Exhibit
10.(m)


 


CUMMINS
INC.


2003
STOCK INCENTIVE PLAN


STOCK
OPTION AGREEMENT


 


AGREEMENT dated ,
            ,


between CUMMINS INC.
(the “Company”) and


«First» «Last»,
(the “Optionee”).


 


The Company and the
Optionee agree that:


 


1.                                       Grant of Option and Rights. 
The Compensation Committee of the Board of Directors of the Company (the
“Committee”), appointed to administer the 2003 Stock Incentive Plan (the “Plan”),
has granted to the Optionee and the Optionee has accepted the option to
purchase an aggregate of
              
shares of the Company’s Common Stock ($2.50 par value) at the purchase price of
$           per share (the “Option
Price”).


 


2.                                       Term of Option and Exercise Period. 
Unless earlier terminated pursuant to the provisions of this Agreement
or the Plan, the options shall expire, if unexercised, at the close of business
on        .  Unless otherwise provided in this Agreement
or the Plan, such option may be exercised on and after          .


 


3.                                       Exercise of Option; Payment for Shares. 
The Company shall not be required to deliver certificates for shares
with respect to which an option is exercised until the purchase price of such
shares has been paid in full.  Payment
may be made (a) in cash; (b) in Common Stock already owned by the
holder of the option, or (c) in any combination of the above.  An option may be exercised by written notice
to the Company.  Such notice shall state
that the Optionee elects to exercise the option, the number of shares in
respect of which it is being exercised and the manner of payment for such
shares, and shall either (i) be accompanied by payment of the full
purchase price of such shares, or (ii) fix a date (not more than 10
business days from the date of exercise) for the payment of the full purchase
price of such shares.  Common Stock
payments (valued at the fair market value on the date of exercise) shall be
made by delivery of stock certificates in negotiable form.  If certificates representing Common Stock are
used to pay all or part of the purchase price of an option, separate
certificates shall be delivered by the Company representing the same number of
shares as each certificate so used, and an additional certificate shall be
delivered representing any additional shares to which the Optionee is entitled
as a result of the exercise of the option.


 

















 


The Optionee may request
the Company to pyramid his shares; that is, automatically to apply the shares
which he is entitled to receive on the exercise of a portion of a stock option
to satisfy the exercise for additional portions of the option,
thus resulting in multiple simultaneous exercises of options by use of
whole shares as payment.  Except as
provided in paragraphs 5 and 6, no option may be exercised at any time unless the
Optionee is then an employee of the Company or of a subsidiary.  The Optionee shall have none of the rights of
a stockholder with respect to the option until such shares are transferred to
the Optionee upon the exercise of his option.


 


4.                                       Acceleration of Exercise Period. 
Each outstanding option granted hereunder shall become exercisable in
full for the aggregate number of shares covered thereby (notwithstanding any
contrary waiting or installment period or other limitation or restriction)
immediately following a Change of Control (as defined in the Plan) of the
Company.


 


5.                                       Termination of Employment. 
In the event that the Optionee ceases to be an employee of the Company
and/or one or more of its subsidiaries otherwise than by reason of death,
disability or retirement, the options granted hereunder shall immediately
terminate.  Nothing in this Agreement
shall confer on any individual any right to continue in the employ of the
Company or any of its subsidiaries or interfere in any way with the right of
the Company or any of its subsidiaries to terminate his employment at any time,
with or without cause, notwithstanding the possibility that the number of
shares purchasable by an employee under this Agreement may thereby be reduced
or eliminated.


 


6.                                       Retirement, Death or Disability of Holder
of Option.  In the event of the retirement pursuant to any
retirement plan of the Company or of a subsidiary, eligibility for benefits
under the Company’s Long Term Disability Plan, or the death of the Optionee,
while he is employed by the Company or a subsidiary, the options granted
hereunder (unless the options shall have been previously terminated) may be
exercised in full (whether or not such option was exercisable in full by the
Optionee at the time of his retirement, death or disability) by the Optionee or
by a legatee or legatees of the Optionee under his last will, or by his
personal representatives or distributees, at any time (a) in the case of
retirement or disability, within a period of five years after his retirement or
disability (or such longer or shorter period as the Committee may in its sole
discretion determine), and (b) in the case of 


 


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death, within a period of
one year after his death, but in all cases not after the original expiration
date of the option.


 


7.                                       Nontransferability. 
The options granted hereby are not transferable by the Optionee other
than by will or the laws of descent and distribution, or to a spouse or lineal
descendant (a “Family Member”), a trust for the exclusive benefit of Family
Members, or a partnership or other entity in which all the beneficial owners
are Family Members.


 


8.                                       Plan Governs. 
The options granted hereby were granted and this Agreement signed
pursuant to the Plan, and are governed by and entitled only to benefits
provided in the Plan.  The Plan sets
forth certain additional provisions, including provisions for adjustments upon
changes in capitalization and withholding of Federal, State and local taxes.  In the event of any conflict between the
provisions of this Agreement and the Plan, the provisions of the Plan shall
govern.


 


9.                                       Binding Agreement. 
This Agreement shall inure to the benefit of and bind the
successors and assigns of the Company.


 


IN WITNESS
WHEREOF, the Company and the Optionee have executed this Agreement in duplicate
as of the date specified above.


 


	
   

  	
   

  	
  CUMMINS INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  BY:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Optionee

  	
   

  	
   

  



 


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