ex_10-7.htm


    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.