EXHIBIT 10 (e)
CATERPILLAR INC.
1993 CORPORATE INCENTIVE COMPENSATION PLAN
MANAGEMENT AND SALARIED EMPLOYEES
(AMENDED AND RESTATED AS OF 10/15/93)
SECTION 1. TYPE OF PLAN AND PURPOSE
1.1 Type of Plan and Purpose. This Plan is an incentive compensation
plan. The purpose of the Plan is to provide contingent benefits to
Employees to reflect their efforts in contribution to the profitability of
the Company; and to serve as an incentive for Employees further to
contribute to the continued and future financial success of the Company and
to its ability to provide continued employment opportunities to its
Employees.
This Plan has been adopted in accordance with rules and guidelines
established by the Stock Option and Officers' Compensation Committee of the
Board of Directors of the company. Those guidelines permit business and
service units of Caterpillar Inc. or its subsidiaries to adopt separate
incentive compensation plans within parameters established by that
Committee based upon measurements approved by the company's internal
Incentive Compensation Review Committee. Those guidelines (a) generally
require that a portion of the award under any such unit plan be based upon
the corporate return on assets measurement established under this Plan, and
(b) permit such unit plan to adopt a shorter eligibility period. Those
unit incentive compensation plans with such a corporate measurement form a
part of the Plan.
It is understood that the duty of the Employers, their Boards of Directors,
and the management they select is to provide the Employers' shareholders
protection of, and a maximum return on, their investment, consistent with
retention in the business of such profits as the Board of Directors of the
Company deems prudent, and with fair and competitive prices, wages,
benefits and other terms of employment; no provision of this Plan or any
unit incentive compensation plan shall be construed as altering that
objective or in any way limiting management of such Board of Directors in
the performance of their duties.
1.2 Supplements. The succeeding provisions of this Plan will be expanded
and/or modified by Supplements. Such Supplements will set forth the
particulars wherein the provisions of this Plan, as applied to any group of
Employees are expanded and/or differ from those set forth in the succeeding
provisions of this Plan exclusive of such Supplements. All provisions of
this Plan are subject to any express provisions to the contrary contained
in any such Supplements.
SECTION 2. DEFINITIONS
2.1 Annual Salary Rate for any year means (i) in the case of a Participant
who is a management employee, his monthly salary rate as of December 31 of
that year (or his last day on the management payroll during that year if
earlier) multiplied by 12; or (ii) in the case of a Participant who is a
salaried employee, his weekly salary rate as of December 31 of that year
(or his last day on the salaried payroll during that year if earlier)
multiplied by 52.
The Annual Salary Rate shall include any salary amount deferred under Part
2 of the Employees' Investment Plan and contributed as a basic Employer
contribution thereunder, and any salary amount deferred under the Flexible
Spending Account, but excludes any (a) bonuses or special cash awards, (b)
commissions, (c) international service allowances, (d) extra shift or
overtime payments, (e) night shift premiums, (f) pay for vacation time not
used and (g) payments under
this plan or other payments or contributions (other than EIP 2
contributions) under any employee benefit plan.
2.2 Company means Caterpillar Inc. or any successor to it by merger,
consolidation, reorganization or otherwise.
2.3 Company Service means all periods of full-time employment with the
Company and its subsidiaries, including all periods of leave of absence and
all periods of layoff.
2.4 Effective Date of this Plan means January 1, 1993.
2.5 Employee means, subject to Subsection 3.1, any person who is a resident
or citizen of the United States of America or Canada and who on or after
the Effective Date is in the regular full-time employ of an Employer on its
salaried or management payrolls and is employed for work on the prevailing
schedules of the department to which he is assigned, and who is included in
a group to whom the Plan has been made available by extension by an
Employer and includes any such person while absent from work under
circumstances which do not break continuity of service.
2.6 Employer means the Company or any subsidiary of the Company that has
adopted or adopts the Plan with the Company's written consent.
2.7 Officer means those Employees who fill the following positions: Vice
President, Group President, and Chairman/Vice Chairman. For purposes of
this Plan, the Controller and Treasurer are not included in the definition
of Officer.
2.8 Participant means any Employee who is eligible to be covered by the
Plan pursuant to Subsection 3.1.
2.9 The first Plan Year will begin on the effective date and will end on
the first December 31 thereafter. Each subsequent Plan Year will end on
the next following December 31.
SECTION 3. ELIGIBILITY AND PARTICIPATION
3.1 Eligibility and Participation. Each Employee of the Employers shall be
eligible to be covered by the Plan and become a Participant as of the
latest to occur of (i) the Effective Date; (ii) the date he has completed
one or more years of Company Service; and (iii) the date he is included in
a group to which the Plan has been and continues to be extended by an
Employer. Notwithstanding anything contained herein to the contrary, for
all purposes of the Plan, any U.S. International Service Employee who is
not an Employee of the Company or any of the other Employers shall be
considered to be an eligible Employee if he then meets the requirements of
Subparagraph (ii) above. As used herein, the term "U.S. International
Service Employee" means an Employee who (i) on the direction or with the
permission of an Employer is transferred to employment outside of the
United States of America with a subsidiary (whether or not organized or
incorporated within the United States of America) which has not adopted the
Plan; and (ii) meets the definition of a U.S. International Service
Employee contained in the Company's U.S. International Service Practices;
and the term Employee shall also include such other persons as shall be
designated by the Committee. A Participant in the Plan shall continue as
such so long as he meets the definition of an Employee contained in
Subsection 2.5 or considered to be an Employee pursuant to this Subsection
3.1.
Notwithstanding the above, payment amounts shall not be duplicated under
this Plan by amounts paid for the same period of service or corporate
performance measurement under any other profit sharing plan, incentive
compensation plan, or similar plan sponsored by Caterpillar Inc. or any
of its subsidiaries, or would be paid except for any applicable waiting
period expressed in such plan. However, an Officer who is eligible to
participate in an incentive compensation plan for a business or service
unit under his control may participate in this Plan for that portion of
his Annual Salary Rate not included in the calculation of his business
or service unit incentive compensation payment.
3.2 Employment Requirements. Any Participant shall be eligible for an
incentive compensation benefit under the Plan for any year, provided that
he is actively employed by the Company and any of its subsidiaries on
December 31 of that year or is on leave of absence or layoff from the
Company or any of its subsidiaries on such December 31; except that any
otherwise eligible Employee who died, retired, or received a separation
payment in lieu of layoff during such year shall also be covered as if he
were an active Employee on December 31 of that year.
SECTION 4. AMOUNT OF BENEFIT
4.1 Salary Grade 23 and Below. The amount payable to a Participant at Salary
Grade 23 and below shall be determined by multiplying the Participant's
Annual Salary Rate times 7%, times the applicable Corporate Performance
Factor.
4.2 Salary Grade 24 and Above. The amount payable to a Participant at Salary
Grade 24 and above shall be determined by multiplying his Annual Salary
Rate times the Team Award percentage (determined from Exhibit I for
non-Officer Participants in Salary Grades 24 and above, and from Exhibit 2
for Officers), for his salary grade as of December 31, times the applicable
Corporate Performance Factor, plus the amount of his Individual Award.
Designated Officers may participate in their units' incentive compensation
plan and may be eligible for Team Awards based on their division results
and the corporate performance of Caterpillar Inc.
Individual Awards may be made only from a discretionary pool. A separate
Employee Discretionary Pool will be established for Participants (excluding
Officers) for each Vice Presidential administrative area or for each group
of Participants subject to a business or service unit incentive
compensation plan. A separate discretionary pool will be established for
Officers.
The Individual Award, if any, for which only Participants in Salary Grades
24 and above are eligible, shall be determined solely at the discretion of
the Participant's Unit Manager (or by the Compensation Committee of the
Board of Directors for Officers) and shall not exceed the amount of the
Employee's Team Award. In addition, the sum of the Individual Awards
payable to all Participants in Salary Grade 24 and above shall not exceed
the Employee Discretionary Pool Amount. The Employee Discretionary Pool
Amount shall be 25% of the total amount of the Team Awards paid to
Participants at Salary Grade 24 and above (excluding Officers).
The sum of the Individual Awards payable to Participants who are Officers
shall not exceed the Officer Discretionary Pool Amount. The Officer
Discretionary Pool Amount shall be the sum of each Officer's percentage of
annual salary rate (See Exhibit 1) adjusted by the Corporate Performance
Factor defined in Section 4.4. The Officer Discretionary Pool will be
calculated as if all officers participated wholly and exclusively in the
Corporate Incentive Compensation Plan.
4.3 Individual Performance Level Less Than Five. Notwithstanding the
provisions of Subparagraphs 4.1 or 4.2 to the contrary, Employees with a
performance rating of Individual Performance Level 5 will not be eligible
for a Team Award or an Individual Award, and contributions shall not be
made to either the Participant Discretionary Pool Amount or the Officer
Discretionary Pool Amount for such Employees or Officers.
4.4 Corporate Performance Factor. The Corporate Performance Factor will be
determined each year in relation to minimum, target and maximum corporate
return on asset (ROA) levels determined by the Company (see Exhibit 3).
The actual performance factor will be determined by interpolation based on
the actual ROA achieved at the end of the year compared to these levels,
and the participants team incentive compensation amount, if any, will be
calculated accordingly. The achieved ROA will be determined by dividing
Profit by the Average Gross Assets rounded to the nearest third decimal.
The Company must achieve the minimum ROA percentage specified before any
amount shall be payable.
As used herein, the term "Average Gross Assets" means the total corporate
assets averaged throughout the year. Total corporate assets excludes the
assets of Financial Products but includes the investment in Financial
Products and is reported in the Annual Report and the Quarterly Report to
Stockholders under the column entitled Machinery and Engines as
Supplemental Consolidating Data on the Statement of Financial Position.
The average for the year will be calculated by adding together five
points: the ending balance for the previous year and the ending balance
for each of the four quarters during the year and dividing by five. The
term "Profit" means the amount of profit for the year before income taxes
reported in such Statement 1 (or any equivalent successor statement thereto
which provides such amount of profit) in the subtotal immediately preceding
the provision for income taxes line, but increased by the amount of accrual
for that year for incentive compensation amounts payable under the Plan and
any other similar incentive compensation plan or profit sharing plan of the
Employers (excluding any investment plan of the Employers) and any awards
granted under any bonus plan of the Employers. Such Profit before income
taxes would exclude the effect of extraordinary gains or losses, if any, as
defined by generally accepted accounting principles. Profit shall also
exclude income from nonconsolidated operations. Consolidated Financial
Statements which are prepared using generally accepted accounting
principles and as audited by the Company's independent certified public
accountants shall be final and conclusive.
4.5 Percentage Determination. The Employee's Team Award percentage, Individual
Award percentage, Employee Discretionary Pool Amount percentage, Officer
Discretionary Pool Amount percentage, the Corporate Performance Factors,
the Company's ROA target percentage, and the minimum and maximum percentage
will be determined for each year by the Committee on Stock Options and
Officer's Compensation.
4.6 RIP, EIP, etc. Credit. 100% of the amount paid under the Plan to an
Employee shall be counted as compensation for the month in which payment is
made for purposes of the Retirement Income Plan or any other pension plan
sponsored by Caterpillar Inc. or its subsidiaries, in which the Employee is
a Participant. No incentive compensation amount shall be taken into
account under the Employee's Investment Plan, the Group Insurance Plan, or
any other employee benefit plan or payroll practice of Caterpillar Inc. or
its subsidiaries.
4.7 Proration of Payment Amount. If an Employee is not a Participant or is not
actively employed by an Employer for the entire year but is eligible for an
incentive compensation amount for the year pursuant to the provisions of
Subsection 3.2, his payment amount will be prorated based
upon his days of active employment in that year on the management or
salaried payrolls while a Participant. Days while on disability leave of
absence will be counted as days of active employment in accordance with
uniform rules established by the Committee with respect to the maximum
number of such days to be counted during any period of disability leave
of absence, but in no event shall any days occurring after the
expiration of a continuous period of absence of six months be counted.
No other leaves of absence will be counted for purposes of calculating
the payment amount.
4.8 Participation in Another Incentive Compensation Plan. If an Employee, who
otherwise met the eligibility requirements of Section 3, ceased to be a
Participant during the Plan Year because he became a participant in another
incentive compensation plan sponsored by Caterpillar Inc. or one of its
subsidiaries, he shall be eligible for a Team Award and/or an Individual
Award under this Plan for that period of time that he was a Participant in
this Plan. Twenty five percent (25%) of the prorated Team Award paid under
this Plan shall be included in the Employee Discretionary Pool Amount.
4.9 Transfer from Hourly Payroll. To Notwithstanding anything contained herein
to the contrary, if a Participant or former Participant is employed by the
Employers on December 31 of any Plan Year and does not receive for any
period of employment in that Plan Year a payment under either this Plan or
the profit sharing plan covering employees on the hourly payroll of the
Employers, he shall receive a payment under this Plan for such period of
employment in the same amount which would otherwise have been payable to
him under the terms of this Plan or under such hourly plan but for his
ineligibility thereunder because he was not participating therein on said
December 31.
4.10 Supplemental Employees. Notwithstanding anything contained herein to the
contrary, if (a) a Participant ceases to be a full-time Employee of an
Employer, and (b) on December 31 of the year in which said Participant
ceases to be a full-time Employee, he is and has thereafter been
continuously employed as a supplemental employee on either a part-time or
temporary basis by an Employer, his payment amount shall be prorated based
upon his days of active regular full-time employment in that year on the
salaried or management payroll while a Participant. His Annual Salary Rate
shall be the rate in effect when he ceased full-time employment.
SECTION 5. INCENTIVE COMPENSATION PAYMENT
5.1 Date and Method of Payment. Any amount which is payable for any year shall
be paid to an eligible Participant not later than 3 months of the year
following the year for which the amount is computed. The amount of such
payment shall be paid by check less required withholding for federal,
state, local and other taxes. Payments will be made in the same currency
in which the Employee receives his base salary.
5.2 Beneficiaries. If a Participant is deceased at the time any payment is
payable to him, the amount of such payment shall be payable to the same
person or persons and in the same proportionate amount as shall be payable
to the beneficiary or beneficiaries of his basic life insurance under the
Group Insurance Plan of his Employer.
5.3 Lost Participants. If any payment becomes distributable pursuant to
Subsection 5.1 and the whereabouts of a Participant (or any beneficiary
pursuant to Subsection 5.2) is then unknown to the Employer and the
Employer shall fail to receive a claim for such payment from the person
entitled thereto (or from any other person validly acting on his behalf),
then such payment shall
be disposed of in an equitable manner as permitted by law under rules
adopted by the Plan Administrator.
SECTION 6. MISCELLANEOUS
6.1 Administration of the Plan. Except as otherwise expressly provided, the
Plan shall be administered by the Incentive Compensation Review Committee
("the Committee"), appointed by the Chairman of the Board, who shall be the
Plan Administrator and shall be authorized to (a) determine all questions
arising in the administration of the Plan, (b) establish rules and
procedures to carry out their duties and responsibilities, (c) delegate
such duties and responsibilities to other employees of the Employers, and
(d) do all other acts which in its judgment are necessary for the proper
administration of this Plan.
6.2 Facility of Payment. If the Committee shall receive evidence satisfactory
to it that any Participant or other person entitled to receive a benefit
under this Plan is physically or mentally incompetent to receive such
payment and to give a valid release therefor, the Committee at its
discretion may make payment in one or more of the following ways: (a)
directly to such Participant or person, (b) to his legal guardian or
conservator, or (c) to his spouse or to any other person to be expended for
his benefit. The decision of the Committee shall be in each case final and
binding on all persons in interest.
6.3 Amendment and Termination of Plan. The Company shall have the power at any
time and from time to time, by action of its Board of Directors, to amend
or terminate this Plan; provided, however, that the Committee may also
amend the Plan so long as such amendment does not change the duties and
responsibilities of the Committee or the Stock Option and Officers'
Compensation Committee of the Company's Board of Directors and so long as
the cost of such amendment to the Employers does not exceed $100,000 per
year.
6.4 Employment Rights. Participation in the Plan will not give any Employee or
an Employer any right to be retained in the service of the Company or its
subsidiaries, nor any right or claim to any payment under the Plan unless
such right or claim has specifically accrued under the terms of the Plan.
6.5 Action by Employers. Any action required or permitted to be taken by any
Employer hereunder may, except as otherwise expressly provided, be taken by
the Group President or any Vice President of such Employer or by any other
person designated by the Group President or any Vice President of the
Employer to act for such Employer.
6.6 Gender and Number. Where the context permits, words in the masculine
gender shall include the feminine gender, the plural shall include the
singular, and the singular shall include the plural.
CATERPILLAR INC.
Dated: 10/15/93 By: /s/ Wayne M. Zimmerman
------------------------
Vice President
Human Services Division