Document:

exhibit 4-1

    SOLAR
      SAVINGS AND INVESTMENT PLAN

     

    Restated
      and Amended: January 1, 2005

     

    

    SUPPLEMENTAL
      AGREEMENT

     

    FOR

     

    SAVINGS
      AND
      INVESTMENT PLAN

     

    TABLE
      OF
      CONTENTS

     

     

    SUPPLEMENTAL
      AGREEMENT FOR SAVINGS AND INVESTMENT PLAN

    SECTION
      1.
      Definitions

    SECTION
      2.
      Modification of Plan

    SECTION
      3.
      Management Rights

    SECTION
      4.
      Information to Union

    SECTION
      5. Claim
      Procedure

    SECTION
      6. Complete
      Agreement not Subject to Strikes, Etc.

    SECTION
      7.
      Necessary Approvals

    SECTION
      8.
      Effective Date and Term of Agreement

     

    EXHIBIT
      A SAVINGS
      AND INVESTMENT PLAN

    SECTION
      1 -
      Introduction

    SECTION
      2 -
      Definitions

    SECTION
      3 -
      Eligibility and Participation

    SECTION
      4 -
      Contributions

    SECTION
      5 -
      Allocation of Employer Payments; Nonforfeiture

    SECTION
      6 - The
      Trust Fund and the Investment Funds

    SECTION
      7 -
      Distribution of a Participant’s Account

    SECTION
      8 -
      Participant’s Annual Statement

    SECTION
      9 - Voting
      of Company Shares

    SECTION
      10 -
      Trustee and Plan Administrator

    SECTION
      11 -
      Accounting

    SECTION
      12 - No
      Reversion to Employer

    SECTION
      13 -
      Miscellaneous

    SECTION
      14 -
      Amendment and Termination

    SECTION
      15 -
      Related Corporations

    SECTION
      16 -
      Qualified Domestic Relations Orders

     

    SUPPLEMENT
      A
      Participating Groups

     

    SUPPLEMENT
      B
      Modified Benefits

     

    SUPPLEMENT
      C
      After-Tax Contributions and Employer Matching Contributions

    SECTION
      1 -
      Purpose

    SECTION
      2 -
      Participation and Service

    SECTION
      3 -
      Participant After-Tax Contributions

    SECTION
      4 -
      Employer Contributions

    SECTION
      5 - Annual
      Classes

    SECTION
      6 -
      Accounting and Plan Investments

    SECTION
      7 -
      Withdrawals, Loans and Distributions

     

    SUPPLEMENT
      D ESOP
      Provisions

    SECTION
      1 -
      Purpose

    SECTION
      2 - ESOP
      Provisions

     

    SUPPLEMENT
      E
      Provisions Relating to the Transfer of Account Balances From Caterpillar Inc.
      Employees’ Investment Plan

    SECTION
      1 -
      Purpose

    SECTION
      2 -
      Participation

    SECTION
      3 -
      Contributions

    SECTION
      4 -
      Transfer of Assets and Account Balances

    SECTION
      5 -
      Investment of Account Balances

    SECTION
      6 -
      Investment of Account Balances and Accounting

    SECTION
      7 -
      Distributions and Withdrawals

     

    SUPPLEMENT
      F
      Minimum Distribution Requirements

    

    

    

      SUPPLEMENTAL
      AGREEMENT

    FOR

    SAVINGS
      AND
      INVESTMENT PLAN

     

     

    On
      this
      14th
      day of January,
      1985, SOLAR TURBINES INCORPORATED (hereinafter referred to as the “Employer”)
      and the INTERNATIONAL ASSOCIATION OF MACHINISTS AND AEROSPACE WORKERS
      (hereinafter referred to as the “Union”), on behalf of the employees covered by
      the applicable Basic Agreement of which this Supplemental Agreement becomes
      a
      part, agree as follows:

     

    SECTION
      1.
  Definitions

     

    When
      used
      herein

     

    
      	(a)  	
              “Bargaining
                Unit” means the unit for collective bargaining purposes to which the
                Savings and Investment Plan (as set forth in Exhibit A attached hereto
                and
                made a part hereof, as further modified in accordance with this Agreement)
                applies pursuant to this Agreement.

            

    

     

    
      	(b)  	
              “Basic
                Agreement” means the agreement between the Employer and the Union covering
                terms and conditions of employment of Employees (other than terms
                and
                conditions which are the subject of special supplemental agreements
                such
                as pensions and group insurance).

            

    

     

    
      	(c)  	
              “Company”
                means Caterpillar Inc. or successor to it by merger, consolidation,
                reorganization or otherwise.

            

    

     

    
      	(d)  	
              “Employee”
                means any person in the Bargaining Unit covered by this Agreement
                who is
                actively employed by the Employer on or after the effective date
                specified
                in Section 8 hereof, or any other Employee of Solar Turbines Incorporated
                or subsidiary of Solar Turbines Incorporated to whom the Plan has
                been
                extended.

            

    

     

    SECTION
      2.
  Modification
      of
      Plan

     

    The
      Employer has
      established for eligible hourly Employees a Savings and Investment Plan,
      hereinafter referred to as the “Plan”. In the event of any conflict between the
      provisions of the Plan and the provisions of this Agreement, the provisions
      of
      this Agreement will supersede the provisions of the Plan to the extent necessary
      to eliminate such conflict. The Employer, in its discretion, may extend the
      Plan
      to persons now or hereafter in its employ outside the Bargaining Unit. The
      parties hereto have agreed to modifications of the Savings and Investment Plan
      agreement that was in force between them on the day before the effective date
      of
      this Agreement.

     

    SECTION
      3.
  Management
      Rights

     

    All
      decisions with
      respect to any and all matters affecting the business of the Company and the
      Employer are vested exclusively in the respective management and Board of
      Directors of the Company and the Employer. Neither the Union nor any eligible
      Employees shall have the right to be informed, notified, or consulted with,
      respect to, or provided information or data concerning such matters except
      that
      the Union shall be provided with such information and data as is required by
      the
      terms of this Agreement, the Plan or, upon request, as is provided to the
      shareholders of the Company in the ordinary course of business. Under no
      circumstances shall the Union or any eligible Employees participate in any
      way
      in the decision-making process concerning such matters or their effects upon
      the
      profit of the Company or the Employer, by way of bargaining, conference, or
      otherwise.

     

    Such
      matters
      include, by way of example and without limitation: terms and conditions of
      employment of employees not within the recognized collective Bargaining Unit
      represented by the Union; the investment of corporate funds; the incurring
      of
      debt, overhead, operating or other expenses; the number, location, size,
      function and manning of facilities; research into existing or possible new
      products to be produced; the methods by, quantities in, and times and locations
      at which they are produced or distributed, or, subject to the Basic Agreement,
      the persons by whom they are produced or distributed; the maintenance of
      materials and finished goods inventories; the marketing, merchandising, pricing
      and advertising policies; the financing of the Company or the Employer including
      incurring or retirement of debt, the issuance of stock, debentures, notes or
      other capital instruments; the accounting and financial policies, practices
      and
      procedures of the Company or the Employer; the acquisition, merger, divestiture
      of assets and holdings; the maintenance of the business plans, and the financial
      books and records of the Company or the Employer in confidence; the hiring,
      firing, promotion or demotion of personnel not within the recognized collective
      Bargaining Unit represented by the Union; and all other matters heretofore
      traditionally determined by management or the Board of Directors
      exclusively.

     

    The
      Union
      recognizes that matters of the nature above stated as examples are committed
      to
      the Company’s and Employer’s respective Board of Directors and the management it
      selects, and are not amenable to consideration through the collective bargaining
      process. To the extent the existence of the Plan might be misconstrued to create
      a right of the Union, or eligible Employees, to bargain, confer or otherwise
      be
      notified concerning such matters or their effects, the Union disclaims any
      interest therein and waives any contractual or statutory right thereto during
      the term of this Agreement or thereafter.

     

    The
      agreements
      herein with respect to the preservation of management rights and the Union’s
      disclaimers and waivers with respect thereto are given in express consideration
      for the establishment of the Plan. The Union has assured the Company and the
      Employer by virtue of the establishment of the Plan that it neither wants nor
      will it request any greater rights or involvement with regard to the management
      functions of the Company and the Employer than has heretofore traditionally
      occurred under the prior collectively bargained agreements and past practices
      between the parties.

     

    SECTION
      4.
  Information
      to
      Union

     

    It
      is recognized
      and agreed that all information necessary for the Union to perform its
      representational duties with respect to the establishment, administration,
      modification or termination of this Agreement, the Plan or any future proposed
      agreement or plan is contained in the published financial statements and such
      releases and periodic reports of the Company to its shareholders and the
      Securities and Exchange Commission as are provided in the ordinary course of
      business. In addition, and upon request, the Employer will provide to the Union
      a copy of a statement of an Employee’s Account under the Plan.

     

    The
      Union hereby
      disclaims any interest in and waives any contractual or statutory right to
      any
      additional financial information or accounting records concerning the Company
      or
      the Employer.

     

    SECTION
      5.
  Claim
      Procedure

     

    In
      the event an
      Employee wishes to seek a review under the Plan and make a claim with respect
      to
      his eligibility or his Account, the following claim procedure will
      apply:

     

    Step
      1.
      The Employee shall first seek a satisfactory explanation from the Employer
      with
      respect to his claim; and if he is unable to secure an explanation to his
      satisfaction, he may then request his designated Union representative to review
      his claim with the designated management representative of the
      Employer.

     

    Step
      2.
      The management representative will review the Employee’s claim with the Union
      representative. If needed, more details with respect to the claim will be
      obtained by the management representative.

     

    Step
      3.
      If, after discussion with the management representative, the Union
      representative feels that the claim was proper, he may notify in writing the
      management representative that he would like to have the claim further
      reviewed.

     

    Step
      4.
      If, after discussion between the representative of the Union and the management
      representative, the parties cannot resolve the claim in dispute and the
      representative of the Union continues to feel that the claim was improperly
      denied, such representatives shall appoint an impartial person to review the
      claim in dispute and to determine whether or not denial was proper. In the
      event
      of the inability of the parties to agree upon such an impartial person within
      a
      period of thirty days after it is determined that such an impartial person
      should be appointed, the parties shall ask the American Arbitration Association
      to furnish a suggested list of names of five persons, from which list the
      parties shall select one person to serve. Such selection shall be by agreement,
      if possible; otherwise, by the Union and the Employer alternately eliminating
      names from said list. After each party has eliminated the names of two persons
      from said list, the remaining one shall be appointed to act.

     

    There
      shall be no
      appeal from any ruling by the impartial person so designated. Each such ruling
      shall be final and binding on the Employer, the Union, and the Employee or
      any
      other persons claiming eligibility or amounts under the Plan; and shall be
      based
      solely on the written facts submitted relating to the case in dispute and such
      ruling shall apply solely to the case in dispute and shall not be used as a
      precedent for future cases. No ruling in any one case nor any initial
      determination in any one case shall create a basis for retroactive adjustments
      in any other cases. The Union will discourage any attempt of their respective
      members and any other persons and will not encourage or cooperate with any
      of
      its members and any other person, in any appeal to any court or administrative
      board or agency from a ruling of such impartial person.

     

    The
      fees and
      expenses of such impartial person, and any clerical or stenographic expense
      mutually agreed to, shall be borne equally by the Employer and the
      Union.

     

    SECTION
      6.
  Complete
      Agreement
      not Subject to Strikes, Etc.

     

    During
      the term of
      this Agreement neither the Union nor any of its officers, agents, or
      representatives, nor any of the Employees or their agents of representatives,
      shall engage or continue to engage in or in any manner sanction or encourage
      any
      strike, work stoppage, slowdown, or other interruption or impeding of work,
      or
      engage or continue to engage in any other use of economic force, for the purpose
      of securing any modification, change, or termination of this Agreement or of
      the
      Plan, or for the purpose of securing the establishment of any new, different
      or
      additional plan. During the term of this Agreement, the Employer shall have
      no
      obligation to negotiate or bargain with the Union or with the Employees or
      any
      other representative of the Employees with respect to any of the subject matters
      of this Agreement, the right to bargain with respect to any such matters being
      expressly waived.

     

    SECTION
      7.
  Necessary
      Approvals

     

    Notwithstanding
      any
      other provision of this Agreement or of the Plan, the Employer, with the consent
      of the Union insofar as Employees in the Bargaining Unit are concerned, may,
      during the term of this Agreement, make revisions in the Plan not inconsistent
      with the purposes, structure and basic provisions thereof which shall be
      necessary to bring the Plan into conformance with any applicable federal or
      state legislation or regulations or which shall be necessary to obtain or
      maintain any necessary approval of any applicable federal or state authority.
      Any such revisions shall adhere as closely as possible to the language and
      intent of the provisions outlined in this Agreement and the attached Exhibit
      A;
      provided, however, that no such revisions will result in any increase in
      benefits or eligibility for benefits under any other benefit plan of the
      Employer. In the event that Internal Revenue Service approval acceptable to
      the
      Employer is not obtained, the Employer, within thirty days after any such
      disapproval, will give written notice thereof to the Union and this
      understanding with respect to the establishment of the Plan for Employees,
      as
      herein provided, shall thereupon
      have no
      force or effect.

     

    SECTION
      8.
  Effective
      Date and
      Term of Agreement

     

    This
      Agreement and
      Plan shall become effective on January 1, 1985 (referred to in the Plan as
      the “Effective Date”), and

     

    
      	(a)  	
              Subject
                to
                subparagraph (b), this Agreement shall remain in force through July
                12,
                1987, and thereafter from July of one year until July of the next
                succeeding year, unless at least 60 (but not more than 90) days prior
                to
                July 12, or at least 60 (but not more than 90) days prior to July
                12 of
                any succeeding year, any party gives written notice to the other
                that it
                desires a modification or termination. In the event that any negotiations
                following such notice do not result in an agreement for renewal,
                with or
                without modification, prior to the July 12 next succeeding such notice,
                this Agreement shall terminate at the end of any term (including
                any
                one-year extension in accordance with the foregoing) unless further
                extended by mutual agreement. Termination of this Agreement shall
                not have
                the effect of automatically terminating the
                Plan;

            

    

     

    
      	(b)  	
              If
                at any
                time any of the approvals referred to in Section 7 ceases to be in
                effect,
                the Employer (unless revisions made pursuant to Section 7 result
                in the
                complete reinstatement of such approval) may terminate this Agreement
                and
                shall provide written notice of such termination to the Union at
                least 10
                days prior to such termination, provided however, that termination
                of this
                Agreement shall not have the effect of automatically terminating
                the
                Plan.

            

    

     

    

     

      EXHIBIT
      A

     

    SAVINGS
      AND
      INVESTMENT PLAN

     

     

    SECTION
      1  -
      Introduction

     

    1.1  Purpose

     

    This
      Savings and
      Investment Plan (the “Plan”) has been established to provide a tax-deferred
      method for savings and investment to certain eligible employees of the Employer.
      The Plan was established and is maintained pursuant to Sections 401(a) and
      (k)
      of the Internal Revenue Code of 1986 (the “Code”), as amended, and is
      conditioned upon determination by the Internal Revenue Service that it meets
      the
      requirements of such Sections or any successor statute of similar import. The
      Plan will be administered by the Plan Administrator described in subsection
      10.2. The succeeding provisions of this Plan may be expanded and/or modified
      by
      any Supplement. Such Supplement will set forth the particulars wherein the
      provisions of this Plan are expanded and/or differ from those set forth in
      the
      succeeding provisions of this Plan exclusive of such Supplement.

     

    The
      Plan, as set
      forth herein, is an amendment to and restatement of the Plan effective as of
      January 1, 2005, unless otherwise noted. Notwithstanding anything contained
      in
      this Plan to the contrary: (a) the value of any investment fund that can be
      valued on a daily basis shall be determined on each business day on which the
      New York Stock Exchange is open for business; (b) Employer contributions to
      the
      Plan may be made more frequently than monthly and shall be credited to eligible
      employees’ Accounts at the time of deposit into the Plan; (c) eligible
      employees’ elections under the Plan shall be made at such time and in such
      manner as prescribed by the Plan Administrator on a uniform and
      nondiscriminatory basis and shall be effective within a reasonable time after
      such election is received and approved by the Plan Administrator; and
      (d) effective
      as of
      February 1, 2003, the
      Plan will not:
      (i) distribute an eligible employee’s Account in the form of an annuity; (ii)
      distribute death benefits in the form of a survivor annuity; or (iii)
      require
      spousal consent
      for distribution of Plan benefits, hardship and non-hardship withdrawals, or
      loans.

     

     

    SECTION
      2  -
      Definitions

     

    2.1  “Account”
means
      the
      interest of a Participant or other eligible employee in the trust
      fund.

     

    2.2  “Benefit
      Funds
      Committee”
means
      the Benefit
      Funds Committee of Caterpillar Inc.

     

    2.3  “Compensation”.

     

    
      	(a)  	
              The
                term
                “Compensation” means a Participant’s total compensation, within the
                meaning of Code Section 415(c)(3), in any Plan Year paid to him by
                the
                Employers for services rendered to
                them.

            

    

     

    
      	(b)  	
              Notwithstanding
                subsection (a) above, for purposes of nondiscrimination testing under
                subsections 4.6 and 4.10, the term “Compensation” means compensation
                within the meaning of Code Section
                414(s).

            

    

     

    
      	(c)  	
              In
                accordance
                with Code Section 401(a)(17), the annual compensation of each Participant
                taken into account for all purposes of this Plan shall not exceed
                $210,000
                or such higher amount as shall be indicated by the Secretary of the
                Treasury in regulations or otherwise pursuant to such Code Section
                for
                Plan Years after 2005; and in no event shall benefits under the Plan
                exceed the maximum allowed under Code Section 401(a)(17) and regulations
                thereunder.

            

    

     

    2.4  “Effective
      Date”
means
      January 1,
      2005, except that, with respect to groups of employees subject to a collective
      bargaining agreement, the term Effective Date is the later of (i) January 1,
      2005, or (ii) the date specified as such in the collective bargaining agreement
      or extension memorandum applicable to such a group.

     

    2.5  “Employer”
means
      Solar
      Turbines Incorporated or any related corporation that adopts the plan pursuant
      to Section 15.

     

    2.6  Highly
      Compensated Employees.
      The term “highly
      compensated employee” means any employee of the Employer or a controlled group
      member who (a) was a 5-percent owner of the Employer or a controlled group
      member at any time during the year or the preceding year, or (b) during the
      preceding year, received compensation (as defined in Code Section 414(q)(4))
      from the Employer or a controlled group member of at least $95,000 (as indexed)
      and, to the extent elected by the Employer, was in the top 20-percent of
      employees based on compensation. For purposes of this subsection 2.6, a
“controlled group member” means any entity that is under common control with the
      Employer within the meaning of Code Sections 414(b), 414(c) or
      414(m).

     

    2.7  “Investment
      Plan
      Committee”
means
      the
      Investment Plan Committee of Caterpillar Inc.

     

    2.8  “Participant”
means
      an eligible
      employee, in accordance with subsection 3.1, who elects to participate in the
      Plan pursuant to subsection 4.1.

     

    2.9  “Plan
      Year”
means
      the
      calendar year.

     

    2.10  “Service”
means
      an
      employee’s period of employment as defined in subsection 3.2.

     

    2.11  “Trustee”
means
      the person,
      persons, organization or organizations described in subsection
      10.1.

     

     

    SECTION
      3  -
      Eligibility and
      Participation

     

    3.1  Eligible
      Employees

     

    Each
      employee of
      the Employer who meets all of the following requirements on the Effective Date
      will become an eligible employee on the Effective Date; and any other employee
      of the Employer will become an eligible employee on the first day of the next
      payroll period following the date on which he meets all of such
      requirements:

     

    
      	(a)  	
              He
                is a
                resident or citizen of the United States of America or
                Canada;

            

    

     

    
      	(b)  	
              He
                is
                included in a group for which an agent for collective bargaining
                has
                signed an agreement making this Plan applicable to such group or
                in a
                group to whom this Plan has been extended by the Employer;
                and

            

    

     

    
      	(c)  	
              Either
                (i) he
                is a regularly scheduled full-time employee who has attained his
                eighteenth birthday, or (ii) he is any other employee who has completed
                one or more years of service as defined in subsection 3.2 and has
                attained
                his eighteenth birthday;

            

    

     

    Notwithstanding
      the
      foregoing, neither leased employees nor contract employees shall be eligible
      to
      participate in the Plan. For purposes of the foregoing, (i) a person shall
      be
      considered a “leased employee” if such person is not employed by the Employer
      but performs services for the Employer pursuant to an agreement between the
      Employer and a leasing organization, after such person performs such services
      for a 12-month
      period
      but only if the services are performed under the primary direction or control
      by
      an employer on a substantially full-time basis; and (ii) a person shall be
      considered a “contract employee” if such person is a common-law employee of the
      Employer and is providing services to the Employer pursuant to a contract or
      other arrangement between the Employer and an unrelated
      organization.

     

    For
      all purposes of
      this Plan, an individual shall be an “employee” of or be “employed by” an
      Employer for any Plan Year only if such individual is treated by the Employer
      for such Plan Year as its employee for purposes of employment taxes and wage
      withholding for Federal income taxes, regardless of any subsequent
      reclassification by the Employer, any governmental agency or court.

     

    An
      eligible
      employee may become a Participant in the Plan pursuant to subsection 4.1.
      Employees will be notified of the eligibility requirements as specified in
      the
      Plan through such general announcements as the Plan Administrator shall
      authorize, but neither the Employer, the Plan Administrator, nor the Trustee
      shall have any duty or obligation to notify any individual employee of any
      date
      as of which he is eligible to become a Participant in the Plan.

     

    3.2  Service

     

    For
      all purposes of
      the Plan, the term “Service” means the total period of service elapsed from an
      employee’s first date of hiring as an employee by the Employer to the date such
      employee last severs his service with the Employer, exclusive of any period
      during which the employee is not, or was not, in active service as an employee
      of the Employer (whether resulting from discharge, suspension, resignation,
      quitting, or any other cause) except there shall be included in such total
      period of service all periods of absence pursuant to leave of absence granted
      by
      the Employer, all periods of layoff after the employee’s last date of hiring as
      an employee by the Employer, up to twelve months of each prior period of layoff
      which commenced after December 1, 1976, by the Employer, and all periods prior
      to July 31, 1981, which are recognized as years of credited service under any
      retirement plan of the Employer. Upon reemployment following any break in
      service, (a) prior service shall be reinstated regardless of duration of such
      break in service in accordance with the preceding sentence; and (b) if such
      break in service occurs after December 1, 1976 and the employee is re-employed
      by the Employer within one year from the day he last performed an hour of
      service for the Employer, he will receive additional service for his period
      of
      absence from active service with the Employer equal to the lesser of (i) his
      period of absence, or (ii) one year, less any period of absence otherwise
      credited.

     

    Solely
      for the
      purposes of this subsection, the term “first date of hiring” means the first day
      an employee performs one hour of service with the Employer; the term “break in
      service” means the period which begins on the date he severs his service with
      the Employer and ends if an employee is reemployed by the Employer on the first
      day the employee performs one hour of service following such reemployment;
      and
      an employee “severs his service” on the date he quits, retires, is discharged or
      dies. Notwithstanding the foregoing provisions of this subsection, service
      shall
      not be duplicated for the same period of service. The records of the Employer
      with respect to an employee’s service will be conclusive unless shown to the
      Plan Administrator’s satisfaction to be incorrect.

     

    3.3  Period
      of
      Participation

     

    Subject
      to
      subsection 7.2, a Participant in the Plan shall continue as such until all
      of
      the assets in his Account under the Plan have been distributed or otherwise
      disposed of in accordance with the Plan.

     

    3.4  Effect
      of Layoff
      or Leave of Absence

     

    If
      a Participant is
      granted a leave of absence or is laid off because of lack of work, his
      employment with the Employer shall not be deemed to have terminated for the
      purposes of this Plan unless and until such Participant incurs a break in
      seniority and/or loses his employment recall rights.

     

    3.5  Military
      Service.
      Notwithstanding
      any provisions of this Plan to the contrary, contributions, benefits and service
      credit with respect to qualified military service will be provided in accordance
      with Code Section 414(u).

     

     

    SECTION
      4  -
      Contributions

     

    4.1  Elections
      and
      Amount of Contributions

     

    Each
      eligible
      employee may elect to make salary reduction contributions to the Plan by filing
      an application to make such contributions with the Plan Administrator within
      30
      days following his initial eligibility date. For each Plan Year, the Plan
      Administrator or its delegate may establish maximum compensation reduction
      amounts (that may be expressed as a dollar amount, a percentage of annual
      compensation, or both) for any Highly Compensated Employees (as defined in
      subsection 2.6) whose Compensation reduction contributions may be limited
      pursuant to subsections 4.6 and 4.10 of the Plan.

     

    In
      no event shall
      the compensation reduction amount for any employee exceed the lesser of (i)
      70%
      of the employee’s compensation or (ii) $14,000 (or such other amount as may be
      determined by the Secretary of the Treasury under Code Section
      402(g)).

     

    The
      Plan
      Administrator shall also establish rules with respect to the amounts and timing
      of such reductions in Compensation, the timing and manner of filing such
      applications, and the timing and manner of filing for the suspension of
      authorized contributions pursuant to subsection 4.2 below.

     

    If
      an eligible
      employee does not elect to become a Participant as of his initial eligibility
      date, he may elect to become a Participant, if he then meets the requirements
      of
      subsection 3.1 of the Plan.

     

    4.2  Suspension
      of
      Authorized Contributions

     

    
      	(a)  	
              A
                Participant
                may voluntarily suspend his authorization of contributions under
                the Plan
                as of the first day of a payroll period by filing an application
                with the
                Plan Administrator. A Participant who has voluntarily suspended such
                authorization may again become an active Participant in the Plan
                by making
                a new election in accordance with subsection
                4.1.

            

    

     

    
      	(b)  	
              The
                participation of an employee who ceases to meet one or more of the
                eligibility requirements specified in subsection 3.1 of the Plan
                will be
                suspended. An employee whose participation was suspended for failure
                to
                meet such eligibility requirements will be eligible to re-enroll
                and to
                become an active Participant after the date he again satisfies such
                requirements.

            

    

     

    4.3  Employer
      Payment
      of Authorized Contributions

     

    The
      Employer shall
      make a payment (or payments) of authorized contributions (hereinafter referred
      to as “Payment”) under the Plan in an amount equal to the total Compensation
      reduction amounts elected by Participants for each payroll period pursuant
      to
      subsection 4.1 who are employed by the Employer during the period.

     

    4.4  Employer
      Contributions.

     

    For
      each calendar
      month in 1991, the Employer will contribute an amount equal to 1% of an eligible
      employee’s Compensation for said calendar month. For each calendar month in
      1992, the Employer will match up to a maximum of 1% of an employee’s
      Compensation for said calendar month which such Participant has elected to
      contribute under subsection 4.1 of the Plan. Amounts contributed by an Employer
      will be paid to the Trustee and allocated as provided in Section 5 of the Plan.
      Employer contributions will not be made under this subsection 4.4 after
      1992.

     

    4.5  Maximum
      Payment
      Limitation

     

    For
      each Plan Year,
      the annual addition (as defined below) to a Participant’s accounts under all
      defined contribution plans maintained by the Employer shall not exceed the
      lesser of $42,000 (or such greater amount as may be determined by the
      Commissioner of Internal Revenue for the calendar year which begins with or
      within that Plan Year) or 100 percent of the Participant’s Section 415
      Compensation (as defined below) during that Plan Year. The term “annual
      addition” for any Plan Year means the sum of the Employer contributions and
      salary reduction contributions credited to a Participant’s accounts for that
      year. Any salary reduction contributions which cannot be allocated to a
      Participant because of the foregoing limitations (and any gains attributable
      thereto) shall be returned to him. For plan years beginning prior to January
      1,
      2000, a Participant’s benefit shall be limited as provided in Code Section
      415(e) and if the sum of a Participant’s defined benefit fraction and defined
      contribution fraction as defined in Code Section 415(e) exceeds 1.0, the
      benefits that otherwise would have been payable to the Participant under the
      defined benefit plans of the employers in which he participates will be adjusted
      to the extent necessary so that the sum of all such fractions does not exceed
      1.0. Notwithstanding the foregoing, the numerator of the defined contribution
      fraction may be adjusted in accordance with the rules set forth by the Secretary
      of the Treasury or his delegate so that the sum of the defined benefit fraction
      and the defined contribution fraction does not exceed 1.0. If, as a result
      of a
      reasonable error in estimating a Participant’s Compensation, Employer
      contributions cannot be allocated to a Participant because of the foregoing
      limitations, such amounts shall be applied to reduce Employer contributions
      in
      succeeding Plan Years, in order of time. A Participant’s “Section 415
      Compensation” means his total compensation for services rendered to the Employer
      as an employee, determined in accordance with Code Section 415(c)(3) and the
      regulations thereunder.

     

    4.6  Average
      Deferral
      Percentage Test Limitation

     

    In
      no event shall
      the Actual Deferral Percentage (as defined below) of Highly Compensated
      Employees (as defined in subsection 2.6 and who are eligible to participate
      under the Plan) for any Plan Year exceed the greater of:

     

    
      	(a)  	
              the
                Actual
                Deferral Percentage of all other eligible employees for the Plan
                Year
                multiplied by 1.25; or

            

    

     

    
      	(b)  	
              the
                Actual
                Deferral Percentage of all other eligible employees for the Plan
                Year
                multiplied by 2; provided that the Actual Deferral Percentage of
                such
                Highly Compensated Employees does not exceed that of all other eligible
                employees by more than 2 percentage
                points.

            

    

     

    The
“Actual
      Deferral Percentage” of a group of eligible employees means the average of the
      ratios (determined for the Plan Year and separately for each eligible employee
      in such group) of;

     

    
      	(i)  	
              The
                employee’s salary reduction contributions made pursuant to subsection 4.1,
                to

            

    

     

    
      	(ii)  	
              The
                employee’s Compensation (as defined in subsection 2.3 of the Plan) for
                such Plan Year

            

    

     

    If
      for any Plan
      Year neither of the tests described above in (a) and (b) are met, then the
      participation test limitation shall apply to each Highly Compensated Employee
      such that (within two and one-half months after the end of the Plan Year) his
      share of the Excess Contributions (as defined below) shall be recharacterized
      as
      a Catch-Up Contribution to the extent permissible under subsection 4.13, and
      any
      remaining excess (and the earnings thereon) shall be returned to him to the
      extent necessary to meet the above tests. The
      income or loss
      allocable to the required distribution for the ‘gap period’ between the end of
      the Plan Year and the date of the distribution shall also be
      distributed.
      Excess
      Contributions shall be returned to Highly Compensated Employees in the order
      of
      their contribution amounts, beginning with the largest amounts, within two
      and
      one-half months after the end of the Plan Year. For purposes of this subsection,
      “Excess Contributions” shall mean that portion of the aggregate employee
      contributions which would produce an excessive Actual Deferral Percentage for
      such employees but for the tests described in (a) and (b) above.

     

    The
      mandatory
      disaggregation rules under Treasury Regulations issued under Code Section 410(b)
      shall not apply for plan years beginning on or after January 1, 2005. For plan
      years beginning before January 1, 2005, the portion of this Plan which
      constitutes an ESOP and the portion of this Plan which constitutes the non-ESOP
      portion, and which is mandatorily disaggregated from the balance of the Plan
      pursuant to Treasury Regulations issued under Code Section 410(b), shall be
      tested separately under the Plan.

     

    4.7  Timing
      of
      Employer Payments

     

    Compensation
      reduction contributions under the Plan for each calendar month will be paid
      or
      delivered to the Trustee as soon as practicable after the payday on which the
      Participant’s Compensation is reduced but not later than 15 days after the end
      of the month in which such amounts are withheld.

     

    4.8  Substitute
      Employer Payments

     

    If,
      because of the
      limitations specified in the first sentence of subsection 4.14 the Employer
      is
      prevented from making all or any part of its Payments required under subsection
      4.3 (and which is to be paid to the Trustee) for any Plan Year, then so much
      of
      such Payments that the Employer is so prevented from making may be made by
      Caterpillar Inc. (hereinafter, “Caterpillar”), if authorized by Caterpillar, to
      the extent that any substitute payments are deductible by Caterpillar under
      Code
      Section 404 or any successor statute thereto.

     

    For
      all purposes of
      the Plan, any substitute payments made by Caterpillar in accordance with this
      subsection on behalf of the Employer shall be considered as having been made
      by
      the Employer.

     

    4.9  Top
      Heavy
      Rules

     

    In
      the event that
      the Plan becomes top heavy under Code Section 416, the Plan shall comply with
      the relevant provisions of Code Section 416.

     

    4.10  Average
      Contribution Percentage Test Limitation

     

    In
      no event shall
      the Actual Contribution Percentage (as defined below) of Highly Compensated
      Employees (as defined in subsection 2.6 and who are eligible to participate
      under the Plan) for any Plan Year exceed the greater of:

     

    
      	(a)  	
              the
                Actual
                Contribution Percentage of all other eligible employees for the Plan
                Year
                multiplied by 1.25; or

            

    

     

    
      	(b)  	
              the
                Actual
                Contribution Percentage of all other eligible employees for the Plan
                Year
                multiplied by 2; provided that the Actual Contribution Percentage
                of such
                Highly Compensated Employees does not exceed that of all other eligible
                employees by more than 2 percentage
                points.

            

    

     

    The
“Actual
      Contribution Percentage” of a group of eligible employees means the average of
      the ratios (determined for the Plan Year and separately for each eligible
      employee in such group) of:

     

    
      	(i)  	
              the
                Employer’s contributions made pursuant subsection 4.4 (to the extent that
                such contributions constitute matching contributions under Code Section
                401(m)), to

            

    

     

    
      	(ii)  	
              the
                employee’s Compensation (as defined in subsection 2.3) for such Plan
                Year.

            

    

     

    The
      Employer
      matching contributions allocated to the Highly Compensated Employees will be
      reduced in the order of their contribution amounts beginning with the largest
      amount to the extent necessary to meet the requirements of this subsection
      4.10.
      If, because of the foregoing limitations, a portion of the Employer matching
      contributions allocated to a Highly Compensated Employee may not be credited
      to
      his account for a Plan Year, such portion shall be recharacterized as a Catch-Up
      Contribution to the extent permissible under subsection 4.13, and any remaining
      excess (and the earnings thereon) shall be distributed to such Employee within
      two and one-half months after the end of that Plan Year. 

     

    Notwithstanding
      the
      foregoing, the provisions of this subsection 4.10 shall not apply to the portion
      of the Plan that is a collectively bargained plan to the extent permitted by
      Treasury Regulations.

     

    The
      mandatory
      disaggregation rules under Treasury Regulations issued under Code Section 410(b)
      shall not apply for plan years beginning on or after January 1, 2005. For plan
      years beginning before January 1, 2005, the portion of this Plan which
      constitutes an ESOP and the portion of this Plan which constitutes the non-ESOP
      portion, and which is mandatorily disaggregated from the balance of the Plan
      pursuant to Treasury Regulations issued under Code Section 410(b), shall be
      tested separately under the Plan.

     

    4.11  Aggregation
      Rules

     

    For
      purposes of
      subsections 4.6 and 4.10, all salary reduction contributions and Employer
      matching contributions made under two or more plans that are aggregated for
      purposes of Code Sections 401(a)(4) and 410(b) (other than Code Section
      410(b)(2)(A)(ii)) are to be treated as made under a single plan; and if two
      or
      more plans are aggregated for purposes of Sections 401(k) or 401(m), the
      aggregated plans must satisfy Code Sections 410(b) and 401(a)(4) as if they
      were
      a single plan. A Highly Compensated Employee’s deferral percentage under
      subsection 4.6 and contribution percentage under subsection 4.10 shall be
      determined by treating all cash or deferred arrangements under which such
      employee is eligible as one arrangement.

     

    Notwithstanding
      the
      foregoing, the provisions of this subsection 4.11 shall not apply to the portion
      of the Plan that is a collectively bargained plan to the extent permitted by
      Treasury Regulations.

     

    4.12  Allocation
      of
      Earnings to Distributions of Excess Contributions

     

    The
      earnings
      allocable to distributions of salary reduction contributions exceeding the
      limits of subsection 4.1 (“excess deferrals”), salary reduction contributions
      exceeding the limits of subsection 4.6 (“excess salary reduction contributions”)
      and Employer matching contributions exceeding the limits of subsection 4.10
      (“excess matching contributions”) shall be determined by multiplying the
      earnings attributable to the salary reduction or matching contributions (for
      the
      calendar and/or Plan Year, whichever is applicable), as the case may be, by
      a
      fraction, the numerator of which is the applicable excess amount, and the
      denominator of which is the balance in the Participant’s applicable account or
      accounts on the first day of such year, increased by the contributions allocated
      to such account or accounts for that year.

     

    4.13  Catch-Up
      Contributions

     

    Effective
      as of
      January 1, 2003, a Participant who has attained the age of 50 (or will attain
      the age of 50 during the Plan Year), and whose salary reduction contributions
      are limited either by subsection 4.6 or any of the other limitations set forth
      in this Plan, may elect to have Catch-Up Contributions made to his Account.
      Except for purposes of Employer matching contributions or as otherwise
      specifically provided, Catch-Up Contributions shall be treated as salary
      reduction contributions for all purposes of the Plan, but shall not be subject
      to any of the limitations on salary reduction or other contributions. The
      maximum amount of Catch-Up Contributions that may be made on behalf of a
      Participant for any Plan Year under this Plan and all other plans of the type
      described in Code Section 414(r)(6) maintained by an Employer or Affiliate
      shall
      be equal to the lesser of the dollar amount set forth in the following table
      or
      the salary reduction contributions other than Catch-Up Contributions made to
      such Participant’s Account. The Plan Administrator shall adopt procedures
      providing for eligible Participants to elect to have Catch-Up Contributions
      made
      in accordance with Treasury Regulations issued pursuant to Code Section
      414(v).

     

    
      	
              Plan
                Year

               

            	
              Dollar
                Limitation

               

            
	
              

            	
              

            
	
              2003

            	
              $2,000

            
	
              2004

            	
              $3,000

            
	
              2005

            	
              $4,000

            
	
              2006

               

            	
              $5,000

               

            

    

    4.14  Restrictions
      on
      Employer Payments

     

    The
      Employer’s
      Payments for a Plan Year which are paid or payable to the Trustee are
      conditioned on their deductibility under Code Section 404 or any successor
      statute thereto, shall comply with the limitations set forth in such subsection
      4.5 and shall not exceed an amount equal to the maximum amount deductible on
      account thereof by the Employer for that year for purposes of federal taxes
      on
      income.

     

     

    SECTION
      5  -
      Allocation of
      Employer Payments; Nonforfeiture

     

    Employer
      Payments
      will be allocated to a Participant’s Account as of each payroll date, pro rata,
      according to the compensation reduction amounts of such Participant for that
      period. A Participant shall have a nonforfeitable right to the assets properly
      allocated to his Account and the assets which, pursuant to Section 11, are
      in
      his Account at the time of distribution pursuant to Section 7.

     

     

    SECTION
      6  -
      The Trust Fund
      and the Investment Funds

     

    6.1  The
      Trust
      fund

     

    A
      separate trust
      fund shall be established for purposes of the Plan. The trust fund will consist
      of all money, stocks, bonds, securities and other property held or acquired
      by
      the Trustee in accordance with the Plan and trust agreement.

     

    6.2  The
      Investment
      Funds

     

    
      	(a)  	
              General.
                All
                Participants and beneficiaries shall direct the investment of their
                Accounts from among various investment funds and other alternative
                arrangements designated from time to time by the Benefit Funds Committee.
                The Benefit Funds Committee shall establish a written procedure to
                govern
                such investments, which procedure shall satisfy the requirements
                of ERISA
                Section 404(c) and DOL Reg. §2550.404c-1, including without limitation the
                establishment of at least three investment funds that provide sufficient
                diversification, the identification of the fiduciaries who are obligated
                to carry out participant investment directions, and any limitations
                on
                permissible investments. The Plan Administrator, or a person designated
                by
                the Plan Administrator, shall be the fiduciary designated to insure
                that
                Participant’s investment elections are processed, and to furnish the
                disclosures required under DOL regulations. Pending investment,
                reinvestment or distribution as provided in the Plan, the Trustee
                may
                temporarily retain the assets of any one or more of the investment
                funds
                in cash, commercial paper, short-term government obligations, or
                undivided
                interest or participation in common or collective short-term investment
                funds, including the short-term investment fund of the
                Trustee.

            

    

     

    
      	(b)  	
              Company
                Shares Fund. In addition to the various investment funds and other
                alternative arrangements designated from time to time by the Benefit
                Funds
                Committee pursuant to (a) above, Participants may also elect to have
                a
                portion or all of their Accounts invested by the Trustee in Company
                Shares, as described in subsection 6.5.

            

    

     

    
      	(c)  	
              Investment
                Managers. The Benefit Funds Committee, in its discretion, may appoint
                an
                investment manager to direct the investment and reinvestment of the
                assets
                of any investment fund or sub-fund and terminate any such appointment,
                and
                may direct the Trustee to invest the assets of any investment fund
                or
                sub-fund in any designated commingled or collective fund, mutual
                fund or
                guaranteed investment contract, as the Benefit Funds Committee from
                time
                to time considers appropriate and in the best interests of the
                Participants.

            

    

     

    6.3  Investment
      Fund
      Elections

     

    A
      Participant from
      time to time may elect one or more of the investment funds for the investment
      of
      the Employer Payments on his behalf. Each such election shall be made at such
      time, in such manner, and with respect to such investment funds as the Plan
      Administrator shall determine, and shall be effective only in accordance with
      such rules as the Plan Administrator shall establish and publish from time
      to
      time. If a Participant fails to make an election under this subsection 6.3,
      his
      share of the Employer Payments will be invested in the Short-Term Investment
      Fund.

     

    6.4  Investment
      Fund
      Transfers

     

    A
      Participant or
      his beneficiary may elect that all or a part of the interest of his Account
      in
      an investment fund shall be liquidated and the proceeds thereof transferred
      to
      one or more of the other investment funds. Each such election shall be made
      at
      such time, in such manner, and with respect to such investment funds as the
      Plan
      Administrator shall determine, and shall be effective only in accordance with
      such rules as shall be established and published from time to time by the Plan
      Administrator.

     

    6.5  Investment
      in
      Company Shares

     

    
      	(a)  	
              Timing
                and
                Method. A Participant’s Account will be credited with the appropriate
                number of whole and/or fractional interests in Company Shares (rounded
                to
                the nearest 1/10,000th based upon his election and his authorized
                contributions) which have been purchased by the Trustee in accordance
                with
                applicable Participant elections. Company Shares purchased by the
                Trustee
                shall be either previously issued shares or newly issued shares.
                Company
                Shares shall be purchased by the Trustee from any source including
                Caterpillar at such times and in such manner as shall be determined
                by the
                Trustee in its sole discretion. Newly issued shares sold by Caterpillar
                shall be priced at the closing price for Company Shares on the New
                York
                Stock Exchange on the date of purchase. Company Shares purchased
                from any
                source, including Caterpillar, shall be credited to the Accounts
                of
                applicable Participants at the average price per share paid by the
                Trustee
                for such shares (excluding brokerage commissions, transfer taxes,
                and
                other costs of purchase).

            

    

     

    
      	(b)  	
              Valuation
                and
                Allocation. For purposes of valuing Company Shares and/or crediting
                Company Shares to a Participant’s Account, in order to adjust the number
                of shares credited to such Account, the Plan Administrator may establish
                such rules as he deems appropriate and also may adjust the average
                price
                per share as may be necessary to reflect appropriately the effect
                of any
                stock dividend, stock split, subdivision, reclassification, combination
                or
                other event affecting Company Shares held or acquired hereunder.
                Company
                Shares will be held by the Trustee and may be registered in the name
                of
                the Trustee or its nominee.

            

    

     

    
      	(c)  	
              Allocation
                of
                Related Assets. As soon as practicable after receipt of related assets,
                the Trustee shall allocate such assets to the Company Shares (in
                Participant Accounts) to which such assets are attributable. For
                purposes
                of this paragraph (c), the term “related” means with respect to Company
                Shares held in Participant Accounts and the term “assets” means, any cash
                dividends or proceeds from any rights, warrants and options (which
                shall
                be sold by the Trustee) or any additional Company Shares received
                by the
                Trustee as a stock dividend or because of a stock split or other
                event
                affecting Company Shares. Any related earnings or other property
                received
                by the Trustee after distribution of a Participant’s Account shall also be
                paid or distributed to the person who shall have received Company
                Shares
                in such distribution. Allocations shall be made to the nearest 1/10,000th
                of a Share and the Plan Administrator may establish appropriate rules
                for
                allocations under this paragraph
                (c).

            

    

     

    6.6  Rollovers

     

    Notwithstanding
      any
      other provision of the Plan to the contrary an otherwise eligible employee
      who
      has received an eligible rollover distribution (as defined in Code Section
      402(c)(4)) may contribute to the Trustee all or a portion of such distribution
      (and, if not already a Participant, become a Participant) for the purpose of
      making a Rollover Contribution in accordance with such rules as the Plan
      Administrator may establish; provided, that such Rollover Contribution meets
      the
      requirements of Code Sections 401(a)(31), 402(c), or 408(d)(3).

     

     

    SECTION
      7  -
      Distribution of a
      Participant’s Account

     

    7.1  Amount
      and Form
      of Distribution

     

    Except
      as provided
      otherwise in subsection 7.2, distributions will include all assets in a
      Participant’s Account plus any dividends on Company Shares which have not been
      credited to his Account but which are attributable to Company Shares previously
      allocated to his subaccount in the Caterpillar Common Stock Fund. A Participant
      or beneficiary shall receive a distribution in cash, except that he may elect
      to
      receive his Company shares in kind and any fractional share will be paid in
      cash
      based upon the average price per share the Trustee receives from sales of
      Company Shares for the purpose of making distribution and hardship withdrawals
      shall be made only in cash. In accordance with rules established by the Plan
      Administrator, any such election shall be in a form prescribed by the Plan
      Administrator prior to distribution, and Company Shares distributed to a
      Participant shall be registered in the Participant’s name and/or in the name of
      such other person or persons as the Participant shall designate.

     

    7.2  Time
      of
      Distributions and Withdrawals

     

    
      	(a)  	
              Prior
                to
                termination of employment, no withdrawal of the assets in a Participant’s
                Account may be made, except as provided
                below:

            

    

     

    
      	(i)  	
              A
                Participant
                may withdraw any assets in his Account (other than from the insurance
                contract fund or funds) if he has attained age 59-1/2
                years.

            

    

     

    
      	(ii)  	
              Once
                in any
                12-month period, a Participant may withdraw any Compensation reduction
                contributions under subsection 4.1 of the Plan on account of financial
                hardship for one of the following
                events:

            

    

     

    
      	(A)  	
              The
                need to
                prevent the eviction of the Participant from his principal residence
                or
                foreclosure on the mortgage on the principal residence of the
                Participant;

            

    

     

    
      	(B)  	
              Purchase
                (excluding mortgage payments) of a Participant’s primary
                residence;

            

    

     

    
      	(C)  	
              Payment
                of
                tuition, related educational fees, and room and board expenses for
                the
                next 12 months of post-secondary education for the Participant or
                the
                Participant’s dependents as defined in Code Section
                152;

            

    

     

    
      	(D)  	
              Payment
                of
                medical expenses (as defined in Code Section 213(d)) which the Participant
                is obligated to pay and not otherwise payable under any insurance
                coverage
                of the Participant; 

            

    

     

    
      	(E)  	
              Effective
                August 19, 2005, the Participant’s need to pay for burial or funeral
                expenses for the Participant’s deceased parent, spouse, children or
                dependents; or

            

    

     

    
      	(F)  	
              Effective
                August 19, 2005, the Participant’s need to pay for expenses for the repair
                of damage to the Participant’s principal residence that would qualify for
                the casualty deduction under Code Section 165 (determined without
                regard
                to whether the loss exceeds 10% of adjusted gross
                income);or

            

    

     

    
      	(G)  	
              Any
                other
                reason acceptable under IRS regulations or
                rulings.

            

    

     

    A
      withdrawal is on
      account of financial hardship if it is (a) necessary to meet the immediate
      and
      heavy financial needs of the Participant, and (b) for an amount which is
      required to meet such needs and which is not reasonably available from other
      resources of the Participant. In addition, the Participant must have obtained
      all other distributions and loans permitted under the Plan and any other plans
      or arrangements maintained or sponsored by the Company. Following a hardship
      withdrawal, his contributions pursuant to subsection 4.1 shall be discontinued
      for six months. It is intended that provisions of this subsection 7.2(a)(i)
      satisfy the deemed hardship distribution standard set forth in Treasury
      Regulations. Hardship withdrawals shall be made in accordance with such rules
      as
      may be established by the Plan Administrator.

     

    If
      the Participant
      has an ESOP Account or an ESOP sub-Account (as described in Supplement D),
      then
      he must elect to have paid to him currently available cash dividends that are
      subject to the dividend election provisions described in subsection 6.5(b)
      of
      Supplement C, effective as of the first date allowed for new elections or
      changes in elections in accordance with the provisions of subsection 6.5(b)
      of
      Supplement C.

     

    
      	(iii)  	
              Effective
                as
                of January 1, 2004, a Participant may withdraw the assets in his
                Account
                attributable to his Rollover Contributions. Effective as of May 31,
                2005,
                a Participant may withdraw the assets in his Account attributable
                his EIP
                Part 1 account transferred to the
                Plan.

            

    

     

    
      	(b)  	
              If
                a
                Participant’s employment with the Employer shall be terminated by death,
                the Participant’s Account shall become fully vested and the remaining
                balance of the Participant’s Account shall be distributed among his
                beneficiaries in the manner and form of required minimum distributions
                in
                accordance with Supplement F. Notwithstanding the foregoing, a beneficiary
                may from time to time request withdrawals of all or any portion of
                his
                share of such Participant’s Account; provided that in no event shall the
                sum of any such withdrawals and distributions during any Plan Year
                be less
                than the minimum amount required to be distributed during such Plan
                Year
                in accordance with Supplement F.

            

    

     

    
      	(c)  	
              If
                a
                Participant’s employment with the Employer shall be
                terminated:

            

    

     

    
      	(i)  	
              because
                of
                total and permanent disability, which, for purposes of the Plan,
                shall
                mean the Participant is entitled to primary disability benefits under
                Title II of the federal Social Security Act;
                or

            

    

     

    
      	(ii)  	
              because
                of
                retirement in accordance with the provisions of the Employer retirement
                plan which applies in his case;

            

    

     

    the
      Participant’s
      Account shall become fully vested. Distribution shall be made in accordance
      with
      such Participant’s consent, except that in accordance with paragraphs 7.2(e) and
      (f) below and any rules or procedures established by the Plan Administrator
      or
      its delegate, the Participant may elect to defer distribution of the assets
      from
      the Plan and later have such assets distributed in a lump sum or withdrawn
      through periodic installments. The Plan Administrator or its delegate may
      establish minimum distribution amounts.

     

    
      	(d)  	
              The
                following
                applies in any case where the Participant’s employment with the Employer
                and its subsidiaries shall have been terminated for any reason other
                than
                as specified in paragraphs 7.2(b) and 7.2(c). No distribution shall
                occur
                before the Participant attains (or would have attained) age 65 years
                unless the Participant elects otherwise. Any distribution under this
                paragraph shall include all assets in the Participant’s Account and the
                portion of the corresponding Employer Account vested at termination,
                and
                shall be subject to the provisions of subparagraph
                7.2(e).

            

    

     

    
      	(e)  	
              Notwithstanding
                anything contained herein to the contrary, a Participant or a beneficiary
                who is the surviving spouse of a Participant may elect to defer
                distributions of the assets otherwise distributable under the Plan
                in
                accordance with this subsection 7.2 and any rules or procedures
                established by the Plan Administrator or its delegate. A Participant
                or a
                beneficiary who is the surviving spouse of a Participant may revoke
                his
                election to defer distribution. Upon such revocation, distribution
                shall
                occur in accordance with the applicable provisions of this subsection
                7.2.

            

    

     

    
      	(f)  	
              [Reserved.]

            

    

     

    
      	(g)  	
              [Reserved.]

            

    

     

    7.3  To
      Whom
      Distributions are Made

     

    Distributions
      will
      be made to the Participant. However, if the Participant is deceased at the
      time
      of distribution, the distribution will be made to the beneficiary or
      beneficiaries designated by the Participant or, if no beneficiary has been
      so
      designated or survives, as provided in subsection 7.4.

     

    7.4  Designation
      of
      Beneficiaries

     

    The
      Account of a
      Participant who dies before his Account has been distributed in full shall
      be
      distributed to his beneficiary or beneficiaries as provided herein:

     

    
      	 	
              (a)

            	
              Each
                Participant may file with the Plan Administrator, in such form as
                the Plan
                Administrator shall from time to time require, a designation of a
                beneficiary or beneficiaries (including contingent or successive
                beneficiaries). If more than one beneficiary is designated, such
                designation shall also specify the manner in which payments are to
                be
                divided. The beneficiaries may be changed at any time or times by
                the
                filing of a new designation with the Plan Administrator, without
                the
                necessity of obtaining the consent of any beneficiary, subject to
                the
                rights of the Participant’s spouse under (b) below. No designation of a
                beneficiary or change thereof shall be effective until it has been
                received by the Plan Administrator. The Plan Administrator shall
                be
                entitled to rely upon the last designation filed by the Participant
                prior
                to his death.

            

    

     

    
      	 	
              (b)

            	
              In
                the case
                of a Participant who is married throughout the one-year period ending
                on
                the date of his death, any beneficiary designation which has the
                effect of
                causing any portion of a Participant’s Account to be paid to any
                beneficiary other than the surviving spouse of the Participant shall
                be
                effective only if (i) such election is consented to, in writing,
                by the
                person who was the Participant’s spouse for the one-year period ending on
                the date of the Participant’s death, and the spouse’s signature is
                witnessed either by a representative designated by the Plan Administrator
                or by a notary public, or (ii) it is established, to the satisfaction
                of
                the Plan Administrator, that the Participant had not been married
                for one
                year on the date of his death or that, if the Participant had been
                married
                for one year on the date of his death, that the consent of the spouse
                could not be obtained when the designation was filed because the
                Participant was unable to locate his spouse, the Participant had
                been
                abandoned by his spouse and had a court order to such effect, or
                that such
                other circumstances existed as would justify a failure to obtain
                the
                spouse’s consent under Code Section
                417.

            

    

     

    
      	 	
              (c)

            	
              To
                the extent
                provided in any qualified domestic relations order, a former spouse
                of the
                Participant shall be treated as the Participant’s spouse at the time of
                his death (and as having been married to the Participant for a one-year
                period at the time of his death).

            

    

     

    
      	 	
              (d)

            	
              If
                a
                Participant dies without having a beneficiary designation in force,
                or if
                at the time of the Participant’s death all designated beneficiaries have
                died, payment shall be made to the Participant’s spouse at the time of his
                death if they had been married for at least one year at the time
                of his
                death; or if the Participant’s spouse predeceases him or they had been
                married for less than one year,
                then
                in
                accordance with the Participant’s beneficiary designation, if any, in
                effect under the Caterpillar Inc. Employees’ Investment Plan, and if no
                such designation is effective, then to the Participant’s
                estate.

            

    

     

    7.5  Loans
      to
      Participants

     

    The
      Benefit Funds
      Committee is authorized to establish a loan program under this Plan and the
      Plan
      Administrator or its delegate shall administer a program and shall establish
      and
      modify related rules and procedures. Such loans shall be available to all
      Participants hereunder on a reasonably equivalent basis, shall be adequately
      secured and shall bear a reasonable rate of interest. Loans shall originate
      so
      as to not be a taxable distribution, by qualifying for the exception under
      code
      section 72(p). The Benefit Funds Committee shall direct the Trustee to make
      a
      loan from the trust fund to a Participant subject to the following:

     

    
      	(a)  	
              The
                principal
                amount of any loan made to a Participant, when added to the outstanding
                balance of all other loans made to the Participant from all qualified
                plans maintained by the Employers, shall not exceed the lesser
                of:

            

    

     

    
      	(i)  	
              $50,000,
                reduced by the excess (if any) of the highest outstanding balance
                during
                the one-year period ending immediately preceding the date of the
                loan,
                over the outstanding balance on the date of the loan, of all such
                loans
                from all such plans, or

            

    

     

    
      	(ii)  	
              one-half
                of
                the Participant’s vested Account under the
                plan.

            

    

     

    
      	(b)  	
              Each
                loan
                must be evidenced by a written note in a form approved by the Plan
                Administrator, shall bear interest at a reasonable rate, and shall
                require
                substantially level amortization (with payments at least quarterly)
                over
                the term of the loan.

            

    

     

    
      	(c)  	
              Each
                loan
                shall specify a repayment period that shall not extend beyond five
                years.
                However, the five year limit shall not apply to any loan used to
                acquire
                any dwelling unit which within a reasonable time is to be used (determined
                at the time the loan is made) as the principal residence of the
                Participant.

            

    

     

    Any
      loan made under
      the Plan on or before December 31, 1986 shall be governed by the terms of the
      Plan in effect on or before that date. Any loan made under the Plan after
      December 31, 1986 (including any renegotiation, extension, revision or renewal
      after that date of a loan made on or before that date) shall be subject to
      the
      foregoing limitations of this subsection. If a Participant’s employment
      terminates and any loan or portion of a loan made to him, together with accrued
      interest thereon, remains unpaid, an amount equal to such loan or any part
      thereof, together with accrued interest thereon, shall be charged to the
      Participant’s Account after all other adjustments required under the Plan, but
      before any distributions pursuant to subsection 7.1 hereof. In determining
      the
      net worth of an investment fund as of an accounting date, the Benefit Funds
      Committee shall disregard both (i) any notes held by the Trustee which evidences
      loans made to Participants under this subsection 7.5, and (ii) any interest
      and
      principal payments on such loans received by the Trustee since the last
      preceding accounting date. For purposes of adjusting a Participant’s Accounts
      under subsection 11.4 hereof, the Plan Administrator shall exclude from the
      credit balance in a Participant’s Account the unpaid amount of any loan made to
      him (disregarding any principal payments made since the last preceding
      accounting date). Interest paid by a Participant on a loan made to him under
      this subsection 7.5 shall be credited to the accounts of such Participant as
      of
      the accounting date which ends the accounting period of the Plan during which
      such interest payment was made, after all other adjustments required under
      the
      Plan as of that date have been completed. Loan repayment will be suspended
      under
      the Plan as permitted under Code Section 414(u).

     

    7.6  Direct
      Rollovers

     

    If
      payment of a
      Participant’s benefits constitutes an eligible rollover distribution under Code
      Section 402(c)(4), then the Participant or other eligible distributee may elect
      to have such distribution paid directly to an eligible retirement plan described
      in Code Section 402(c)(8)(B). Each election under this subsection 7.6 shall
      be
      made at such time and in such manner as the Plan Administrator shall determine,
      and shall be effective only in accordance with such rules as shall be
      established from time to time by the Plan Administrator.

     

     

    SECTION
      8  -
      Participant’s
      Annual Statement

     

    A
      Participant will
      be furnished an annual statement showing the assets credited to this Account.
      Each such statement shall be conclusive on the Participant unless written
      exceptions or objections to such statement are filed within thirty days after
      the date furnished to the Participant.

     

     

    SECTION
      9  -
      Voting of Company
      Shares

     

    All
      Company Shares
      held or acquired by the Trustee under the Plan will be registered in the name
      of
      the Trustee or its nominee. Each Participant shall be entitled to vote the
      Shares in his Account (insofar as practicable considering fractional interests
      in shares) by providing written direction to the Trustee as to how such Shares
      should be voted. A copy of the notice and proxy statement for each meeting
      of
      the holders of Company Shares will be mailed to each Participant at the same
      time mailed to shareholders, together with an appropriate form for the
      Participant’s use in instructing the Trustee with respect to voting the Company
      Shares that, at the record date for determination of the shareholders entitled
      to notice of, and to vote at, the meeting, are both (i) credited to the
      Participant’s Account and (ii) of record in the name of the Trustee or its
      nominee.

     

     

    SECTION
      10  -
      Trustee and Plan
      Administrator

     

    10.1  The
      Trustee

     

    The
      Plan
      Administrator shall designate a corporate Trustee (or Trustees) referred to
      herein as “the Trustee” to act under the Plan and will enter into and execute
      such trust agreement or agreements -- referred to herein as the “trust
      agreement” -- with the Trustee as it may consider necessary or appropriate in
      order to carry out the provisions of the Plan. The Plan Administrator may at
      any
      time remove Trustee and appoint a successor Trustee or Trustees. The Plan
      Administrator from time to time may enter into such other agreements with a
      Trustee or other parties, make such amendments to such agreements and take
      such
      other steps as they may deem necessary or desirable, without reference to (or
      action by) any Participant or beneficiary of a Participant. Except to the extent
      expressly provided in the Plan, no Participant or beneficiary of a Participant
      shall have any interest under any such agreement. A Trustee and the Plan
      Administrator may, by agreement in writing, arrange for the delegation by such
      Trustee of any of the functions of such Trustee to the Employer, any one or
      more
      employees of Caterpillar or the Employer, the Plan Administrator, or such banks
      or trust companies as the Plan Administrator shall select.

     

    10.2  Plan
      Administrator

     

    The
      Plan
      Administrator shall be the Investment Plan Committee. In the administration
      of
      the Plan, the Plan Administrator shall have the following powers, rights and
      duties in addition to those vested in him elsewhere in the trust agreement
      and
      the Plan:

     

    
      	(a)  	
              To
                adopt such
                rules of procedure and regulations as in his opinion may be necessary
                for
                the proper and efficient administration of the Plan and as are consistent
                with the Plan and the trust
                agreement.

            

    

     

    
      	(b)  	
              To
                enforce
                the Plan in accordance with its terms and with such applicable rules
                and
                regulations as are adopted by the Plan Administrator as
                above.

            

    

     

    
      	(c)  	
              To
                determine
                all questions arising under the Plan, including the power to determine
                the
                rights and eligibility of Participants (and their beneficiaries)
                and the
                value of their respective Accounts under the
                Plan.

            

    

     

    
      	(d)  	
              To
                maintain
                and keep adequate records concerning the respective Accounts of
                Participants as specified herein and concerning the Plan Administrator’s
                decisions and actions which records shall be open to the inspection
                of the
                Employer at all reasonable times.

            

    

     

    The
      Plan
      Administrator may act or take action regarding financial aspects of the Plan
      in
      accordance with any direction provided by the Benefit Funds Committee
      established pursuant to resolution of the Board of Directors of Caterpillar.
      The
      Plan Administrator may execute any instrument or document by signing one
      instrument or document or multiple counterparts of such instrument or document,
      and may authorize any agent to sign any document on his behalf. Subject to
      subsection 13.3, and unless otherwise expressly provided in any applicable
      collective bargaining agreement, any decision by the Plan Administrator on
      any
      matter within his discretion shall be final, binding and conclusive upon all
      Participants and may be relied upon by the Employer, employees, the Trustee,
      and
      all other persons whomsoever. The certificate of the Plan Administrator that
      he
      has taken or authorized any action shall be conclusive in favor of any person
      acting in reliance thereon. The Plan Administrator shall furnish to the Employer
      such information in his possession or within his control as the Employer
      considers necessary to perform its functions hereunder and under the trust
      agreement. To the extent permitted by law, neither the Plan Administrator nor
      any director, officer, or employee of Caterpillar or the Employer shall incur
      any personal liability of any nature in connection with any act done or omitted
      to be done in good faith under or in connection with the Plan. The Plan
      Administrator shall have discretionary authority in exercising all of its
      powers, rights and duties under the Plan.

     

     

    SECTION
      11  -
      Accounting

     

    11.1  Separate
      Accounts

     

    The
      Plan
      Administrator will maintain a separate Account in the name of each Participant
      which will reflect his share of Employer Payments that are credited to such
      Account pursuant to subsection 11.4, if any, and the income, losses,
      appreciation and depreciation attributable thereto. In addition, separate
      sub-accounts will be maintained for each Participant’s Account which will
      reflect the value of any interest in the respective investment funds
      attributable to such Account. The Plan Administrator also may maintain such
      other accounts in the name of a Participant or otherwise as he considers
      advisable, correct a Participant’s Account and, where appropriate, charge the
      Participant’s Employer for any expense or cost of such correction.

     

    11.2  Accounting
      Dates
      and Plan Records

     

    A
“regular
      accounting date” is the last day of each Plan Year and each business day during
      the Plan Year. A “special accounting date” is any date designated as such by the
      Plan Administrator in the event of termination or partial termination of the
      Plan as respects the Employer. The term “accounting date” includes both a
      regular accounting date and a special accounting date. Plan records shall be
      maintained on a calendar year basis.

     

    11.3  Employer
      Payments Considered Made on Last Day of Each Payroll Period

     

    For
      purposes of
      this Section, the Employer’s Payment for any payroll period will be considered
      to have been made on the last day of that period, regardless of when paid to
      the
      Trustee.

     

    11.4  Adjustment
      of
      Participants’ Accounts

     

    As
      of each accounting date, the Plan Administrator shall:

     

    
      	(a)  	
              First,
                charge to a
                Participant’s Account all payments or distributions made since the last
                preceding accounting date that have not been charged
                previously;

            

    

     

    
      	(b)  	
              Next,
                allocate
                and credit dividends and other cash proceeds on allocated Company
                Shares
                to a Participant’s Account in the same manner as provided in subsection
                6.5;

            

    

     

    
      	(c)  	
              Next,
                credit a
                Participant’s Account with its pro rata share of any increase or charge
                such account with its pro rata share of any decrease in the value
                of the
                adjusted net worth (as defined below) of each investment fund (other
                than
                the Caterpillar Common Stock Fund) in which such Account has an interest
                as of that date;

            

    

     

    
      	(d)  	
              Next,
                credit to a
                Participant’s Account the portion of the Employer Payment that is
                allocable to a Participant’s investment fund sub-account as of that date,
                including the allocation of Company Shares to the Participant’s subaccount
                in the Caterpillar Common Stock Fund in the same manner as provided
                in
                subsection 6.5;

            

    

     

    
      	(e)  	
              Finally,
                make the
                appropriate investment fund transfers, as provided in subsection
                6.4.

            

    

     

    The
“adjusted
      net
      worth” of an investment fund (other than the Caterpillar Common Stock Fund) as
      of any accounting date means the then net worth of such investment fund as
      determined by the Trustee, less an amount equal to Employer Payments not yet
      allocated to Participants’ Accounts.

     

    11.5  Charging
      Payments and Distributions

     

    All
      payments or
      distributions made to a Participant or his beneficiary will be charged to the
      appropriate Participant Accounts.

     

     

    SECTION
      12  -
      No Reversion to
      Employer

     

    The
      Employer shall
      not have any beneficial interest in the trust fund, or any part thereof, and
      no
      part of the trust fund shall ever revert or be repaid to the Employer, either
      directly or indirectly.

     

     

    SECTION
      13  -
      Miscellaneous

     

    13.1  Information
      to
      Participants

     

    Any
      notice,
      statement or other communication required or permitted to be given hereunder
      to
      an employee, a Participant or beneficiary of a Participant will be properly
      given if delivered or mailed, postage prepaid, to the employee, Participant
      or
      beneficiary of a Participant at his last post office address shown on the
      Employer’s records, or if (in the case of an employee) delivered to him at his
      normal work station. Any notice or other communication from an employee,
      Participant or beneficiary to the Plan Administrator, the Employer, or the
      Trustee shall be in such form as may be prescribed by the Plan Administrator
      and
      shall be properly given or filed if delivered or mailed by registered or
      certified mail, postage prepaid, to the Plan Administrator, the Employer or
      the
      Trustee, as the case may be, at such address as may be specified from time
      to
      time by the Plan Administrator.

     

    13.2  Nonassignability

     

    Except
      with respect
      to indebtedness owing to the Employer and except as provided in Section 16,
      the
      interests of a Participant and his beneficiaries under the Plan are not in
      any
      way subject to their debts or other obligations and may not be voluntarily
      or
      involuntarily sold, transferred or assigned. When a Participant or his
      beneficiary is under legal disability, or in the Plan Administrator’s opinion is
      in any way incapacitated so as to be unable to manage his financial affairs,
      the
      Plan Administrator may have the Trustee make distributions to the Participant’s
      or beneficiary’s legal representatives for his benefit, or the Plan
      Administrator may have the Trustee apply any distribution for the benefit of
      the
      Participant or beneficiary in any manner that the Plan Administrator determines.
      Any amount alienated or assigned to the Employer shall not exceed 10% of the
      amount payable under the Plan to the Participant or beneficiary and such
      alienation or assignment shall be revocable at any time by the person making
      such alienation or assignment.

     

    13.3  Notice
      of Claim
      Denial

     

    The
      Plan
      Administrator or his delegate will provide adequate notice in writing to any
      employee, Participant or beneficiary whose claim for benefits under the Plan
      has
      been denied, setting forth the specific reasons for such denial. Subject to
      the
      express provisions of any applicable collective bargaining agreement, the
      employee, Participant or beneficiary will be given an opportunity for a full
      and
      fair review by the Plan Administrator (or his delegate) of the decision denying
      the claim. The employee, Participant or beneficiary will be given 60 days from
      the date of the notice denying such claim within which to request such
      review.

     

    13.4  Records

     

    The
      records of the
      Plan Administrator, the Employer, and the Trustee with respect to the Plan
      and
      trust fund shall be conclusive on all employees, Participants and beneficiaries
      unless shown to the Plan Administrator’s satisfaction to be
      incorrect.

     

    13.5  Absence
      of
      Guaranty

     

    Neither
      the
      Trustee, the Plan Administrator, Caterpillar nor the Employer in any way
      guarantees the trust fund from loss of depreciation, or the payment of any
      cash
      or other assets which may be or become due to any person from the trust fund.
      To
      the extent permitted by law, the liability of the Trustee to make any payment
      or
      distribution under the Plan will be limited to the available assets of the
      trust
      fund.

     

    13.6  Mistake
      of
      Fact

     

    Any
      mistake of fact
      in any certificate, notice, or other document filed with any employee,
      Participant, beneficiary, the Employer, the Plan Administrator, the Trustee
      or
      any other person shall be corrected when it becomes known; and the Plan
      Administrator, insofar as may be practicable, shall make any adjustment required
      in a manner which, in his sole discretion, is equitable.

     

    13.7  Action
      by
      Employer

     

    Any
      action required
      or permitted to be taken by the Employer hereunder may, except as otherwise
      expressly provided, be taken by the President or any Vice President of the
      Employer or by any other person designated by the President or any Vice
      President of the Employer to act for the Employer.

     

    13.8  Employment
      Rights

     

    Participation
      in
      the Plan will not give any employee of the Employer any right to be retained
      in
      the service of the Employer or its subsidiaries, nor any right to claim any
      benefit under the Plan unless such right or claim has specifically accrued
      under
      the terms of the Plan.

     

    13.9  Gender
      and
      Number

     

    Where
      the context
      admits, words in the masculine gender shall include the feminine gender, the
      plural shall include the singular, and the singular shall include the
      plural.

     

    13.10  Waiver
      of
      Notice

     

    Any
      notice required
      under the Plan may be waived by the person entitled thereto.

     

    13.11  Attorneys,
      Agents, Accountants, etc.

     

    The
      Plan
      Administrator may employ such agents, attorneys, accountants, and other persons
      (who also may be employed by Caterpillar or the Employer) as in his opinion
      may
      be necessary or desirable for proper administration of the Plan and trust
      agreement and to advise the Plan Administrator, and the Employer may pay them
      a
      reasonable compensation. The Plan Administrator may delegate to any agent,
      attorney, accountant, or other person selected by him, any power or duty vested
      in, imposed upon or granted to him by this Plan or the trust agreement, and
      the
      Plan Administrator may act or refrain from acting on the advice or opinion
      of
      reputable agents, attorneys, accountants or other persons selected as above
      with
      reasonable diligence, without liability for so doing and without court
      action.

     

    13.12  Limitation
      of
      Liability

     

    To
      the extent
      permitted by law, neither the Trustee, the Plan Administrator, Caterpillar,
      the
      Employer nor any director, officer or employee of Caterpillar or the Employer,
      shall have any personal liability of any nature for any act done or omitted
      to
      be done in good faith, under or in connection with the Plan and the trust fund,
      including but not limited to delay in the making of any payment, investment
      or
      distribution. To the extent permitted by law the Trustee, the Plan
      Administrator, and every director, officer and employee of Caterpillar or the
      Employer shall be indemnified and saved harmless by the Employer against any
      claims, and the expenses of defending against such claims, resulting from any
      action or conduct relating to the administration of the Plan and/or the trust
      fund. The Employer shall pay such claim and/or expenses as the Plan
      Administrator shall direct. Any payment or distribution to a Participant, or
      in
      case of his death to his beneficiary, at the last known post office address
      of
      the distributee on file with the Employer, shall constitute a complete
      acquittance and discharge to the Plan Administrator, Caterpillar, the Employer
      and the Trustee with respect thereto unless the Plan Administrator shall have
      received prior written notice of any change in the condition or status of such
      distributee. Neither the Plan Administrator, Caterpillar, the Employer, nor
      the
      Trustee shall have any duty or obligation to search for or ascertain the
      whereabouts of any Participant or his beneficiary. Except as otherwise may
      be
      required by the Employee Retirement Income Security Act of 1974 (“ERISA”), as
      amended, the Employer will have no liability under this Plan except to make
      the
      Payments required under the Plan. Any distributions under the Plan will be
      made
      solely from the trust fund held by the Trustee.

     

    13.13  Limitation
      of
      Rights

     

    Benefits
      under the
      Plan shall be payable out of the trust fund and no employee, Participant,
      beneficiary or other person shall have any rights under the Plan with respect
      to
      the trust fund (or against Caterpillar, the Trustee, the Plan Administrator
      or
      the Employer) except as specifically provided in the Plan.

     

    13.14  Separate
      Administration

     

    The
      Plan
      Administrator, from time to time, may provide for the segregation of trust
      assets allocable to the employees of the Employer, or any group of employees
      of
      the Employer, and may provide for the administration and investment of such
      assets under a substantially similar plan and a trust forming a part thereof.
      No
      such segregation or transfer under a substantially similar plan shall constitute
      a termination of this Plan or a permanent discontinuance of Employer Payments
      hereunder with respect to employees affected thereby.

     

    13.15  Courts

     

    In
      case of any
      court proceedings involving the Trustee, the Plan Administrator, the Employer,
      or the trust fund, only the Employer, the Plan Administrator, the Trustee and
      other named parties shall be necessary parties thereto, and no other employee,
      Participant, beneficiary or other person shall be entitled to any notice of
      process. Any final judgement entered in any such proceedings shall be conclusive
      upon the Employer, the Plan Administrator, the Trustee, all employees,
      Participants and all beneficiaries of the trust fund.

     

    13.16  Merger
      of
      Plan

     

    No
      merger or
      consolidation of the Plan with (or transfer in whole or in part of the assets
      or
      liabilities of the Plan to) any other plan maintained or to be established
      for
      the benefit of all or some of the Participants in this Plan, shall be permitted
      unless each Participant in this Plan would (if either this Plan or such other
      plan then terminated) receive a benefit immediately after the merger,
      consolidation, or transfer which is equal to or greater than the benefit such
      Participant would have been entitled to receive immediately before the merger,
      consolidation, or transfer (if this Plan had then terminated).

     

     

    SECTION
      14  -
      Amendment and
      Termination

     

    Subject
      to the
      provisions of any applicable collective bargaining agreement, the Employer
      specifically preserves the right to amend, modify, suspend or terminate the
      Plan
      at any time by action of its Board of Directors, or by action of any person
      or
      persons designated by such Board of Directors to act on its behalf, provided,
      however, that (1) no such action shall be effective as respects any other
      employer and the employees employed by it unless such action is approved by
      such
      other employer; (2) except to the extent considered necessary by the Plan
      Administrator to satisfy Internal Revenue Service or other governmental
      requirements, no such action shall reduce a Participant’s benefits below an
      amount equal to the benefits which he would be entitled to receive if his
      employment with the Employer and all of its subsidiaries was terminated for
      a
      reason other than death, retirement or total and permanent disability on the
      day
      of such action; (3) under no condition shall any such action result in the
      return or prepayment to the Employer of any portion of the trust fund, or the
      income therefrom, or result in the distribution thereof for the benefit of
      anyone other than Participants or their beneficiaries; and (4) no such action
      shall substantially change the duties of either the Plan Administrator or the
      Trustee without their consent. If the Plan is terminated or if all Employer
      Payments are permanently discontinued, then all amounts credited to Accounts
      of
      Participants may be held for distribution as provided in Section 7.

     

    Upon
      termination or
      partial termination of the Plan or permanent discontinuance of Employer Payments
      (other than in the event of merger, consolidation or liquidation which does
      not
      result in termination or permanent discontinuance of Employer Payments, as
      provided below) as respects any employer or any group of employees of an
      employer, each Participant with respect to whom the Plan shall have been
      terminated or Employer Payments permanently discontinued shall receive
      distribution of all assets in his Account in such manner as the Plan
      Administrator shall determine. In the event of the merger, consolidation or
      liquidation of the Employer with or into another corporation (other than a
      related corporation, as defined in Section 15), the merged or consolidated
      corporation with the Plan Administrator’s consent may adopt the Plan with all
      obligations and rights of such former Employer hereunder (including, without
      limitation, those specified in this Section 14) or may substitute for the Plan
      another plan. In such event (or the merger or consolidation of two or more
      such
      related corporations, one of which is the Employer), the Plan shall not be
      deemed to be terminated nor the Employer Payments permanently discontinued
      within the meaning of Section 15 or this Section 14 unless a substituted plan
      contains provisions which would have constituted changes or modifications
      prohibited by this Section 14 had they been adopted. Any amendment or
      termination of the Plan shall be effective as of such date as the Board of
      Directors of the Employer (or such a related corporation) may
      establish.

     

     

    SECTION
      15  -
      Related
      Corporations

     

    Any
      related
      corporation may adopt the Plan and become a party to the trust agreement
      by:

     

    
      	(a)  	
              filing
                with
                the Plan Administrator and the Trustee a written instrument to that
                effect, which instrument shall be in such form as the Plan Administrator
                may require; and

            

    

     

    
      	(b)  	
              filing
                with
                the Trustees a certified copy of a form of consent to such action
                executed
                by the Plan Administrator.

            

    

     

    Any
      related
      corporation may withdraw from participation in the Plan upon thirty days’ prior
      written notice to the Trustee and the Plan Administrator, and upon such
      withdrawal for any reason (other than in the event of merger, consolidation,
      or
      liquidation which does not result in the Plan being terminated nor the Employer
      Payments permanently discontinued as provided in Section 14), the Plan then
      shall terminate insofar as, but only insofar as, such related corporation is
      concerned and each Participant employed by such related corporation then shall
      receive distribution of all assets in his Account in such manner as the Plan
      Administrator shall determine. 

     

     

    SECTION
      16  -
      Qualified
      Domestic Relations Orders

     

    Notwithstanding
      any
      provisions of the Plan to the contrary, if a Participant’s Account is subject to
      a “qualified domestic relations order” entered on or after January 1, 1985, as
      that term is defined and applied under Code Section 414, then

     

    
      	(a)  	
              part
                or all
                of such Account shall be payable to one or more alternate payees
                (as such
                term in the singular number is defined in such Code Section 414)
                pursuant
                to the terms of such order, and

            

    

     

    
      	(b)  	
              the
                balance
                remaining, if any, shall continue to be held in such Account (or
                shall be
                distributed to the Participant as otherwise permitted under the
                Plan).

            

    

     

    Any
      such order may
      not require the Plan to provide any type or form of benefit or any option not
      otherwise provided under the Plan, may not require the Plan to provide increased
      benefits (determined on the basis of actuarial value), and may not require
      the
      payment of benefits to an alternate payee which are required to be paid to
      another alternate payee under another order previously determined to be a
      qualified domestic relations order. For purposes of this Section 16, the term
      “Participant” shall include “former Participant.” The Plan Administrator may
      direct the Trustee to distribute benefits to an alternate payee on the earliest
      date specified in a qualified domestic relations order, without regard to
      whether such distribution is made or commences prior to the Participant’s
      earliest retirement age (as defined in Code Section 414(p)(4)(B)), or the
      earliest date that the Participant could commence receiving benefits under
      the
      Plan.

     

      SUPPLEMENT
      A

    Participating
      Groups

     

     

    The
      employees of
      the following Participating Groups are eligible to participate in the
      Plan:

     

    International
      Association of Machinists and Aerospace Workers Local 389 (and as otherwise
      provided under the central collective bargaining agreement); International
      Union
      of Operating Engineers Local 82 International Brotherhood of Electrical Workers
      (to the extent provided under a collective bargaining agreement); Welders’ Union
      Open Shop Employees with jobs that are covered under a collective bargaining
      agreement that requires coverage under the Plan; TurboFab Employees (provided
      that effective as of January 1, 2003, TurboFab Employees shall no longer be
      eligible to participate under the Plan)

     

      SUPPLEMENT
      B

    Modified
      Benefits

     

    [Reserved.]

     

      SUPPLEMENT
      C

    After-Tax
      Contributions
      and
      Employer Matching Contributions

     

     

    SECTION
      1  -
      Purpose

     

    1.1  Purpose
      and Use
      of Terms

     

    The
      provisions of
      this Supplement modify the provisions of the Solar Savings and Investment Plan
      (the “Plan”), and unless otherwise expressly qualified by the context of this
      Supplement, the conditions contained in the Plan shall be applicable to this
      Supplement and terms used in this Supplement shall have the meanings defined
      in
      the Plan. This Supplement becomes effective on January 1, 2004 and shall be
      applicable only to otherwise eligible employees who are members of a group
      to
      whom this Supplement has been extended by an Employer.

     

     

    SECTION
      2  -
      Participation and
      Service

     

    2.1  Voluntary
      Participation

     

    Participation
      under
      this Supplement is optional on the part of eligible employees (as defined in
      subsection 3.1 of the Plan). Effective as of January 1, 2004, subject to
      subsection 5.3 of this Supplement, an eligible employee may elect to make
      after-tax contributions to the Plan for each plan year in accordance with
      Section 3. If an eligible employee does not elect to become a participant as
      of
      his initial eligibility date, he may elect to become a participant as of the
      first day of a subsequent payroll period, if he then meets the requirements
      of
      subsection 3.1 of the Plan. Employees will be notified of the eligibility
      requirements as specified in the Plan through such general announcements as
      the
      Plan Administrator shall authorize, but neither the Employers, the Plan
      Administrator, nor the Trustee shall have any duty or obligation to notify
      any
      individual of any date as of which he is eligible to become a participant in
      this Supplement. 

     

    2.2  Service

     

    
      	(a)  	
              This
                paragraph applies to employees who are hired for an indefinite period
                and
                are employed on the prevailing full-time schedules of their respective
                departments. For purposes of this Supplement C, the term “service” means
                the total period elapsed subsequent to an employee’s first date of hiring
                as an employee by any of the employers, exclusive of any period during
                which the employee is not, or was not, in active service as an employee
                of
                any employer (whether resulting from discharge, suspension, resignation
                or
                quit, or any other cause) except there shall be included in such
                total
                period of service all periods of absence pursuant to leave of absence
                granted by an employer, all periods of layoff after the employee’s last
                date of hiring as an employee by any of the employers, and up to
                12 months
                of each prior period of layoff which commenced after December 1,
                1976, by
                any of the employers. Upon reemployment following any break in service,
                (a) prior service shall be reinstated regardless of duration of such
                break
                in service in accordance with the preceding sentence; and (b) if
                such
                break in service occurs after December 1, 1976 and the employee is
                reemployed by an employer within one year from the day he last performed
                an hour of service for an employer, he will receive additional service
                for
                his period of absence from active service with an employer equal
                to the
                lesser of (i) his period of absence, or (ii) one year, less any period
                of
                absence otherwise credited. In the case of a maternity or paternity
                absence (as defined below), an employee will not be deemed to have
                incurred a break in service for the twelve consecutive month period
                beginning on the first anniversary of the first date of such
                absence.

            

    

     

    A
“maternity
      or
      paternity absence” shall mean an employee’s absence from work because of the
      pregnancy of the employee or birth of a child of the employee, the placement
      of
      a child with the employee in connection with the adoption of such child by
      the
      employee, or for purposes of caring for the child immediately following such
      birth or placement. Solely for the purposes of this subsection, the term
“employer” shall, unless otherwise provided by the Company, include any
      organization (whether a corporation, partnership, sole proprietorship or other
      business entity), regardless of when formed or acquired, as well as all of
      its
      affiliates and predecessors, the control of which organization or a substantial
      part of the assets of which organization have been acquired (whether before
      or
      after the effective date hereof) by the Company or any of its subsidiaries.
      Notwithstanding the foregoing provisions of this subsection, service shall
      not
      be duplicated for the same period of service with more than one employer. The
      records of the respective employers with respect to an employee’s service will
      be conclusive unless shown to the Plan Administrator’s satisfaction to be
      incorrect.

     

    
      	(b)  	
              This
                paragraph applies to employees who are not in the class of employees
                defined in paragraph 2.2(a), notwithstanding any provisions of the
                Plan to
                the contrary. “Service” shall be determined as
                follows:

            

    

     

    
      	(i)  	
              An
                employee
                shall receive a full year of service for each Computation Year for
                which
                he is credited with 1,000 or more Hours Worked (as such terms are
                defined
                below), subject to the following provisions of this
                paragraph.

            

    

     

    
      	(ii)  	
              “Computation
                Year” shall mean a calendar year period, coinciding with the annual 52/53,
                26 or 12 pay periods applicable to employees who are paid weekly,
                biweekly
                or monthly, respectively.

            

    

     

    
      	(iii)  	
              “Hours
                Worked” shall mean (A) each hour for which an employee is paid or entitled
                to payment for the performance of duties for an employer; (B) each
                hour
                during which no such duties are performed but for which an employee
                is
                paid by an employer for vacation, holiday, illness, disability, layoff,
                jury duty, military duty, or leave of absence; and (C) each hour
                for which
                back pay is awarded or agreed to by an employer; except that “Hours
                Worked” shall not include (1) hours in excess of 501 hours of any
                continuous period during which no duties are performed; (2) hours
                for
                which payment is due solely for purposes of complying with applicable
                worker’s compensation, unemployment compensation or disability insurance
                laws; (3) any time period which is or may be related to payment that
                reimburses an employee for medical expenses; and (4) hours related
                to back
                pay where credit has already been given for such
                hours.

            

    

     

    
      	(iv)  	
              In
                the case
                of an employee as defined in this paragraph 2.2(b) who transfers
                into the
                class of employees as defined in paragraph 2.2(a), such employee’s service
                shall consist of:

            

    

     

    
      	(A)  	
              his
                service
                as of the end of the Computation Year immediately preceding the
                Computation Year during which such transfer
                occurred;

            

    

     

    
      	(B)  	
              the
                greater
                of (a) the service that would be credited under the provisions of
                paragraph 2.2(a) for his service during the entire Computation Year
                in
                which such transfer occurred, as if he had been an employee as defined
                in
                paragraph 2.2(a) or (b) the service taken into account under this
                paragraph 2.2(b) (for such Year) as of the date of such transfer;
                and

            

    

     

    
      	(C)  	
              for
                any
                Computation Year subsequent to the Year in which such transfer occurred
                and during which such employee is a member of the class defined in
                paragraph 2.2(a), the service taken into account under the provisions
                of
                that paragraph.

            

    

     

    
      	(v)  	
              In
                the case
                of an employee as defined in paragraph 2.2(a) who transfers into
                the class
                of employees as defined in paragraph 2.2(b), such employee’s service shall
                consist of:

            

    

     

    
      	(A)  	
              the
                number of
                years of service equal to the number of one-year periods of service
                credited to him as of the date of such
                transfer;

            

    

     

    
      	(B)  	
              with
                respect
                to any fractional part of a full year of service possessed by him
                as of
                the date of such transfer, one hundred ninety (190) hours of service
                for
                each month or part of a month for which the employee received service
                under paragraph 2.2(a); and

            

    

     

    
      	(C)  	
              for
                the
                period subsequent to the date of such transfer, the service credited
                to
                him in accordance with this paragraph
                2.2(b).

            

    

     

    
      	(vi)  	
              In
                the case
                of a maternity or paternity absence as defined in paragraph 2.2(a),
                to
                avoid incurring a break in service, an employee will be credited
                with up
                to 501 Hours Worked.

            

    

     

     

    SECTION
      3  -
      Participant
      After-Tax Contributions

     

    3.1  Contributions

     

    Subject
      to
      subsection 5.3 of this Supplement C and subsection 4.5 of the Plan, a
      participant may elect to make after-tax contributions under the Plan for each
      plan year at a rate of 2, 3, 4, 5 or 6 percent of the compensation (as defined
      in subsection 3.4) received by him from time to time during such plan year;
      and
      a participant with 25 or more years of service (as defined in subsection 2.2)
      on
      the day immediately preceding the first day of any payroll period which
      commences on or after December 1, 1977 may further elect to contribute an
      additional 1, 2, 3, or 4 percent (in excess of 6%) of such compensation for
      such
      payroll period. All participant contributions shall be made only through payroll
      deductions and unless otherwise authorized by the Plan Administrator, each
      participant shall, at the time he elects to participate in the Plan, file with
      the Plan Administrator an appropriate form of payroll deduction authorization,
      which may be a part of his application for participation. Such authorization,
      when filed with and accepted by the Plan Administrator, shall become effective
      as specified therein and shall continue in effect until changed or
      suspended.

     

    3.2  Changes
      in Rate
      of Payroll Deductions

     

    A
      participant who
      has elected to make contributions under this Supplement may change the rate
      of
      such contributions (within the limits specified in subsection 3.1 above) at
      such
      times and upon such prior notice as may be determined by the Plan
      Administrator.

     

    3.3  Suspension
      of
      Contributions

     

    A
      participant may
      voluntarily suspend his participation in this Supplement as of the first day
      of
      a payroll period by filing an application with the Plan Administrator at such
      time and in such manner as the Plan Administrator shall determine. The
      participation of an employee who ceases to meet one or more of the eligibility
      requirements specified in subsection 3.1 of the Plan will be suspended. A
      participant who has voluntarily suspended his participation in this Supplement
      may again become an active participant in this Supplement by submitting an
      application with the Plan Administrator. An employee whose participation was
      suspended for failure to meet the eligibility requirements of subsection 3.1
      of
      the Plan will be eligible to enroll and to become an active participant
      following the date he again satisfies such requirements.

     

    3.4  Compensation

     

    
      	(a)  	
              The
                term
                “compensation” for purposes of this Supplement C means a participant’s
                total compensation payable to him by the employers (before deductions
                and
                before charging against such compensation any salary reduction
                contributions under subsection 4.1 of the Plan) for services rendered
                to
                them, excluding, however, (i) bonuses, short-term incentive pay, 6
                Sigma pay and foreign service premiums, (ii) commissions,
                (iii) amounts paid by the employers for jury duty, educational costs,
                and reimbursements for other extra costs incurred, and
                (iv) contributions paid by the employers under this Plan (other than
                as such a “basic employer contribution”) or any other employee benefit
                plan or arrangement (whether funded through insurance or otherwise).
                Any
                sums paid to an employee which are attributable to a payroll period
                which
                ended before the date he becomes a participant in the Plan or which
                are
                attributable to any payroll period during which he at no time meets
                all of
                the eligibility requirements specified in subsection 2.1 shall not
                constitute compensation.

            

    

     

    
      	(b)  	
              Notwithstanding
                paragraph 3.4(a) above, the term “compensation” for purposes of
                determining the group of highly compensated employees (as defined
                in
                subsection 3.5) means an eligible employee’s compensation within the
                meaning of Code Section 415(c)(3); and for purposes of the average
                contribution percentage test under subsection 5.3 of the Supplement
                to the
                Plan, the term “compensation” means an eligible employee’s compensation
                within the meaning of Code Section
                414(s).

            

    

     

    
      	(c)  	
              In
                accordance
                with Code Section 401(a)(17), the annual compensation of each
                eligible employee taken into account for all purposes of this Plan
                for any
                plan year shall not exceed $210,000, as such amount may be adjusted
                for
                cost-of-living adjustments under Code Section 401(a)(17). In no event
                shall compensation under the Plan for accrual purposes for any plan
                year
                exceed the maximum allowed under Code Section
                401(a)(17).

            

    

     

    3.5  Highly
      Compensated Employees

     

    The
      term “highly
      compensated employee” means any employee of the Employer or a controlled group
      member who (a) was a 5-percent owner of the Employer or a controlled group
      member at any time during the calendar year ending with or within the plan
      year
      or the preceding calendar year, or (b) during the calendar year preceding the
      calendar year that ends with or within the plan year, received compensation
      from
      the Employer or a controlled group member of at least $90,000 (as indexed)
      and
      was in the top 20-percent of employees based on compensation. For purposes
      of
      this subsection 3.5, a “controlled group member” means any entity that is under
      common control with the Employer within the meaning of Code Sections 414(b),
      414(c) or 414(m).

     

     

    SECTION
      4  -
      Employer
      Contributions

     

    4.1  Employer
      Contributions.

     

    For
      each payroll
      period, the Employer will contribute to the trustee an amount determined by
      multiplying

     

    
      	(a)  	
              the
                applicable percentage specified below, depending on a participant’s
                service (as defined in subsection 2.2) on the last day of the preceding
                payroll period --

            

    

     

    
      	
              Service

               

            	
              Percentage

               

            
	
              

            	
              

            
	
              Less
                than 25
                years

            	
              50%

            
	
              25
                but less
                than 35 years

            	
              66-1/3%

            
	
              35
                years or
                more

               

            	
              80%

               

            

    

    times

     

    
      	(b)  	
              the
                amount of
                each participant’s compensation (as defined in subsection 3.4) for such
                period which such participant has elected to contribute under this
                Supplement; except that no Employer contributions under this paragraph
                4.1(b) will be made on account of any amounts which are contributed
                by the
                participant in excess of 6% of his compensation in any payroll period;
                and
                provided further that any Employer contribution hereunder will be
                made
                only from the Employer’s current profits or accumulated profits employed
                in the business.

            

    

     

     

    SECTION
      5  -
      Annual
      Classes

     

    5.1  Establishment

     

    A
      separate class shall be established each plan year.

     

    5.2  Maturity

     

    In
      accordance with
      subsection 5.1, a separate class has been or will be established for each Plan
      Year. Each such class which was established for Plan Years ending prior to
      December 1, 1971, has matured; and each such class which has been or will be
      established for Plan Years ending after December 1, 1971, matures on the
      November 30 of the fifth Plan Year following the Plan Year in which it was
      established.

     

    5.3  Nondiscrimination
      Test Limitation

     

    Notwithstanding
      any
      provision of the Plan to the contrary, in no event shall the actual contribution
      percentage (as defined below) of highly compensated employees (as defined in
      subsection 3.5 and who are eligible to participate under subsection 3.1) for
      any
      Plan Year exceed the greater of:

     

    
      	(a)  	
              the
                actual
                contribution percentage of all other eligible employees for the Plan
                Year
                multiplied by 1.25; or

            

    

     

    
      	(b)  	
              the
                actual
                contribution percentage of all other eligible employees for the Plan
                Year
                multiplied by 2; provided that the actual contribution percentage
                of such
                highly compensated employees does not exceed that of all other eligible
                employees by more than 2 percentage
                points.

            

    

     

    The
“actual
      contribution percentage” of a group of eligible employees means the average of
      the ratios (determined for the Plan Year and separately for each eligible
      employee in such group) of:

     

    
      	(i)  	
              the
                employee’s contributions made pursuant to subsection 3.1, plus any
                corresponding employer contributions made pursuant to subsection
                4.1 plus
                any other amounts required to be included pursuant to Code Section
                401(m)
                to

            

    

     

    
      	(ii)  	
              the
                employee’s compensation (as defined in paragraph 3.4(b)) for such Plan
                Year.

            

    

     

    If
      for any Plan
      Year neither of the tests described above in (a) and (b) are met, then the
      nondiscrimination test limitation shall apply to each highly compensated
      employee such that (within two and one-half months after the end of the Plan
      Year) his share of the excess contributions (as defined below and including
      any
      investment gains or losses) shall be returned to him, beginning with “unmatched”
employee contributions (whether recharacterized as such or in excess of 6%
      of
      compensation) and then, as necessary, returning employee contributions that
      were
“matched” under subsection 4.1. “Excess contributions” shall mean that portion
      of the aggregate employee and Employer contributions on behalf of highly
      compensated employees which would produce an excessive actual contribution
      percentage for such employees but for the tests described in (a) and (b) above.
      Such a share shall be determined (i) in order of the amount of employee and
      Employer contributions beginning with the highly compensated employee with
      the
      largest contribution amount (ii) by reducing such contribution amount so that
      (A) either of the above tests is satisfied without reducing such contribution
      amount below the next largest contribution amount or (B) such contribution
      amount becomes equal to the contribution amount of the highly compensated
      employee with the next largest contribution amount, and reducing that next
      largest contribution amount of both employees to the extent necessary to the
      third largest contribution amount, and so on until either of the above tests
      is
      satisfied, and (iii) by subtracting from the aggregate amount of employee and
      Employer contributions that were made on behalf of the employee (in that plan
      year) an amount determined by multiplying (A) the employee’s contribution
      percentage determined after application of the provisions of the preceding
      clause (ii) by (B) the employee’s compensation that was used in determining his
      actual contribution percentage.

     

     

    SECTION
      6  -
      Accounting and
      Plan Investments

     

    6.1  Accounts

     

    Suitable
      accounts
      shall be established by the Benefit Funds Committee for each class to reflect
      the investment of participant and Employer contributions and the earnings
      therefrom for such class. All of the accounts established for a given class
      to
      reflect a participant’s contributions and the earnings therefrom are, for
      convenience, hereinafter collectively referred to as his “Participant Account”
for such class. All of the accounts established for a given class to reflect
      Employer contributions for a participant and the earnings therefrom are, for
      convenience, hereinafter collectively referred to as his “Employer Account” for
      such class. Other general accounts also may be established from time to
      time.

     

    6.2  Crediting
      of
      Contributions

     

    Pre-tax
      or
      after-tax participant contributions under the Plan for each calendar month
      will
      be paid or delivered to the trustee as soon as practicable after the payday
      on
      which the participant’s compensation is reduced but not later than 15 days after
      the end of the month such amounts are withheld. Irrespective of whether or
      not
      such contributions shall have been actually paid to the trustee and except
      as
      otherwise provided below in this subsection, as of the last day of each payroll
      period:

     

    
      	(a)  	
              A
                participant’s contributions made during such payroll period will be
                credited to his Participant Account;
                and

            

    

     

    
      	(b)  	
              Each
                Employer’s contribution for such period on behalf of a participant will be
                credited to the Employer Account of such
                participant.

            

    

     

    6.3  Investment
      of
      Contributions

     

    Contributions
      credited to Participant Accounts and Employer Accounts shall be invested only
      in
      the Caterpillar Common Stock Fund. In no event will any interest be payable
      with
      respect to any uninvested funds held by the trustee.

     

    6.4  Intraplan
      Transfer of Accounts

     

    A
      participant who
      has attained his fortieth birthday may direct the trustee of the Plan to
      transfer all of the assets credited to his Participant Account and/or Employer
      Account for any class (other than the then-current class for participants who
      have not retired) to the trustee of the trust fund established under the Plan
      pursuant to subsection 6.1; provided that effective as of October 28, 2005,
      the
      foregoing fortieth birthday restriction shall no longer apply. Any such election
      by a participant shall be made in accordance with rules and procedures
      established by the Plan Administrator. Notwithstanding any other provisions
      of
      the Plan, with respect to the ESOP portion of the Plan, a participant who has
      attained age 55 and who has at least 10 years of ESOP participation (“qualified
      participant”) may direct the trustee to transfer investments in Company Shares
      to one or more of the investment funds under subsection 6.2 of the Plan without
      any restrictions in making such transfer, except as provided below. Such
      election may be made within 90 days after the close of each Plan Year in the
      qualified election period (i.e., the six year period beginning with the first
      Plan Year such participant became a qualified participant) and shall apply
      to
      the investment of 25 percent of the participant’s account (50 percent with
      respect to the last election year that such participant could make such an
      election), but only to the extent such portion exceeds the amount to which
      a
      prior election has been made.

     

    6.5  Crediting
      and
      Investment of Earnings

     

    Except
      as otherwise
      provided in this subsection and in subsection 6.3 of this Supplement, all
      earnings when and as received by the trustee shall be applied and credited
      as
      specified below in this subsection:

     

    
      	(a)  	
              Cash
                dividends and other cash proceeds received by the trustee with respect
                to
                Company Shares credited to the accounts of a participant shall be
                credited
                to such accounts and shall be reinvested in Company Shares in the
                same
                manner (and at the same price per share) as employer and participants’
                contributions.

            

    

     

    
      	(b)  	
              Notwithstanding
                anything to the contrary in subparagraph 6.5(a) of the Supplement,
                a
                participant (or his beneficiary) shall be offered an election to
                receive a
                payment or distribution of cash dividends that are paid on Company
                Shares
                held in his accounts, including cash dividends paid on Company Shares
                held
                by the Caterpillar Common Stock Fund described in section 6.2 of
                the Plan.
                The Plan Administrator may provide that this election may be
                offered:

            

    

     

    
      	(i)  	
              before
                a
                dividend is paid, in which case the dividend may be paid by the Company
                directly to the participant (or beneficiary), or to the Plan pursuant
                to
                paragraph 6.5(a) and then distributed to the participant (or beneficiary)
                not later than ninety (90) days after the close of the Plan Year
                in which
                paid to the Plan, or

            

    

     

    
      	(ii)  	
              after
                the
                dividend has been paid, in which case the dividend paid to the Plan
                pursuant to paragraph 6.5(a) shall be distributed to the participant
                (or
                beneficiary) within ninety (90) days after the close of the Plan
                Year in
                which paid to the Plan.

            

    

     

    Dividends
      that are
      not paid or distributed to a participant (or beneficiary) pursuant to the
      election described above shall remain subject to the requirements of paragraph
      6.5(a). The Plan Administrator shall determine the scope, manner and timing
      of
      the elections, dividend payments or distributions, and reinvestment in Company
      Shares described in this paragraph and paragraph 6.5(a) in any manner that
      is
      consistent with Code Section 404(k) and other applicable provisions and ERISA.
      A
      participant will be fully vested in dividends with respect to which an election
      under Code Section 404(k)(2)(A)(iii), as amended by the Economic Growth and
      Tax
      Relief Reconciliation Act of 2001, is offered.

     

    
      	(c)  	
              Rights,
                warrants and options, if any, issued with respect to Company Shares
                shall
                be allocated to the Company Shares to which they appertain, shall
                be sold
                by the trustee, and the proceeds thereof shall be applied, in accordance
                with the rules established by the Benefit Funds Committee, as provided
                in
                subparagraph (b) above.

            

    

     

    
      	(d)  	
              All
                Company
                Shares received by the trustee, as a stock dividend or because of
                a stock
                split, shall be allocated to the Company Shares to which they
                appertain.

            

    

     

    Any
      earnings or
      other property received by the trustee with respect to Company Shares
      theretofore distributed also shall be paid or distributed in the form received
      to the distributee of such shares, or his beneficiary.

     

    6.6  Assets
      of
      Accounts and Plan Classes

     

    All
      cash and other
      property held by the trustee for each Participant Account or Employer Account,
      or for each class, as the case may be, shall constitute the assets
      thereof.

     

    6.7  Charging
      Distributions

     

    All
      distributions
      from a Participant Account will be charged to such account when
      made.

     

    6.8  Rollover
      Amounts
      from Other Plans

     

    Rollovers
      contributions are not permitted pursuant to this Supplement C.

     

     

    SECTION
      7  -
      Withdrawals,
      Loans and Distributions

     

    7.1  Withdrawals

     

    After
      the maturity
      of each Plan class, the assets in the accounts of participants for such class
      shall continue to be held in their accounts and a participant may thereafter
      withdraw assets in his account for such class at any time after the January
      1
      next following the date of such maturity in accordance with this subsection
      7.1.
      Withdrawals by a participant from his accounts for any class may be made in
      accordance with the following rules:

     

    
      	(a)  	
              A
                participant
                may, with respect to any class, elect to
                withdraw:

            

    

     

    
      	(i)  	
              all
                Company
                Shares (with fractional interests in Company Shares paid in cash)
                that
                were or will thereafter be purchased with his own contributions;
                and

            

    

     

    
      	(ii)  	
              all
                earnings
                on participant contributions, provided that any assets of the same
                class
                that are described in subparagraph (i) above have previously been
                withdrawn or will be included in the withdrawal of such
                earnings.

            

    

     

    Any
      such election
      to withdraw shall also cover Company Shares and cash attributable to the
      participant’s contributions for the same class that are received by the trustee
      after the effective date of withdrawal.

     

    
      	(b)  	
              [Reserved]

            

    

     

    
      	(c)  	
              Subject
                to
                subsection 7.5 of the Plan and subparagraph 7.3(b) of this Supplement,
                a
                participant may at any time, at or after the time he elects a withdrawal
                as described in subparagraph 7.1(a) from a Participant Account for
                any
                class, withdraw the balance, if any, of the assets (including but
                not
                limited to those subsequently paid in or acquired) in such Participant
                Account plus the corresponding Employer Account (but only to the
                extent
                that it is attributable to employer contributions credited thereto
                more
                than twenty-four (24) months prior to such withdrawal, if
                any).

            

    

     

    
      	(d)  	
              All
                requests
                for withdrawals shall be effective as of the first day of the month
                and
                shall be pursuant to a written election filed by the participant
                with the
                Plan Administrator a reasonable period of time (as determined by
                the Plan
                Administrator) prior thereto. All assets withdrawn by a participant
                shall
                be distributed as soon as practicable after the effective date of
                withdrawal.

            

    

     

    7.2  Termination
      of
      Employment

     

    Upon
      termination of
      employment for any reason, distribution shall be made in accordance with
      subsection 7.2 of the Plan.

     

    7.3  Vesting

     

    Each
      participant’s
      vested interest in his Account for each class prior to termination of employment
      for any reason shall be as follows:

     

    
      	(a)  	
              Participant
                Account
                - Each
                participant at all times shall have a fully vested interest in the
                assets
                of his Participant Accounts for all
                classes.

            

    

     

    
      	(b)  	
              Employer
                Account
                - Each
                participant at all times shall have a fully vested interest in the
                assets
                of his Employer Accounts for all
                classes.

            

    

     

    7.4  Loans

     

    Loans
      shall be
      available to participants with respect to their accounts under this Supplement
      C
      in accordance with the provisions of subsection 7.5 of the Plan.

     

      SUPPLEMENT
      D

      
      ESOP Provisions

     

     

    SECTION
      1  -
      Purpose

     

    1.1  Purpose
      and Use
      of Terms

     

    The
      provisions of
      this Supplement modify the provisions of the Solar Savings and Investment Plan
      (the “Plan”), and unless otherwise expressly qualified by the context of this
      Supplement, the conditions contained in the Plan shall be applicable to this
      Supplement and terms used in this Supplement shall have the meanings defined
      in
      the Plan. This Supplement becomes effective on January 1, 2004. For purposes
      of
      this Supplement D, the term “participant” means any Participant, any participant
      under a supplement to the Plan, a beneficiary in pay status and an alternate
      payee under a qualified domestic relations order within the meaning of Code
      Section 414(p), each of whom shall be considered to be a “named fiduciary”
within the meaning of (and to the extent permitted under) ERISA Section
      402(a)(2) with respect to the treatment of dividends paid on Company Shares
      credited to participants’ accounts.

     

    The
      portion of the
      Plan consisting of this Supplement is intended to qualify as a stock bonus
      plan
      as defined in Treasury Regulations section 1.401-1(b)(1)(iii) and an employee
      stock ownership plan (“ESOP”) satisfying the requirements of Code Sections
      401(a), 409, and 4975(e). The ESOP portion of the Plan is designed to be
      invested almost exclusively in Company Shares, which are qualifying employer
      securities within the meaning of Code Section 4975(e)(8).

     

     

    SECTION
      2  -
      ESOP
      Provisions

     

    2.1  ESOP
      Accounting

     

    The
      ESOP portion of
      the Plan shall consist of all amounts credited to Participant Accounts, Employer
      Accounts and other participant accounts established under Supplement C of the
      Plan. The non-ESOP portion of the Plan shall consist of all other amounts
      credited to participants Accounts. Amounts credited to accounts in the ESOP
      portion of the Plan shall be referred to herein as amounts credited to
      participants’ “ESOP accounts” or “ESOP sub-accounts” and amounts credited to
      accounts in the non-ESOP portion of the Plan shall be referred to as amounts
      credited to participants “non-ESOP accounts” or “non-ESOP
      sub-accounts.”

     

    Paragraphs
      (a),
      (b), and (c) below shall apply only with respect to Plan Years beginning prior
      to January 1, 2005:

     

    
      	(a)  	
              The
                Investment Plan Committee will maintain separate sub-accounts for
                each
                Participant Account to reflect the value of the participant’s interests in
                the ESOP portion of the Plan and the non-ESOP portion of the Plan.
                Two
                ESOP sub-accounts will be maintained for each Participant’s Account which
                will reflect the value of any interests in the Caterpillar Common
                Stock
                Fund attributable to such account. One of these ESOP sub-accounts
                (“Current Year Contributions Stock Fund ESOP Sub-Account”) will reflect
                the value of any interest in the Caterpillar Common Stock Fund
                attributable to the Participant’s Account to the extent attributable to
                employer basic contributions made during the Plan Year and intra-plan
                transfers from the then-current class pursuant to subsection 6.4
                of
                Supplement C. The other of these ESOP sub-accounts (“Prior Contributions
                Stock Fund ESOP Sub-Account”) will reflect the value of any interest in
                the Caterpillar Common Stock Fund attributable to the participant’s
                Account to the extent such interest is attributable to employer basic
                contributions made in previous plan years, direct transfers from
                other
                plans, intra-plan transfers from other than the then-current class
                pursuant to section 6.4 of Supplement C, and rollovers to the
                Plan.

            

    

     

    Separate
      ESOP
      sub-accounts will reflect the value of any interest in other investment funds
      attributable to the participant’s account to the extent such interest in the
      fund is attributable to contributions made during the plan year and intra-plan
      transfers from the then-current class pursuant to section 6.4 of Supplement
      C.
      Separate non-ESOP sub-accounts will reflect the value of any interest in
      investment funds (other than the Caterpillar Common Stock Fund) attributable
      to
      the participant’s Account to the extent such interest is attributable to
      contributions made in previous plan years, direct transfers from other plans,
      intra-plan transfers from other than the then-current class pursuant to section
      6.4 of Supplement C, and rollovers to the Plan.

     

    As
      of the first day
      of each Plan Year, (i) all amounts credited to the Current Year
      Contributions Stock Fund ESOP Sub-Account as of the last day of the previous
      Plan Year will be automatically transferred to the participant’s Prior
      Contributions Stock Fund ESOP Sub-Account, and (ii) all amounts credited to
      each of the other ESOP sub-accounts in a Participant Account as of the last
      day
      of the previous Plan Year will be automatically transferred to the participant’s
      non-ESOP sub-account that reflects an interest in the same investment fund.
      No
      transfers shall otherwise be permitted between any ESOP sub-account other than
      the Prior Contributions Stock Fund ESOP Sub-Account and the Prior Contributions
      Stock Fund ESOP Sub-Account or any non-ESOP sub-account.

     

    2.2  Dividend
      Election.

     

    Notwithstanding
      anything to the contrary in paragraph 6.5(c) of the Plan paragraph 6.5(a) of
      Supplement C, as applicable (or any successor provision), a participant (or
      his
      beneficiary) shall be offered an election to receive a payment or distribution
      of cash dividends that are paid on or after January 1, 2004, on Company Shares
      credited to his accounts, including cash dividends paid on Company Shares held
      in the Caterpillar Common Stock Fund. The Plan Administrator may provide that
      this election may be offered:

     

    
      	(a)  	
              before
                a
                dividend is paid, in which case the dividend may be paid by the Company
                directly to the participant (or beneficiary), or to the Plan and
                then
                distributed to the participant (or beneficiary) not later than ninety
                (90)
                days after the close of the Plan Year in which paid to the Plan,
                or

            

    

     

    
      	(b)  	
              after
                the
                dividend has been paid, in which case the dividend paid to the Plan
                shall
                be distributed to the participant (or beneficiary) within ninety
                (90) days
                after the close of the Plan Year in which paid to the
                Plan.

            

    

     

    A
      participant shall
      be deemed to elect to have the cash dividends automatically reinvested in
      Company Shares, unless the participant files a timely election with the Plan
      Administrator to have all or a portion of the cash dividends paid to the
      participant. Dividends that are not paid or distributed to a participant (or
      beneficiary) pursuant to the election described above shall remain subject
      to
      the requirements of paragraph 6.5(c) of the Plan or paragraph 6.5(a) of
      Supplement C, as applicable. The Plan Administrator shall determine the scope,
      manner and timing of the elections, dividend payments or distributions, and
      reinvestment in Company Shares described in this subsection 2.2 in any manner
      that is consistent with Code Section 404(k) and other applicable provisions
      and
      ERISA. A participant shall be fully vested in and have a non-forfeitable right
      to any cash dividends that are subject to the dividend election provisions
      of
      subsection 2.2, without regard to whether the Participant is vested in the
      Company Shares with respect to which the dividend is paid.

     

    2.3  Acquisition
      Loans.

     

    An
      installment
      obligation incurred by the Trustee in connection with the purchase of Company
      Stock shall constitute an Acquisition Loan. The Trustee may incur Acquisition
      Loans in accordance with the Trust and from time to time to finance (i) the
      acquisition of Company Stock by the Trust which are newly issued shares,
      outstanding shares held by the Company, or outstanding shares held by a
      shareholder, or (ii) the repayment of a prior Acquisition Loan. An Acquisition
      Loan shall be for a specific term, shall bear a reasonable rate of interest,
      and
      shall not be payable on demand except in the event of default. If the lender
      with respect to an Acquisition Loan is a Disqualified Person, the Acquisition
      Loan must provide that Trust assets will be transferred upon default only upon
      and to the extent of the failure of the Plan to meet the repayment schedule
      of
      the Acquisition Loan.

     

    
      	(a)  	
              Financed
                Shares.
                Shares of
                Company Stock acquired by the Trustee with the proceeds of an Acquisition
                Loan shall be described as “Financed Shares.” Except as provided in Code
                Section 409(l) or Treas. Reg. §54.4975-7(b)(9) and (10), or as otherwise
                provided by applicable law, no shares acquired by the Trustee with
                the
                proceeds of an Acquisition Loan may be subject to a put, call or
                other
                option or buy-sell or similar arrangement while held by and when
                distributed from the Plan.

            

    

     

    
      	(b)  	
              Collateral.
                An
                Acquisition Loan may be secured by a collateral pledge of the Financed
                Shares so acquired and any other Plan assets which are a permissible
                security within the provisions of Treas. Reg. §54.4975-7(b). No other
                assets of the Plan or Trust may be pledged as collateral for an
                Acquisition Loan, and no lender shall have recourse against any other
                Plan
                assets.

            

    

     

    
      	(c)  	
              Loan
                Payment.
                Repayment
                of principal and interest on any Acquisition Loan shall be made by
                the
                Trustee from annual employer contributions made pursuant to subsection
                4.1
                of Supplement C and, as directed by the Benefits Fund Committee shall
                also
                be made from the following sources:

            

    

     

    
      	(i)  	
              Cash
                dividends on Financed Shares which are allocated to Participants’ Accounts
                and earnings, if any, on such dividends;
                and

            

    

     

    
      	(ii)  	
              Cash
                dividends on Financed Shares held in the Loan Suspense Account and
                earnings, if any, thereon.

            

    

     

    
      	(d)  	
              Release
                of
                Financed Shares.
                Financed
                Shares shall initially be credited to a “Loan Suspense Account” and shall
                be transferred for allocation to participant ESOP Stock Accounts
                of
                Participants as payments of principal and interest are made on the
                Acquisition Loan by the Trustee, and any pledge of Financed Shares
                must,
                and shall be deemed to, provide for the release of shares so pledged
                on a
                consistent basis.

            

    

     

    The
      number of
      Financed Shares to be released from the Loan Suspense Account for allocation
      to
      Participants’ ESOP Stock Accounts as of each accounting date shall equal the
      number of Financed Shares held in the Loan Suspense Account immediately prior
      to
      such accounting date multiplied by a fraction, the numerator of which is equal
      to the payments of principal and interest on the Acquisition Loan for the year
      ending on such date, and the denominator of which is equal to the sum of the
      numerator plus the total projected payments of principal and interest on the
      Acquisition Loan over the duration of the Acquisition Loan repayment
      period.

     

    
      	(e)  	
              Allocation
                of Financed Shares.
                The
                released Financed Shares shall be allocated to Participants’ Accounts in
                accordance with the provisions of subsection 4.1 of Supplement
                C.

            

    

     

    2.4  Timing
      of
      Distributions.

     

    Notwithstanding
      anything in the Plan to the contrary, unless a participant elects a later date,
      distributions of all ESOP accounts will begin not later than one year after
      the
      end of the Plan Year

     

    
      	(a)  	
              during
                which
                the participant retires or dies, or

            

    

     

    
      	(b)  	
              which
                is the
                fifth Plan Year following the plan year during which the Participant
                terminates employment for any other
                reason.

            

    

     

    2.5  Method
      of
      Payment and Put Option.

     

    Notwithstanding
      anything else in the Plan to the contrary, all distributions to ESOP accounts
      will be in a lump sum or over a period not longer than 5 years, in compliance
      with Code Section 409(o).

     

    In
      accordance with
      Code Sections 409(h)(4), (5) and (6), if the Company Shares are or become not
      readily tradable on an established market, then any participant who otherwise
      is
      entitled to a total distribution from the Plan shall have the right (hereinafter
      referred to as the “Put Option”) to require that his Company Shares be
      repurchased by the Company. The Put Option shall only be exercisable during
      the
      sixty-day (60-day) period immediately following the date of distribution, and
      if
      the Put Option is not exercised within such sixty-day (60-day) period, it can
      be
      exercised for an additional sixty (60) days in the following Plan Year. The
      amount paid for the Company Shares pursuant to the exercise of a Put Option
      as
      part of a total distribution shall be paid in substantially equal periodic
      payments (not less frequently than annually) over a period beginning not later
      than thirty (30) days after the request for total distribution is made and
      not
      exceeding five (5) years. There shall be adequate security provided and
      reasonable interest paid on an unpaid balance due under this paragraph. If
      the
      Company is required to repurchase Company Shares as part of an installment
      distribution, the amount to be paid for the Company Shares will be paid not
      later than thirty (30) days after the exercise of the Put Option.

     

      SUPPLEMENT
      E

    Provisions
      Relating to the Transfer of 

    Account
      Balances From Caterpillar Inc. Employees’ Investment Plan

     

     

     

    SECTION
      1  -
      Purpose

     

    1.1  General.

     

    On
      or about
      February 2, 2004, the account balances of participants in the Caterpillar Inc.
      Employees’ Investment Plan, Part 1 (“EIP Part 1”) who were also participants in
      the Plan shall be transferred to this Plan and shall be held as a part of this
      Plan. The provisions of this Supplement E shall apply solely with respect to
      such participants and their accounts that are transferred to this Plan.
      Capitalized terms not defined in this Supplement shall have the same meanings
      as
      those terms are defined in the Plan. Terms that are not capitalized shall have
      the same meanings as those terms are defined or used in EIP Part 1 as of the
      Transfer Date, unless the context clearly indicates otherwise.

     

     

    SECTION
      2  -
      Participation

     

    2.1  Participation.

     

    Each
      participant
      whose account balance in EIP Part 1 is transferred to this Plan shall become
      a
      participant in the Plan as of the date of transfer of his account balance into
      this Plan (each, a “Transferred Participant”) for purposes of this
      Supplement.

     

     

    SECTION
      3  -
      Contributions

     

    3.1  Contributions.

     

    There
      shall be no
      Participant or Employer contributions to the Plan under this Supplement
      E.

     

     

    SECTION
      4  -
      Transfer of
      Assets and Account Balances

     

    4.1  Transfer
      of
      Assets.

     

    The
      applicable
      assets of EIP Part 1 and corresponding liabilities shall be transferred to
      the
      trust that funds the Plan. The date upon which assets attributable to a
      Transferred Participant’s account balance are transferred to this Plan shall be
      a “Transfer Date” with respect to that Participant. The transfer of assets and
      liabilities described in this paragraph E-4 shall be made in accordance with
      Code Sections 401(a)(12) and 414(1) and regulations thereunder.

     

    4.2  Transfer
      of
      Account Balances.

     

    All
      accounts
      maintained under EIP Part 1 on behalf of Transferred Participants immediately
      prior to the Transfer Date shall be adjusted as of that date in accordance
      with
      the provisions of EIP. The account balances as so adjusted shall be transferred
      to the Plan and credited on the Transfer Date to separate “Transfer Accounts”
established on behalf of the Transferred Participants. The Plan shall separately
      account for each Transferred Participant’s after-tax contributions and matching
      contributions related to a Transferred Participant’s after-tax contributions.
      Each Transferred Participant’s accounts shall be subject to the provisions of
      the Plan, including this Supplement E, and shall be treated at all times in
      a
      manner that complies with Code Section 411(d)(6) and regulations
      thereunder.

     

     

    SECTION
      5  -
      Investment of
      Account Balances

     

    5.1  Vesting.

     

    Each
      participant’s
      vested interest in his accounts for each class prior to termination of
      employment for any reason shall be as follows:

     

    
      	(a)  	
              Participant
                Account
                - Each
                participant at all times shall have a fully vested interest in the
                assets
                of his Participant Accounts for all
                classes.

            

    

     

    
      	(b)  	
              Employer
                Account
                - Each
                participant who performs at least one hour of service for an employer
                on
                or after January 1, 2003 shall have a fully vested interest in the
                assets
                of his Employer Accounts for all classes at all times. If a participant
                has one hour of service on or after December 1, 2002, and has three
                or
                more years of service, he shall have a fully vested interest in the
                assets
                of his Participant Accounts for all classes (notwithstanding any
                provision
                of the Plan to the contrary).

            

    

     

     

    SECTION
      6  -
      Investment of
      Account Balances and Accounting

     

    6.1  Investment
      of
      Transferred Accounts.
      As of the
      Transfer Date, Caterpillar stock in EIP Part 1 will be transferred into the
      Company Shares Fund in the Plan, and the value of assets in the Government
      Short-Term Investment Fund of EIP Part 1 will be transferred into the
      Government Fixed Income Fund under the Plan. After the Transfer Date, a
      Transferred Participant who has attained age 40 may direct the investment of
      his
      Transfer Account among the available investment funds under subsection 6.2
      the
      Plan; provided that effective as of October 28, 2005, the foregoing age 40
      restriction shall no longer apply. The Transfer Account of a Transferred
      Participant who has not attained age 40 as of the Transfer Date will remain
      invested in the Company Shares Fund and the money market fund or its equivalent
      until such Participant attains age 40; provided that effective as of October
      28,
      2005, the foregoing age 40 restriction shall no longer apply.

     

    6.2  Crediting
      and
      Investment of Earnings

     

    Except
      as otherwise
      provided in this subsection, all earnings when and as received by the trustee
      shall be applied and credited as specified below in this
      subsection:

     

    
      	(a)  	
              Earnings
                with
                respect to the Government Fixed Income Fund shall be retained in
                such fund
                and reinvested as a part thereof.

            

    

     

    
      	(b)  	
              Cash
                dividends and other cash proceeds received by the trustee with respect
                to
                Company Shares held in the accounts of a participant shall be credited
                to
                such accounts and shall be reinvested in Company
                Shares.

            

    

     

    
      	(c)  	
              Notwithstanding
                anything to the contrary in paragraph 6.2(b), a participant (or his
                beneficiary) shall be offered an election to receive a payment or
                distribution of cash dividends that are paid on or after December
                1, 2000,
                on Company Shares held in his accounts, including cash dividends
                paid on
                Company Shares held by the Caterpillar Common Stock Fund described
                in
                section 6.2 of the Plan. The Plan Administrator may provide that
                this
                election may be offered:

            

    

     

    
      	(i)  	
              before
                a
                dividend is paid, in which case the dividend may be paid by the Company
                directly to the participant (or beneficiary), or to the Plan pursuant
                to
                paragraph 6.2(b) and then distributed to the participant (or beneficiary)
                not later than ninety (90) days after the close of the plan year
                in which
                paid to the Plan, or

            

    

     

    
      	(ii)  	
              after
                the
                dividend has been paid, in which case the dividend paid to the Plan
                pursuant to paragraph 6.2(b) shall be distributed to the participant
                (or
                beneficiary) within ninety (90) days after the close of the plan
                year in
                which paid to the Plan.

            

    

     

    Dividends
      that are
      not paid or distributed to a participant (or beneficiary) pursuant to the
      election described above shall remain subject to the requirements of paragraph
      6.2(b). The Plan Administrator shall determine the scope, manner and timing
      of
      the elections, dividend payments or distributions, and reinvestment in Company
      Shares described in this paragraph (c) and paragraph 6.2(b) in any manner that
      is consistent with Code Section 404(k) and other applicable provisions and
      ERISA. A participant will be fully vested in dividends with respect to which
      an
      election under Code Section 404(k)(2)(A)(iii), as amended by the Economic Growth
      and Tax Relief Reconciliation Act of 2001, is offered.

     

    
      	(d)  	
              All
                Company
                Shares received by the trustee, as a stock dividend or because of
                a stock
                split, shall be allocated to the Company Shares to which they
                appertain.

            

    

     

    6.3  Assets
      of
      Accounts and Plan Classes

     

    All
      cash and other
      property held by the trustee for each Participant Account or Employer Account,
      or for each class, as the case may be, shall constitute the assets
      thereof.

     

    6.4  Charging
      Distributions

     

    All
      distributions
      from any of the accounts of a participant will be charged to such account when
      made.

     

     

    SECTION
      7  -
      Distributions and
      Withdrawals

     

    7.1  Distributions
      and Withdrawals.

     

    Benefits
      payable on
      or after the Transfer Date to or on account of any Transferred Participant
      who,
      prior to the Transfer Date, was receiving installment payments or making
      periodic withdrawals shall continue to be paid in the same manner under the
      Plan. A Transferred Participant may receive a distribution or request a
      withdrawal of his Transfer Account in accordance with Section 7 of Supplement
      C
      and with uniform rules and procedures established by the Plan Administrator.
      A
      Transferred Participant may borrow against his Transfer Account, in accordance
      with the provisions of subsection 7.5 of the Plan. Upon Termination of
      Employment or death of a Transferred Participant, the balance of his Transfer
      Account shall be paid in the manner and at such time as determined in accordance
      with the provisions of Section 7 of Supplement C, except as provided below.
      Any
      earnings or other property received by the trustee with respect to Company
      Shares theretofore distributed also shall be paid or distributed in the form
      received to the distributee of such shares, or his beneficiary.

     

    7.2  Loans

     

    Loans
      shall be
      available to participants with respect to their accounts under this Supplement
      E
      in accordance with the provisions of subsection 7.5 of the Plan.

     

     

      SUPPLEMENT
      F

    Minimum
      Distribution Requirements

     

     

    1.1  General
      Rules.

     

    The
      provisions of
      this Supplement F shall apply for purposes of determining required minimum
      distributions for calendar years beginning on or after January 1, 2002. The
      requirements of this Supplement F will take precedence over any inconsistent
      provisions of the plan, to the extent such provision would result in a violation
      of the requirements of this Supplement F. All distributions required under
      this
      Supplement shall be determined and made in accordance with the Treasury
      Regulations under Code Section 401(a)(9), except that distributions may be
      made under a designation made before January 1, 1984, in accordance with Section
      242(b) of the Tax Equity and Fiscal Responsibility Act (TEFRA) and the
      provisions of the plan that relate to Section 242(b)(2) of TEFRA.

     

    1.2  Time
      and Manner
      of Distribution.

     

    
      	(a)  	
              Required
                Beginning Date.
                The
                Participant’s entire interest must be distributed, or begin to be
                distributed, to the Participant no later than the Participant’s required
                beginning date.

            

    

     

    
      	(b)  	
              Death
                of
                Participant Before Distributions Begin.
                If
                the
                Participant dies before distributions begin the Participant’s entire
                interest must be distributed, or begin to be distributed, no later
                than as
                follows:

            

    

     

    
      	(i)  	
              If
                the
                Participant’s surviving spouse is the Participant’s sole designated
                beneficiary, distributions to the surviving spouse must begin by
                December
                31 of the calendar year immediately following the calendar year in
                which
                the Participant died or by December 31 of the calendar year in which
                the
                Participant would have attained age 70-1/2, if
                later.

            

    

     

    
      	(ii)  	
              If
                the
                Participant’s surviving spouse is not the Participant’s sole designated
                beneficiary, distributions to the designated beneficiary must begin
                by
                December 31 of the calendar year immediately following the calendar
                year
                in which the Participant died.

            

    

     

    
      	(iii)  	
              If
                there is
                no designated beneficiary as of September 30 of the year following
                the
                year of the Participant’s death, the Participant’s entire interest must be
                distributed by December 31 of the calendar year containing the fifth
                anniversary of the Participant’s
                death.

            

    

     

    
      	(iv)  	
              If
                the
                Participant’s surviving spouse is the Participant’s sole designated
                beneficiary and the surviving spouse dies after the Participant but
                before
                distributions to the surviving spouse begin, this subsection 1.2,
                other
                than paragraph 1.2(a), will apply as if the surviving spouse were
                the
                Participant.

            

    

     

    For
      purposes of
      this subsection 1.2 and subsection 1.4, unless subparagraph 1.2(b)(iv) applies,
      distributions are considered to begin on the Participant’s required beginning
      date. If subparagraph 1.2(b)(iv) applies, distributions are considered to begin
      on the date distributions are required to begin to the surviving spouse under
      subparagraph 1.2(b)(i). If distributions under an annuity purchased from an
      insurance company irrevocably commence to the Participant before the
      Participant’s required beginning date (or to the Participant’s surviving spouse
      before the date distributions are required to begin to the surviving spouse
      under subparagraph 1.2(b)(i)), the date distributions are considered to begin
      is
      the date distributions actually commence.

     

    
      	(c)  	
              Forms
                of
                Distribution.
                Unless
                the
                Participant’s interest is distributed in the form of an annuity purchased
                from an insurance company or in a single sum on or before the required
                beginning date, as of the first distribution calendar year distributions
                must be made in accordance with subsections 1.3 and 1.4 of this
                Supplement. If the Participant’s interest is distributed in the form of an
                annuity purchased from an insurance company, distributions thereunder
                must
                be made in accordance the requirements of Code Section 401(a)(9)
                and the
                Treasury Regulations.

            

    

     

    1.3  Required
      Minimum
      Distributions During Participant’s Lifetime.

     

    
      	(a)  	
              Amount
                of
                Required Minimum Distribution For Each Distribution Calendar
                Year.
                During
                the
                Participant’s lifetime, the minimum amount that must be distributed for
                each distribution calendar year is the lesser
                of:

            

    

     

    
      	(i)  	
              the
                quotient
                obtained by dividing the Participant’s account balance by the distribution
                period in the Uniform Lifetime Table set forth in Section 1.401(a)(9)-9
                of
                the Treasury Regulations, using the Participant’s age as of the
                Participant’s birthday in the distribution calendar year;
                or

            

    

     

    
      	(ii)  	
              if
                the
                Participant’s sole designated beneficiary for the distribution calendar
                year is the Participant’s spouse, the quotient obtained by dividing the
                Participant’s account balance by the number in the Joint and Last Survivor
                Table set forth in Section 1.401(a)(9)-9 of the Treasury Regulations,
                using the Participant’s and spouse’s attained ages as of the Participant’s
                and spouse’s birthdays in the distribution calendar
                year.

            

    

     

    
      	(b)  	
              Lifetime
                Required Minimum Distributions Continue Through Year of Participant’s
                Death.
                Required
                minimum distributions will be determined under this subsection 1.3
                beginning with the first distribution calendar year and up to and
                including the distribution calendar year that includes the Participant’s
                date of death.

            

    

     

    1.4  Required
      Minimum
      Distributions After Participant’s Death.

     

    
      	(a)  	
              Death
                On
                or After Date Distributions Begin.

            

    

     

    
      	(i)  	
              Participant
                Survived by Designated Beneficiary.
                If the
                Participant dies on or after the date distributions begin and there
                is a
                designated beneficiary, the minimum amount that must be distributed
                for
                each distribution calendar year after the year of the Participant’s death
                is the quotient obtained by dividing the Participant’s account balance by
                the longer of the remaining life expectancy of the Participant or
                the
                remaining life expectancy of the Participant’s designated beneficiary,
                determined as follows:

            

    

     

    
      	(A)  	
              The
                Participant’s remaining life expectancy is calculated using the age of the
                Participant in the year of death, reduced by one for each subsequent
                year.

            

    

     

    
      	(B)  	
              If
                the
                Participant’s surviving spouse is the Participant’s sole designated
                beneficiary, the remaining life expectancy of the surviving spouse
                is
                calculated for each distribution calendar year after the year of
                the
                Participant’s death using the surviving spouse’s age as of the spouse’s
                birthday in that year. For distribution calendar years after the
                year of
                the surviving spouse’s death, the remaining life expectancy of the
                surviving spouse is calculated using the age of the surviving spouse
                as of
                the spouse’s birthday in the calendar year of the spouse’s death, reduced
                by one for each subsequent calendar
                year.

            

    

     

    
      	(C)  	
              If
                the
                Participant’s surviving spouse is not the Participant’s sole designated
                beneficiary, the designated beneficiary’s remaining life expectancy is
                calculated using the age of the beneficiary in the year following
                the year
                of the Participant’s death, reduced by one for each subsequent
                year.

            

    

     

    
      	(ii)  	
              If
                the
                Participant
                dies on or after the date distributions begin and there is no designated
                beneficiary as of September 30 of the year after the year of the
                Participant’s death, the minimum amount that must be distributed for each
                distribution calendar year after the year of the Participant’s death is
                the quotient obtained by dividing the Participant’s account balance by the
                Participant’s remaining life expectancy calculated using the age of the
                Participant in the year of death, reduced by one for each subsequent
                year.

            

    

     

    
      	(b)  	
              Death
                Before Date Distributions Begin.

            

    

     

    
      	(i)  	
              Participant
                Survived Designated Beneficiary.
                If
                the
                Participant dies before the date distributions begin and there is
                a
                designated beneficiary, the minimum amount that must be distributed
                for
                each distribution calendar year after the year of the Participant’s death
                is the quotient obtained by dividing the Participant’s account balance by
                the remaining life expectancy of the Participant’s designated beneficiary,
                determined as provided in paragraph
                1.4(a).

            

    

     

    
      	(ii)  	
              No
                Designated Beneficiary.
                If the
                Participant
                dies before the date distributions begin and there is no designated
                beneficiary as of September 30 of the year following the year of
                the
                Participant’s death, distribution of the Participant’s entire interest
                must be completed by December 31 of the calendar year containing
                the fifth
                anniversary of the Participant’s
                death.

            

    

     

    
      	(iii)  	
              Death
                of
                Surviving Spouse Before Distributions to Surviving Spouse Are Required
                to
                Begin.
                If
                the
                Participant dies before the date distributions begin, the Participant’s
                surviving spouse is the Participant’s sole designated beneficiary, and the
                surviving spouse dies before distributions are required to begin
                to the
                surviving spouse under subparagraph 1.2(b)(i), this paragraph 1.4(b)
                will
                apply as if the surviving spouse were the
                Participant.

            

    

     

    1.5  Definitions.

     

    
      	(a)  	
              “Designated
                beneficiary”
means
                the
                individual who
                is
                designated as the beneficiary under the plan and is the designated
                beneficiary under Code Section 401(a)(9) and Section 1.401(a)(9)-1,
                Q&A-4, of the Treasury
                Regulations.

            

    

     

    
      	(b)  	
              “Distribution
                calendar year”
means
                a
                calendar
                year for which a minimum distribution is required. For distributions
                beginning before the Participant’s death, the first distribution calendar
                year is the calendar year immediately preceding the calendar year
                which
                contains the Participant’s required beginning date. For distributions
                beginning after the Participant’s death, the first distribution calendar
                year is the calendar year in which distributions are required to
                begin
                under paragraph 1.2(b). The required minimum distribution for the
                Participant’s first distribution calendar year must be made on or before
                the Participant’s required beginning date. The required minimum
                distribution for other distribution calendar years, including the
                required
                minimum distribution for the distribution calendar year in which
                the
                Participant’s required beginning date occurs, must be made on or before
                December 31 of that distribution calendar
                year.

            

    

     

    
      	(c)  	
              “Life
                expectancy”
means
                life
                expectancy as computed by use of the Single Life Table in Section
                1.401(a)(9)-9 of the Treasury
                Regulations.

            

    

     

    
      	(d)  	
              “Participant’s
                account balance”
means
                the
                account
                balance as of the last valuation date in the calendar year immediately
                preceding the distribution calendar year (valuation calendar year)
                increased by the amount of any contributions made and allocated or
                forfeitures allocated to the account balance as of dates in the valuation
                calendar year after the valuation date and decreased by distributions
                made
                in the valuation calendar year after the valuation date. The account
                balance for the valuation calendar year includes any amounts rolled
                over
                or transferred to the plan either in the valuation calendar year
                or in the
                distribution calendar year if distributed or transferred in the valuation
                calendar year.

            

    

     

    
      	(e)  	
              “Required
                beginning date”
                means:

            

    

     

    
      	(i)  	
              for
                a
                Participant who is not a 5% owner (as defined under Code Section
                416(i)(1)), April 1 of the calendar year following the year in which
                occurs the later of the Participant’s: (A) termination of employment with
                an Employer; or (B) attainment of age 70-1/2;
                and

            

    

     

    
      	(ii)  	
              for
                a
                Participant who is a 5% owner (as defined under Code Section 416(i)(1)),
                April 1 of the calendar year following the calendar year in which
                the
                Participant attains age 70-1/2, or such other date as may be prescribed
                by
                applicable law or regulations.2005 Non-Employee Directors Stock Option Plan

    

      EXHIBIT
        10(m)

      

      DIRECTOR
        STOCK OPTION AGREEMENT

      Pursuant
        to

      THE
        BOMBAY COMPANY, INC.

      2005
        NON-EMPLOYEE DIRECTOR STOCK OPTION PLAN

      

      

      This
        Option Agreement (the “Agreement”) is made this ______ day of ___________, 2005,
        between THE BOMBAY COMPANY, INC., a Delaware corporation (the “Company”) and
        ___________________, a director of the Company (the “Director”).

      

      WHEREAS,
        the Company desires to carry out the purposes of The Bombay Company, Inc.
        2005
        Non-Employee Director Stock Option Plan (the “Plan”) by affording non-employee
        members of the Board of Directors (the “Board”) the opportunity to purchase
        shares of the Company’s $1.00 par value common stock.

      

      NOW
        THEREFORE, in consideration of the mutual covenants hereinafter set forth
        and
        for other good and valuable consideration, the parties hereto agree as
        follows:

      

      1. Grant
        of
        Option. The Company hereby grants to Director the right and option (the
“Option”) to purchase an aggregate of ________ shares of the Company’s $1.00 par
        value common stock (the “Shares”), such Shares being subject to adjustment as
        provided in paragraph 8 hereof, and on the terms and conditions herein set
        forth. The Shares are granted as a nonqualified option not entitled to special
        tax treatment under Internal Revenue Code Section 422A.

      

      2. Purchase
        Price. The purchase price of the Shares covered by the Option shall be $______
        per Share, such purchase price being 100% of the fair market value of such
        Shares on __________________, 20__ (the ‘Date of Grant”).

      

      3. Exercise
        of Option. Unless expired as provided in paragraph 5 below, and subject to
        the
        special provisions of paragraph 6 below, the Option may be exercised from
        time
        to time in whole or in part [for not more than 20% of the entire number of
        Shares at any time after the first anniversary of the Date of Grant, and
        an
        additional 20% of the total Shares on each of the four (4) succeeding
        anniversaries of] [at any time after the completion of six (6) months following]
        the Date of Grant. 

      

      4. Manner
        of
        Exercise; Payment of Purchase Price.

      

      A. Subject
        to the terms and conditions of this Agreement, the Option shall be exercised
        by
        written notice to the Company at its principal office. Such notice shall
        state
        the election to exercise the Option and shall specify the number of Shares
        sought to be exercised pursuant to the notice. Such notice of exercise shall
        be
        signed by Director and shall be irrevocable when given.

      

      B. The
        Notice of exercise shall be accompanied by the full payment, in cash, of
        the
        purchase price for the Shares or by tendering Shares owned by Director to
        the
        Company with a fair market value equal to the purchase price for the Shares
        or
        by a combination of such methods of payment.

      

      C. Upon
        receipt of the purchase price, and subject to the terms of paragraph 11,
        the
        certificate or certificates representing the Shares exercised shall be
        registered in the name of the person or persons so exercising the Option.
        If the
        Option shall be exercised by Director and, if Director shall so request in
        the
        notice exercising the Option, the Shares shall be registered in the name
        of
        Director and another person, as joint tenants with right of survivorship,
        and
        shall be delivered as provided above to or upon the written order of the
        person
        or persons exercising the Option. In the event the Option shall be exercised
        pursuant to paragraph 7 hereof, by any person or persons other than Director,
        such notice shall be accompanied by appropriate proof satisfactory to the
        Company of the right of such person or persons to exercise the Option. All
        Shares that shall be purchased upon the exercise of the Option as provided
        therein shall be fully paid and non-assessable.

      

      
        
           

        

        
          1

          
            

          

        

        
           

        

      

      5. Expiration
        of Option. A departing Director shall have twelve (12) months to exercise
        vested
        options for each full three (3) year term and any partial term served on
        the
        Board, to a maximum exercise period of thirty-six (36) months. In no event,
        however, shall the period to exercise this Option extend beyond the date,
        which
        is ten (10) years after the Date of Grant. Except as provided in paragraph
        6
        below, only those portions of this Option exercisable as of the date Director
        ceases to serve as a Director of the Company may be exercised, whether such
        termination is by retirement or otherwise. Any option not exercised within
        the
        permitted exercise period shall expire and become null and void.

      

      6. Acceleration
        of Exercisable Dates. Notwithstanding the provisions of paragraph 3 above
        relating to the exercise of this Option: (a) upon Director’s death or
        disability, this Option shall be fully vested and immediately exercisable,
        until
        the expiration date provided in paragraph 5 above, for the entire number
        of
        Shares covered hereby; (b) upon Director’s retirement, or other termination of
        service, this Option shall be fully vested and immediately exercisable, until
        the expiration date provided in paragraph 5 above, for the entire number
        of
        Shares covered hereby provided Director has completed at least five (5) years
        service on the Board; and (c) upon any Change in Control of the Company (as
        defined in the Plan), this Option shall be fully vested and immediately
        exercisable for a period of the lesser of thirty-six (36) months following
        the
        date of the Change of Control or the remaining life of the option (which
        shall
        not exceed ten (10) years from the Date of Grant), for the entire number
        of
        Shares covered hereby.

      

      7. Option
        Nontransferable. Unless otherwise approved by the Board, the Option and any
        right related thereto shall not be transferable by Director otherwise than
        by
        will or by the laws of descent and distribution and may be exercised, during
        Director’s lifetime, only by Director. Upon the death of Director, the Option
        may be exercised by Director’s executor, administrator, legatee or distributee,
        as the case may be, in accordance with paragraphs 4.C and 6.

      

      8. Adjustments
        of Shares Subject to Option. If the Shares shall at any time prior to exercise
        be changed or exchanged by reason of reorganization, merger, consolidation,
        recapitalization, reclassification, stock split, combination of Shares or
        a
        dividend payable in stock, then the aggregate number of Shares subject to
        this
        Agreement and the purchase price of such Shares shall be automatically adjusted
        such that Director’s proportionate interest shall be maintained as before the
        occurrence of such event. The determination of any such adjustment by the
        Board
        or the Administrative Committee shall be final, binding and
        conclusive.

      

      9. No
        Right
        to Continue as a Director. This Agreement does not constitute or be evidence
        of
        any agreement or understanding, express or implied, that the Company will
        retain
        Director for any period of time or at any particular rate of
        compensation.

      

      10. Rights
        as
        Shareholder. This Option shall not entitle Director or any permitted transferee
        to any rights of a shareholder of the Company or to any notice of proceedings
        of
        the Company with respect to any Shares issuable upon exercise of this Option
        unless and until the Option has been exercised for such Shares.

      

      11. Restriction
        on Issuance of Shares. The Company shall not be required to issue or deliver
        any
        certificate for Shares purchased upon the exercise of an Option prior to
        the
        obtaining of any approval from any governmental agency which the Company
        shall,
        in its sole discretion, determine to be necessary or advisable, and the
        completion of any registration or other qualification of such Shares under
        any
        state or federal law or ruling or regulations of any governmental body which
        the
        Company shall, in its sole discretion, determine to be necessary or advisable.
        In addition, if Shares reserved for issuance upon exercise of Options shall
        not
        then be registered under the Securities Act of 1933, the Company may, upon
        Director’s exercise of the Option, require Director or his permitted transferee
        to represent in writing that the Shares being acquired are for investment
        and
        not with a view to distribution, and may mark the certificate for the Shares
        with a legend restricting transfer and may issue stop transfer orders relating
        to such certificate to the transfer agent.

      

      12. Binding
        Effect. This Agreement shall be binding upon the heirs, executors,
        administrators, and successors of the parties hereto.

      
        
           

        

        
          2

          
            

          

        

        
           

        

      

      

      13. Governing
        Instrument and Law. This Option and any Shares issued hereunder shall in
        all
        respects be governed by the terms and provision of the Plan, and by the laws
        of
        the State of Texas, and in the event of a conflict between the terms of this
        Agreement and the terms of the Plan, the terms of the Plan shall
        control.

      

      THE
        BOMBAY COMPANY, INC.

      

      

      By:         /s/MICHAEL
        J. VEITENHEIMER      

      Michael
        J. Veitenheimer

      Vice
        President, Secretary and

      General
        Counsel

      

      

      Accepted
        and Agreed:

      

      

      _________________________________

      __________________,
        Director

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