Document:

CORPORATE INCENTIVE COMPENSATION PLAN

 	 

   

   EXHIBIT 10.5

   
   CATERPILLAR INC.

   
   CORPORATE INCENTIVE COMPENSATION PLAN
   

   MANAGEMENT AND SALARIED EMPLOYEES
   

   (AMENDED AND RESTATED THROUGH DECEMBER 31, 1999)

   
   Section 1.  Type of Plan and Purpose

   

 	1.1		 Type of Plan and Purpose. This Plan is an incentive
     compensation plan. The purpose of the Plan is to provide contingent
     benefits to Employees to reflect their efforts in contribution to the
     profitability of the Company; and to serve as an incentive for Employees
     further to contribute to the continued and future financial success of the
     Company and to its ability to provide continued employment opportunities
     to its Employees.

 

 	 		This Plan has been adopted in accordance with rules and guidelines
     established by the Stock Option and Officers’ Compensation Committee
     of the Board of Directors of the company. Those guidelines permit business
     and service units of Caterpillar Inc. or its subsidiaries to adopt
     separate incentive compensation plans within parameters established by
     that Committee based upon measurements approved by the company’s
     internal Incentive Compensation Review Committee. Those guidelines (a)
     generally require that a portion of the award under any such unit plan be
     based upon the corporate return on assets measurement established under
     this Plan, and (b) permit such unit plan to adopt a shorter eligibility
     period. Those unit incentive compensation plans with such a corporate
     measurement form a part of the Plan.

 

 	 		It is understood that the duty of the Employers, their Boards of
     Directors, and the management they select is to provide the Employers
     ’ shareholders protection of, and a maximum return on, their
     investment, consistent with retention in the business of such profits as
     the Board of Directors of the Company deems prudent, and with fair and
     competitive prices, wages, benefits and other terms of employment; no
     provision of this Plan or any unit incentive compensation plan shall be
     construed as altering that objective or in any way limiting management of
     such Board of Directors in the performance of their duties.

 

 	1.2		 Supplements. The succeeding provisions of this Plan will be
     expanded and/or modified by Supplements. Such Supplements will set forth
     the particulars wherein the provisions of this Plan, as applied to any
     group of Employees are expanded and/or differ from those set forth in the
     succeeding provisions of this Plan exclusive of such Supplements. All
     provisions of this Plan are subject to any express provisions to the
     contrary contained in any such Supplements.

 

 	
   
   Section 2.  Definitions

   

 	2.1		 Annual Salary Rate for any year means (i) in the
     case of a Participant who is a management employee, his monthly salary
     rate as of December 31 of that year (or his last day on the management
     payroll during that year if earlier) multiplied by 12; or (ii) in the case
     of a Participant who is a salaried employee, his weekly salary rate as of
     December 31 of that year (or his last day on the salaried payroll during
     that year if earlier) multiplied by 52.

 

 

 	Exhibit 10.5	Page 1 of 7

 

 	 

   

   

 	 		The Annual Salary Rate shall include any salary amount deferred under
     Part 2 of the Employees’ Investment Plan and contributed as a basic
     Employer contribution thereunder, and any salary amount deferred under the
     Flexible Spending Account, but excludes any (a) bonuses or special cash
     awards, (b) commissions, (c) international service allowances, (d) extra
     shift or overtime payments, (e) night shift premiums, (f) pay for vacation
     time not used and (g) payments under this plan or other payments or
     contributions (other than EIP 2 contributions) under any employee benefit
     plan.

 

 	2.2 		Company means Caterpillar Inc. or any successor to it by
     merger, consolidation, reorganization or otherwise.

 

 	2.3		 Company Service means all periods of full-time
     employment with the Company and its subsidiaries, including all periods of
     leave of absence and all periods of layoff.

 

 	2.4 		Effective Date of this Plan means January 1, 1993.

 

 	2.5		 Employee means, subject to Subsection 3.1, any person who is
     a resident or citizen of the United States of America or Canada and who on
     or after the Effective Date is in the regular full-time employ of an
     Employer (or a part-time or temporary employee included in a group for
     whom approval to include in the Plan has been obtained from the Incentive
     Compensation Review Committee) on its salaried or management payrolls and
     is employed for work on the prevailing schedules of the department to
     which he is assigned, and who is included in a group to whom the Plan has
     been made available by extension by an Employer and includes any such
     person while absent from work under circumstances which do not break
     continuity of service.

 

 	2.6		 Employer means the Company or any subsidiary of the Company
     that has adopted or adopts the Plan with the Company’s written
     consent.

 

 	2.7 		Officer means those Employees who fill the following
     positions: Vice President, Group President, and Chairman/Vice Chairman.
     For purposes of this Plan, the Controller and Treasurer are not included
     in the definition of Officer.

 

 	2.8		 Participant means any Employee who is eligible to be covered
     by the Plan pursuant to Subsection 3.1.

 

 	2.9		 The first Plan Year will begin on the effective date and
     will end on the first December 31 thereafter. Each subsequent Plan Year
     will end on the next following December 31.

 

 	
   
   Section 3.  Eligibility and Participation

   

 	3.1		 Eligibility and Participation. Each Employee of the
     Employer shall be eligible to be covered by the Plan and become a
     Participant as of the latest to occur of (i) the Effective Date; (ii) the
     date he has completed 90 days of Company Service (does not include any
     time with Advanced Technology Services); and (iii) the date he is included
     in a group to which the Plan has been and continues to be extended by an
     Employer. Notwithstanding anything contained herein to the contrary, for
     all purposes of the Plan, any U.S. International Service Employee who is
     not an Employee of the Company or any of the other Employers shall be
     considered to be an eligible Employee if he then meets the requirements of
     Subparagraph (ii) above. As used herein, the term “U.S. International
     Service Employee” means an Employee who (i) on the direction or with
     the permission of an Employer is transferred to employment outside of the
     United States of America with a subsidiary (whether or not organized or
     incorporated within the United States of America) which has not adopted
     the Plan; and (ii) meets the definition of a U.S. International Service
     Employee contained in the Company’s U.S. International Service
     Practices; and the term 

 

 

 	Exhibit 10.5	Page 2 of 7

 

 	 

   

   

 	 		Employee shall also include such other persons as shall be designated
     by the Committee. A Participant in the Plan shall continue as such so long
     as he meets the definition of an Employee contained in Subsection 2.5 or
     considered to be an Employee pursuant to this Subsection 3.1.

 

 	 		Notwithstanding the above, payment amounts shall not be duplicated
     under this Plan by amounts paid for the same period of service or
     corporate performance measurement under any other profit sharing plan,
     incentive compensation plan, gainsharing-type plan, or similar plan
     sponsored by Caterpillar Inc. or any of its subsidiaries, or would be paid
     except for any applicable waiting period expressed in such plan or except
     where specifically provided for in approved plan documentation. However,
     an Officer who is eligible to participate in an incentive compensation
     plan for a business or service unit under his control may participate in
     this Plan for that portion of his Annual Salary Rate not included in the
     calculation of his business or service unit incentive compensation
     payment.

 

 	3.2		 Employment Requirements. Any Participant shall be
     eligible for an incentive compensation benefit under the Plan for any
     year, provided that he is actively employed by the Company and any of its
     subsidiaries on December 31 of that year or is on leave of absence or
     layoff from the Company or any of its subsidiaries on such December 31;
     except that any otherwise eligible Employee who died, retired, or received
     a separation payment in lieu of layoff during such year shall also be
     covered as if he were an active Employee on December 31 of that
     year.

 

 	
   
   Section 4.  Amount of Benefit

   

 	4.1		 Salary Grade 23 and Below. The amount payable to a
     Participant at Salary Grade 23 and below (as of December 31 of that year)
     shall be determined by multiplying the Participant’s Annual Salary
     Rate times the following applicable rate of percentage for that salary
     grade times the applicable Corporate Performance Factor:

 

 		Salary Grade 
 		Percentage 
 	
	 	 	21 and below	 	7%	
	 	 	22	 	8%	
	 	 	23	 	9%	

 

 	4.2		 Salary Grade 24 and Above. The amount payable to a
     Participant at Salary Grade 24 and above (as of December 31 of that year)
     shall be determined by multiplying his Annual Salary Rate times the Team
     Award percentage (determined from Exhibit 1 for non-Officer Participants
     in Salary Grades 24 and above, and from Exhibit 2 for Officers), for his
     salary grade as of December 31, times the applicable Corporate Performance
     Factor, plus the amount of his Individual Award, if any. Designated
     Officers may participate in their units’ incentive compensation plan
     and may be eligible for Team Awards based on their division results and
     the corporate performance of Caterpillar Inc. (each award to be prorated
     according to the approved weighting between the division results and
     corporate performance).

 

 	  		Individual Awards may be made only from a discretionary pool. A
     separate Employee Discretionary Pool will be established for Participants
     (excluding Officers) for each Vice Presidential administrative area or for
     each group of Participants subject to a business or service unit incentive
     compensation plan. A separate discretionary pool will be established for
     Officers.

 

 

 	Exhibit 10.5	Page 3 of 7

 

 	 

   

   

 	  		The Individual Award, if any, for which only Participants in Salary
     Grades 24 and above are eligible, shall be determined solely at the
     discretion of the Participant’s Unit Manager (or by the Compensation
     Committee of the Board of Directors for Officers) and shall not exceed the
     amount of the Employee’s Team Award. In addition, the sum of the
     Individual Awards payable to all Participants in Salary Grade 24 and above
     shall not exceed the Employee Discretionary Pool Amount. The Employee
     Discretionary Pool Amount shall be 25% of the total amount of the Team
     Awards paid to Participants at Salary Grade 24 and above (excluding
     Officers).

 

 	  		The sum of the Individual Awards payable to Participants who are
     Officers shall not exceed the Officer Discretionary Pool Amount. The
     Officer Discretionary Pool Amount shall be the sum of each Officer’s
     percentage of annual salary rate (See Exhibit 1) adjusted by the Corporate
     Performance Factor defined in Section 4.4. The Officer Discretionary Pool
     will be calculated as if all officers participated wholly and exclusively
     in the Corporate Incentive Compensation Plan. Individual awards payable to
     the officers are at the total discretion of the Chairman who may choose to
     use all, part or none of the award so determined (any amounts not used do
     not carry over).

 

 	4.3		 Individual Performance Level Less Than Five.  Notwithstanding
     the provisions of Subparagraphs 4.1 or 4.2 to the contrary, Employees or
     Officers with a performance rating of Individual Performance Level 5 or
     those who have unsatisfactory/unacceptable performance in units not using
     specific performance ratings will not be eligible for a Team Award or an
     Individual Award, and contributions shall not be made to either the
     Participant Discretionary Pool Amount or the Officer Discretionary Pool
     Amount for such Employees or Officers.

 

 	4.4		 Corporate Performance Factor. The Corporate Performance
     Factor will be determined each year in relation to minimum, target and
     maximum corporate return on asset (ROA) levels determined by the Company
     (see Exhibit 3). The actual performance factor will be determined by
     interpolation based on the actual ROA achieved at the end of the year
     compared to these levels, and the participants team incentive compensation
     amount, if any, will be calculated accordingly. The achieved ROA will be
     determined by dividing Profit by the Average Gross Assets rounded to the
     nearest third decimal. The Company must achieve the minimum ROA percentage
     specified before any amount shall be payable.

 

 	  		As used herein, the term “Average Gross Assets” means the
     total corporate assets averaged throughout the year. Total corporate
     assets excludes the assets of Financial Products but includes the
     investment in Financial Products and is reported in the Annual Report and
     the Quarterly Report to Stockholders under the column entitled Machinery
     and Engines as Supplemental Consolidating Data on the Statement of
     Financial Position. The average for the year will be calculated by adding
     together five points: the ending balance for the previous year and the
     ending balance for each of the four quarters during the year and dividing
     by five. The term “Profit” means the amount of profit for the
     year before income taxes reported in such Statement 1 (or any equivalent
     successor statement thereto which provides such amount of profit) in the
     subtotal immediately preceding the provision for income taxes line, but
     increased by the amount of expense for that year for incentive
     compensation amounts payable under the Plan and any other similar
     incentive compensation plan or profit sharing plan of the Employers
     (excluding any investment plan of the Employers) and any awards granted
     under any bonus plan of the Employers. Such Profit before income taxes
     would exclude the effect of extraordinary gains or losses, if any, as
     defined by generally accepted accounting principles. Profit shall also
     exclude income from nonconsolidated operations. Consolidated Financial
     Statements which are prepared using generally accepted accounting
     principles and as audited by the Company’s independent certified
     public accountants shall be final and conclusive.

 

 

 	Exhibit 10.5	Page 4 of 7

 

 	 

   

   

 	4.5		 Percentage Determination. The Employee’s Team Award
     percentage, Individual Award percentage, Employee Discretionary Pool
     Amount percentage, Officer Discretionary Pool Amount percentage, the
     Corporate Performance Factors, the Company’s ROA target percentage,
     and the minimum and maximum percentage will be determined for each year by
     the Committee on Stock Options and Officer’s Compensation.

 

 	4.6 		RIP, EIP, etc. Credit. 100% of the amount paid under the Plan
     to an Employee shall be counted as compensation for the month in which
     payment is made for purposes of the Retirement Income Plan or any other
     pension plan sponsored by Caterpillar Inc. or its subsidiaries, in which
     the Employee is a Participant. No incentive compensation amount shall be
     taken into account under the Employee’s Investment Plan, the Group
     Insurance Plan, or any other employee benefit plan or payroll practice of
     Caterpillar Inc. or its subsidiaries.

 

 	4.7		 Proration of Payment Amount. If an Employee is not a
     Participant or is not actively employed by an Employer for the entire year
     but is eligible for an incentive compensation amount for the year pursuant
     to the provisions of Subsection 3.2, his payment amount will be prorated
     based upon his days of active employment in that year on the management or
     salaried payrolls while a Participant. Days while on disability leave of
     absence will be counted as days of active employment in accordance with
     uniform rules established by the Committee with respect to the maximum
     number of such days to be counted during any period of disability leave of
     absence, but in no event shall any days occurring after the expiration of
     a continuous period of absence of six months be counted. No other leaves
     of absence will be counted for purposes of calculating the payment
     amount.

 

 	4.8		 Participation in Another Incentive Compensation Plan. If an
     Employee, who otherwise met the eligibility requirements of Section 3,
     ceased to be a Participant during the Plan Year because he became a
     participant in another incentive compensation plan sponsored by
     Caterpillar Inc. or one of its subsidiaries, he shall be eligible for a
     Team Award and/or an Individual Award under this Plan for that period of
     time that he was a Participant in this Plan. Twenty five percent (25%) of
     the prorated Team Award paid under this Plan shall be included in the
     Employee Discretionary Pool Amount.

 

 	4.9		 Transfer from Hourly Payroll. Notwithstanding anything
     contained herein to the contrary, if a Participant or former Participant
     is employed by the Employers on December 31 of any Plan Year and does not
     receive a payment for any period of employment in that Plan Year under
     either this Plan or the profit sharing plan or an incentive compensation
     plan covering employees on the hourly payroll of the Employers, he shall
     receive a payment under this Plan for such period of employment in the
     same amount which would otherwise have been payable to him under the terms
     of this Plan or under such hourly plan but for his ineligibility
     thereunder because he was not participating therein on said December
     31.

 

 	4.10		 Supplemental Employees. Notwithstanding anything contained
     herein to the contrary, if (a) a Participant ceases to be a full-time
     Employee of an Employer, and (b) on December 31 of the year in which said
     Participant ceases to be a full-time Employee, he is and has thereafter
     been continuously employed as a supplemental employee on either a
     part-time or temporary basis by an Employer, his payment amount shall be
     prorated based upon his days of active regular full-time employment in
     that year on the salaried or management payroll while a Participant. His
     Annual Salary Rate shall be the rate in effect when he ceased full-time
     employment.

 

 

 	Exhibit 10.5	Page 5 of 7

 

 	 

   

   
   Section 5.  Incentive Compensation Payment

   

 	5.1		 Date and Method of Payment. Any amount which is payable for
     any year shall be paid to an eligible Participant not later than 3 months
     of the year following the year for which the amount is computed. The
     amount of such payment shall be paid by check less required withholding
     for federal, state, local and other taxes. Payments will be made in the
     same currency in which the Employee receives his base salary.

 

 	5.2		 Beneficiaries. If a Participant is deceased at the time any
     payment is payable to him, the amount of such payment shall be payable to
     the same person or persons and in the same proportionate amount as shall
     be payable to the beneficiary or beneficiaries of his basic life insurance
     under the Group Insurance Plan of his Employer.

 

 	5.3		 Lost Participants. If any payment becomes distributable
     pursuant to Subsection 5.1 and the whereabouts of a Participant (or any
     beneficiary pursuant to Subsection 5.2) is then unknown to the Employer
     and the Employer shall fail to receive a claim for such payment from the
     person entitled thereto (or from any other person validly acting on his
     behalf), then such payment shall be disposed of in an equitable manner as
     permitted by law under rules adopted by the Plan Administrator.

 

 	
   
   Section 6.  Miscellaneous

   

 	6.1		 Administration of the Plan. Except as otherwise expressly
     provided, the Plan shall be administered by the Incentive Compensation
     Review Committee (“the  Committee”), appointed by the
     Chairman of the Board, who shall be the Plan Administrator and shall be
     authorized to (a) determine all questions arising in the administration of
     the Plan, (b) establish rules and procedures to carry out their duties and
     responsibilities, (c) delegate such duties and responsibilities to other
     employees of the Employers, and (d) do all other acts which in its
     judgment are necessary for the proper administration of this
     Plan.

 

 	6.2		 Facility of Payment. If the Committee shall receive evidence
     satisfactory to it that any Participant or other person entitled to
     receive a benefit under this Plan is physically or mentally incompetent to
     receive such payment and to give a valid release therefor, the Committee
     at its discretion may make payment in one or more of the following ways:
     (a) directly to such Participant or person, (b) to his legal guardian or
     conservator, or (c) to his spouse or to any other person to be expended
     for his benefit. The decision of the Committee shall be in each case final
     and binding on all persons in interest.

 

 	6.3		 Amendment and Termination of Plan. The Company shall have the
     power at any time and from time to time, by action of its Board of
     Directors, to amend or terminate this Plan; provided, however, that the
     Committee may also amend the Plan so long as such amendment does not
     change the duties and responsibilities of the Committee or the Stock
     Option and Officers’ Compensation Committee of the Company’s
     Board of Directors and so long as the cost of such amendment to the
     Employers does not exceed $100,000 per year.

 

 	6.4		 Employment Rights. Participation in the Plan will not give
     any Employee or an Employer any right to be retained in the service of the
     Company or its subsidiaries, nor any right or claim to any payment under
     the Plan unless such right or claim has specifically accrued under the
     terms of the Plan.

 

 

 	Exhibit 10.5	Page 6 of 7

 

 	 

   

   

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

 

 	6.6		 Gender and Number. Where the context permits, words in the
     masculine gender shall include the feminine gender, the plural shall
     include the singular, and the singular shall include the
     plural.

 

 

 	Exhibit 10.5	Page 7 of 7DIRECTORS' DEFERRED COMPENSATION PLAN

 	 

   

   EXHIBIT 10.6

   
   CATERPILLAR INC.
   

   DIRECTORS’ DEFERRED COMPENSATION PLAN, AS AMENDED
   

   (AS AMENDED AND RESTATED THROUGH 4/12/99)

   

 	1. 		Purpose

 

 	 		The purpose of the Caterpillar Inc. Directors’ Deferred
     Compensation Plan (the “Plan”) is to provide each eligible
     member of the Board of Directors (the “Board”) of Caterpillar
     Inc. (the “Company”) with an opportunity to defer the payment of
     the compensation (excluding expense reimbursements) payable from time to
     time either for services as a Director of the Company, including but not
     limited to annual fees and fees payable for attendance at meetings of the
     Board and of Committees of the Board, or for others services performed for
     or on behalf of the Company (“Compensation”).

 

 	2. 		Eligibility

 

 	 		Any member of the Board (“Director”) is eligible to
     participate in the Plan.

 

 	3. 		Election to Defer

 

 	 		In order to participate in the Plan, a Director must make a valid
     election, on or before December 1 of any year, to defer payment of all or
     a stated percentage of the Compensation (but not less than 50% of such
     Compensation) that would otherwise be payable to him during the following
     calendar year and each succeeding calendar year until such Director ceases
     to be eligible to participate in the Plan or until such election is
     otherwise modified or terminated as provided herein (any such Director
     being hereinafter called a “Participant”). Any such election
     must be made by timely written notice delivered to the Director,
     Compensation and Benefits, of the Company by use of the Deferred
     Compensation Form attached hereto as Exhibit A which shall specify the
     amount deferred and form and time of distribution.

 

 	 		Any person who shall first become a Director during any calendar
     year, and who was not a Director on the preceding December 31, may elect,
     before his term as a Director begins, to defer payment of all or a stated
     percentage of the Compensation (but not less than 50% of such
     Compensation) that would otherwise be payable to him during the remainder
     of such calendar year and each succeeding calendar year until such
     election is otherwise modified or terminated as provided herein. Any such
     election must be made by timely written notice delivered to the Director,
     Compensation and Benefits, of the Company by use of such Deferred
     Compensation Form.

 

 

 	Exhibit 10.6	Page 1 of 4

 

 	 

   

   

 	 		In the event that a Participant desires to modify the amount of
     Compensation that is being deferred, the Participant may do so by
     delivering a revised Deferred Compensation Form to the Director,
     Compensation and Benefits, of the Company. Such modified election shall be
     effective for each calendar year following the year in which such Form is
     delivered to the Director, Compensation and Benefits, and until such
     election is modified or terminated as provided herein.

 

 	 		In the event that a Participant desires to change his scheduled
     distribution commencement date, the Participant may do so by delivering a
     revised Deferred Compensation Form to the Director, Compensation and
     Benefits, of the Company; provided that such modified election shall be
     made (a) while an active Director, and (b) prior to November 30 of any
     year to be effective the following January 1.

 

 	 		In the event that a Participant desires to change his choice as to
     whether distribution is made in a lump sum or in installments or as to the
     number of installment payments to be made, the Participant may do so by
     delivering a revised Deferred Compensation Form to the Director,
     Compensation and Benefits, of the Company; provided that such modified
     election shall be made prior to November 30 of any year to be effective
     the following January 1, except that if the Participant has ceased to be a
     Director, such modified election shall not be effective unless made prior
     to November 30 of the second year that precedes the year of the scheduled
     distribution commencement date.

 

 	 		In the event that a Participant should desire to terminate the
     deferral of his Compensation, the Participant must elect to do so by
     written notice delivered to the Director, Compensation and Benefits, of
     the Company. Such termination shall become effective as of the end of the
     calendar year in which notice of termination is given with respect to
     Compensation payable during subsequent calendar years. An election to
     terminate deferral of Compensation will be effective for all future
     calendar years unless a new Deferred Compensation Form is completed and
     delivered to the Director, Compensation and Benefits, of the Company.
     Amounts credited to the account of a Participant prior to the effective
     date of termination shall not be affected by such termination election and
     shall be paid only in accordance with paragraphs 6 and 7
     hereof.

 

 	4. 		Amount of Deferral

 

 	 		A Participant may elect to defer all or a specified portion of the
     Compensation (but not less than 50% of such Compensation) payable from
     time to time as a result of his service as a Director.

 

 	5. 		Status of Accounts

 

 	 		All deferred Compensation shall be held in the general funds of the
     Company, but the Company will establish an individual bookkeeping account
     for each Participant to which the deferred Compensation for that
     Participant will be credited. Deferred Compensation will be credited to
     the individual account of a Participant at the same time that it would
     otherwise have been paid to the Director in the absence of a deferral
     election. The

 

 

 	Exhibit 10.6	Page 2 of 4

 

 	 

   

   

 	 		Company will credit interest to the individual account of a
     Participant on a quarterly basis. The interest rate will be equal to the
     base corporate lending rate (sometimes referred to as the “prime rate
     ”) applicable to commercial lending customers of Citibank, N.A., New
     York, New York (or any successor thereto) on the last business day of each
     calendar quarter. The annual interest rate will be divided by four and
     applied effective the last day of each quarter to the total average daily
     amount (deferred Compensation and accrued interest) in each Participant
     ’s account in that quarter. In any calendar quarter in which a
     Participant does not have deferred amounts credited to his account for the
     entire period of that quarter, interest will be credited pro rata based on
     the number of business days that amounts are credited to his account in
     that quarter compared to the total number of business days in that
     quarter.

 

 	 		The deferral of Compensation and the establishment of individual
     bookkeeping accounts shall not be deemed to have created a trust, and no
     Participant shall have any ownership interest in any and interest thereon
     under this Plan shall not be transferrable or assignable. Each Participant
     will receive an annual report showing the status of his account at the
     close of each calendar year.

 

 	 		As an alternative to the crediting of interest to the individual
     account (“interest election”), each Participant may elect to
     have all or a specified percentage of his Compensation treated as though
     it were invested in Company common stock (“stock election”).
     Pursuant to Rule 16b-3(d)(1) under the Securities Exchange Act of 1934,
     any stock election or amendment thereto must be approved by the
     Compensation Committee of the Board prior to taking effect. If a
     Participant makes a stock election, dividend equivalents will accrue to
     the account quarterly and will be reinvested and a Participant’s
     account will in all other respects reflect share ownership for events such
     as a stock split but no voting rights will exist. The number of shares of
     stock equivalents shall be determined by dividing the amount of
     Compensation (deferred into stock equivalents) or dividends credited by
     the average of the high and low prices of Company common stock on the New
     York Stock Exchange on the date of such deferral or dividend credit (or
     the next succeeding trading day if there is no trading on that date). A
     Participant’s account will be valued based on the average of the high
     and low prices for Company common stock on the New York Stock Exchange as
     of (a) the last trading day in December prior to the January of the
     year(s) in which distribution occurs or (b) the date of the Participant
     ’s death (or the next succeeding trading day if there is no trading
     on that date). Distribution of account balances shall be in cash. All such
     elections must be made on forms approved by the Director, Compensation and
     Benefits.

 

 	 		A director may elect to switch previously deferred amounts between
     the stock equivalent and interest accounts provided that an election to
     switch amounts from the stock equivalent account to the interest account
     does not occur within six months of an election to switch from the
     interest account to the stock equivalent account, and vice versa. Any such
     election shall be made by written notice to the Director, Compensation
     & Benefits, and will become effective on the first of the month
     following the month in which the election was made.

 

 

 	Exhibit 10.6	Page 3 of 4

 

 	 

   

   

 	6. 		Disbursement Schedules

 

 	 		Each Participant shall elect on the Deferred Compensation Form one of
     the following options under which deferred Compensation and interest
     thereon will be payable:

 

 		a) 		A lump sum payment, or

 

 		b) 		Annual installments for a period of up to 10 years

 

 	 		Each Participant may elect on the Deferred Compensation Form that the
     payment of installments will commence, or a lump sum payment will be made
     in January of any calendar year following:

 

 		a) 		the year in which the Participant ceases to be a Director,
     or

 

 		b) 		the year in which the Participant retires from his principal
     occupation.

 

 	7. 		Death of a Participant

 

 	 		Upon the death of a Participant, the balance in the Participant
     ’s account (including interest for the elapsed portion of the year of
     death) shall be determined as of the date of death and such balance shall
     be paid as soon as reasonably possible thereafter in a lump sum payment to
     such beneficiary as the Participant shall have designated in writing to
     the Company and filed with its Director, Compensation and Benefits, or in
     the absence of such designation, to the Participant’s
     estate.

 

 	8. 		Amendment or Termination of the Plan

 

 	 		The Board of Directors may at any time amend or terminate this Plan,
     but no amendment or termination will have the effect of reducing the
     amount that any Participant is entitled to receive prior to such amendment
     or termination nor accelerating the distribution of any amount theretofore
     credited to a Participant’s account; provided, however, that in the
     event a Participant (or, if applicable, the designated beneficiary) incurs
     a severe financial hardship caused by an accident, illness, or other event
     beyond the control of the Participant (or, if applicable, designated
     beneficiary) the Stock Option and Officers’ Compensation Committee of
     the Company, in its sole discretion, may revise such Participant’s
     (or, if applicable, designated beneficiary) payment schedule for
     distribution from the interest account (but not from the stock-equivalent
     account) to the extent reasonably necessary to eliminate such financial
     hardship.

 

 	9. 		Administration

 

 	 		Except as otherwise expressly provided herein, the Plan shall be
     administered under the direction of the Director, Compensation and
     Benefits, of the Company.

 

 

 	Exhibit 10.6	Page 4 of 4

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