• Approve Amendment to Articles of Incorporation
  Another management proposal seeks to amend our articles of incorporation to increase the amount of authorized shares from 900 million to 2 billion. While we do not have plans to issue additional shares of common stock, this amendment enhances the board's flexibility in possible future actions, including share splits that help keep our stock in an attractive price range for individual investors. Our overall history demonstrates a responsible and prudent use of authorized capital, with a long history of dividend increases, superior stock price performance, and a reasonable equity compensation burn rate that has been more than offset with our share buyback program. I encourage you to vote “for” Proposal 2.

• Annual Election of Directors
  The first stockholder proposal seeks to declassify our board by having annual elections of all directors. Our current board structure is designed to provide stability, prevent sudden disruptive changes to its composition, enhance long-term planning, and ensure that, at any given time, we have directors who are familiar with our company, our business, and our strategic goals. This is particularly important as we implement our new enterprise strategy, a commitment that stretches over several years and will best be managed by a stable and continuous board. I encourage you to vote “against” Proposal 6.

• Separate CEO & Chair
  The second stockholder proposal asks that we split the CEO and Chairman roles. Such a change could cause unnecessary dilution of leadership authority and accountability. Our current structure has generated outstanding results, and the board supports it. We do understand the need for an independent director to act as chair for executive sessions. In April, the board designated the chairman of our Governance Committee as the presiding director with clearly delineated responsibilities, which are listed in the proxy under the Governance Committee report. I encourage you to vote “against” Proposal 7.

• Director Election Majority Vote Standard
  The third stockholder proposal asks that we switch from plurality voting to majority voting. Caterpillar has a long history of electing, by a plurality, strong and independent boards. In the past 10 years, the average affirmative vote for our directors has been greater than 96 percent of the shares voted through the plurality process, and none of our directors has ever received less than a majority. We also believe the implementation of a majority vote standard would be inappropriate given that a number of associations, scholars, corporations, and investors are analyzing and evaluating alternative voting standards. At this time, we do not believe our current plurality vote standard should be changed, and there is no reason to rush to adopt a majority vote standard. I encourage you to vote “against” Proposal 8.