Document:

Exhibit 10.(c)

 

CUMMINS INC. DEFERRED COMPENSATION PLAN

 

Restated as of October 2012

 

 

TABLE OF CONTENTS

 

	
 
    	
Page
    
	
 
    	
 
    
	
ARTICLE I RESTATEMENT AND   PURPOSE
    	
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
    	
5
    
	
 
    	
 
    
	
ARTICLE III PARTICIPATION
    	
6
    
	
 
    	
 
    
	
ARTICLE IV DEFERRAL AND   DISTRIBUTION ELECTIONS
    	
6
    
	
 
    	
 
    
	
Section 4.01
    	
Deferral of Compensation
    	
6
    
	
Section 4.02
    	
Initial Deferral Election
    	
7
    
	
Section 4.03
    	
Annual Deferral Elections
    	
7
    
	
Section 4.04
    	
Elections to Defer Longer-Term Performance Plan Payouts
    	
7
    
	
Section 4.05
    	
Election of Form and Timing of Payment
    	
7
    
	
Section 4.06
    	
Election Changes
    	
7
    
	
Section 4.07
    	
Special Transition Period Elections
    	
7
    
	
 
    	
 
    
	
ARTICLE V PARTICIPANT   ACCOUNTS
    	
8
    
	
 
    	
 
    
	
Section 5.01
    	
Establishment of Accounts
    	
8
    
	
Section 5.02
    	
Crediting of Deferrals
    	
8
    
	
Section 5.03
    	
Crediting of RSP True Up Matching Credits
    	
8
    
	
Section 5.04
    	
Investment Options
    	
8
    
	
Section 5.05
    	
Crediting of Earnings
    	
8
    
	
Section 5.06
    	
Charge for Distributions
    	
9
    
	
 
    	
 
    
	
ARTICLE VI DISTRIBUTION OF   ACCOUNTS
    	
9
    
	
 
    	
 
    
	
Section 6.01
    	
Distribution on Designated Benefit Commencement Date
    	
9
    
	
Section 6.02
    	
Distribution Upon Termination of Employment for Reasons   other than Retirement
    	
9
    
	
Section 6.03
    	
Distribution Upon Death
    	
9
    
	
Section 6.04
    	
Distribution on Account of Unforeseeable Emergency
    	
9
    
	
Section 6.05
    	
Distribution on Account of Change of Control
    	
10
    
	
Section 6.06
    	
Delay in Payment for Specified Employees
    	
10
    
	
Section 6.07
    	
Designating a Beneficiary
    	
10
    
	
 
    	
 
    
	
ARTICLE VII ADMINISTRATION   OF PLAN
    	
11
    
	
 
    	
 
    
	
Section 7.01
    	
Powers and Responsibilities of the Administrator
    	
11
    

 

i

 

	
Section 7.02
    	
Indemnification
    	
11
    
	
Section 7.03
    	
Claims and Claims Review Procedure
    	
11
    
	
 
    	
 
    
	
ARTICLE VIII AMENDMENT AND   TERMINATION
    	
13
    
	
 
    	
 
    
	
ARTICLE IX MISCELLANEOUS
    	
13
    
	
 
    	
 
    
	
Section 9.01
    	
Obligations of Employer
    	
13
    
	
Section 9.02
    	
Employment Rights
    	
13
    
	
Section 9.03
    	
Non-Alienation
    	
13
    
	
Section 9.04
    	
Tax Withholding
    	
13
    
	
Section 9.05
    	
Other Plans
    	
13
    
	
Section 9.06
    	
Liability of Affiliated Employers
    	
13
    

 

ii

 

ARTICLE I

RESTATEMENT AND PURPOSE

 

Section 1.01                            History and Restatement.  Cummins Inc. established the Cummins Engine Company, Inc. 1994 Deferred Compensation Plan (“Plan”), effective February 1, 1994, and it has amended and/or restated the Plan on several occasions since that time.  The Company most recently restated the Plan, effective January 1, 2008, to comply with the requirements of the final regulations under Code Section 409A and to change the name of the Plan to the Cummins Inc. Deferred Compensation Plan (the “2008 Restatement”).  By this restatement, which is generally effective as of October 15, 2012, the Company amends the Plan to incorporate certain changes to the terms of the Plan.

 

Section 1.02                            Application of Restatement.  The 2008 Restatement applied, effective January 1, 2008, to all amounts deferred or vested under the Plan after 2004 and any earnings credited with respect to such amounts.  Neither the 2008 Restatement nor this restatement apply to any amount deferred and vested as of 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 the 2008 Restatement or 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 Plan is intended to constitute an unfunded plan maintained by the Employer primarily for the purpose of providing deferred compensation for a select group of management or highly compensated employees within the meaning of Sections 201, 301, and 401 of ERISA.

 

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 employee 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 an Employer other than as a general creditor of the Employer.

 

ARTICLE II

DEFINITIONS AND INTERPRETATION

 

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

 

(a)                                 “Account” means the bookkeeping account established to reflect a Participant’s interest under the Plan attributable to amounts deferred pursuant a specific deferral election and related RSP true up matching credits under Section 5.03.  The Administrator shall maintain a separate Account with respect to amounts deferred pursuant to all deferral elections made with respect to a single year and any related RSP True Up Matching Credits.  Where the context so permits, the term “Account” means the amount credited to such bookkeeping 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)                                  “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.

 

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

 

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

 

(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 persons entitled to receive a Participant’s remaining Accounts, if any, after his death.  A Participant’s Beneficiary shall be determined as provided in Section 6.07.

 

(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)                                     “Benefit Commencement Date” means the date as of which distribution of an Account begins or is paid, if payable as a lump sum, as determined under Section 6.01.

 

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

 

(k)                                 “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 (“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 30% or more of the combined voting power of the Company’s then outstanding securities ordinarily

 

2

 

(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 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 with respect to a Participant 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).

 

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

 

(m)                             “Company” means Cummins Inc.

 

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

 

(o)                                 “Designated Benefit Commencement Date” means, with respect to an Account, the date elected by an Eligible Employee for distribution (or commencing distribution, if payable in installments) of the Account.  Except as otherwise provided in Section 4.06, a Participant’s Designated Benefit Commencement Date must be either (i) a specified Quarterly Distribution Date occurring at least two years after the end of the calendar year for which the deferral is made or (ii) a specified Quarterly Distribution Date occurring in the calendar quarter after the Participant’s Retirement or one of the next following three calendar quarters.

 

(p)                                 “Designated Form” means, with respect to an Account, the form in which an Eligible Employee has elected for the Account to be distributed.  The “Designated Form” must be either (i) a single lump sum payment or (ii) annual installments beginning on the Designated Benefit Commencement Date and continuing over the next following anniversaries of such date for a designated number of years, not to exceed a total of 15 annual installments.  Each installment shall consist of a portion of the remaining Account, which shall be equal to (i) one divided by (ii) one plus the number of installments remaining after the installment for which the calculation is being made.  If an Eligible Employee fails to elect the Designated Form for an Account, the Designated Form for such Account shall be a single lump sum payment.

 

(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

 

3

 

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 Partner filed with the Administrator.

 

(r)                                    “Domestic Relations Order” has the meaning specified in Code Section 414(p)(1)(B).

 

(s)                                   “Earnings Credit” means, with respect to an Account, the amount credited to the Account pursuant to Section 5.05.

 

(t)                                    “Eligible Employee” means a common-law employee of the Employer who (i) is paid on the Employer’s United States payroll, (ii) has an annual base salary payable by the Employer of at least $100,000 or such greater amount specified by the Administrator before the calendar year in which such greater amount first applies, (iii) is either (A) a citizen or legal permanent resident of the United States or (B) holds one of the following types of United States’ visas:  F-1, F-2, H-1B, H-2B, H-3, H-4, L-1, O-1, O-3, or TN, and (iv) has received written notice from the Administrator that he is eligible to participate in the Plan.

 

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

 

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

 

(w)                               “Fund” means an Investment Fund.

 

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

 

(y)                                 “Investment Fund” means one or more funds selected by the Administrator pursuant to Section 5.04 to determine Earnings Credits.

 

(z)                                  “Longer-Term Performance Plan” means the Cummins Inc. Longer-Term Performance Plan, the Cummins Inc. Senior Executive Longer-Term Performance Plan, or the successor of either.

 

(aa)                          “Non-Grandfathered Amount” means an amount deferred under the Plan that is not a Grandfathered Amount.

 

(bb)                          “Participant” means an Eligible Employee who has elected to make deferrals under the Plan on an Applicable Form and whose Accounts have not been fully distributed.

 

(cc)                            “Plan” means the “Cummins Inc. Deferred Compensation Plan” as set out in this document, as amended from time to time.

 

4

 

(dd)                          “Quarterly Distribution Date” means March 15, June 15, September 15, or December 15.

 

(ee)                            “Retire” or “Retirement” refers to Termination of Employment after (i) reaching age 55 and completing at least five years of employment with the Affiliated Employers or (ii) completing 30 years of employment with the Affiliated Employers.

 

(ff)                              “RSP True Up Matching Credit” means an amount credited to a Participant’s Account pursuant to Section 5.03.

 

(gg)                            “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.

 

(hh)                          “Specified Employee Effective Date” means, in the case of an Employee who Terminates Employment before December 31, 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.

 

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

 

(jj)                                “Spouse” means, as of a Participant’s Benefit Commencement Date, (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 an Participant not described in clause (i), the Participant’s Domestic Partner.

 

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

 

(ll)                                  “Trust” means the grantor trust established by the Company to hold assets for the provision of certain benefits under the Plan as well as other Employer benefits.

 

(mm)                  “Unforeseeable Emergency” has the meaning given to such term by Code Section 409A and the guidance thereunder.  In general, the term means a severe financial hardship to the Participant resulting from an illness or accident of the Participant, the Participant’s spouse, the Participant’s beneficiary or a dependent (as defined in Code Section 152(a)) of the Participant; loss of the Participant’s property due to casualty; or other similar extraordinary and unforeseeable circumstances arising from events beyond the control of the Participant.

 

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

 

5

 

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.

 

(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 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.

 

(e)                                  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

PARTICIPATION

 

The Administrator shall notify an individual of his eligibility to participate in the Plan as soon as administratively feasible after it determines that the individual has satisfied the requirements (other than notification) for eligibility to participate.  An individual shall become an Eligible Employee upon receipt of the Administrator’s notice.  An Eligible Employee shall become a Participant only after completing such forms and making such elections as the Administrator may prescribe.

 

ARTICLE IV

DEFERRAL AND DISTRIBUTION ELECTIONS

 

Section 4.01                            Deferral of Compensation.  An Eligible Employee may elect pursuant to this Article IV to defer receipt of all or a portion, as specified in the election, of his base salary, annual bonus, and/or Longer-Term Performance Plan payments that would otherwise be paid to him in cash.  All elections pursuant to this Article IV shall be made by filing an Applicable Form with the Administrator.  Subject to the provisions of Section 4.06 and 4.07, elections under this Article IV shall become irrevocable (i) in the case of initial deferral elections pursuant to Section 4.03, when it is filed, or (ii) in the case of deferral elections other than initial deferral elections, as of the last day of the applicable election period; provided, however, if the Administrator grants a Participant’s request for a distribution on account of an Unforeseeable Emergency, it shall cancel the Participant’s existing deferral elections.  Amounts deferred pursuant to a Participant’s election shall be withheld from his cash compensation and credited to his Account as provided in Section 5.02.  The Participant’s Employer shall withhold employment and other taxes with respect to the deferred amounts from the Participant’s other compensation, as required by law.  If the Participant’s other compensation is insufficient for that purpose, the required amounts shall be withheld by the Participant’s Employer from the amounts subject to the Participant’s deferral election or the Participant shall reimburse the Employer for the required withholding not withheld from the Participant’s other compensation.

 

6

 

Section 4.02                            Initial Deferral Election.  An individual may make a deferral election pursuant to this Section only within the enrollment period specified by the Administrator, which shall end not later than 30 days after the individual becomes an Eligible Employee (or, if earlier, within 30 days after the date on which he becomes eligible to participate in any other plan of an Affiliated Employer that is required to be aggregated with this Plan for purposes of Code Section 409A).  Pursuant to such election, an Eligible Employee may elect to defer (i) part or all of his base salary for services performed after the date on which his election is filed with the Administrator and/or (ii) part or all of his annual bonus for services performed in months after the date on which his election is filed with the Administrator.  For purposes of clause (ii) of the preceding sentence, the portion of an Eligible Employee’s annual bonus for services performed in months after the date on which his election is filed with the Administrator shall be equal to the amount of his annual bonus multiplied by a fraction, the numerator of which is the number of full months in the calendar year occurring after the filing of the Eligible Employee’s election and the denominator of which is 12.

 

Section 4.03                            Annual Deferral Elections.  An Eligible Employee may elect to defer part or all of his base salary and/or annual bonus for services performed during a calendar year by filing an election during the enrollment period established by the Administrator, which period shall end not later than December 31 of the preceding year.

 

Section 4.04                            Elections to Defer Longer-Term Performance Plan Payouts.  An Eligible Employee may elect to defer part or all of his cash payouts under the Longer-Term Performance Plan, provided that such election is made during the enrollment period established by the Administrator, which period shall end not later than 12 months before the end of the performance period, and such election is otherwise permitted by Code Section 409A.  Except as permitted by the preceding provisions of this Section, an Eligible Employee’s election to defer part or all of his cash payouts under the Longer-Term Performance Plan must be made before the beginning of the applicable performance period.

 

Section 4.05                            Election of Form and Timing of Payment.  At the time a Participant makes a deferral election pursuant to Section 4.02, 4.03 or 4.04, he shall also elect a Designated Benefit Commencement Date and Designated Form for the Account to which amounts subject to the deferral are credited.

 

Section 4.06                            Election Changes.  A Participant may, pursuant to this Section, elect to change the Designated Distribution Date and/or Designated Form for an Account, provided, however, that a Participant may make only one election pursuant to this Section with respect to an Account.  A Participant’s election change pursuant to this Section shall be not be valid until 12 months after it is filed with the Administrator, and it shall be valid only if (i) it defers the original Designated Distribution Date for at least five years, and (ii) if it changes an election for payment at a specified time or pursuant to a specified schedule, it is made at least 12 months before the prior Designated Distribution Date.  In addition, if the prior Designated Distribution Date is based on the Participant’s Retirement date, the Participant’s new Designated Distribution Date must be precisely five years after the prior Designated Distribution Date.

 

Section 4.07                            Special Transition Period Elections.

 

(a)                                 A Participant was permitted to elect during the election period established by the Administrator (which shall begin no earlier than September 1, 2007, and end no later than December 31, 2007) to change his Designated Benefit Commencement Date and/or Designated

 

7

 

Form with respect to an Account, provided that such election does not cause any amounts otherwise payable in another year to be payable in 2007 or cause any amounts otherwise payable in 2007 to be paid in a later year.

 

(b)                                 A Participant was permitted to elect during the election period established by the Administrator (which shall begin and end in 2008) to change his Designated Benefit Commencement Date and/or Designated Form with respect to an Account, provided that such election does not cause any amounts otherwise payable in another year to be payable in 2008 or cause any amounts otherwise payable in 2008 to be paid in a later year.

 

ARTICLE V

PARTICIPANT ACCOUNTS

 

Section 5.01                            Establishment of Accounts.  The Administrator shall establish a separate Account to reflect each Participant’s interest under the Plan with respect to amounts deferred pursuant to all of the Participant’s deferral elections made with respect to a single year.  The Administrator also shall separately account for Grandfathered Amounts and Non-Grandfathered Amounts.

 

Section 5.02                            Crediting of Deferrals.  A Participant’s deferrals shall be credited to his appropriate Account as of the payroll date on which they are withheld from his pay.

 

Section 5.03                            Crediting of RSP True Up Matching Credits.  As a result of a Participant’s deferrals under the Plan, he may not receive matching contributions that he would have received under the Cummins Inc. and Affiliates Retirement and Savings Plans (“RSP”) in the absence of such election.  In such a case, to the extent determined by the Company, in its discretion, the Participant’s Account with respect to such deferrals may be credited with the amount of such lost matching contributions and any earnings thereon deemed appropriate by the Company.  Such credited amounts shall be subject to the same deferral elections otherwise in effect with respect to such Account.

 

Section 5.04                            Investment Options.  The Administrator shall, from time to time, specify the available Investment Funds, which the Administrator may prospectively change or close to new investments in its discretion.  Each Participant shall elect one or more Investment Funds to which his existing Accounts shall be allocated, in increments of 1%.  Before 2008, a Participant may change his investment election once each calendar year.  After 2007, a Participant may change his investment elections one time per month, and he may make separate investment elections with respect to his existing Accounts and future deferrals.  The sole purpose of the Investment Funds is to measure Earnings Credits to the Participant’s Accounts, and there is no requirement that amounts be invested in the Investment Funds.

 

Section 5.05                            Crediting of Earnings.  As of the end of each business day, the Administrator shall credit each Participant’s Accounts with an Earnings Credit (which may be positive or negative) as provided in this Section.  Except as the Administrator otherwise determines, the Earnings Credit rate for that portion of a Participant’s Accounts allocated to a fixed income Investment Fund for any day in a calendar quarter shall be based on the rate under such fixed income investment on the last day of the preceding calendar quarter.  The Earnings Credit rate for that portion of a Participant’s Accounts allocated to any Investment Fund other than a fixed income Investment Fund shall be the rate of investment earnings under such

 

8

 

Investment Fund.  Notwithstanding the preceding provisions, no Earnings Credits shall be allocated with respect to a Payment after the last business day immediately preceding that Payment (or such earlier date preceding a Payment as reasonably designated by the Administrator).  In determining the Earnings Credits, the Administrator may adopt such procedures as it deems appropriate, in its sole discretion.

 

Section 5.06                            Charge for Distributions.  Upon a distribution with respect to a Participant, the Participant’s appropriate Accounts shall be reduced by the amount of the distribution.

 

ARTICLE VI

DISTRIBUTION OF ACCOUNTS

 

Section 6.01                            Distribution on Designated Benefit Commencement Date.  Except as expressly provided in the following provisions of this Article, a Participant’s Accounts subject to a deferral election shall be distributed in their respective Designated Forms, beginning as of their respective Designated Benefit Commencement Dates.  Amounts payable as of a date shall be paid on such date or as soon as administratively feasible (and under no circumstances more than 30 days) thereafter.  Notwithstanding the preceding provisions of this Section, if a Participant’s Account on his separation from service is less than $10,000, the Designated Form for such Account shall be deemed to be a lump sum.

 

Section 6.02                            Distribution Upon Termination of Employment for Reasons other than Retirement.  Notwithstanding Section 6.01, and subject to Section 6.06, if a Participant Terminates Employment for a reason other than Retirement, his remaining Account balances shall be paid to him (or his Beneficiary, if he is deceased) in a single lump sum payment as of the Quarterly Distribution Date occurring in the first calendar quarter beginning after his Termination of Employment; provided, however this sentence shall not result in the deferral of any amount otherwise payable under the Plan.

 

Section 6.03                            Distribution Upon Death.  Notwithstanding Section 6.01, if a Participant dies before the distribution of his entire Account balance, his remaining Account balance shall be distributed to his Beneficiary in a single lump sum payment as of the Quarterly Distribution Date occurring in the first calendar quarter beginning after his death; provided, however, this sentence shall not result in the deferral of any amount otherwise payable under the Plan; and provided further that, if the Administrator does not receive notice of the Participant’s death and distribution under this Section 6.01 therefore does not occur at the time specified herein, no breach of the Plan shall be deemed to have occurred.

 

Section 6.04                            Distribution on Account of Unforeseeable Emergency.  Notwithstanding Section 6.01, if a Participant demonstrates to the satisfaction of the Administrator that he has incurred an Unforeseeable Emergency, the amount reasonably necessary to satisfy the emergency need (including any amounts necessary to pay any income taxes or penalties reasonably anticipated to result from the distribution), as determined by the Administrator, shall be distributed to him as soon as administratively feasible after the Administrator’s decision; provided that, in determining whether an Unforseeable Emergency has been incurred and the amount reasonably necessary to satisfy the emergency need, the Administrator shall take into consideration, among other things, all amounts available to the Participant under the RSP (including by obtaining a loan under the RSP).  If the Administrator

 

9

 

grants a request for withdrawal pursuant to this Section, it shall prospectively cancel the Participant’s existing deferral elections, and it shall take into account the additional compensation that is available as a result of the cancellation of those elections in determining the amount reasonably necessary to satisfy the Participant’s emergency need.

 

Section 6.05                            Distribution on Account of Change of Control.  Notwithstanding Section 6.01, if a Change of Control occurs with respect to a Participant, the Participant’s remaining Accounts shall be distributed to him in a single lump sum payment on the date of such Change of Control or as soon as administratively feasible (and not more than 30 days) thereafter; provided, however, this sentence shall not result in the deferral of any amount otherwise payable under the Plan.

 

Section 6.06                            Delay in Payment for Specified Employees.  Notwithstanding any provision of this Plan to the contrary, to the extent required by Code Section 409A(a)(2)(B)(i), distributions to a Participant who is a Specified Employee on account of his Termination of Employment for any reason other than death shall be delayed until the earliest date permitted by such section.  Payments delayed pursuant to the preceding sentence shall be increased by deemed earnings, as determined pursuant to Section 5.05, to the date on which such payments are made.

 

Section 6.07                            Designating a Beneficiary.

 

(a)                                 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, then the Participant’s Beneficiary shall be his Spouse, if living at the time of the Participant’s death, or if his Spouse is not then living, 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, the Participant’s estate.

 

(b)                                 Except to the extent the Participant’s Beneficiary is the individual named as the Participant’s beneficiary under his Employer-provided group life insurance program pursuant to the preceding paragraph and such program otherwise provides, the following rules shall determine the apportionment of payments due under the Plan among Beneficiaries in the event of the Participant’s death:

 

(1)                      If any Beneficiary designated by the Participant as a “Direct Beneficiary” dies before the Participant, his interest and the interest of his heirs in any payments under the Plan shall terminate and the percentage share of the remaining Beneficiaries designated as Direct Beneficiaries shall be increased on a pro rata basis.  If no such Beneficiary survives the Participant, then the Participant’s entire interest in the Plan shall pass to any Beneficiary designated as a “Contingent Beneficiary.”

 

(2)                      If any Beneficiary designated by the Participant as a “Contingent Beneficiary” dies before the Participant, his interest and the interest of his heirs in any payments under the Plan shall terminate and the percentage share of the remaining Beneficiaries designated as Contingent Beneficiaries shall be increased on a pro rata basis.

 

10

 

(3)                      If any Beneficiary dies after the Participant, but before payment is made to such Beneficiary, then the payment shall be made to the Beneficiary’s estate.

 

ARTICLE VII

ADMINISTRATION OF PLAN

 

Section 7.01                            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:

 

(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 7.02                            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 7.03                            Claims and Claims Review Procedure.

 

(a)                                 In general, distributions under the Plan will be made automatically as provided in Article VI and no Benefit Claim will be necessary for a Participant to receive distributions under the Plan.  If a Participant or his designated Beneficiary believes he is entitled to a benefit under the Plan that is not provided, however, he may file a written Benefit Claim for payments under

 

11

 

the Plan with the Administrator provided such claim is filed within 90 days of the date payments under the Plan are made or begin to be made, or the date the Participant or his designated Beneficiary believes payments should have been made, as applicable.  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 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).

 

(f)                                   Notwithstanding the foregoing claims and appeals procedures, to avoid an additional tax on payments that may be payable under the Plan, a claimant must make a reasonable, good faith effort to collect any payment or benefit to which the claimant believes he is entitled hereunder no later than 90 days after the latest date upon which the payment could

 

12

 

have been timely made pursuant to Code Section 409A, and if not paid or provided, must take further enforcement measures within 180 days after such latest date.

 

ARTICLE VIII

AMENDMENT AND TERMINATION

 

The Plan shall continue in force with respect to any Participant until the completion of any payments due hereunder.  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 following expiration of the Participant’s irrevocable election; 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 Code 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 IX

MISCELLANEOUS

 

Section 9.01                            Obligations of Employer.  The Employer’s only obligation hereunder shall be a contractual obligation to make payments to Participants or Beneficiaries entitled to benefits provided for herein when due, and only to the extent that such payments are not made from the Trust.  Nothing herein shall give a Participant, 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 9.02                            Employment Rights.  Nothing contained herein shall confer any right on an 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 9.03                            Non-Alienation.  Except as otherwise required by a Domestic Relations Order, no right or interest of an Participant, Spouse, or other Beneficiary under this Plan shall be subject to voluntary or involuntary alienation, assignment, or transfer of any kind.  Payments shall be made to an Alternate Payee to the extent provided in a Domestic Relations Order.  To the extent permitted by Code Section 409A, payments pursuant to a Domestic Relations Order may be made in a lump sum and before the Participant’s earliest retirement age (as defined by ERISA Section 206(d)(3)(E)(ii)).

 

Section 9.04                            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 9.05                            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 9.06                            Liability of Affiliated Employers.  If any payment to be made under the Plan is to be made on account of an Participant who is or was employed by an Affiliated

 

13

 

Employer, the cost of such payment shall be borne in such proportion as the Company and the Affiliated Employer agree.

 

This Restatement of Cummins Inc. Deferred Compensation Plan has been signed by the Company’s duly authorized officer, acting on behalf of the Company, on this 15th day of October, 2012.

 

	
 
    	
CUMMINS   INC.
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
Jill   E. Cook
    
	
 
    	
Title:
    	
Vice   President — Human Resources
    

 

14Exhibit 10.(f)

 

CUMMINS INC. DEFERRED COMPENSATION PLAN

FOR NON-EMPLOYEE DIRECTORS

 

Restated as of October 15, 2012

 

 

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
    	
5
    
	
 
    	
 
    
	
Article III   PARTICIPATION
    	
5
    
	
Section 3.01. Commencement   of Participation
    	
5
    
	
Section 3.02. Cessation of   Participation
    	
5
    
	
 
    	
 
    
	
Article IV   ELECTIONS TO DEFER
    	
6
    
	
Section 4.01. General   Provisions
    	
6
    
	
Section 4.02. Election Form
    	
6
    
	
 
    	
 
    
	
Article V DEFERRED   COMPENSATION ACCOUNT’S
    	
6
    
	
Section 5.01. Establishment   of Deferred Cash Accounts
    	
6
    
	
Section 5.02. Establishment   of Deferred Stock Account
    	
7
    
	
Section 5.03. Separate   Accounts for Grandfathered Amounts
    	
8
    
	
 
    	
 
    
	
Article VI   ADJUSTMENTS TO DEFERRED CASH ACCOUNTS
    	
8
    
	
 
    	
 
    
	
Article VII PAYMENT   OF DEFERRED AMOUNTS
    	
8
    
	
Section 7.01. Timing of   Payments
    	
8
    
	
Section 7.02. Form of   Payment
    	
8
    
	
Section 7.03. Amount of   Installment Payments
    	
9
    
	
Section 7.04. Death Benefits
    	
9
    
	
Section 7.05. Payments Upon   a Change of Control
    	
9
    
	
Section 7.06. Designating a   Beneficiary
    	
9
    
	
 
    	
 
    
	
Article VIII   ADMINISTRATION OF PLAN
    	
10
    
	
Section 8.01. Powers and   Responsibilities of the Administrator
    	
10
    
	
Section 8.02.   Indemnification
    	
11
    
	
Section 8.03. Claims and   Claims Review Procedure
    	
11
    

 

i

 

	
Article IX GROSS-UP   PAYMENTS
    	
12
    
	
 
    	
 
    
	
Article X AMENDMENT   AND TERMINATION
    	
13
    
	
 
    	
 
    
	
Article XI   MISCELLANEOUS
    	
13
    
	
Section 11.01. Obligations   of the Company
    	
13
    
	
Section 11.02. Employment   Rights
    	
13
    
	
Section 11.03.   Non-Alienation
    	
13
    
	
Section 11.04. Tax   Withholding
    	
13
    
	
Section 11.05. Other Plans
    	
14
    
	
Section 11.06. Liability of   Affiliated Employers
    	
14
    

 

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 Inc. (“Plan”), effective April 5, 1994, and it has amended the Plan since that time.  The Plan was last amended and restated effective January 1, 2008, to comply with the requirements of Code Section 409A and the final regulations and guidance thereunder.  The Plan is again amended and restated effective October 15, 2012, to incorporate certain changes to the terms of the Plan.

 

Section 1.02.  Application of Restatement.  This document shall apply 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 as in effect on December 31, 2007; 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 document, 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 the 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 Company’s and any Affiliated 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 and the word or phrase is not otherwise defined, 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.  To the extent necessary to administer the Plan, a separate sub-account may be created for each Payment Year to which is credited the amounts deferred during such Payment Year.

 

 

(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)                                  “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(d)) with the Company.

 

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

 

(e)                                  “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.

 

(f)                                   “Beneficiary” means the person or entity entitled to receive a Participant’s death benefits under Section 7.04, if any, remaining after the Participant’s death.  A Participant’s Beneficiary shall be determined as provided in Section 7.05.

 

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

 

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

 

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

 

(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 Company or a subsidiary thereof or any employee benefit plan sponsored by the Company or a

 

2

 

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

 

(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).

 

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

 

(l)                                     “Company” means Cummins Inc.

 

(m)                             “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.

 

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

 

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

 

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

 

3

 

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

 

(r)                                    “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 he 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 Partner filed with the Administrator.

 

(s)                                   “Domestic Relations Order” has the meaning specified in Code Section 414(p)(1)(B).

 

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

 

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

 

(v)                                 “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.

 

(w)                               “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.

 

(x)                                 “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.

 

(y)                                 “Spouse” means, as of the date of a Participant’s death, (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.

 

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

 

(aa)                          “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.

 

4

 

(bb)                          “Trust” means the grantor trust established by the Company to hold assets for the provision of certain benefits under the Plan as well as other employer benefits.

 

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

 

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.

 

(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 Administrator or the Board.

 

Section 3.02.  Cessation of Participation.  A Participant shall continue to he 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.

 

5

 

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)           A Participant may change the investment option(s) stipulated for crediting earnings on his or her Account pursuant to Section 5.02(c) and Article VI of the Plan and such procedures as are prescribed by the Administrator.

 

(e)           A Participant may change his or her designation of 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 an Applicable Form 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 Account.  The Participant may elect to receive payment of his Account in either (i) one lump sum payment or (ii) a specified number of annual installments, not to exceed 15.  A Participant may elect a different form of distribution for each Payment Year’s sub-account.

 

(c)           The optional rate(s) for crediting earnings on Cash Deferrals.

 

ARTICLE V
 DEFERRED COMPENSATION ACCOUNT’S

 

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

 

6

 

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.

 

(a)           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. 2012 Omnibus Incentive Plan (or any successor plan thereto) and the applicable award thereunder.

 

(b)           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 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.

 

(c)           Upon either (i) a Participant reaching age 70, or (ii) commencement of distribution of the Participant’s Account, the Participant may elect to allocate all or any portion of the value of Participant’s Deferred Stock Account into the other available investment options under the Plan.  The Participant may chose more than one investment option in such minimum increments as are prescribed by the Administrator.

 

Such option must be made in writing no later than the beginning of the year one year prior to the year in which either (i) age 70 is attained, or (ii) the first annual installment from the Account which is to be affected by the election is made.

 

The value of the stock units affected by this election shall be determined by multiplying the number of stock units so affected by the 90-day average closing price of the Common Stock of the Company on the New York Stock Exchange covering the 90 trading days immediately preceding the date the investment diversification election is submitted by the Participant to the Administrator.  After the initial diversification is made, a Participant may change the investment election once each Payment Year (beginning after the year of the initial diversification election) or at other times prescribed by the Administrator.

 

(d)           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, as determined by the Administrator in its discretion, 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

 

7

 

than normal cash dividends), recapitalizations, reorganizations, mergers, consolidations, combinations, exchanges, or other relevant changes in the Company’s corporate structure or capitalization.  Notwithstanding the foregoing, if the Company shall subdivide the shares of common stock or the Company shall declare a dividend payable in shares of common stock, and if no action is taken by the Administrator, then the adjustments contemplated by this subsection (d) that are proportionate shall nevertheless automatically be made as of the date of such subdivision of the shares or dividend in shares.

 

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 Company.  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 or at other times as prescribed by the Administrator.  The Participant may choose more than one investment option in such minimum increments as are prescribed by the Administrator.  The Company 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 business day of the calendar quarter following the Participant’s Termination of Service; or

 

(c)           a Change of Control.

 

Section 7.02.  Form of Payment.  All distributions from a Participant’s Deferred Cash Account shall be paid in cash.  All distributions from a Participant’s Deferred Stock Account shall be paid in shares of Company common stock (other than any fractional share which shall be paid in cash) and such shares shall be issued under, and subject to, the Cummins Inc. 2012 Omnibus Incentive Plan (or a successor plan thereto); provided that, to the extent the allocation

 

8

 

election described in Section 5.02(c) has been made, the amount so allocated shall be paid in cash.

 

Section 7.03.  Amount of Installment Payments.

 

(a)           The amount of each annual cash installment from a Participant’s Deferred Cash Account or a Participant’s Deferred Stock Account (to the extent the allocation election described in Section 5.02(c) has been made) 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 or Deferred Stock Account shall be reduced by the amount of each distribution out of such Account.

 

(b)           The number of shares distributed in each annual installment from a Participant’s Deferred Stock Account (to the extent allocated to stock units) shall be determined by dividing the number of stock units 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 stock units 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 7.04.  Death Benefits.  In the event of the Participant’s death, payment of the entire balance in the Participant’s Deferred Cash Account and Deferred Stock Account shall be made to the Participant’s designated Beneficiary(ies) in a single lump sum payment within 90 days following the Participant’s death.

 

Section 7.05.  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 7.06.  Designating a Beneficiary.

 

(a)           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, then payment of the balance in the Participant’s Deferred Cash Account and Deferred Stock Account shall be made to the Participant’s estate in the event of the Participant’s death.

 

(b)           The following rules shall determine the apportionment of payments due under the Plan among Beneficiaries in the event of the Participant’s death:

 

(1)                                 If any Beneficiary designated by the Participant as a “Direct Beneficiary” dies before the Participant, his or her interest and the interest of his or her heirs in any payments under the Plan shall terminate and the percentage share of the remaining Beneficiaries

 

9

 

designated as Direct Beneficiaries shall be increased on a pro rata basis.  If no such Beneficiary survives the Participant, the Participant’s entire interest in the Plan shall pass to any Beneficiary designated as a “Contingent Beneficiary.”

 

(2)                                 If any Beneficiary designated by the Participant as a “Contingent Beneficiary” dies before the Participant, his or her interest and the interest of his or her heirs in any payments under the Plan shall terminate and the percentage share of the remaining Beneficiaries designated as Contingent Beneficiaries shall be increased on a pro rata basis.

 

(3)                                 If any Beneficiary dies after the Participant, but before payment is made to such Beneficiary, then the payment shall be made to the Beneficiary’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:

 

(1)                                 to interpret Plan documents, decide all questions of eligibility, determine whether a Participant has Terminated Service, 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

 

10

 

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 the Company or any Affiliated 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 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

 

11

 

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 7.05 (“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 he 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 Code 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, 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 Code 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 and acceptable to the Participant 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

 

12

 

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.  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 the Company.  The only obligation of the Company or any Affiliated Employer hereunder shall be a contractual obligation to make payments to Participants, Spouses, or other 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 service of the Company 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 the Company or any Affiliated Employer.

 

Section 11.03.  Non-Alienation.  Except as otherwise required by a 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 Company or the Trustee may withhold from any distribution hereunder amounts that the Company or the Trustee deems necessary to satisfy

 

13

 

federal, state, or local tax withholding requirements (or make other arrangements satisfactory to the Company 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 the Company or any Affiliated 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 15th day of October, 2012.

 

	
 
    	
CUMMINS   INC.
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
Jill   E. Cook
    
	
 
    	
Title:
    	
Vice   President — Human Resources
    

 

14

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00212-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00212-of-00352.parquet"}]]