directors then still in office who were directors at the beginning of such
two-year period, or


 


(5)                                  any other event
shall occur that would be required to be reported in response to Item 6(e) (or
any successor provision) of Schedule 14A or Regulation 14A promulgated under
the Exchange Act.


 


Notwithstanding the
preceding provisions, an event or series of events shall not constitute a Change
of Control unless the event or series of events qualifies as a change in the
ownership or effective control of the corporation or in the ownership of a
substantial portion of the assets of the corporation within the meaning of Code
Section 409A(a)(2)(A)(v).


 


3

















 


(l)                                     “Code” means
the Internal Revenue Code of 1986, as amended from time to time.


 


(m)                               “Company” means
Cummins Inc.


 


(n)                                 “Covered
Compensation” means, with respect to an Executive for a period, as follows:


 


(1)                                  For benefits
with an Annuity Starting Date after 2005, the total of base salary and
short-term bonus earnings paid by the Employer to the Executive during such
period; provided, however, if the Executive Terminates Employment after a
Change of Control, his Covered Compensation shall include the total of all base
salary and bonus payments paid to the Executive pursuant to the Executive
Retention Plan following his Termination of Employment.  For purposes of this Paragraph, “short-term
bonus” means variable incentive compensation based on a performance measurement
period of one year or less, including but not limited to amounts earned under
the Company’s Target Bonus Plan and Senior Executive Bonus Plan.


 


(2)                                  For benefits
with an Annuity Starting Date in 2005, the meaning specified by the Plan, as in
effect immediately before this restatement.


 


(o)                                 “Deferred
Vested Benefit” means the benefit payable pursuant to Section 6.04.


 


(p)                               “Denial” or “Denied”
means a denial, reduction, termination, or failure to provide or make payment
(in whole or in part) of a Plan benefit.


 


(q)                                 “Domestic
Partner” means a person of the same or opposite sex (i) with whom the
Executive has a single, dedicated relationship and has shared the same
permanent residence for at least six months, (ii) who is not married to
another person or part of another domestic partner relationship and is at least
age 18, (iii) who, with the Executive, is mutually responsible for the
other’s welfare, (iv) who, with the Executive, intends for their
relationship to be permanent, (v) who is not so closely related to the
Executive as to preclude marriage under state law, and (vi) for whom there
is an Affirmation of Domestic Partnership on file with the Administrator.  In determining whether the requirements of
clauses (i) through (v) of the preceding sentence have been
satisfied, the Administrator may rely on the Affirmation of Domestic Partner
filed with the Administrator.


 


(r)                                    “Employer”
means the Company and all of its Affiliated Employers.


 


(s)                                  “ERISA” means
the Employee Retirement Income Act of 1974, as amended from time to time.


 


(t)                                    “Excess Benefit
Retirement Plan” means the Cummins Inc. Excess Benefit Retirement Plan, as
amended from time to time.


 


4

















 


(u)                                 “Executive”
means (i) an individual who has been designated by the Board as an officer
of the Company and who is paid through the Company’s United States payroll or (ii) any
other employee of the Company designated by the Board as an executive eligible
to participate in the Plan; provided in each case that the individual has
completed any forms required by the Administrator as a condition of
participation.


 


(v)                                 “Executive
Retention Plan” means the Cummins Inc. Executive Retention Plan, as amended from
time to time.


 


(w)                               “Grandfathered
Amount” has the meaning specified in Section 1.02.


 


(x)                                   “Non-Grandfathered
Amount” means a benefit under the Plan in excess of the Grandfathered Amount.


 


(y)                                 “Pension Plan”
means the Cummins Inc. and Affiliates Pension Plan provisions applicable to the
Participant, as amended from time to time.


 


(z)                                   “Plan” means
the Cummins Inc. Supplemental Life Insurance and Deferred Income Plan, as set
out in this document, as amended from time to time.


 


(aa)                            “Present
Actuarial Value” means the present value of a future stream of payments, as
determined by the Administrator using:


 


(1)                                  the mortality
table based on the commissioner’s standard table (described in Code Section 807(d)(5)(A))
used to determine reserves for group annuity contracts issued on the date as of
which present value is determined (without regard to any other subparagraph of
Code Section 807(d)(5)), that is prescribed by the Commissioner of the
Internal Revenue Service in revenue rulings, notices, or other guidance published
in the Internal Revenue Bulletin; and


 


(2)                                  the annual
interest rate on 30-year U.S. Treasury Bonds as specified by the Commissioner
of the Internal Revenue Service in revenue rulings, notices, or other guidance
published in the Internal Revenue Bulletin for the fourth month preceding the
first day of the calendar quarter in which the benefit becomes payable.


 


(bb)                          “Prior Program”
means the predecessor of this Plan for the period from January 1, 1986,
through December 31, 1996.


 


(cc)                            “Qualified Domestic
Relations Order” has the meaning specified in Code Section 414(p).


 


(dd)                          “Service”‘
means the total of (i) the Executive’s employment service with the
Employer, plus (ii) if the Executive Terminates Employment after a Change
of Control, the period of months for which Termination Payments (as defined in
the Executive Retention Plan) are paid or payable to the Executive under the
Executive Retention Plan.  For purposes
of the Plan, an Executive shall receive credit for Service for all periods of
employment with the Employer, expressed in full years and months 


 


5

















 


(with credit for 1/12 of a
year (one month) being credited for each month during which the Executive works
one day.


 


(ee)                            “Specified
Employee” means, with respect to the 12-month period beginning on the Specified
Employee Effective Date, an individual who, (i) during any part of the
12-month period ending on the Specified Employee Identification Date, is in
salary grade 99 or compensation class 6, or (ii) a “specified employee”
within the meaning of Code Section 409A(a)(2)(B)(i) and the guidance
thereunder.


 


(ff)                                “Specified
Employee Effective Date” means, in the case of an Employee who Terminates
Employment before December 1, 2009, the April 1 next following the
Specified Employee Identification Date, and, in the case of an Employee who
Terminates Employment after December 31, 2009, the January 1 next
following the Specified Employee Identification Date.


 


(gg)                          “Specified
Employee Identification Date” means December 31.


 


(hh)                          Spouse” means,
as of the Executive’s Annuity Starting Date, (i) the person to whom the
Executive is married in accordance with applicable law of the jurisdiction in
which the Executive resides, or (ii) in the case of an Executive not
described in clause (i), the Executive’s Domestic Partner.


 


(ii)                                  “Supplemental
Life Annuity” means the benefit payable to an Executive pursuant to Article VI.


 


(jj)                                  “Survivor
Benefit” means the benefit, if any, payable to an Executive’s Spouse or other Beneficiary
pursuant to Article VI following the Executive’s death after Termination
of Employment with Vested rights to a Supplemental Life Annuity.


 


(kk)                            “Termination of
Employment,” “Terminates Employment,” or any variation thereof refers to a
separation from service within the meaning of Code Section 409A(a)(2)(A)(i) for
a reason other than the Executive’s death.


 


(ll)                                  “Trust” means
the grantor trust established by the Company to provide a source for the
payment of retirement benefits under the Plan and benefits under certain other
Employer programs.


 


(mm)                      “Trustee” means
the Trustee of the Trust.


 


(nn)                          “Vested” means,
with respect to an Executive, the portion of the Executive’s Supplemental Life
Annuity in which the Executive has a non-forfeitable interest, to the extent
provided herein.


 


(oo)                          “Vesting
Service” means, with respect to an Executive, his total Service; provided,
however, in determining the Executive’s total Vesting Service, he shall be
credited with a full year of Vesting Service for any period of at least five
months in addition to his full years of Service.  For example, a Participant with four years
and six months of Service shall be credited with five years of Vesting Service.


 


6

















 


Section 2.02                            Rules of Interpretation.


 


(a)                                  The Plan is
intended to comply with (i) Code Section 409A and (ii) the
applicable provisions of ERISA, and it shall be interpreted and administered in
accordance with such intent. Except as provided in the preceding sentence or as
otherwise expressly provided herein, the Plan shall be construed, enforced, and
administered, and the validity thereof determined, in accordance with the
internal laws of the State of Indiana without regard to conflict of law
principles, and the following provisions of this Section.


 


(b)                                 Words used
herein in the masculine shall be construed to include the feminine, where
appropriate, and vice versa, and words used herein
in the singular or plural shall be construed to include the plural or singular,
where appropriate.


 


(c)                                  Headings and
subheadings are used for convenience of reference only and shall not affect the
interpretation of any provision hereof.


 


(d)                                 If any
provision of the Plan shall be held to violate the Code or ERISA or be illegal
or invalid for any other reason, that provision shall be deemed null and void,
but the invalidation of that provision shall not otherwise affect the Plan.


 


(e)                                  Reference to
any provision of the Code, ERISA or other law shall be deemed to include a
reference to the successor of such provision.


 


ARTICLE III

PARTICIPATION


 


An Executive shall commence
participation in the Plan following his or her execution of a form provided by
the Company authorizing periodic payroll deductions in amounts sufficient to
pay the Executive’s share of the premiums on life insurance policies on the
Executive’s life.  From time to time, the
Executive shall also complete any forms required by the Administrator or an
insurer and submit to any necessary physical examinations requested by an insurer.


 


ARTICLE IV

INSURANCE POLICIES


 


Section 4.01                            Purchase of Insurance Policies.  An Executive shall be covered by one or more
insurance policies with an aggregate face value of approximately three times
the Executive’s base salary.  All such
policies shall be owned by the Trustee. 
Additional policies shall be purchased as the Executive’s salary is
increased, except that no incremental policy shall be purchased in a face
amount of less than $20,000.  Coverage
under all such policies shall terminate on the Executive’s Termination of
Employment.


 


7

















 


Section 4.02                            Premium Payments.


 


(a)                                  The annual
premium payable with respect to policies on the Executive’s life shall be paid
in part by the Executive, with any remaining amount paid by the Trustee to the
extent not paid by the Employer.  The
Executive shall be required to pay only that portion of the premium equal to
the amount that would be included in the Executive’s income for Federal income
tax purposes, if the entire premium were paid by the Trustee for the
Employer.  Such amount shall be
determined annually in accordance with Internal Revenue Service rules and
regulations.


 


(b)                                 If an Executive
becomes “disabled” within the meaning of Code Section 409A and is entitled
to benefits under the Company’s Long Term Disability Plan, the Trustee shall
pay all insurance premiums under the policies until the earlier of the end of
the disability or the Executive’s Termination of Employment.


 


(c)                                  Unless paid by
the Employer, the Employer’s share of the annual premium shall be paid by the
Trustee from the assets of the Trust, including, in the discretion of the
Trustee, by borrowing against the value of any policies on the Executive’s
life.


 


ARTICLE V

DEATH BENEFITS


 


If the Executive dies before
Termination of Employment, the death benefits payable under the policies
described in Article IV shall be paid (i) to the Trustee to the
extent and in the amount of the total premiums paid by the Employer and the
Trustee, and not previously reimbursed, under the policies on the Executive’s
life, and (ii) to the Executive’s Beneficiary, to the extent of the
remainder; provided, however, in no event shall a death benefit payment be made
to an Executive’s Beneficiary in an amount greater than three times the
Executive’s annual base salary at the time of his or her death.


 


ARTICLE VI

RETIREMENT BENEFITS


 


Section 6.01                            General Provisions.


 


(a)                                  No benefits
shall be payable under this Article with respect to an Executive for whom
death benefits have been paid pursuant to Article V.


 


(b)                                 Benefits
payable pursuant to this Article shall commence or be paid, if payable in
a lump sum, on the Executive’s Annuity Starting Date.


 


Section 6.02                            Normal Retirement Benefit.  Subject to the
modifications specified in Appendix A with respect to certain Executives, an
Executive with at least 10 years of Service who Terminates Employment on or
after reaching age 60 (age 65 for benefits with an Annuity Starting Date in
2005) shall receive from the Trustee, beginning as of the first day of the
month following his Termination of Employment, in monthly installments, a
Supplemental Life Annuity in an annual amount equal to:


 


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


 


8

















 


(b)                                 (i) in the
case of a benefit with an Annuity Starting date after 2005, 1% of the Executive’s
Average Covered Compensation times his years of Service in excess of 20, up to
a maximum of 10 years, and excluding, to the extent permitted by law, years
following the year in which the Executive reaches age 65, or (ii) in the
case of a benefit with an Annuity Starting Date in 2005, 1% of the Executive’s
Average Covered Compensation times his years of Service in excess of 20, up to
a maximum of 10 years, and excluding, to the extent permitted by law, years
following the year in which the Executive reaches age 60; 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 from the Pension Plan and the Excess Benefit Plan, if
applicable, determined as if such annual benefit (i) commenced on the
first day of the month following the Executive’s Termination of Employment and (ii) were
payable in monthly installments in the form of a single life annuity to the
Executive.


 


Benefits payable pursuant to
this Section shall begin as of the first day of the month following the
Executive’s Termination of Employment.


 


Section 6.03                            Early Retirement.  If an
Executive with at least 10 years of Service Terminates Employment on or after
age 55 but before reaching age 60 (age 65 in the case of benefits with an
Annuity Starting Date in 2005), the Executive shall be entitled to receive from
the Trustee, beginning as of his Annuity Starting Date, in monthly
installments, a Supplemental Life Annuity in an annual amount equal to the
amount determined in accordance with Section 6.02, reduced as follows:


 


(1)                                  in the case of
benefits with an Annuity Starting Date after 2005, by 1/3 of 1% for
each full month by which the Executive’s Annuity Starting Date precedes his 60th birthday; provided, however, in the case of an
individual who was an Executive before 2006, no reduction shall be made, if the
Executive (i) Terminates Employment after reaching age 55 and completing
20 years of Service and his total years of age and Service upon Termination of Employment
are at least 80 or (ii) was a participant in the Prior Plan and has
completed at least 30 years of Service upon Termination of Employment;


 


(2)                                  in the case of
benefits with an Annuity Starting Date in 2005, by .5% for each full month by
which the Executive’s Annuity Starting Date precedes his 65th birthday; provided, however, in the case of an
individual who was an Executive before 2006, no reduction shall be made, if the
Executive (i) Terminates Employment after reaching age 55 and completing
20 years of Service and his total years of age and Service upon Termination of
Employment are at least 80 or (ii) was a participant in the Prior Plan and
has completed at least 30 years of Service upon Termination of Employment.


 


9














 


Benefits
payable pursuant to this Section shall begin as of the first day of the
month following the Executive’s Termination of Employment.


 


Section 6.04         Deferred
Vested Benefit.  An
Executive who Terminates Employment before he is eligible for benefits pursuant
to Section 6.02 or 6.03 shall be entitled to receive from the Trustee,
beginning as of his Annuity Starting Date, in monthly installments, a
Supplemental Life Annuity in an annual amount equal to his Vested percentage
multiplied by the amount determined in accordance with Section 6.02, and
reduced as provided in Section 6.03. 
The Annuity Starting Date for benefits payable pursuant to this Section shall
be the first day of the month next following the later of the Executive’s (i) Termination
of Employment or (ii) 55th birthday.


 


Section 6.05         Survivor
Benefit.  If the Executive dies after
Termination of Employment with a Vested right to a Supplemental Life Annuity,
the following survivor benefits shall be paid:


 


(a)           If the Executive dies on or
after his Annuity Starting Date, a survivor benefit equal to 50% of the monthly
amount payable to the Executive during his life shall be paid to the Executive’s
Spouse for the remainder of her life, beginning with the first day of the month
after the Executive’s death; provided, however, if the Executive had not
received Supplemental Life Annuity payments for at least 15 years before his
death, his Spouse shall be entitled to receive the same monthly benefit that
was payable to the Executive for the remainder of such 15-year period, and the
50% benefit thereafter for the remainder of her life.  If the Executive and his Spouse, if any,
should die before receiving Supplemental Life Annuity benefits for at least 15
years, a lump-sum payment equal to the Present Actuarial Value of the remaining
benefit due to be paid over the 15-year period shall be paid to the Executive’s
designated Beneficiary.


 


(b)           If the Executive dies before
his Annuity Starting Date, a survivor benefit shall be paid pursuant to this
Subsection, beginning as of the date that would have been the Executive’s
Annuity Starting Date, if he had Terminated Employment on the date of his death
and lived until distribution of benefits under the Plan began.  If the Executive is survived by his Spouse, a
monthly survivor benefit shall be paid to his Spouse for the remainder of her
life (i) in an amount equal to 100% of the amount that would have been
payable to the Executive under the preceding provisions of this Article (if
he had Terminated Employment on the date of his death and lived) for the first
15 years in which such payments were made, and (ii) in an amount equal to
50% of the amount that would have been payable to the Executive under the
preceding provisions of this Article (if he had Terminated Employment on
the date of his death and lived) for periods after the first 15 years in which
such payments.  If the Executive’s Spouse
dies before payments are made for a period of 15 years, a lump-sum payment
equal to the Present Actuarial Value of the remaining benefit due to be paid
over the 15-year period shall be paid to the Executive’s designated
Beneficiary.


 


Section 6.06         Distribution
of Small Benefits.  Notwithstanding the preceding provisions of
this Article, if the Present Actuarial Value of the benefits payable pursuant
to this Article as of the Annuity Starting Date is less than $25,000, the
Trustee shall pay


 


10

















 


the
Present Actuarial Value of such payments as a single lump sum payment within 60
days following the Executive’s Termination of Employment.


 


Section 6.07         Delay
in Payment for Specified Employees.  Notwithstanding any provision of this Plan to
the contrary, to the extent required by Code Section 409A(a)(2)(B)(i),
distribution of the Supplemental Life Annuity to a Participant who is a
Specified Employee on account of his Termination of Employment for any reason
other than death shall be delayed until the earliest date permitted by such
section.  If the Supplemental Life
Annuity is payable in the form of a monthly annuity, the sum of the monthly
payments that are required to be delayed in accordance with this Section shall
be paid with the first permitted monthly payment.  Any delayed payments shall be increased by
interest from the first day of the month following the Executive’s Termination
of Employment to the date on which his benefit payments begin at the applicable
interest rate for retroactive annuity starting dates under the Pension Plan.


 


Section 6.08         Designating
a Beneficiary.  The Executive
may designate a Beneficiary only by filing a completed Applicable Form with
the Administrator during his life.  The
Executive’s proper filing of a Beneficiary designation shall cancel all prior
Beneficiary designations.  If the
Executive does not designate a Beneficiary, or if all properly designated
Beneficiaries die before the Executive, the Executive’s Beneficiary shall be
his Spouse, if living at the time of the Executives death, or if his Spouse is
not then living, to the individual(s), if any, named as the Executive’s
beneficiary under his Employer-provided group life insurance program, who are
living at the time of the Executive’s death or, if no such beneficiaries are
then living, to the Executive’s estate.


 


ARTICLE VII

VESTED BENEFITS


 


An
Executive’s interest in his or her Supplemental Life Annuity shall become
Vested in accordance with the following Schedule:


 


	
  Years
  of Vesting Service

  	
   

  	
  Vested Percentage

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Fewer than 5

  	
   

  	
  0

  	
   

  
	
  5

  	
   

  	
  25

  	
   

  
	
  6

  	
   

  	
  40

  	
   

  
	
  7

  	
   

  	
  55

  	
   

  
	
  8

  	
   

  	
  70

  	
   

  
	
  9

  	
   

  	
  85

  	
   

  
	
  10 or more

  	
   

  	
  100

  	
   

  



 


ARTICLE VIII

ACCELERATED PAYMENT UPON CHANGE OF CONTROL


 


Upon
a Change of Control, an Executive who is entitled to benefits under the Plan,
other than an Executive who has Terminated Employment with a right to a
Deferred 


 


11

















 


Vested
Benefit, shall become fully Vested in the Supplemental Life Annuity and,
notwithstanding anything in Article VI to the contrary, shall receive, in
place of future payments under the Plan, a lump sum payment equal to the
Present Actuarial Value of the Supplemental Life Annuity accrued to the date of
the Change of Control and remaining to be paid under the Plan.  The lump sum Present Actuarial Value of the
Supplemental Life Annuity benefit payable shall be calculated assuming that,
solely for the purpose of reducing the benefit for early commencement, that the
Executive, other than one who is entitled to a Deferred Vested Benefit, has
already met the conditions for unreduced benefits described in Section 6.03
at the earliest possible time, taking into consideration the Executive’s age
and Service.


 


ARTICLE IX

ADMINISTRATION OF PLAN


 


Section 9.01         Powers
and Responsibilities of the Administrator.


 


(a)           The Administrator shall have
full responsibility and discretionary authority to control and manage the
operation and administration of the Plan. 
The Administrator is authorized to accept service of legal process on
behalf of the Plan.  To the fullest
extent permitted by applicable law, any action taken by the Administrator
pursuant to a reasonable interpretation of the Plan shall be binding and
conclusive on all persons claiming benefits under the Plan, except to the
extent that a court of competent jurisdiction determines that such action was
arbitrary or capricious.


 


(b)           The Administrator’s discretionary
powers include, but are not limited to, the following:


 


(1)           to interpret
Plan documents, decide all questions of eligibility, determine whether a
Participant has Terminated Employment, determine the amount, manner, and timing
of distributions under the Plan, and resolve any claims for benefits;


 


(2)           to prescribe
procedures to be followed by a Participant, Beneficiary, or other person
applying for benefits;


 


(3)           to appoint or
employ persons to assist in the administration of the Plan and any other agents
as it deems advisable;


 


(4)           to adopt such rules as
it deems necessary or appropriate; and


 


(5)           to maintain and
keep adequate records concerning the Plan, including sufficient records to
determine each Participant’s eligibility to participate and his interest in the
Plan, and its proceedings and acts in such form and detail as it may decide.


 


Section 9.02         Indemnification.  The Company shall indemnify and hold harmless
the Administrator, any person serving on a committee that serves as
Administrator, and any officer, employee, or director of an Employer to whom
any duty 


 


12

















 


or
power relating to the administration of the Plan has been properly delegated
from and against any cost, expense, or liability arising out of any act or
omission in connection with the Plan, unless arising out of such person’s own
fraud or bad faith.


 


Section 9.03         Claims
and Claims Review Procedure.


 


(a)           All Benefit Claims must be
made in accordance with procedures established by the Administrator from time
to time.  A Benefit Claim and any appeal
thereof may be filed by the claimant or his authorized representative.


 


(b)           The Administrator shall
provide the claimant with written or electronic notice of its approval or
Denial of a properly filed Benefit Claim within 90 days after receiving the
claim, unless special circumstances require an extension of the decision
period.  If special circumstances require
an extension of the time for processing the claim, the initial 90-day period
may be extended for up to an additional 90 days.  If an extension is required, the
Administrator shall provide written notice of the required extension before the
end of the initial 90-day period, which notice shall (i) specify the
circumstances requiring an extension and (ii) the date by which the
Administrator expects to make a decision.


 


(c)           If a Benefit Claim is
Denied, the Administrator shall provide the claimant with written or electronic
notice containing (i) the specific reasons for the Denial, (ii) references
to the applicable Plan provisions on which the Denial is based, (iii) a
description of any additional material or information needed and why such
material or information is necessary, and (iv) a description of the
applicable review process and time limits.


 


(d)           A claimant may appeal the
Denial of a Benefit Claim by filing a written appeal with the Administrator
within 60 days after receiving notice of the Denial.  The claimant’s appeal shall be deemed filed
on receipt by the Administrator.  If a
claimant does not file a timely appeal, the Administrator’s decision shall be
deemed final, conclusive, and binding on all persons.


 


(e)           The Administrator shall
provide the claimant with written or electronic notice of its decision on
appeal within 60 days after receipt of the claimant’s appeal request, unless
special circumstances require an extension of this time period.  If special circumstances require an extension
of the time to process the appeal, the processing period may be extended for up
to an additional 60 days.  If an
extension is required, the Administrator shall provide written notice of the
required extension to the claimant before the end of the original 60-day
period, which shall specify the circumstances requiring an extension and the
date by which the Administrator expects to make a decision.  If the Benefit Claim is Denied on appeal, the
Administrator shall provide the claimant with written or electronic notice
containing a statement that the claimant is entitled to receive, upon request
and free of charge, reasonable access to and copies of all documents, records,
and other information relevant to the Benefit Claim, as well as the specific
reasons for the Denial on appeal and references to the applicable Plan
provisions on which the Denial is based. 
The Administrator’s decision on appeal shall be final, 


 


13

















 


conclusive,
and binding on all persons, subject to the claimant’s right to file a civil
action pursuant to ERISA Section 502(a).


 


ARTICLE X

GROSS-UP PAYMENTS


 


If
payment of the lump sum Present Actuarial Value of the Supplemental Life
Annuity pursuant to Article VIII (“Accelerated Payment”) causes the
Accelerated Payment and any other payments made in connection with a Change of
Control (together with the Accelerated Payment, the “Total Payments”) to be
subject to the tax (“Excise Tax”) imposed by Code Section 4999, the
Company shall pay to the Executive an additional amount (“Gross-Up Payment”)
such that the net amount retained by the Executive, after deduction of any
Excise Tax paid or payable (and not grossed-up under a similar provision of
another plan or program sponsored by the Company) on the lump sum and such
other Total Payments and any federal, state and local income tax and Excise Tax
upon the payment provided for by this Article, shall be equal to the
Accelerated Payment and such other Total Payments.  If any of such other Total Payments are
subject to the Excise Tax without regard to the Accelerated Payment, a Gross-Up
Payment shall be made, but shall be limited to the increase in the Excise Tax
(plus any federal, state, and local income tax and Excise Tax on such Gross-Up
Payment) arising solely as a result of the Accelerated Payment.


 


For
purposes of determining whether any of the payments described above will be
subject to the Excise Tax and the amount of such Excise Tax, (i) any other
payments or benefits received or to be received by the Executive in connection
with a Change of Control, whether payable pursuant to the terms of the Plan or
any other plan, arrangement, or agreement with the Company, its successors, any
person whose actions result in a change in control of the Company or any
corporation affiliated (or which, as a result of the completion of a
transaction causing a change of control, will become affiliated) with the
Company within the meaning of Code Section 1504 shall be treated as “parachute
payments” within the meaning of Code Section 280G(b)(2), and all “excess
parachute payments” within the meaning of Section 280G(b)(1) shall be
treated as subject to the Excise Tax, unless in the opinion of tax counsel
selected by the Company’s independent auditors and acceptable to the Executive,
the payments (in whole or in part) do not constitute parachute payments, or
such excess parachute payments (in whole or in part) represent reasonable
compensation for services actually rendered within the meaning of Code Section 280G(b)(4) either
in their entirety or in excess of the base amount within the meaning of Code Section 280G(b)(3),
or are otherwise not subject to the Excise Tax, (ii) the amount of the
payments that shall be treated as subject to the Excise Tax shall be equal to
the lesser of (A) the total amount of the payments or (B) the amount
of excess parachute payments within the meaning of Section 280G(b)(1) (after
applying clause (i), above), and (iii) the value of any non-cash benefits
or any deferred payment or benefit shall be determined by the Company’s
independent auditors in accordance with the principles of Code Sections 280G(d)(3) and
(4).  In the event that the Excise Tax is
subsequently determined to be less than the amount taken into account hereunder
at the time of payment, the Executive shall repay to the Company at the time
that the amount of such reduction in Excise Tax is finally determined the
portion of the 


 


14

















 


Gross-Up
Payment attributable to such reduction (plus the portion of the Gross-Up
Payment attributable to the Excise Tax and federal and state and local income
tax imposed on the Gross-Up Payment being repaid by the Executive if such
repayment results in a reduction in Excise Tax and/or a federal and state and
local income tax deduction) plus interest on the amount of such repayment at
the rate provided in Code Section 1274(d). 
In the event that the Excise Tax is determined to exceed the amount
taken into account hereunder at the time of the Gross-Up Payment (including by
reason of any payment the existence or amount of which cannot be determined at
the time of the Gross-Up Payment), the Company shall make an additional
Gross-Up Payment in respect of such excess (plus any interest payable with
respect to such excess) at the time that the amount of such excess is finally
determined.


 


To
the extent that earlier payment is not required by the preceding provisions of
this Section, the Company’s payment pursuant to this Section shall be made
not later than the end of the calendar year next following the calendar year in
which the Participant remits the related taxes.


 


ARTICLE XI

PRESERVATION OF ACCRUED BENEFITS


 


Nothing
in this restatement shall reduce the Supplemental Life Annuity payable with
respect to an Executive, to the extent accrued as of December 31, 2005,
under the terms of the Plan, as in effect immediately before this restatement.


 


ARTICLE XII

AMENDMENT AND TERMINATION


 


The
Plan shall continue in force with respect to any Executive until the completion
of any payments due hereunder and shall be binding upon any successor to
substantially all the assets of the Company. 
The Company may, however, at any time, amend the Plan to provide that no
additional benefits shall accrue with respect to any Executive under the Plan;
provided, however, that no such amendment shall (i) deprive any Executive
or Beneficiary of any benefit that accrued under the Plan before the adoption
of such amendment; (ii) result in an acceleration of benefit payments in
violation of Code Section 409A and the guidance thereunder, or (iii) result
in any other violation of Section 409A or the guidance thereunder.  The Company may also, at any time, amend the
Plan retroactively or otherwise, if and to the extent that it deems such action
appropriate in light of government regulations or other legal requirements.


 


ARTICLE XIII

MISCELLANEOUS


 


Section 13.01       Obligations
of Employer.  The
Employer’s only obligation hereunder shall be a contractual obligation to make
payments to Executives, Spouses, or other Beneficiaries entitled to benefits
provided for herein when due, and only to the extent that such payments are not
made from the Trust.  Nothing herein
shall give a Participant, Spouse, Beneficiary, or other person any right to a
specific asset of an Employer or the Trust, other than as a general creditor of
the Employer.


 


15

















 


Section 13.02       Employment
Rights.  Nothing contain herein shall
confer any right on an Executive to be continued in the employ of any Employer
or affect the Executive’s right to participate in and receive benefits under
and in accordance with any pension, profit-sharing, incentive compensation, or
other benefit plan or program of an Employer.


 


Section 13.03       Non-Alienation.
 Except as otherwise required by
a Qualified Domestic Relations Order, no right or interest of an Executive,
Spouse, or other Beneficiary under this Plan shall be subject to voluntary or
involuntary alienation, assignment, or transfer of any kind.  Payments shall be made to an Alternate Payee
to the extent provided in a Qualified Domestic Relations Order.  To the extent permitted by Code Section 409A,
payments pursuant to a Qualified Domestic Relations Order may be made in a lump
sum and before the Participant’s earliest retirement age (as defined by ERISA Section 206(d)(3)(E)(ii)).


 


Section 13.04       Tax
Withholding.  The
Employer or Trustee may withhold from any distribution hereunder amounts that
the Employer or Trustee deems necessary to satisfy federal, state, or local tax
withholding requirements (or make other arrangements satisfactory to the
Employer or Trustee with regard to such taxes).


 


Section 13.05       Other
Plans.  Amounts and benefits paid
under the Plan shall not be considered compensation to the Executive for
purposes of computing any benefits to which he may be entitled under any other
pension or retirement plan maintained by an Employer.


 


Section 13.06       Liability
of Affiliated Employers.  If any payment
to be made under the Plan is to be made on account of an Executive who is or
was employed by an Affiliated Employer, the cost of such payment shall be borne
in such proportion as the Company and the Affiliated Employer agree.


 


16

















 


This
Restatement of the Cummins Inc. Supplemental Life Insurance and Deferred Income
Plan has been signed by the Company’s duly authorized officer, acting behalf of
the Company, this      day of December, 2008.


 


	
   

  	
  CUMMINS
  INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  



 


17

















 


APPENDIX A


 


Guidelines for Enhanced SERP


For Executives Joining Cummins Mid-Career


 


General
Criteria


 


The
Company’s Chief Executive Officer (“CEO”) may designate an enhanced SERP
benefit for an Executive (Officer or Executive Director) joining Cummins
mid-career.  In determining whether an
enhanced benefit is appropriate and, if so, the amount of such benefit, the CEO
shall consider:


 


·                  any existing
pension benefits of the Executive from previous employers;


 


·                  the recruiting
and retention value of the enhanced benefit;


 


·                  the amount of
time that the Executive is expected to work before retiring from Cummins (as a
rule, at least age 55; as a target, at least age 58); and


 


·                  the amount of
Service that the Executive will have upon likely retirement.


 


An
enhanced benefit may also be used to assist the transition of other Officers,
if the CEO determines that such a benefit is in the best interests of Cummins.


 


The
enhanced retirement benefit formula is to be applied at the discretion of the
CEO, who has the obligation to inform the Administrator of such benefits.


 


The
CEO will define the benefit or formula applicable to each case in the
future.  For existing Executives, the
following is authorized:


 


·                  Grow benefit by
double-accrual approach:  4% per year for
each of the first 10 years of Service; 2% per year for next five years of
Service, maximum 50% at 15 years of Service.


 


·                  Replace “rule of
80” with “rule of 70”, which means eligible for unreduced benefits upon
achieving at least age 58, at least 10 years of Service, but the total of the
two must be at least 70. (This does not mean a full 50% benefit, but merely
unreduced accrued benefit.)


 


·                  Fully vested
after five years of Service. (Normally vesting begins at five years and is not
100% until ten years of Service are completed.


 


·                  A full 50%
benefit will be provided at age 60, even if not achieved by the formula.


 


Upon
a Change of Control, the designated Executives:


 


·                  become fully
Vested, regardless of Service (no change from current Plan);


 


A-1

















 


·                  will have a
Final Average Total Cash Compensation equal the average for that received
during their actual years of Service, if less than five years of Service;


 


·                  will be deemed
to have met the requirements for unreduced commencement of benefits (no change
from current Plan); and


 


·                  will receive a
lump sum payment of the Present Actuarial Value of the benefit accrued to the
date of the Change of Control, using the formula designated for the respective
Executive (in the case of the existing group, the “double-accrual” formula).


 


The
foregoing provisions apply to the following officers:


 


R.
S. Adu-Gyamfi


J.
S. Blackwell


P.
F. Carter


A.
R. Dohner


S.
P. Knaebel


F.
J. McDonald


L.
O. Moore


B.
S. Vedak


S.
L. May


 


A-2