EXHIBIT 10(h)
CATERPILLAR INC.
DIRECTORS' CHARITABLE AWARD PROGRAM
1. PURPOSE OF THE PROGRAM
Under the Caterpillar Inc. Directors' Charitable Award Program (the
"Program"), Caterpillar Inc. (the "Company") will make a donation of up to
$1,000,000 on behalf of each eligible Director. The donation will be made
by the Company, in the Director's name, in ten equal annual installments,
with the first installment to be made as soon as is practicable after the
Director's death. Of the total donation amount, 50% will be donated to the
eligible tax-exempt organization(s) (the "Donee(s)") selected by the
Director, and the remaining portion of the donation will be made to the
Caterpillar Foundation (the "Foundation"). The purpose of the Program is
to acknowledge the service of the Company's Directors, recognize the
interest of the Company and its Directors in supporting worthy educational
institutions and charitable organizations, provide an additional means of
support to the Foundation, and enhance the Company's Director benefit
program so that the Company is able to continue to attract and retain
Directors of the highest caliber.
2. ELIGIBILITY
All persons serving as Directors of the Company as of April 1, 1993, shall
be eligible to participate in the Program. All Directors who join the
Company's Board of Directors after that date shall be immediately eligible
to participate in the Program upon election to the Board.
3. DONATION AMOUNT
While serving as a Director, the donation amount for a Director will be
determined based on the Director's months of Board service, in accordance
with the following schedule:
Months of Selected Charity Foundation
Service Donation Donation
--------- ---------------- ----------
0-11 months $ 0 $ 0
12-23 100,000 100,000
24-35 200,000 200,000
36-47 300,000 300,000
48-59 400,000 400,000
60 or more 500,000 500,000
A Director will continue to be eligible to participate in the program after
he or she terminates Board service. The total donation amount in effect on
the date a Director's Board service terminates shall be continued based
upon his or her months of service on that date. However, notwithstanding
this schedule, a Director will be treated as having served for 60 or more
months if he or she terminates Board service as a result of disability or
mandatory retirement.
In determining a Director's total donation amount, Board service prior to
the effective date of the Program (even if it is not continuous service)
will be counted.
4. RECOMMENDATION OF DONATION
When a Director becomes eligible to participate in the Program, he or she
shall make a written recommendation to the Company, on a form approved by
the Company for this purpose, designating the Donee(s) which he or she
intends to be the recipient(s) of the Company donation to be made on his or
her behalf. A Director may revise or revoke any such recommendation prior
to his or her death by signing a new recommendation form and submitting it
to the Company. Each eligible Director may choose one Donee to receive a
Company donation of $500,000, or up to five Donees to receive donations
aggregating $500,000. Each recommended Donee must be recommended to
receive a donation of at least $100,000.
5. TIMING OF DONATION
The donation made on a Director's behalf will be made by the Company in ten
equal annual installments, with the first installment to be made as soon as
is practicable after the Director's death. The first five installments
(the Donee installments) will be donated to the Director's selected
Donee(s), and the last five installments (the Foundation installments) will
be donated to the Foundation. If a Director recommends more than one Donee
to receive a donation, unless otherwise instructed by the Director, each
will receive a prorated portion of each Donee installment. Each Donee
installment payment will be divided among the recommended Donees in the
same proportions as the total donation amount has been allocated among the
Donees by the Director. However, a Director may instruct the Company to
allocate the installment payments in a different manner.
6. DONEES
In order to be eligible to receive a donation, a recommended organization
must be an educational institution or charitable organization, and must
initially, and at the time a donation is to be made, qualify to receive
tax-deductible donations under the Internal Revenue Code. Also, the
organization must be reviewed and approved by the Vice President and
Manager of the Foundation. An organization will be approved unless it is
determined, in the exercise of good faith judgment, that a donation to the
organization would be detrimental to the best interests of the Company.
Private foundations (except for the Foundation) are not eligible to receive
donations under the Program.
7. FUNDING AND PROGRAM ASSETS
The Company may fund the Program or it may choose not to fund the Program.
If the Company elects to fund the Program in any manner, neither the
Directors nor their recommended Donee(s) shall have any rights or interests
in any assets of the Company identified for such purpose. Nothing
contained in the Program shall create, or be deemed to create, a trust,
actual or constructive, for the benefit of a Director or any Donee
recommended by a Director to receive a donation, or shall give, or be
deemed to give, any Director or recommended Donee any interest in any
assets of the Program or the Company. If the Company elects to fund the
Program through life insurance policies, a participating Director agrees to
cooperate and fulfill the enrollment requirements necessary to obtain
insurance on his or her life.
8. AMENDMENT OR TERMINATION
The Board of Directors of the Company may, at any time, without the consent
of the Directors participating in the Program, amend, suspend or terminate
the Program.
9. ADMINISTRATION
The Program shall be administered by the Company. The Company shall have
plenary authority in its discretion, but subject to the provisions of the
Program, to prescribe, amend and rescind rules, regulations and procedures
relating to the Program. The determinations of the Company on the
foregoing matters shall be conclusive and binding on all interested
parties.
10. GOVERNING LAW
The Program shall be construed and enforced according to the laws of the
State of Illinois, and all provisions thereof shall be administered
according to the laws of said State.
11. EFFECTIVE DATE
The effective date of the Program is April 1, 1993. The recommendation of
an individual Director will be effective when he or she completes all
enrollment requirements.