Document:

Exhibit
10.(f)

 

CUMMINS INC. DEFERRED COMPENSATION PLAN

FOR NON-EMPLOYEE DIRECTORS

 

 

Restated
as of January 1, 2008

 

 

TABLE OF CONTENTS

 

	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  
	
  ARTICLE I

  	
  RESTATEMENT AND PURPOSE

  	
  1

  
	
   

  	
   

  	
   

  
	
  Section 1.01.

  	
  Restatement and Application

  	
  1

  
	
  Section 1.02.

  	
  Application of Restatement

  	
  1

  
	
  Section 1.03.

  	
  Purpose

  	
  1

  
	
  Section 1.04.

  	
  Funding

  	
  1

  
	
   

  	
   

  	
   

  
	
  ARTICLE II

  	
  DEFINITIONS AND INTERPRETATION

  	
  1

  
	
   

  	
   

  	
   

  
	
  Section 2.01.

  	
  Definitions

  	
  1

  
	
  Section 2.02.

  	
  Rules of Interpretation

  	
  4

  
	
   

  	
   

  	
   

  
	
  ARTICLE III

  	
  PARTICIPATION

  	
  5

  
	
   

  	
   

  	
   

  
	
  Section 3.01.

  	
  Commencement of Participation

  	
  5

  
	
  Section 3.02.

  	
  Cessation of Participation

  	
  5

  
	
   

  	
   

  	
   

  
	
  ARTICLE IV

  	
  ELECTIONS TO DEFER

  	
  5

  
	
   

  	
   

  	
   

  
	
  Section 4.01.

  	
  General Provisions

  	
  5

  
	
  Section 4.02.

  	
  Election Form

  	
  6

  
	
   

  	
   

  	
   

  
	
  ARTICLE V

  	
  DEFERRED COMPENSATION ACCOUNTS

  	
  6

  
	
   

  	
   

  	
   

  
	
  Section 5.01.

  	
  Establishment of Deferred Cash Accounts

  	
  6

  
	
  Section 5.02.

  	
  Establishment of Deferred Stock Account

  	
  6

  
	
  Section 5.03.

  	
  Separate Accounts for Grandfathered Amounts

  	
  7

  
	
   

  	
   

  	
   

  
	
  ARTICLE VI

  	
  ADJUSTMENTS TO DEFERRED CASH
  ACCOUNTS

  	
  7

  
	
   

  	
   

  	
   

  
	
  ARTICLE VII

  	
  PAYMENT OF DEFERRED AMOUNTS

  	
  7

  
	
   

  	
   

  	
   

  
	
  Section 7.01.

  	
  Timing of Payments

  	
  7

  
	
  Section 7.02.

  	
  Amount of Installment Payments

  	
  8

  
	
  Section 7.03.

  	
  Death Benefits

  	
  8

  
	
  Section 7.04.

  	
  Payments Upon a Change of Control

  	
  8

  
	
  Section 7.05.

  	
  Designating a Beneficiary

  	
  8

  
	
   

  	
   

  	
   

  
	
  ARTICLE VIII

  	
  ADMINISTRATION OF PLAN

  	
  8

  
	
   

  	
   

  	
   

  
	
  Section 8.01.

  	
  Powers and Responsibilities of the Administrator

  	
  8

  
	
  Section 8.02.

  	
  Indemnification

  	
  9

  
	
  Section 8.03.

  	
  Claims and Claims Review Procedure

  	
  9

  
	
   

  	
   

  	
   

  
	
  ARTICLE
  IX

  	
  GROSS-UP
  PAYMENTS

  	
  10

  
	
   

  	
   

  	
   

  
	
  ARTICLE X

  	
  AMENDMENT
  AND TERMINATION

  	
  11

  
				

 

i

 

	
  ARTICLE XI

  	
  MISCELLANEOUS

  	
  11

  
	
   

  	
   

  	
   

  
	
  Section 11.01.

  	
  Obligations of Employer

  	
  11

  
	
  Section 11.02.

  	
  Employment Rights

  	
  12

  
	
  Section 11.03.

  	
  Non-Alienation

  	
  12

  
	
  Section 11.04.

  	
  Tax Withholding

  	
  12

  
	
  Section 11.05.

  	
  Other Plans

  	
  12

  
	
  Section 11.06.

  	
  Liability of Affiliated Employers

  	
  12

  
				

 

ii

 

CUMMINS INC. DEFERRED COMPENSATION PLAN FOR

NON-EMPLOYEE DIRECTORS

 

ARTICLE I

RESTATEMENT AND PURPOSE

 

Section 1.01.                         Restatement and Application.  Cummins Inc. established the Deferred
Compensation Plan for Non-Employee Directors of Cummins Engine Company, Inc.
(“Plan”), effective April 5, 1994, and it has amended the Plan since that
time.  By this restatement, which is
generally effective January 1, 2008, the Company amends the Plan to comply
with the requirements of Code Section 409A and the final regulations and
guidance thereunder.

 

Section 1.02.                         Application of Restatement.  This restatement shall apply, effective January 1,
2008, to all amounts deferred or vested under the Plan after 2004 and any
earnings credited with respect to such amounts. 
It does not apply to any amount deferred and vested on or before December 31,
2004, or any earnings credited under the Plan with respect to such amounts
(together, “Grandfathered Amounts”), and Grandfathered Amounts shall continue
to be governed by the terms and conditions of the Plan without regard to this
restatement; provided, however, the person or persons entitled to receive any
remaining portion of a Participant’s Accounts after his death shall be
determined pursuant to this restatement, provided that the Participant’s death
occurs after 2004.

 

Section 1.03.                         Purpose.  The sole
purpose of this Plan is to provide non-employee directors of the Company with
an opportunity to defer Compensation from the Company in accordance with the
terms and conditions set forth herein.

 

Section 1.04.                         Funding.  The Company
has established a grantor trust to hold assets for the provision of certain
benefits under the Plan as well as other employer benefits.  Assets of the Trust are subject to the claims
of the Employer’s general creditors, and no Participant shall have any interest
in any assets of the Trust or the Company other than as a general creditor of
the Company.

 

ARTICLE II

DEFINITIONS AND INTERPRETATION

 

Section 2.01.                         Definitions.  When the
first letter of a word or phrase is capitalized herein, the word or phrase
shall have the meaning specified below:

 

(a)                                  “Account”
means, with respect to a Participant, his Deferred Cash Account or Deferred
Stock Account.  Where the context
permits, “Account” also means the amount credited to such Account.

 

(b)                                 “Administrator”
means the Company’s Benefits Policy Committee or such other person that the
Board designates as Administrator.  To
the extent that the Administrator delegates a duty or responsibility to an
agent, the term “Administrator” shall include such agent.

 

 

(c)                                  “Affirmation of
Domestic Partnership” means an Applicable Form for affirming the
relationship between a Participant and his Domestic Partner.

 

(d)                                 “Applicable
Form” means a form provided by the Administrator for making an election or
designation under the Plan.

 

(e)                                  “Beneficiary”
means the person or entity entitled to receive a Participant’s death benefits
under Section 7.03, if any, remaining after the Participant’s death.  A Participant’s Beneficiary shall be
determined as provided in Section 7.05.

 

(f)                                    “Benefit Claim”
means a request or claim for a benefit under the Plan, including a claim for
greater benefits than have been paid.

 

(g)                                 “Board” or “Board
of Directors” means the Company’s Board of Directors or, where the context so
permits, its designee.

 

(h)                                 “Cash Deferrals”
means the cash portion of eligible Compensation deferred by a Director pursuant
to the Plan.

 

(i)                                     “Change of
Control” means the occurrence of any of the following:

 

(1)                                  there shall be consummated (A) any
consolidation or merger of the Company in which the Company is not the
continuing or surviving corporation or pursuant to which shares of the Company’s
common stock would be converted in whole or in part into cash or other
securities or property, other than a merger of the Company in which the holders
of the Company’s common stock immediately before the merger have substantially
the same proportionate ownership of common stock of the surviving corporation
immediately after the merger, or (B) any sale, lease, exchange or transfer
(in one transaction or a series of related transactions) of all or
substantially all of the assets of the Company, or

 

(2)                                  the liquidation or
dissolution of the Company, or

 

(3)                                  any ‘person’ (as such term
is used in Sections 13(d)(3) and 14(d)(2) of the Securities Exchange
Act of 1934, as amended (‘the Exchange Act’)), other than the Company or a
subsidiary thereof or any employee benefit plan sponsored by the Company or a
subsidiary thereof or a corporation owned, directly or indirectly, by the
shareholders of the Company in substantially the same proportions as their
ownership of stock of the Company, shall become the beneficial owners (within
the meaning of Rule 13d-3 under the Exchange Act) of securities of the
Company representing 25% or more of the combined voting power of the Company’s
then outstanding securities ordinarily (and apart from rights accruing in
special circumstances) having the right to vote in the election of directors,
as a result of a tender or exchange offer, open market purchases, privately
negotiated purchases, or otherwise, or

 

2

 

(4)                                  at any time during a period of
two consecutive years, individuals who at the beginning of such period
constituted the Board of Directors shall cease for any reason to constitute at
least a majority thereof, unless the election or the nomination for election by
the Company’s stockholders of each new director during such two-year period was
approved by a vote of at least two-thirds (2/3) of the directors then still in
office who were directors at the beginning of such two-year period, or

 

(5)                                  any other event shall occur
that would be required to be reported in response to Item 6(e) (or any
successor provision) of Schedule 14A or Regulation 14A promulgated under the
Exchange Act.

 

Notwithstanding the preceding provisions, an
event or series of events shall not constitute a Change of Control unless the
event or series of events qualifies as a change in the ownership or effective
control of the corporation or in the ownership of a substantial portion of the
assets of the corporation within the meaning of Code Section 409A(a)(2)(A)(v).

 

(j)                                     “Code” means
the Internal Revenue Code of 1986, as amended from time to time.

 

(k)                                  “Company” means
Cummins Inc.

 

(l)                                     “Compensation”
means all fees, including shares of the Company’s common stock otherwise
payable pursuant to the Company’s Restricted Stock Plan for Non-Employee
Directors, earned as a Director, and fees to be received for serving as a
chairperson or member or for attending a meeting of a Board committee;
provided, however, Compensation does not include any consulting fees earned by
the Director.

 

(m)                               “Deferred Cash
Account” means the bookkeeping account established by the Company for a
Participant under Section 5.01.

 

(n)                                 “Deferred Stock
Account” means the bookkeeping account established by the Company for a
Participant under Section 5.02.

 

(o)                               “Denial” or “Denied”
means a denial, reduction, termination, or failure to provide or make payment
(in whole or in part) of a Plan benefit.

 

(p)                                 “Director”
means a member of the Company’s Board of Directors who is not an officer or
employee of the Company.

 

(q)                                 “Domestic
Partner” means a person of the same or opposite sex (i) with whom the
Participant has a single, dedicated relationship and has shared the same
permanent residence for at least six months, (ii) who is not married to
another person or part of another domestic partner relationship and is at least
age 18, (iii) who, with the Participant, is mutually responsible for the
other’s welfare, (iv) who, with the Participant, intends for their
relationship to be permanent, (v) who is not so closely related to the
Participant as to preclude marriage under state law, and (vi) for whom
there is an Affirmation of Domestic Partnership on file with the
Administrator.  In determining whether
the requirements of clauses (i) through (v) of the preceding sentence
have 

 

3

 

been satisfied, the
Administrator may rely on the Affirmation of Domestic Partner filed with the
Administrator.

 

(r)                                    “Grandfathered
Amount” has the meaning specified in Section 1.02.

 

(s)                                  “Non-Grandfathered
Amount” means a benefit under the Plan that is not a Grandfathered Amount.

 

(t)                                    “Participant”
means a Director who agrees to make deferrals under the Plan and to be bound by
the provisions of the Plan on a form provided by the Company, and who is, or
whose Beneficiaries are, entitled to benefits under the Plan.  Once an individual has become a Participant
pursuant to the preceding sentence, he shall remain a Participant until his
entire benefit under the Plan has been distributed.

 

(u)                                 “Payment Year”
means a Director’s annual term of service, which is the period beginning on the
day after an annual shareholders meeting of the Company and ending on the date
of the subsequent year’s annual shareholders meeting.

 

(v)                                 “Plan” means
the “Cummins Inc. Deferred Compensation Plan for Non-Employee Directors,” as
set out in this document and as it may be amended from time to time.

 

(w)                               “Qualified
Domestic Relations Order” has the meaning specified in Code Section 414(p).

 

(x)                                   “Spouse” means,
as of the date a Participant’s benefits under the Plan are paid, or commence to
be paid, (i) the person to whom the Participant is married in accordance
with applicable law of the jurisdiction in which the Participant resides, or (ii) in
the case of a Participant not described in clause (i), the Participant’s
Domestic Partner.

 

(y)                                 “Stock
Deferrals” means the stock portion of eligible Compensation deferred by a
Director pursuant to the Plan.

 

(z)                                   “Terminates
Service,” “Termination of Service,” or any variation thereof refers to a
separation from service within the meaning of Code Section 409A(a)(2)(A)(i) for
a reason other than the Director’s death.

 

Section 2.02.                         Rules of Interpretation.

 

(a)                                  The Plan is
intended to comply with Code Section 409A, and it shall be interpreted and
administered in accordance with such intent. 
Except as provided in the preceding sentence or as otherwise expressly
provided herein, the Plan shall be construed, enforced, and administered, and
the validity thereof determined, in accordance with the internal laws of the
State of Indiana without regard to conflict of law principles, and the
following provisions of this Section.

 

(b)                                 Words used
herein in the masculine shall be construed to include the feminine, where
appropriate, and vice versa, and words used herein
in the singular or plural shall be construed to include the plural or singular,
where appropriate.

 

4

 

(c)                                  Headings and
subheadings are used for convenience of reference only and shall not affect the
interpretation of any provision hereof.

 

(d)                                 If any
provision of the Plan shall be held to violate the Code or be illegal or
invalid for any other reason, that provision shall be deemed null and void, but
the invalidation of that provision shall not otherwise affect the Plan.

 

(e)                                  Reference to
any provision of the Code or other law shall be deemed to include a reference
to the successor of such provision.

 

ARTICLE III

PARTICIPATION

 

Section 3.01.                         Commencement of Participation.  The Board or its designee shall provide each
Director with a copy or summary of the Plan and the forms needed to make Cash
Deferrals or Stock Deferrals under the Plan. 
Any such Director shall become a Participant only after completing such
forms and making such elections as the Board may prescribe, including an
agreement to be bound by all terms of the Plan and all determinations of the
Board.

 

Section 3.02.                         Cessation of Participation.  A Participant shall continue to be eligible
to make deferrals under the Plan until the Participant ceases to be an eligible
Director.  Termination of participation
shall be effective as of the date on which the Director both Terminates Service
and his entire interest in the Plan has been distributed.

 

ARTICLE IV

ELECTIONS TO DEFER

 

Section 4.01.                         General Provisions.

 

(a)                                  A Director
newly elected to the Board may elect to defer his or her Compensation
attributable to services performed for the balance of the Payment Year in which
he or she was elected.  The election to
defer Compensation may be made until 6:00 P.M. of the day of the Board
meeting at which the Director is so elected (the time zone of location of said
Board meeting shall control).

 

(b)                                 Before December 31
of any year, an incumbent Director may elect to defer all or a portion of his
Compensation for services as a Director during any Payment Year(s) beginning
in a later calendar year, in which case the elected deferrals shall be deferred
and credited to a bookkeeping account or accounts established pursuant to the
terms of the Plan.

 

(c)                                  A Participant
may change an existing deferral election only by filing a new election form
pursuant to Subsection (b), in which case the change shall be effective with
respect to the Participant’s Compensation for services as a Director during the
Payment Year beginning after the calendar year in which the election was filed
(and later Payment Years, as elected by the Participant).

 

(d)                                 Once during
each Payment Year, a Participant may change the investment option(s) stipulated
for crediting earnings on Cash Deferrals.

 

5

 

(e)                                  A Participant
may change his or her designation of Beneficiary(ies), but not the method of
distribution to such Beneficiary(ies), at any time by filing a new election
form with the Secretary of the Company.

 

Section 4.02.                         Election Form.  A Director
may make an election to participate in the Plan by filing with the Secretary of
the Company a completed election form (the form thereof being attached hereto)
within the applicable time as specified in Section 4.01 above.  A completed election form shall stipulate:

 

(a)                                  The percentage
of the cash portion of eligible Compensation and the common stock portion of
eligible Compensation to be deferred;

 

(b)                                 The method of
distribution of the Participant’s Deferred Cash Account.  The Participant may elect to receive payment
of his Deferred Cash Account in either (i) one lump sum payment or (ii) a
specified number of annual installments, not to exceed 15.

 

(c)                                  The date on
which distribution is to commence;

 

(d)                                 The optional
rate(s) for crediting earnings on Cash Deferrals; and

 

(e)                                  The Beneficiary
or Beneficiaries to whom death benefits shall be paid pursuant to the Plan and
the method of distribution of such benefits.

 

ARTICLE V

DEFERRED COMPENSATION ACCOUNTS

 

Section 5.01.                         Establishment of Deferred Cash Accounts. 
At the time of a Participant’s initial election to make Cash Deferrals
pursuant to Article IV, the Company shall establish a bookkeeping account
(known as the Deferred Cash Account) for such Participant to record his
interest under the Plan attributable to Cash Deferrals.  Cash Deferrals made by a Participant for a
Payment Year shall be credited to the Deferred Cash Account as of the last day
of the Payment Year, and the Account shall be adjusted as provided in Article VI.

 

Section 5.02.                         Establishment of Deferred Stock Account.  At the time of a Participant’s initial
election to make Stock Deferrals pursuant to Article IV, the Company shall
establish a bookkeeping account (known as the Deferred Stock Account) for such
Participant to record his interest under the Plan attributable to Stock
Deferrals.  Stock Deferrals made by a
Participant for a Payment Year (rounded up to the next whole share) shall be
credited to the Deferred Stock Account as of the last day of the Payment
Year.  Any part of the stock portion of a
Director’s Compensation not covered by a Stock Deferral election shall be paid
to the Director in accordance with the terms of the Cummins Inc. Restricted
Stock Plan for Non-Employee Directors.

 

The Deferred Stock Account
shall also be credited with an amount equivalent to the dividends that would
have been paid on an equal number of outstanding shares of the Company’s common
stock then credited to the Participant’s Deferred Stock Account.  Such amount shall be credited as of the
payment date of such dividend and converted into an additional number of whole
and partial deferred shares as of such date (based on the average of the
closing prices of 

 

6

 

such
stock for the 20 consecutive trading days immediately preceding such
date).  Such additional deferred shares
shall thereafter be treated in the same manner as any other shares credited to
the Participant’s Deferred Stock Account.

 

The number and kinds of
shares standing to the credit of a Participant’s Deferred Stock Account shall
be appropriately adjusted from time to time in the event of changes in the
Company’s outstanding common stock by reason of stock dividends, stock splits,
spinoffs, or other distributions of assets (other than normal cash dividends),
recapitalizations, reorganizations, mergers, consolidations, combinations,
exchanges, or other relevant changes in the Company’s corporate structure or
capitalization.

 

Section 5.03.                         Separate Accounts for Grandfathered Amounts.  The Company shall separately account for
Grandfathered Amounts and Non-Grandfathered Amounts.

 

ARTICLE VI

ADJUSTMENTS TO DEFERRED CASH ACCOUNTS

 

As of the last day of each
calendar month, the Company shall credit the Participant’s Deferred Cash
Account with an earnings factor.  The
earnings factor will equal the amount the Participant’s Deferred Cash Account
would have earned if it had been invested in the investment options determined
from time to time by the Board.  The
Participant is permitted to select the investment option(s) used to
determine the earnings factor and may change the selection once each Payment
Year.  The Participant may choose more
than one investment option in increments of at least ten percent (10%).  The Board reserves the right to change or
amend any of the investment options at any time.  The Company is under no obligation to acquire
or provide any of the investments designated by a Participant, and any
investments actually made by the Company will be made solely in the name of the
Company and will remain the property of the Company.  The crediting of an earnings factor shall
occur so long as there is a balance in the Participant’s Deferred Cash Account,
regardless of whether the Participant has Terminated Service.

 

ARTICLE VII

PAYMENT OF DEFERRED AMOUNTS

 

Section 7.01.                         Timing of Payments.  A
Participant’s Deferred Cash Account and Deferred Stock Account shall be paid
(or commence distribution, if paid in installments) to the Participant (or the
Participant’s Beneficiary, if the Participant is deceased) on the earliest to
occur of the following:

 

(a)                                  the first day
of the month occurring at least 30 days after the Participant’s death;

 

(b)                                 the first day
of the calendar quarter following the Participant’s Termination of Service;

 

(c)                                  a Change of
Control; or

 

(d)                                 the date
specified in the election made by the Participant.

 

7

 

Section 7.02.                         Amount of Installment Payments.

 

(a)                                  The amount of
each annual installment from a Participant’s Deferred Cash Account shall be
determined by dividing the credit balance in such Account as of the
distribution date by the number of installments then remaining unpaid
(including the installment for which the calculation is being made).  The credit balance in the Participant’s
Deferred Cash Account shall be reduced by the amount of each distribution out
of such Account.

 

(b)                                 The number of
shares in each annual installment from a Participant’s Deferred Stock Account
shall be determined by dividing the number of shares in such Account as of the
distribution date by the number of installments then remaining unpaid
(including the installment for which the calculation is being made), with the
number to be distributed rounded up to the next whole share.  The number of shares in the Participant’s
Deferred Stock Account shall be reduced by the number of shares included in
each installment. The value of any partial share remaining on the date of the
final installment from such Account shall be paid in cash.

 

Section 7.03.                         Death Benefits.  In
the event of the Participant’s death, payment of the balance in the Participant’s
Deferred Cash Account and Deferred Stock Account shall be made to the
Participant’s designated Beneficiary(ies), in either a lump sum or installments
as elected by the Participant to Article IV.

 

Section 7.04.                         Payments Upon a Change of Control.  Upon a Change of Control, the balance in each
Participant’s Deferred Cash Account and Deferred Stock Account shall be paid to
the Participant (or, if the Participant is deceased, Beneficiary) in a single
lump sum payment.  Such payment shall be
made on the date of the Change of Control.

 

Section 7.05.                         Designating a Beneficiary.  The Participant may designate a Beneficiary
only by filing a completed Applicable Form with the Administrator during
his life.  The Participant’s proper
filing of a Beneficiary designation shall cancel all prior Beneficiary
designations.  If the Participant does
not designate a Beneficiary, or if all properly designated Beneficiaries die
before the Participant, the Participant’s Beneficiary shall be his Spouse, if
living at the time of the Participants death, or if his Spouse is not then
living, to the Participant’s estate.

 

ARTICLE VIII

ADMINISTRATION OF PLAN

 

Section 8.01.                         Powers and Responsibilities of the Administrator.

 

(a)                                  The
Administrator shall have full responsibility and discretionary authority to
control and manage the operation and administration of the Plan.  The Administrator is authorized to accept
service of legal process on behalf of the Plan. 
To the fullest extent permitted by applicable law, any action taken by
the Administrator pursuant to a reasonable interpretation of the Plan shall be
binding and conclusive on all persons claiming benefits under the Plan, except
to the extent that a court of competent jurisdiction determines that such
action was arbitrary or capricious.

 

(b)                                 The
Administrator’s discretionary powers include, but are not limited to, the
following:

 

8

 

(1)                                  to interpret Plan documents,
decide all questions of eligibility, determine whether a Participant has
Terminated Employment, determine the amount, manner, and timing of
distributions under the Plan, and resolve any claims for benefits;

 

(2)                                  to prescribe procedures to
be followed by a Participant, Beneficiary, or other person applying for
benefits;

 

(3)                                  to appoint or employ persons
to assist in the administration of the Plan and any other agents as it deems
advisable;

 

(4)                                  to adopt such rules as
it deems necessary or appropriate; and

 

(5)                                  to maintain and keep
adequate records concerning the Plan, including sufficient records to determine
each Participant’s eligibility to participate and his interest in the Plan, and
its proceedings and acts in such form and detail as it may decide.

 

Section 8.02.                         Indemnification.  The
Company shall indemnify and hold harmless the Administrator, any person serving
on a committee that serves as Administrator, and any officer, employee, or
director of an Employer to whom any duty or power relating to the administration
of the Plan has been properly delegated from and against any cost, expense, or
liability arising out of any act or omission in connection with the Plan,
unless arising out of such person’s own fraud or bad faith.

 

Section 8.03.                         Claims and Claims Review Procedure.

 

(a)                                All Benefit
Claims must be made in accordance with procedures established by the
Administrator from time to time.  A
Benefit Claim and any appeal thereof may be filed by the claimant or his
authorized representative.

 

(b)                               The Administrator
shall provide the claimant with written or electronic notice of its approval or
Denial of a properly filed Benefit Claim within 90 days after receiving the
claim, unless special circumstances require an extension of the decision
period.  If special circumstances require
an extension of the time for processing the claim, the initial 90-day period
may be extended for up to an additional 90 days.  If an extension is required, the
Administrator shall provide written notice of the required extension before the
end of the initial 90-day period, which notice shall (i) specify the
circumstances requiring an extension and (ii) the date by which the
Administrator expects to make a decision.

 

(c)                                If a Benefit
Claim is Denied, the Administrator shall provide the claimant with written or
electronic notice containing (i) the specific reasons for the Denial, (ii) references
to the applicable Plan provisions on which the Denial is based, (iii) a
description of any additional material or information needed and why such
material or information is necessary, and (iv) a description of the
applicable review process and time limits.

 

(d)                               A claimant may
appeal the Denial of a Benefit Claim by filing a written appeal with the
Administrator within 60 days after receiving notice of the Denial.  The claimant’s appeal 

 

9

 

shall be deemed filed on
receipt by the Administrator.  If a
claimant does not file a timely appeal, the Administrator’s decision shall be
deemed final, conclusive, and binding on all persons.

 

(e)                                  The
Administrator shall provide the claimant with written or electronic notice of
its decision on appeal within 60 days after receipt of the claimant’s appeal
request, unless special circumstances require an extension of this time
period.  If special circumstances require
an extension of the time to process the appeal, the processing period may be
extended for up to an additional 60 days. 
If an extension is required, the Administrator shall provide written
notice of the required extension to the claimant before the end of the original
60-day period, which shall specify the circumstances requiring an extension and
the date by which the Administrator expects to make a decision.  If the Benefit Claim is Denied on appeal, the
Administrator shall provide the claimant with written or electronic notice
containing a statement that the claimant is entitled to receive, upon request
and free of charge, reasonable access to and copies of all documents, records,
and other information relevant to the Benefit Claim, as well as the specific
reasons for the Denial on appeal and references to the applicable Plan
provisions on which the Denial is based. 
The Administrator’s decision on appeal shall be final, conclusive, and
binding on all persons.

 

ARTICLE IX

GROSS-UP PAYMENTS

 

If payment of the lump sum
value of the Deferred Amounts pursuant to Section 7.04 (“Accelerated
Payment”) causes the Accelerated Payment and any other payments made in
connection with a Change of Control (together with the Accelerated Payment, the
“Total Payments”) to be subject to the tax (“Excise Tax”) imposed by Code Section 4999,
the Company shall pay to the Participant an additional amount (“Gross-Up
Payment”) such that the net amount retained by the Participant, after deduction
of any Excise Tax paid or payable (and not grossed-up under a similar provision
of another plan or program sponsored by the Company) on the lump sum and such
other Total Payments and any federal, state, and local income tax and Excise
Tax upon the payment provided for by this Article, shall be equal to the
Accelerated Payment and such other Total Payments.  If any of such other Total Payments are
subject to the Excise Tax without regard to the Accelerated Payment, a Gross-Up
Payment shall be made, but shall be limited to the increase in the Excise Tax
(plus any federal, state, and local income tax and Excise Tax on such Gross-Up
Payment) arising solely as a result of the Accelerated Payment.

 

For purposes of determining
whether any of the payments described above will be subject to the Excise Tax
and the amount of such Excise Tax, (i) any other payments or benefits
received or to be received by the Participant in connection with a Change of
Control, whether payable pursuant to the terms of the Plan or any other plan,
arrangement, or agreement with the Company, its successors, any person whose
actions result in a change in control of the Company or any corporation
affiliated (or which, as a result of the completion of a transaction causing a
change of control, will become affiliated) with the Company within the meaning
of Code Section 1504 shall be treated as “parachute payments” within the
meaning of Code Section 280G(b)(2), and all “excess parachute payments”
within the meaning of Section 280G(b)(1) shall be treated as subject
to the Excise Tax, unless in the opinion of tax counsel selected by the Company’s
independent auditors and acceptable to the Participant, the payments (in whole
or in part) do not constitute parachute payments, or such excess parachute
payments (in whole or in part) represent 

 

10

 

reasonable
compensation for services actually rendered within the meaning of Code Section 280G(b)(4) either
in their entirety or in excess of the base amount within the meaning of Code Section 280G(b)(3),
or are otherwise not subject to the Excise Tax, (ii) the amount of the
payments that shall be treated as subject to the Excise Tax shall be equal to
the lesser of (A) the total amount of the payments or (B) the amount
of excess parachute payments within the meaning of Section 280G(b)(1) (after
applying clause (i), above), and (iii) the value of any non-cash benefits
or any deferred payment or benefit shall be determined by the Company’s
independent auditors in accordance with the principles of Code Sections 280G(d)(3) and
(4).  In the event that the Excise Tax is
subsequently determined to be less than the amount taken into account hereunder
at the time of payment, the Participant shall repay to the Company at the time
that the amount of such reduction in Excise Tax is finally determined the
portion of the Gross-Up Payment attributable to such reduction (plus the
portion of the Gross-Up Payment attributable to the Excise Tax and federal and
state and local income tax imposed on the Gross-Up Payment being repaid by the
Participant if such repayment results in a reduction in Excise Tax and/or a
federal and state and local income tax deduction) plus interest on the amount
of such repayment at the rate provided in Code Section 1274(d).  In the event that the Excise Tax is
determined to exceed the amount taken into account hereunder at the time of the
Gross-Up Payment (including by reason of any payment the existence or amount of
which cannot be determined at the time of the Gross-Up Payment), the Company
shall make an additional Gross-Up Payment in respect of such excess (plus any
interest payable with respect to such excess) at the time that the amount of
such excess is finally determined.

 

To the extent that earlier
payment is not required by the preceding provisions of this Section, the
Company’s payment pursuant to this Section shall be made not later than
the end of the calendar year next following the calendar year in which the
Participant remits the related taxes.

 

ARTICLE X

AMENDMENT AND TERMINATION

 

The Plan shall continue in
force with respect to any Participant until the completion of any payments due
hereunder and shall be binding upon any successor to substantially all the
assets of the Company.  The Company may,
however, at any time, amend the Plan to provide that no additional benefits
shall accrue with respect to any Participant under the Plan; provided, however,
that no such amendment shall (i) deprive any Participant or Beneficiary of
any benefit that accrued under the Plan before the adoption of such amendment; (ii) result
in an acceleration of benefit payments in violation of Code Section 409A
and the guidance thereunder, or (iii) result in any other violation of Section 409A
or the guidance thereunder.  The Company
may also, at any time, amend the Plan retroactively or otherwise, if and to the
extent that it deems such action appropriate in light of government regulations
or other legal requirements.

 

ARTICLE XI

MISCELLANEOUS

 

Section 11.01.                  Obligations of Employer.  The Employer’s only obligation hereunder
shall be a contractual obligation to make payments to Participants, Spouses, or
other 

 

11

 

Beneficiaries entitled to benefits provided
for herein when due, and only to the extent that such payments are not made
from the Trust.

 

Section 11.02.                  Employment Rights. 
Nothing contain herein shall confer any right on a Participant to be
continued in the employ of any Employer or affect the Participant’s right to
participate in and receive benefits under and in accordance with any pension,
profit-sharing, incentive compensation, or other benefit plan or program of an
Employer.

 

Section 11.03.                  Non-Alienation.  Except
as otherwise required by a Qualified Domestic Relations Order, no right or
interest of a Participant, Spouse, or other Beneficiary under this Plan shall
be subject to voluntary or involuntary alienation, assignment, or transfer of
any kind.

 

Section 11.04.                  Tax Withholding.  The
Employer or Trustee may withhold from any distribution hereunder amounts that
the Employer or Trustee deems necessary to satisfy federal, state, or local tax
withholding requirements (or make other arrangements satisfactory to the
Employer or Trustee with regard to such taxes).

 

Section 11.05.                  Other Plans.  Amounts and
benefits paid under the Plan shall not be considered compensation to the
Participant for purposes of computing any benefits to which he may be entitled
under any other pension or retirement plan maintained by an Employer.

 

Section 11.06.                  Liability of Affiliated Employers. 
If any payment to be made under the Plan is to be made on account of a
Participant who is or was employed by an Affiliated Employer, the cost of such
payment shall be borne in such proportion as the Company and the Affiliated
Employer agree.

 

This Restatement of the
Cummins Inc. Deferred Compensation Plan for Non-Employee Directors has been
signed by the Company’s duly authorized officer, acting on behalf of the
Company, on this           
day of December, 2008.

 

	
   

  	
  CUMMINS
  INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  
	
   

  	
  Title:

  	
   

  

 

12Exhibit
10.(g)

 

CUMMINS INC. EXCESS BENEFIT RETIREMENT PLAN

 

 

Restated as of January 1,
2008

 

 

TABLE OF CONTENTS

 

	
   

  	
   

  	
   

  	
   

  	
  PAGE

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE I

  	
  GENERAL PROVISIONS

  	
  1

  
	
   

  	
   

  	
   

  	
   

  
	
  Section 1.01

  	
  History and Restatement

  	
   

  	
  1

  
	
  Section 1.02

  	
  Application of Restatement

  	
   

  	
  1

  
	
  Section 1.03

  	
  Purpose

  	
   

  	
  1

  
	
  Section 1.04

  	
  Grantor Trust

  	
   

  	
  1

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE II

  	
  DEFINITIONS AND INTERPRETATION

  	
   

  	
  1

  
	
   

  	
   

  	
   

  	
   

  
	
  Section 2.01

  	
  Definitions

  	
   

  	
  1

  
	
  Section 2.02

  	
  Rules of Interpretation

  	
   

  	
  6

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE III

  	
  VESTING OF EXCESS BENEFIT AND FORFEITURES

  	
   

  	
  6

  
	
   

  	
   

  	
   

  	
   

  
	
  Section 3.01

  	
  Vesting

  	
   

  	
  6

  
	
  Section 3.02

  	
  Forfeitures

  	
   

  	
  6

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE IV

  	
  DISTRIBUTIONS

  	
   

  	
  6

  
	
   

  	
   

  	
   

  	
   

  
	
  Section 4.01

  	
  Timing of Distributions

  	
   

  	
  6

  
	
  Section 4.02

  	
  Distributions Upon Termination

  	
   

  	
  6

  
	
  Section 4.03

  	
  Survivor Benefits

  	
   

  	
  7

  
	
  Section 4.04

  	
  Distributions Upon a Change in Control

  	
   

  	
  8

  
	
  Section 4.05

  	
  Delay in Payment for Specified Employees

  	
   

  	
  8

  
	
  Section 4.06

  	
  Designating a Beneficiary

  	
   

  	
  8

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE V

  	
  ADMINISTRATION OF PLAN

  	
   

  	
  8

  
	
   

  	
   

  	
   

  	
   

  
	
  Section 5.01

  	
  Powers and Responsibilities of the Administrator

  	
   

  	
  8

  
	
  Section 5.02

  	
  Indemnification

  	
   

  	
  9

  
	
  Section 5.03

  	
  Claims and Claims Review Procedure

  	
   

  	
  9

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE VI

  	
  GROSS-UP PAYMENTS

  	
   

  	
  10

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE VII

  	
  AMENDMENT AND TERMINATION

  	
   

  	
  11

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE VIII

  	
  MISCELLANEOUS

  	
   

  	
  12

  
	
   

  	
   

  	
   

  	
   

  
	
  Section 8.01

  	
  Obligations of Employer

  	
   

  	
  12

  
	
  Section 8.02

  	
  Employment Rights

  	
   

  	
  12

  
	
  Section 8.03

  	
  Non-Alienation

  	
   

  	
  12

  
	
  Section 8.04

  	
  Tax Withholding

  	
   

  	
  12

  
	
  Section 8.05

  	
  Other Plans

  	
   

  	
  12

  
	
  Section 8.06

  	
  Pension Plan Termination

  	
   

  	
  12

  
	
  Section 8.07

  	
  Liability of Affiliated Employers

  	
   

  	
  12

  
						

 

i

 

ARTICLE I

GENERAL PROVISIONS

 

Section 1.01         History
and Restatement.  Cummins Inc.
(“Company”) established the Excess Benefit Retirement Plan of Cummins Engine
Company, Inc. (“Plan”), effective March 1, 1984, and it has amended
the Plan on several occasions since that time. 
The Company most recently restated the Plan, effective January 1,
2005, to comply with the requirements of Code Section 409A and the
guidance thereunder.  By this
restatement, which is generally effective as of January 1, 2008, the
Company amends the Plan to comply with the requirements of the final
regulations under Code Section 409A.

 

Section 1.02         Application
of Restatement.  This
restatement shall apply, effective January 1, 2008, except as expressly
provided herein.  This restatement shall not
apply to any benefits under the Plan accrued and vested on or before December 31,
2004, with an Annuity Starting Date on or before such date (“Grandfathered
Benefit”), and Grandfathered Benefits shall continue to be governed by the
terms and conditions of the Plan without regard to this restatement; provided,
however, the individual entitled by receive benefits following a Participant’s
death shall be determined pursuant to this restatement.

 

Section 1.03         Purpose.  Code Section 415 imposes limits on the
maximum benefit that can be paid to a participant under a qualified retirement
plan, and Code Section 401(a)(17) limits the amount of annual compensation
that can be taken into account in calculating a participant’s benefit under a
qualified retirement plan.  The purpose
of the Plan is to provide additional retirement benefits for a select group of
management or highly compensated employees to compensate them for the reduction
in the benefits that would otherwise have been payable to them under the
Pension Plan were it not for the limitations imposed by Code Sections 415 and
401(a)(17).  The Company intends for the
Plan to qualify as an unfunded arrangement maintained primarily for the purpose
of providing deferred compensation for a select group of management or highly
compensated employees within the meaning of ERISA Sections 201, 301 and
401.  The Company also intends for the
Plan to satisfy the applicable requirements of Code Section 409A.

 

Section 1.04         Grantor
Trust.  The Company has established a
grantor trust to hold assets for the provision of certain benefits under the
Plan as well as other Employer benefits. 
Assets of the Trust are subject to the claims of the Employer’s general
creditors.

 

ARTICLE II

DEFINITIONS AND INTERPRETATION

 

Section 2.01         Definitions.  When the first letter of a word or phrase is
capitalized herein, the word or phrase shall have the meaning specified below:

 

(a)           “Administrator” means the Company’s
Benefits Policy Committee or such other person that the Board designates as Administrator.  To the extent that the Administrator
delegates a duty or responsibility to an agent, the term “Administrator” shall
include such agent.

 

 

(b)           “Affiliated Employer” means (i) a
member of a controlled group of corporations (as defined in Code Section 414(b))
of which the Company is a member or (ii) an unincorporated trade or
business under common control (as defined in Code Section 414(c)) with the
Company.

 

(c)           “Affirmation of Domestic Partnership”
means an Applicable Form for affirming the relationship between a
Participant and his Domestic Partner.

 

(d)           “Alternate Payee” has the meaning set
out in ERISA Section 206(d)(3)(K).

 

(e)           “Annuity Starting Date” means the
first day of the month following the earlier of the Participant’s (i) Termination
of Employment or (ii) death; provided, however, the “Annuity Starting Date”
with respect to a Participant who Terminated Employment with a Vested Excess
Benefit on or before December 31, 2004, and whose entire benefit under the
Plan was accrued and vested as of his Termination of Employment, shall continue
to be the same as the annuity starting date with respect to the Participant
under the Pension Plan.

 

(f)            “Applicable Form” means a form
provided by the Administrator for making an election or designation under the
Plan.  To the extent permitted by the
Administrator, an Applicable Form may be provided and/or an election or
designation made electronically.

 

(g)           “Beneficiary” means the person or
entity entitled to receive a benefit with respect to a Participant (i) following
his death before his Annuity Starting Date or (ii) following his death
after his Annuity Starting Date, if any benefits are payable under the form of
distribution in effect at the time of the Participant’s death following the
death of the Participant and his Joint Annuitant, if any.  A Participant’s Beneficiary shall be
determined as provided in Section 4.06.

 

(h)           “Benefit Claim” means a request or
claim for a benefit under the Plan, including a claim for greater benefits than
have been paid.

 

(i)            “Board” or “Board of Directors”
means the Company’s board of directors or, where the context so permits, its
designee.

 

(j)            “Change of Control” means the
occurrence of any of the following:

 

(1)           there shall be consummated (A) any consolidation or
merger of the Company in which the Company is not the continuing or surviving
corporation or pursuant to which shares of the Company’s common stock would be
converted in whole or in part into cash or other securities or property, other
than a merger of the Company in which the holders of the Company’s common stock
immediately before the merger have substantially the same proportionate
ownership of common stock of the surviving corporation immediately after the
merger, or (B) any sale, lease, exchange, or transfer (in one transaction
or a series of related transactions) of all or substantially all of the assets
of the Company, or

 

(2)           the liquidation or dissolution of the Company, or

 

(3)           any ‘person’ (as such term is used in Sections 13(d)(3) and
14(d)(2) of the Securities Exchange Act of 1934, as amended (the ‘Exchange
Act’)), other than the

 

2

 

Company or a subsidiary thereof or any employee
benefit plan sponsored by the Company or a subsidiary thereof or a corporation
owned, directly or indirectly, by the shareholders of the Company in
substantially the same proportions as their ownership of stock of the Company,
shall become the beneficial owners (within the meaning of Rule 13d-3 under
the Exchange Act) of securities of the Company representing 30% or more of the
combined voting power of the Company’s then outstanding securities ordinarily
(and apart from rights accruing in special circumstances) having the right to
vote in the election of directors, as a result of a tender or exchange offer,
open market purchases, privately negotiated purchases, or otherwise, or

 

(4)           at any time during a period of two consecutive years,
individuals who at the beginning of such period constituted the Board shall
cease for any reason to constitute at least a majority thereof, unless the
election or the nomination for election by the Company’s shareholders of each
new director during such two-year period was approved by a vote of at least
two-thirds (2/3) of the directors then still in office who were directors at
the beginning of such two-year period, or

 

(5)           any other event shall occur that would be required to be
reported in response to Item 6(e) (or any successor provision) of Schedule
14A or Regulation 14A promulgated under the Exchange Act.

 

Notwithstanding the
preceding provisions, an event or series of events shall not constitute a
Change of Control unless the event or series of events qualifies as a change in
the ownership or effective control of the corporation or in the ownership of a
substantial portion of the assets of the corporation within the meaning of Code
Section 409A(a)(2)(A)(v).

 

(k)           “Code” means the Internal Revenue
Code of 1986, as amended from time to time.

 

(l)            “Company” means Cummins Inc.

 

(m)          “Denial” or “Denied” means a denial,
reduction, termination, or failure to provide or make payment (in whole or in
part) of a Plan benefit.

 

(n)           “Domestic Partner” means a person of
the same or opposite sex (i) with whom the Participant has a single,
dedicated relationship and has shared the same permanent residence for at least
six months, (ii) who is not married to another person or part of another
domestic partner relationship and is at least age 18, (iii) who, with the
Participant, is mutually responsible for the other’s welfare, (iv) who,
with the Participant, intends for their relationship to be permanent, (v) who
is not so closely related to the Participant as to preclude marriage under
state law, and (vi) for whom there is an Affirmation of Domestic
Partnership on file with the Administrator. 
In determining whether the requirements of clauses (i) through (v) of
the preceding sentence have been satisfied, the Administrator may rely on the
Affirmation of Domestic Partnership filed with the Administrator.

 

(o)           “Employee” means a common law
employee of an Employer.

 

(p)           “Employer” means the Company and all
of its Affiliated Employers.

 

3

 

(q)           “ERISA” means the Employee Retirement
Income Security Act of 1974, as amended from time to time.

 

(r)            “Excess Benefit” means, with respect
to a Participant as of any date, a benefit equal to the excess, if any, of (i) the
benefit that would have been payable to, or with respect to, the Participant
under the Pension Plan as of such date in the same form and with the same
Annuity Starting Date, if the amount of such benefit were calculated without
giving effect to the Qualified Plan Limits, over (ii) the benefit that
would be payable to, or with respect to, the Participant under the Pension Plan
as of such date in the same form and with the same Annuity Starting Date, after
giving effect to the Qualified Plan Limits.

 

(s)           “Grandfathered Benefit” has the
meaning specified in Section 1.01.

 

(t)            “Joint Annuitant” means the survivor
annuitant under an annuity benefit payable to the Participant pursuant to the
Plan.

 

(u)           “Married” means, with respect to a
Participant, that the Participant has a Spouse.

 

(v)           “Non-Grandfathered Benefit” means a
benefit under the Plan that is not a Grandfathered Benefit.

 

(w)          “Participant” means an Employee (or
former Employee) who is (or was) a participant in the Pension Plan and who has
an Excess Benefit.  An individual shall
cease to be a Participant at such time as he no longer has an Excess Benefit.

 

(x)            “Pension Plan” means the Cummins
Inc. and Affiliates Pension Plan, as amended from time to time.

 

(y)           “Plan” means the Cummins Inc. Excess
Benefit Retirement Plan, as set out in herein and as amended from time to time
hereafter.

 

(z)            “Present Actuarial Value” means the
present value of a future stream of payments, as determined by the
Administrator using:

 

(1)           the mortality table based on the commissioner’s standard
table (described in Code Section 807(d)(5)(A)) used to determine reserves
for group annuity contracts issued on the date as of which present value is
determined (without regard to any other subparagraph of Code Section 807(d)(5)),
that is prescribed by the Commissioner of the Internal Revenue Service in
revenue rulings, notices, or other guidance published in the Internal Revenue
Bulletin; and

 

(2)           the annual interest rate on 30-year U.S. Treasury Bonds as
specified by the Commissioner of the Internal Revenue Service in revenue
rulings, notices, or other guidance published in the Internal Revenue Bulletin
for the fourth month preceding the first day of the calendar quarter in which
the Participant’s Annuity Starting Date falls.

 

(aa)         “Qualified Domestic Relations Order”
has the meaning specified in Code Section 414(p).

 

4

 

(bb)         “Qualified Joint and Survivor Annuity”
means an immediate level monthly annuity for the life of a Participant with a
survivor annuity for the life of the Participant’s surviving Spouse in a
monthly amount equal to 50% of the amount payable during the joint lives of the
Participant and his Spouse.

 

(cc)         “Qualified Plan Limits” means the
limitation on compensation that may be taken into account under a qualified
retirement plan, as provided in Code Section 401(a)(17), and the dollar
limitation on annual benefits under a qualified retirement plan, as provided in
Code Section 415.

 

(dd)         “Service” means the Participant’s
service for vesting purposes credited under the Pension Plan.

 

(ee)         “Single Life Annuity” means a level
monthly annuity payable to the Participant for his life, or, where the context
permits, a level monthly annuity payable to the Joint Annuitant for his life.

 

(ff)           “Specified Employee” means, with
respect to the 12-month period beginning on the Specified Employee Effective
Date, an individual who, (i) during any part of the 12-month period ending
on the Specified Employee Identification Date, is in salary grade 99 or
compensation class 6, or (ii) is a specified employee within the meaning
of Code Section 409A(a)(2)(B)(i) and the guidance thereunder.

 

(gg)         “Specified Employee Effective Date”
means, in the case of an Employee who Terminates Employment before December 1,
2009, the April 1 next following the Specified Employee Identification
Date, and, in the case of an Employee who Terminates Employment after December 31,
2009, the January 1 next following the Specified Employee Identification
Date.

 

(hh)         “Specified Employee Identification Date”
means December 31.

 

(ii)           “Spouse” means (i) the person to
whom the Participant is married in accordance with applicable law of the
jurisdiction in which the Participant resides, or (ii) in the case of a
Participant not described in clause (i), the Participant’s Domestic Partner.

 

(jj)           “Terminates Employment”, “Termination
of Employment” or any variation thereof refers to a separation from service
within the meaning of Code Section 409A(a)(2)(A)(i).

 

(kk)         “Trust” means the grantor trust
established by the Company to provide a source for the payment of retirement
benefits under the Plan and benefits under certain other Employer programs.

 

(ll)           “Trustee” means the Trustee of the
Trust.

 

(mm)       “Vested” means, with respect to a
Participant, the portion of the Participant’s Excess Benefit in which the
Participant has a non-forfeitable interest, to the extent provided herein.

 

5

 

Section 2.02         Rules of
Interpretation.

 

(a)           The Plan is intended to comply with (i) Code
Section 409A and (ii) the applicable provisions of ERISA, and it
shall be interpreted and administered in accordance with such intent. Except as
provided in the preceding sentence or as otherwise expressly provided herein,
the Plan shall be construed, enforced, and administered, and the validity
thereof determined, in accordance with the internal laws of the State of
Indiana, without regard to conflict of law principles, and the following
provisions of this Section.

 

(b)           Words used herein in the masculine
shall be construed to include the feminine, where appropriate, and vice versa, and words used herein in the singular shall be
construed to include the plural, and vice versa, where
appropriate.

 

(c)           Headings and subheadings are inserted
for convenience of reference only and shall not affect the interpretation of
any provision hereof.

 

(d)           If any provision of the Plan shall be
held to violate the Code or ERISA or be illegal or invalid for any other
reason, that provision shall be deemed null and void, but the invalidation of
that provision shall not otherwise affect the Plan.

 

Reference to any provision
of the Code, ERISA, or other law shall be deemed to include a reference to the
successor of such provision.

 

ARTICLE III

VESTING OF EXCESS BENEFIT AND FORFEITURES

 

Section 3.01         Vesting.  A Participant’s interest in his Excess
Benefit shall become 100% Vested upon the earliest to occur of (i) the
Participant’s completion of three years of Service or, (ii) while the
Participant is an Employee, his (A) death or (B) disability within
the meaning of the Pension Plan.

 

Section 3.02         Forfeitures.  A Participant shall forfeit
his rights to any non-Vested Excess Benefit under the Plan upon his Termination
of Employment.

 

ARTICLE IV

DISTRIBUTIONS

 

Section 4.01         Timing
of Distributions.  A
Participant’s Vested Excess Benefit shall be paid, or commence to be paid, on
the Participant’s Annuity Starting Date in the form determined pursuant to this
Article.

 

Section 4.02         Distributions
Upon Termination.

 

(a)           If a Participant Terminates
Employment for a reason other than his death, his Vested Excess Benefit shall be
distributed pursuant to this Section; provided, however, if the Participant
dies before his Annuity Starting Date, no benefits shall be paid pursuant to
this Section, and the only benefits with respect to the Participant shall be
paid pursuant to Section 4.03.

 

6

 

(b)           Notwithstanding the following
provisions of this Section, if the Present Actuarial Value of the benefit
payable with to a Participant (and his Joint Annuitant, if applicable) pursuant
to this Section is less than $10,000, such Present Actuarial Value shall
be paid to the Participant in a single lump sum payment within 60 days
following the Participant’s Annuity Starting Date.

 

(c)           Subjection to Subsection (b), unless
a Participant elects an optional form of distribution pursuant to Subsection
(d), his Vested Excess Benefit shall be distributed (i) to him as a Single
Life Annuity, if he is not Married on his Annuity Starting Date, and (ii) to
him and his Spouse as a Qualified Joint and Survivor Annuity, if he is Married
on his Annuity Starting Date.

 

(d)           A Participant may elect not to
receive his Vested Excess Benefit in the normal form described in Subsection (c) and
elect, instead, to receive his Vested Excess Benefit in one of the optional
annuity forms of benefit then available under the Pension Plan.  If the Participant elects an optional annuity
form, the annuity amount shall be the actuarial equivalent of the normal form
of benefit (as determined by the Administrator, using the applicable actuarial
factors specified in the Pension Plan). 
A Participant’s election of an optional annuity form must be submitted
to the Administrator in writing before his Annuity Starting Date, and the
Participant may revoke his election at any time before his Annuity Starting
Date by providing written notice to the Administrator.  If the Participant elects an optional form of
annuity with a survivor annuity, the survivor annuitant dies before the
Participant’s Annuity Starting Date, and the Participant has not made a later
election, the Participant’s Vested Excess Benefit shall be distributed in the
normal form described in Subsection (c).

 

(e)           Notwithstanding the preceding
provisions, if the Participant’s Vested Excess Benefit is paid as a life
annuity to the Participant with a survivor annuity for his Spouse, and the
Participant’s Spouse dies after the Participant’s Annuity Starting Date (but
before the Participant dies), the Participant’s monthly benefit shall be
increased to the monthly benefit that would have been payable if the
Participant’s Vested Excess Benefit had been paid as a Single Life Annuity,
beginning as of the first day of the month next following his Spouse’s death.

 

Section 4.03         Survivor
Benefits.

 

(a)           Except as provided in Section 4.02
with respect to a Participant who dies after his Annuity Starting Date or (ii) the
following provisions of this Section, no benefits shall be payable pursuant to
the Plan following a Participant’s death.

 

(b)           If a Participant dies before his
Annuity Starting Date, and the survivor benefit payable to the beneficiary of
the Participant under the Pension Plan is less than the survivor benefit that
would have been payable, if such benefit were calculated without giving effect
to the Qualified Plan Limits, the Company shall pay to the Participant’s
Beneficiary a survivor benefit equal to the excess of (i) the survivor
benefit that would have been payable to the Beneficiary, if paid under the
Pension Plan as a Single Life Annuity beginning as of the Participant’s Annuity
Starting Date, if such benefit were calculated without giving effect to the
Qualified Plan Limits, over (ii) the survivor benefit that would be
payable to the Beneficiary under the Pension Plan, if paid as a Single Life
Annuity beginning as of the Participant’s Annuity Starting Date, after

 

7

 

giving effect to the
Qualified Plan Limits.  Subject to the
following sentence, the survivor benefit payable under this Subsection shall be
a Single Life Annuity commencing as of the Participant’s Annuity Starting
Date.  If the Present Actuarial Value of
the amounts payable pursuant to this Section is less than $10,000, such
Present Actuarial Value shall be paid to the Participant’s Beneficiary in a
single lump sum payment within 60 days following the Participant’s death.
Annuity Starting Date.

 

(c)           If a Participant dies after his
Annuity Starting Date, survivor benefits (if any) shall be paid to the Joint
Annuitant pursuant to the form of payment in effect at the time of death.

 

Section 4.04         Distributions
Upon a Change of Control.  Upon a Change
of Control, notwithstanding any provision of the Plan to the contrary, each
Participant and each Beneficiary or Joint Annuitant of a deceased Participant
(if applicable), shall receive,  in place
of future payments under the Plan, a lump sum payment equal to the Present
Actuarial Value of the Participant’s Vested Excess Benefit accrued to the date
of the Change of Control and remaining to be paid under the Plan.  In the case of a Participant who has not
Terminated Employment, the lump sum Present Actuarial Value of the Vested
Excess Benefit payable shall be calculated assuming that, solely for the
purpose of reducing the benefit for early commencement, that the Participant
has already met the conditions for unreduced benefits under the Pension Plan at
the earliest possible time, taking into consideration the Participant’s age and
Service.

 

Section 4.05         Delay
in Payment for Specified Employees.  Notwithstanding any provisions in the Plan to
the contrary, if a Participant who is a Specified Employee Terminates
Employment for any reason other than death, the Participant’s Vested Excess
Benefit shall not commence earlier than six months after the date of the
Participant’s Termination of Employment. 
If the Excess Benefit is payable in the form of a monthly annuity, the
sum of the monthly payments that are required to be delayed in accordance with
this Section shall be paid with the first permitted monthly payment.  Any delayed payments shall be increased by
interest from the Participant’s Annuity Starting Date to the date on which his
benefit payments begin at the applicable interest rate for retroactive annuity
starting dates under the Pension Plan.

 

Section 4.06         Designating
a Beneficiary.  A Participant
may designate a Beneficiary only by filing a completed Applicable Form with
the Administrator during his life.  The
Participant’s proper filing of a Beneficiary designation shall cancel the
Participant’s prior Beneficiary designations under the Plan, if any.  If the Participant does not designate a
Beneficiary, or if all properly designated Beneficiaries die, the Participant’s
Beneficiary shall be his Spouse, if living at the time of the Participants
death, or if his Spouse is not then living, to the individual(s), if any, named
as the Participant’s beneficiary under his Employer-provided group life
insurance program, who are living at the time of the Participant’s death or, if
no such beneficiaries are then living, to the Participant’s estate.

 

ARTICLE V

ADMINISTRATION OF PLAN

 

Section 5.01         Powers
and Responsibilities of the Administrator.

 

(a)           The Administrator shall have full
responsibility and discretionary authority to control and manage the operation
and administration of the Plan.  The Administrator
is

 

8

 

authorized to accept service
of legal process on behalf of the Plan. 
To the fullest extent permitted by applicable law, any action taken by
the Administrator pursuant to a reasonable interpretation of the Plan shall be
binding and conclusive on all persons claiming benefits under the Plan, except
to the extent that a court of competent jurisdiction determines that such
action was arbitrary or capricious.

 

(b)           The Administrator’s discretionary
powers include, but are not limited to, the following:

 

(1)           to interpret Plan documents, decide all questions of
eligibility, determine whether a Participant has Terminated Employment,
determine the amount, manner, and timing of distributions under the Plan, and
resolve any claims for benefits;

 

(2)           to prescribe procedures to be followed by a Participant,
Beneficiary, or other person applying for benefits;

 

(3)           to appoint or employ persons to assist in the
administration of the Plan and any other agents as it deems advisable;

 

(4)           to adopt such rules as it deems necessary or
appropriate; and

 

(5)           to maintain and keep adequate records concerning the Plan,
including sufficient records to determine each Participant’s eligibility to
participate and his interest in the Plan, and its proceedings and acts in such
form and detail as it may decide.

 

Section 5.02         Indemnification.  The Company shall indemnify and hold harmless
the Administrator, any person serving on a committee that serves as
Administrator, and any officer, employee, or director of an Employer to whom
any duty or power relating to the administration of the Plan has been properly
delegated from and against any cost, expense, or liability arising out of any
act or omission in connection with the Plan, unless arising out of such person’s
own fraud or bad faith.

 

Section 5.03         Claims
and Claims Review Procedure.

 

(a)           All Benefit Claims must be made in
accordance with procedures established by the Administrator from time to
time.  A Benefit Claim and any appeal
thereof may be filed by the claimant or his authorized representative.

 

(b)          The Administrator shall provide the
claimant with written or electronic notice of its approval or Denial of a
properly filed Benefit Claim within 90 days after receiving the claim, unless
special circumstances require an extension of the decision period.  If special circumstances require an extension
of the time for processing the claim, the initial 90-day period may be extended
for up to an additional 90 days.  If an
extension is required, the Administrator shall provide written notice of the
required extension before the end of the initial 90-day period, which notice
shall (i) specify the circumstances requiring an extension and (ii) the
date by which the Administrator expects to make a decision.

 

9

 

(c)           If a Benefit Claim is Denied, the
Administrator shall provide the claimant with written or electronic notice
containing (i) the specific reasons for the Denial, (ii) references
to the applicable Plan provisions on which the Denial is based, (iii) a
description of any additional material or information needed and why such
material or information is necessary, and (iv) a description of the
applicable review process and time limits.

 

(d)          A claimant may appeal the Denial of a
Benefit Claim by filing a written appeal with the Administrator within 60 days
after receiving notice of the Denial. 
The claimant’s appeal shall be deemed filed on receipt by the
Administrator.  If a claimant does not
file a timely appeal, the Administrator’s decision shall be deemed final,
conclusive, and binding on all persons.

 

(e)           The Administrator shall provide the
claimant with written or electronic notice of its decision on appeal within 60
days after receipt of the claimant’s appeal request, unless special
circumstances require an extension of this time period.  If special circumstances require an extension
of the time to process the appeal, the processing period may be extended for up
to an additional 60 days.  If an
extension is required, the Administrator shall provide written notice of the
required extension to the claimant before the end of the original 60-day
period, which shall specify the circumstances requiring an extension and the
date by which the Administrator expects to make a decision.  If the Benefit Claim is Denied on appeal, the
Administrator shall provide the claimant with written or electronic notice
containing a statement that the claimant is entitled to receive, upon request
and free of charge, reasonable access to and copies of all documents, records,
and other information relevant to the Benefit Claim, as well as the specific
reasons for the Denial on appeal and references to the applicable Plan
provisions on which the Denial is based. 
The Administrator’s decision on appeal shall be final, conclusive, and
binding on all persons, subject to the claimant’s right to file a civil action
pursuant to ERISA Section 502(a).

 

ARTICLE VI

GROSS-UP PAYMENTS

 

If payment of the lump sum
Present Actuarial Value of the Participant’s Vested Excess Benefit pursuant to Section 4.04
(“Accelerated Payment”) causes the Accelerated Payment and any other payments
made in connection with a Change of Control (together with the Accelerated
Payment, the “Total Payments”) to be subject to the tax (“Excise Tax”) imposed
by Code Section 4999, the Company shall pay to the Participant an
additional amount (“Gross-Up Payment”) such that the net amount retained by the
Participant, after deduction of any Excise Tax paid or payable (and not
grossed-up under a similar provision of another plan or program sponsored by
the Company) on the lump sum and such other Total Payments and any federal,
state and local income tax and Excise Tax upon the payment provided for by this
Article, shall be equal to the Accelerated Payment and such other Total
Payments.  If any of such other Total
Payments are subject to the Excise Tax without regard to the Accelerated
Payment, a Gross-Up Payment shall be made, but shall be limited to the increase
in the Excise Tax (plus any federal, state, and local income tax and Excise Tax
on such Gross-Up Payment) arising solely as a result of the Accelerated
Payment.

 

For purposes of determining
whether any of the payments described above will be subject to the Excise Tax
and the amount of such Excise Tax, (i) any other payments or benefits
received or to be received by the Participant in connection with a Change of
Control, whether payable

 

10

 

pursuant
to the terms of the Plan or any other plan, arrangement, or agreement with the
Company, its successors, any person whose actions result in a change in control
of the Company or any corporation affiliated (or which, as a result of the
completion of a transaction causing a change of control, will become
affiliated) with the Company within the meaning of Code Section 1504 shall
be treated as “parachute payments” within the meaning of Code Section 280G(b)(2),
and all “excess parachute payments” within the meaning of Section 280G(b)(1) shall
be treated as subject to the Excise Tax, unless in the opinion of tax counsel
selected by the Company’s independent auditors and acceptable to the
Participant, the payments (in whole or in part) do not constitute parachute
payments, or such excess parachute payments (in whole or in part) represent
reasonable compensation for services actually rendered within the meaning of
Code Section 280G(b)(4) either in their entirety or in excess of the
base amount within the meaning of Code Section 280G(b)(3), or are
otherwise not subject to the Excise Tax, (ii) the amount of the payments
that shall be treated as subject to the Excise Tax shall be equal to the lesser
of (A) the total amount of the payments or (B) the amount of excess
parachute payments within the meaning of Section 280G(b)(1) (after
applying clause (i), above), and (iii) the value of any non-cash benefits
or any deferred payment or benefit shall be determined by the Company’s
independent auditors in accordance with the principles of Code Sections 280G(d)(3) and
(4).  In the event that the Excise Tax is
subsequently determined to be less than the amount taken into account hereunder
at the time of payment, the Participant shall repay to the Company at the time
that the amount of such reduction in Excise Tax is finally determined the
portion of the Gross-Up Payment attributable to such reduction (plus the
portion of the Gross-Up Payment attributable to the Excise Tax and federal and
state and local income tax imposed on the Gross-Up Payment being repaid by the
Participant if such repayment results in a reduction in Excise Tax and/or a
federal and state and local income tax deduction) plus interest on the amount
of such repayment at the rate provided in Code Section 1274(d).  In the event that the Excise Tax is
determined to exceed the amount taken into account hereunder at the time of the
Gross-Up Payment (including by reason of any payment the existence or amount of
which cannot be determined at the time of the Gross-Up Payment), the Company shall
make an additional Gross-Up Payment in respect of such excess (plus any
interest payable with respect to such excess) at the time that the amount of
such excess is finally determined.

 

To the extent that earlier
payment is not required by the preceding provisions of this Section, the
Company’s payment pursuant to this Section shall be made not later than
the end of the calendar year next following the calendar year in which the
Participant remits the related taxes.

 

ARTICLE VII

AMENDMENT AND TERMINATION

 

The Plan shall continue in
force with respect to any Participant until the completion of any payments due
hereunder and shall be binding upon any successor to substantially all the
assets of the Company.  The Company may,
however, at any time, amend the Plan to provide that no additional benefits
shall accrue with respect to any Participant under the Plan; provided, however,
that no such amendment shall (i) deprive any Participant, Joint Annuitant,
or Beneficiary of any benefit that accrued under the Plan before the adoption
of such amendment; (ii) result in an acceleration of benefit payments in
violation of Code Section 409A and the guidance thereunder, or (iii) result
in any other violation of Section 409A or the guidance thereunder.  The Company may also, at any time, amend the
Plan retroactively or otherwise, if

 

11

 

and
to the extent that it deems such action appropriate in light of government
regulations or other legal requirements.

 

ARTICLE VIII

MISCELLANEOUS

 

Section 8.01         Obligations
of Employer.  The Employer’s
only obligation hereunder shall be a contractual obligation to make payments to
Participants, Joint Annuitants, and Beneficiaries entitled to benefits provided
for herein when due, and only to the extent such payments are not made from the
Trust.  Nothing herein shall give a
Participant, Joint Annuitant, Beneficiary, or other person any right to a
specific asset of an Employer or the Trust, other than as a general creditor of
the Employer.

 

Section 8.02         Employment
Rights.  Nothing contained herein shall
confer any right on a Participant to be continued in the employ of any Employer
or affect the Participant’s right to participate in and receive benefits under
and in accordance with any pension, profit-sharing, incentive compensation, or
other benefit plan or program of an Employer.

 

Section 8.03         Non-Alienation.  Except as otherwise required by a Qualified
Domestic Relations Order, no right or interest of a Participant, Joint
Annuitant, Beneficiary, or other person under the Plan shall be subject to
voluntary or involuntary alienation, assignment, or transfer of any kind.  Payment shall be made to Alternate Payees as
provided in a Qualified Domestic Relations Order.

 

Section 8.04         Tax
Withholding.  The
Employer or Trustee may withhold from any distribution hereunder amounts that
the Employer or Trustee deems necessary to satisfy federal, state, or local tax
withholding requirements (or make other arrangements satisfactory to the
Employer or Trustee with regard to such taxes).

 

Section 8.05         Other
Plans.  Amounts and benefits paid
under the Plan shall not be considered compensation to the Participant for
purposes of computing any benefits to which he may be entitled under any other
pension or retirement plan maintained by an Employer.

 

Section 8.06         Pension
Plan Termination.  If the
Pension Plan is terminated in accordance with its terms, the obligation to
provide any Excess Benefit accrued up to the termination date shall continue,
but no benefits shall accrue hereunder after the effective date of the Pension
Plan’s termination.

 

Section 8.07         Liability
of Affiliated Employers.  If any
payment to be made under the Plan is to be made on account of an Employee who
is or was employed by an Employer other than the Company, the cost of such
payment shall be borne in such proportions as the Company and the other
Employer agree.

 

12

 

This Restatement of the
Cummins Inc. Excess Benefit Retirement Plan has been signed by the Company’s
duly authorized officer, acting of behalf of the Company, on this
           day of December,
2008.

 

 

	
   

  	
  CUMMINS
  INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  

 

13

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