Document:

Exhibit

 
EXHIBIT 10.2

Mercer Super Trust
CatSuper Plan
Special Arrangement Agreement
Between:
CATERPILLAR OF AUSTRALIA PTY LTD (ABN 97 004 332 469) (“Participant”) 

ROBERT BRIAN CHARTER (“Member”)

King & Wood Mallesons
Level 61
Governor Phillip Tower
1 Farrer Place
Sydney  NSW  2000
Australia
T +61 2 9296 2000
F +61 2 9296 3999
DX 113 Sydney
www.kwm.com

Details
	
			
	Parties
	 

	Participant
	Name
	CATERPILLAR OF AUSTRALIA PTY LTD

	 
	ABN
	97 004 332 469

	Member
	Name
	ROBERT BRIAN CHARTER

	Recitals
	A           The Participant is the participant of a plan known as CatSuper (client code MT315) (“Plan”) in the Corporate Superannuation Division of the Mercer Super Trust (“MST”).

	 
	B    The Member is a Member of the Plan.

	 
	C    Under rule 13.5 of the Designated Rules of the Corporate Superannuation Division of the MST, the Participant and the Member may vary, by agreement, any or all of: 

(a)    the benefits otherwise payable as a result of the Member’s membership of the Plan;
(b)    the contributions otherwise payable as a result of the Member’s membership of the Plan; and
(c)    other terms and conditions of membership.

	
			
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	Special Arrangement Agreement
3 April 2018
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	D    The Participant and the Member entered into a previous “Special Arrangement Agreement” dated 26 June 2007 (“Previous SAA”), whereby the parties agreed to vary the membership of the Member on the terms specified in the Previous SAA.
E    The Participant and the Member have agreed to further vary the terms and conditions of the Member’s membership of the Plan in the manner set out in this Agreement. 
F    In particular, the Previous SAA made provision for certain benefit enhancements based on the recognition of an additional period of Service on the Member qualifying for a benefit pursuant to Rule 4.4.1(c) on the basis of the Member with the approval of the Participant having ceased Employment on or after the Member’s 55th birthday (described in that Rule as being within 10 years of the Member’s Normal Retirement Date) and in certain other circumstances, namely on the Member’s death or on the Member ceasing Employment due to Total and Permanent Disablement or on the Member retiring no more than 5 years before the Member’s Normal Retirement Date or on or after his Normal Retirement Date.
G    The Member’s 55th birthday is on 8 April 2018.
H    The Member and the Participant have agreed that the benefit enhancements provided for in the Previous SAA will only be provided if the Member qualifies for a benefit on the basis of the Member having retired from Employment on or after the “Earliest Retirement Date” (being the Member’s 55th birthday) and electing to retain his benefit entitlement in the Plan in which case, the enhanced benefit will be payable on the earlier of the Member’s death and a specified “Nominated Date”.

	
			
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	Special Arrangement Agreement
3 April 2018
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General terms

		
	1
	Operative Provisions:

		
	1.1
	Unless otherwise defined or the contrary intention appears, an expression defined in the Rules of the Plan has the same meaning in this Agreement and the Annexure to this Agreement.

		
	1.2
	The Participant and the Member agree that the benefits payable as a result of the Member’s membership of the Plan are varied in the manner set out in the Previous SAA and in the Annexure to this Agreement.

		
	1.3
	The parties agree this Agreement is confidential and neither party will divulge information of the terms of the Agreement, other than as required by the force of law.

		
	1.4
	This Agreement may be amended only by another document executed by the parties.

		
	1.5
	This Agreement is governed by the law in force in New South Wales, Australia and the parties submit to the jurisdiction of the courts of New South Wales, Australia.

		
	1.6
	This Agreement may be executed in any number of counterparts. All counterparts taken together will be deemed to constitute one document.

		
	1.7
	This Agreement will take effect on and from the date it is executed by the parties.

EXECUTED as an agreement

	
			
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	Special Arrangement Agreement
3 April 2018
	3

Signing page
DATED: 4 April 2018

	
		
	Signed for and on behalf of Caterpillar of Australia Pty Ltd:

	)
)
)
)

	/s/ Walter J. Bradbury      
	/s/ Edrees Faizi      

	Signature of director
	Signature of director

	 
	 

	DIRECTOR      
	DIRECTOR   

	Office held
	Office held

	 
	 

	WALTER J. BRADBURY
	EDREES FAIZI       

	Name of director (block letters)
	Name of director

	
			
	Signed by Robert Brian Charter
	)
	 

	 
	)
	 

	/s/ Robert Brian Charter   
	)
	 

	Signature
	)
	 

	 
	 
	 

	 
	 
	 

	 
	 
	 

	 
	 
	 

Mercer Superannuation (Australia) Limited (ABN 79 004717 533), as trustee of the MST acknowledges receipt of the above agreement.

	
			
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	Special Arrangement Agreement
3 April 2018
	4

	
		
	Executed by Mercer Superannuation (Australia) Limited ABN 79 004 717 533 by its Attorney, who has not received notice of the revocation of the Power of Attorney dated 29 November 2016 in the presence of:

	)
)
)
)

	/s/ Rita Harris      
	 

	Attorney Signature
	 

	 
	 

	RITA HARRIS   
	 

	Attorney Name
	 

	 
	 

	/s/ Sonia Campbell-Hirst   
	 

	Signature of Witness
	 

	 
	 

	SONIA CAMPBELL-HIRST   
	 

	Name of Witness
	 

	
			
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	Special Arrangement Agreement
3 April 2018
	5

Annexure – Benefits for Robert Brian Charter

		
	1
	Application

		
	1.1
	The provisions of this Annexure apply in respect of the Member.

		
	2
	Interpretation

		
	2.1
	In this Annexure the following words and expressions shall unless the context requires otherwise have the following meanings:

“Earliest Retirement Date” means 8 April 2018.
“Member” means Robert Brian Charter.
“Nominated Date” means 31 July 2018.
		
	2.2
	A reference in clause 3 of this Annexure to a clause reference to that clause in the Annexure to the Participation Agreement.

		
	3
	Variation to benefits

		
	3.1
	Clause 4.4.1 shall not apply in respect of the Member and the following clause 4.4.2 shall apply instead, and in relation to the Member, all references in the Participation Agreement to clause 4.4.1 shall be read as references to clause 4.4.2:

“4.4.2    (a) Subject to paragraphs (b) and (c) of this clause, if a Member ceases Employment on or after the Earliest Retirement Date, the Member shall be entitled to a lump sum benefit payable from the Plan equal to the greater of the following amounts, calculated when the benefit is to be paid or rolled over to another fund:
(A)    the Member’s Accrued Retirement Benefit; and
(B)    two times the Member’s Member Contribution Account Balance.
A Member who is entitled to a benefit pursuant to this clause 4.4.2 may call for payment of the benefit at any time before the Nominated Date, in which case, the Trustee must pay the benefit to the Member if Superannuation Law permits or may roll over the benefit to another superannuation fund in accordance with Superannuation Law and the Member’s instructions. If the Member does not call for payment of the benefit before the Nominated Date, the Trustee must pay the benefit to the Member as soon as reasonably practical after the Nominated Date. 
For the avoidance of doubt, for the purpose of calculating the benefit payable pursuant to this clause, the Member’s Accrued Retirement Benefit is not adjusted to take account of any interest or earnings with respect to the period between the date the Member ceases Employment and the date on which the benefit is to be paid.

	
			
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	Special Arrangement Agreement
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(b) For the purpose of determining the Member’s Accrued Retirement Benefit, if the Member does not call for payment of the benefit before the Nominated Date, with effect from the Nominated Date, “Service” shall be increased by including the period commencing on 7 April 1989 and ending on 22 March 1998.
(c) If a Member who is entitled to a benefit pursuant to this clause 4.4.2 dies before the Nominated Date, for the purpose of determining the Member’s Accrued Retirement Benefit, “Service” shall be increased by including the period commencing on 7 April 1989 and ending on 22 March 1998 and the benefit shall be paid as soon as reasonably practical after the Trustee is notified of the Member’s death to such persons and in such manner as if it were a benefit payable pursuant to clause 4.7.
(d) For the avoidance of doubt:
		
	(i)
	a Member who ceases Employment on or after the Earliest Retirement Date remains a Member of the Plan until a benefit becomes payable pursuant to this clause 4.4.2 but apart from contributions required in the ordinary course to fund defined benefits payable from the Plan, including benefits payable pursuant to this clause 4.4.2, no contributions may be made to the Plan by or for the benefit of the Member after the Member ceases Employment; and

		
	(ii)
	the benefit increase provided for in paragraph (b) of this clause does not accrue until the Nominated Date and the benefit increase provided for in paragraph (c) of this clause does not accrue until the Member’s death.”

	
			
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	Special Arrangement Agreement
3 April 2018
	7Exhibit

EXHIBIT 10.3

            

May 1, 2018

Andrew Bonfield
Dalkeith House
Shrubbs Hill Lane
Sunningdale, SL5 OLD
England

Dear Andrew:

It is my pleasure to confirm our offer for the position of Chief Financial Officer (CFO) at Caterpillar. Your position will report to the Chief Executive Officer (CEO).  This offer is contingent upon and assumes you would commence employment as soon as possible on or before August 1, 2018.    

This letter summarizes the significant components of your Total Rewards that you would receive as an employee and officer.  The various components discussed below are each governed by the terms of their respective plans, and are regularly reviewed and subject to change at any time. Your employment with Caterpillar is at all time an at-will relationship, meaning that either you or the Company may terminate your employment at any time and for any reason, with or without cause.  Neither this letter, nor any attachments, are intended to constitute an employment contract guaranteeing employment for a specified time.  This offer is further contingent on your securing valid immigration status and work authorization before your expected start date and maintaining your valid immigration status and work authorization thereafter.  

At Caterpillar, we provide a Total Rewards package that is designed to be competitive and align with our pay for performance philosophy. Annual cash compensation currently consists of base salary and a cash payment under our Annual Incentive Plan (“AIP”).  Long-term incentive compensation currently consists of equity awards including nonqualified stock options (“Options”) and performance-based restricted stock units (“PRSUs”). 

Annual Compensation

Base Salary
The annual base salary for this position is $800,000. You will be eligible for salary increases based on market movements and your overall performance. Future increases are at the discretion of the Compensation and Human Resources Committee of the Board of Directors (“Committee”) and subject to its approval.

Annual Incentive Plan
The target AIP opportunity for this position is 115% of base salary. The AIP performance factor modifier can range from 0 to 2.0 (1.0 at target), depending on corporate and business unit performance during each year.  The AIP payment for 2018 will be pro-rated based on your start date.  

Long Term Incentive Plan
The long-term incentive (LTI) plan at Caterpillar is administered under the authority of the Committee and is subject to change based on the Committee’s discretion. For 2018, the Committee elected to grant long-term incentives in the form of 50% Options and 50% PRSUs to all officers and certain other key employees of Caterpillar. The target grant value for this position in 2018 was $3,000,000, with adjustments above or below the target level based on Committee discretion. 

You will be granted a 2018 LTI award with a dollar value on the grant date of $1,500,000 to be made as soon as administratively practicable following the completion of your first day of employment. The vesting will align with those grants previously made by the Company to eligible employees on March 5, 2018 (i.e. options will have a 3-year pro-rata vesting schedule, vesting 1/3 on each of March 5th of 2019, 2020 and 2021 and PRSUs will have a 3 year performance period from 1/1/18 – 12/31/20).  Additional terms of this grant will be set forth in a more formal award document that will be provided to you shortly after the grant date. You will be required to electronically accept the award in accordance with the Company’s routine procedures established by Caterpillar’s stock plan administrator. 

Stock Ownership Guidelines
The Board of Directors set a minimum stock ownership target for all Caterpillar officers to align executives’ interests with our shareholders and to demonstrate confidence in the long-term success of Caterpillar.  The current target ownership requirement for the CFO is three times base salary.  You will have a 5-year grace period to meet the target ownership requirement.  

SDCP
The Supplemental Deferred Compensation Plan is a non-qualified executive compensation plan. This plan allows eligible employees to make contributions on a tax deferred basis and receive company contributions in excess of limitations imposed on our 401(k) plan by the tax code. (Details of our 401(k) plan are included in the attached U.S. Benefits summary).

Benefits and Paid Time Off
Caterpillar offers competitive employee, and dependent health and welfare benefits.  You will be eligible for relocation benefits under the Company’s relocation policy relating to the sale of your current residence, relocation and moving expenses and purchase of a new residence.  You will be eligible for twenty-three (23) paid vacation days.   Vacation accrues annually and must be used in the calendar year it is earned, as unused vacation time does not accumulate or carry over after each December 31.  

Sign-On Compensation

Cash 
Caterpillar will provide a cash sign-on bonus of $800,000, less applicable withholdings and taxes, to be paid as soon as administratively practicable following the completion of your first day of employment. You shall not have earned and thus shall be obligated to repay 100% of the cash sign-on bonuses described in the paragraph above, including any taxes withheld, within 30 days of your termination of employment, if you are terminated by the Company for cause or you voluntarily terminate employment with the Company prior to the first anniversary of your hire date.

Restricted Stock Units
Caterpillar will award you a sign-on grant of restricted stock units (“RSUs”) with a dollar value on the grant date of $5,360,000 to be made as soon as administratively practicable after you begin employment. This RSUs will have a two-year pro-rata vesting schedule, vesting 1⁄2 on each of the first two anniversaries of the grant date.  Additional terms of the grant will be set forth in a more formal award document that will be provided to you shortly after the grant date. You will be required to electronically accept the award in accordance with the Company’s routine procedures established by Caterpillar’s stock plan administrator. If your employment with the Company terminates during the vesting period, except for termination due to long-service separation, involuntary termination of your employment by the Company without cause, disability, death or in connection with a change in control of the Company, you will forfeit all unvested RSUs associated with this grant.

*     *    *    *

Please contact Cheryl Johnson with any questions regarding any details of this letter. Caterpillar is pleased to offer you this compensation package and I look forward to you joining our team.

Please indicate your acceptance of this offer by signing the bottom portion of this letter and returning a copy to Cheryl prior to close of business on May 16, 2018. 
  
Sincerely, 
  
Caterpillar Inc.

  
	
				
	/s/ Jim Umpleby
	 
	 

	Jim Umpleby, Chief Executive Officer
	 

I have read, understood and accept this offer of employment with Caterpillar Inc.
	
	
	

/s/ Andrew Bonfield

	 

	Andrew Bonfield

	

  3 May 2018

	 

	 

	Date

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