CUMMINS ENGINE COMPANY, INC., AND SUBSIDIARIES
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EXHIBIT 10(c)
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CUMMINS KEY EMPLOYEE STOCK INVESTMENT PLAN
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AS AMENDED FEBRUARY 14, 1989
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1. Objectives of Plan
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This Cummins Key Employee Stock Investment Plan (herein called
the Plan) is intended to encourage ownership of common stock of
the Company by eligible key employees, including officers of the
Company and its affiliates. Through the proprietary interests
thus created, the Plan is expected to benefit the Company and
its affiliates by attracting and retaining the best available
executive talent.
2. Definitions
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(a) Company: The term "Company", as used herein, means Cummins
Engine Company, Inc., and any successor corporation, whether
by merger, consolidation, purchase or otherwise, including
the corporation issuing any shares distributed to all the
holders of the common stock of the Company resulting from a
sale of assets or similar transaction.
(b) Affiliate: The term "affiliate", as used herein, means any
corporation controlling, controlled by or under common
control with the Company. The term "control", as applied to
a particular corporation, means the ownership of more than
50% of the issued and outstanding voting stock of such
corporation, not including treasury shares.
(c) Committee: The term "Committee" means the Compensation
Committee of the Board of Directors.
3. The Shares of Stock
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Shares of the Company's common stock may be acquired by the
Company, either in the open market or in private transactions,
and sold under the Plan from time to time while the Plan is in
effect. The amount that may be expended from time to time for
the acquisition of shares for the Plan shall be determined by the
Board of Directors; but the amount expended on any such
acquisition, when added to the aggregate amount theretofore
expended by the Company for purchases of shares for the Plan,
less the aggregate amount (not including interest) theretofore
received by the Company upon disposition of such shares, shall in
no event exceed 4% of a figure derived by multiplying the number
of shares then outstanding including treasury shares, by the
price of such shares determined as set forth in paragraph 5
hereof as of the last business day preceding the date of such
acquisition. The Plan will expire April 1, 1999 or earlier at
the option of the Board of Directors. Upon expiration of the
Plan no further shares shall be sold thereunder but the Plan will
continue in effect for the purpose of collecting installments
remaining due on shares theretofore sold.
4. Persons to Whom Shares of Stock may be Offered
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Shares of stock may be offered under the Plan to such present or
future officers and employees of the Company or of any of its
affiliates as the Board of Directors may designate, and purchases
by officers and employees pursuant to such offers shall be
covered by separate purchase agreements entered into pursuant
hereto. No member of the Committee, nor any person who is a
director but not an officer of the Company or of an affiliate of
the Company shall be eligible to participate in the Plan. The
Board of Directors shall determine the number of shares to be
offered to each individual under the Plan; provided, however,
that, on the date of the execution and delivery of any such
agreement with a purchaser and after giving effect to such
agreement, the aggregate of the unpaid installments on all
purchase agreements of such purchaser shall not exceed the annual
salary then in effect for such purchaser. In determining the
number of shares to be offered to an officer or employee, the
Board may take into account the nature of the services rendered
by him, his present and potential contributions to the Company's
success, the responsibility involved in his employment and such
other factors as the Board shall deem relevant.
5. Price and Terms of Payment
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The terms of payment for all shares sold under the Plan shall be
those specified by the Board of Directors and set forth in the
written agreement entered into with each purchaser, subject,
however, to the limitations herein set forth. The price of all
shares sold under the Plan shall be the closing price of the
shares on the New York Stock Exchange on the last business day
preceding the date of purchase (or, if there were no such sales
on such day, the fair market value of such shares determined by
the Board of Directors in any reasonable manner). Provision will
be made for the payment of the purchase price for shares in
installments; provided, however, that (a) the purchaser at his
option may repay any or all such installments any time, (b) the
provisions of the agreement of purchase shall be such as to
comply with credit regulations, if any, then in effect and issued
or enacted by governmental authority having jurisdiction,
including Regulation G of the Board of Governors of the Federal
Reserve System if such Regulation is then in effect, and (c) no
more than ten years shall be allowed in which to complete payment
for the shares purchased pursuant to each such agreement. Each
agreement shall provide for interest at the rate of 4% per annum
on unpaid installments or such higher or lower rate as the Board
of Directors shall fix from time to time.
6. Delivery of Shares -- Title Thereto
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Upon the making of a purchase hereunder, certificates for the
shares of stock purchased will be delivered to the purchaser, who
shall take title to such shares and be entitled to all voting
rights with respect thereto and all cash dividends paid thereon.
The certificates for such shares, together with a properly
executed stock power, will be immediately deposited by the
purchaser with the Company to be held by the Company as security
for the payment of the installments of the purchase price,
including interest. In the event of the payment by the Company
of a stock dividend on any of its shares held as security
pursuant to a purchase agreement hereunder, the pledge under such
agreement shall extend to the shares issued in payment of such
stock dividend. The purchaser shall promptly after the payment
of any such stock dividend deliver to the Company the
certificates representing the dividend shares, with a properly
executed stock power. In the event that the shares held as
security pursuant to a purchase agreement hereunder shall be
changed or reclassified as a result of any charter amendment,
recapitalization, reorganization, merger, consolidation, sale of
assets or similar transaction, the changed or reclassified shares
or other assets or both received as a result of such transaction
shall be substituted for the shares pledged under such agreement,
and the purchaser shall promptly deliver to the Company any
certificates issued to represent the shares so changed or
reclassified and any such other assets, together with a properly
executed stock power. If there shall be issued to holders of
shares held as security pursuant to purchase agreement hereunder,
rights to subscribe for or purchase agreement hereunder, rights
to subscribe for or purchase stock or other securities, such
rights shall belong to the purchaser free from pledge. If at the
time of a purchase pursuant to the Plan the Company does not have
in effect under the Securities Act of 1933 a registration
statement covering the shares purchased, the Company may, as a
condition of accepting the purchase, require the purchaser to
represent to the Company that he is purchasing the shares for
investment and not with a view to resale or distribution. Upon
completion of payment for such shares, including interest to the
date of payment, and subject to any requirements necessary to
comply with Regulation G or other applicable credit regulation,
the purchaser shall be entitled to re-delivery from the Company
of the certificates so pledged.
7. Sale of Shares After Purchase-Effect
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In the event that, after a purchase of shares under the Plan, the
purchaser sells any common stock of the Company, he shall not,
for a period of six months following such sale, be entitled to
make any additional purchase of shares under the Plan or make any
borrowing under paragraph 11; provided, however, that the
Committee may waive the provisions of this paragraph 7 in cases
in which it determines that an unforeseen hardship necessitated
the sale of such common stock by such purchaser.
8. Termination of Employment or Death of Employee
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Upon the death of an employee or upon his ceasing to be an
employee of the Company or an affiliate of the Company (not
including a transfer of employment from the Company to an
affiliate, from an affiliate to the Company or among affiliates),
all remaining unpaid installments for the purchase of shares of
stock under the Plan or of a loan under paragraph 11 hereof shall
become immediately due and payable, with interest to the date of
payment; provided, however, upon the death of an employee, the
Committee in its discretion may permit such employee's estate,
herein or personal representative to continue payment of such
purchase price or of such loan in installments.
9. Amendment of Plan
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The Board of Directors at any time may make such changes in the
Plan, and in any agreements subsequently entered into thereunder,
as it may deem necessary or advisable; provided, however, that no
such amendment shall (i) increase the maximum amount that may be
expended by the Company for shares for purposes of the Plan, (ii)
reduce the price at which shares are to be sold to employees
under the Plan, or (iii) extend the period for the completion of
payment for shares purchased by employees under the Plan or of
loans pursuant to paragraph 11 hereof. Neither the termination
of the Plan nor any amendment thereof will affect any then
existing purchase agreement or loan agreement entered into under
paragraph 11 without the consent of the purchaser.
10. Effectiveness of the Plan
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Subject to securing any necessary rulings of regulatory
authorities having jurisdiction in the premises, the Plan shall
become effective on the date when it is approved by the vote of
the holders of a majority of the outstanding common stock of the
Company voting at a meeting of stockholders. No employee or
other person shall have any rights in or under the Plan except as
expressly granted in an agreement entered into pursuant to the
terms thereof.
11. Loans for Purchase of Common Stock of the Company
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As an alternative to the sale of shares to key employees pursuant
to the foregoing provisions of this Plan, the Company may make
loans to such employees, to the extent permitted by law for the
purpose of purchasing shares of the Company's common stock;
provided, however, that (a) the unpaid balance of the aggregate
principal amount of such loans shall be deducted from the amount
that may be expended by the Company pursuant to paragraph 3
hereof, (b) the amount of each loan shall not be greater than the
purchase price, determined as provided in paragraph 5 hereof, of
the number of shares that might have been then offered to the key
employee involved pursuant to the provisions of paragraph 4
hereof, (c) each such loan shall be payable in installments or in
a single payment of principal with the last installment or single
payment payable not later than ten years from the date of the
making of the loan, and the other provisions of paragraph 5
hereof, regarding prepayment of principal, interest, and credit
regulations, shall be applicable to such loan, and (d) the shares
purchased by the employee shall be pledged with the Company as
security for the repayment of such loan, in accordance with and
subject to the provisions of paragraph 6.