OMB
APPROVAL
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OMB
Number: 3235-0059
Expires: January
31, 2008
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average
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per
response.
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UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
SCHEDULE
14A
Proxy
Statement Pursuant to Section 14(a) of the Securities Exchange
Act
of 1934 (Amendment No. )
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Filed
by the
Registrant:
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X
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Filed
by a
Party other than the Registrant:
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Check
the
appropriate box:
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Preliminary
Proxy Statement
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Confidential,
for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
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X
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Definitive
Proxy Statement
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Definitive
Additional Materials
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Soliciting
Material Pursuant to §240.14a-12
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Caterpillar
Inc.
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(Name
of
Registrant as Specified In Its Charter)
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(Name
of
Person(s) Filing Proxy Statement, if other than the
Registrant)
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Payment
of
Filing Fee (Check the appropriate box):
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X
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No
fee
required.
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Fee
computed
on table below per Exchange Act Rules 14a-6(i)(1) and
0-11.
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(1)
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Title
of each
class of securities to which transaction applies:
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(2)
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Aggregate
number of securities to which transaction applies:
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(3)
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Per
unit price
or other underlying value of transaction computed pursuant to Exchange
Act
Rule 0-11 (set forth the amount on which the filing fee is calculated
and
state how it was determined):
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(4)
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Proposed
maximum aggregate value of transaction:
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(5)
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Total
fee
paid:
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Fee
paid
previously with preliminary materials.
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Check
box if
any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2)
and identify the filing for which the offsetting fee was paid
previously.
Identify the previous filing by registration statement number,
or the Form
or Schedule and the date of its filing.
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(1)
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Amount
Previously Paid:
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(2)
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Form,
Schedule
or Registration Statement No.:
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(3)
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Filing
Party:
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(4)
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Date
Filed:
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SEC
1913
(04-05)
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Persons
who are to respond to the collection of information contained in
this form
are not required to respond unless the form displays a currently
valid OMB
control number.
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§ |
elect
directors;
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§ |
ratify
Independent Registered Public Accounting
Firm;
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act
on
stockholder proposals, if properly presented;
and
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conduct
any
other business properly brought before the
meeting.
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Sincerely
yours,
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James
W.
Owens
Chairman
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Table
of Contents
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Q:
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Who
can attend the annual meeting of stockholders?
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A:
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Anyone
wishing to attend the Caterpillar Inc. (Caterpillar or the company)
2007
annual meeting of stockholders (annual meeting) must have an admission
ticket issued in his or her name. Admission is limited
to:
§ stockholders
of record on April 16, 2007 and one guest or
§ a
stockholder’s authorized proxy holder or representative designated to
present a stockholder proposal.
You
must
provide evidence of your ownership of shares with your ticket request.
The
specific requirements for obtaining an admission ticket are specified
in
the “Admission & Ticket Request Procedure” on page 47.
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Q:
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What
is a stockholder of record?
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A:
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A
stockholder
of record or registered stockholder is a stockholder whose ownership
of
Caterpillar stock is reflected directly on the books and records
of our
transfer agent, Mellon Investor Services (transfer agent). If you
hold
stock through a bank, broker or other intermediary, you hold your
shares
in street name and are not a stockholder of record. For shares held
in a
street position, the record owner of the shares is your bank, broker
or
other intermediary. Caterpillar only has access to ownership records
for
the registered shares so, if you are not a registered stockholder,
the
company needs additional documentation to evidence your stock ownership
as
of the record date, such as, a copy of your brokerage account statement,
a
letter from your broker, bank or other nominee or a copy of your
voting
instruction card.
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Q:
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When
is the record date and who is entitled to
vote?
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A:
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The
board of
directors (board) set April 16, 2007 as the record date for the 2007
annual meeting. Holders of Caterpillar stock on that date are entitled
to
one vote per share. As of April 16, 2007, there were approximately
640
million shares of Caterpillar common stock outstanding.
A
list of all
registered holders will be available for examination by stockholders
during normal business hours at 100 NE Adams Street, Peoria, Illinois
61629, at least ten days prior to the annual meeting and will also
be
available for examination at the annual
meeting.
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Q:
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How
do I vote?
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A:
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You
may vote
by any of the following methods:
§ in
person
-
stockholders who obtain an admission ticket (following the specified
procedure) and attend the meeting will receive a ballot for
voting
§ by
mail - using
the
proxy and/or voting instruction card provided
§ by
phone or via the Internet,
following
the instructions on the enclosed proxy and/or voting instruction
card.
If
you vote
by phone or via the Internet, please have your proxy and/or voting
instruction card available. The control number appearing on your
card is
necessary to process your vote. A phone or Internet vote authorizes
the
named proxies in the same manner as if you marked, signed and returned
the
card by mail. In the opinion of counsel, voting by phone or via the
Internet are valid proxy voting methods under Delaware law and
Caterpillar’s bylaws.
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Q:
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How
can I authorize someone else to vote for me?
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A:
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If
you want
to authorize someone other than the individual(s) named on the proxy
card
to vote for you:
§ cross
out the
individual(s) named and insert the name of the individual you are
authorizing to vote; or
§ provide
a
written authorization to the individual you are authorizing to vote
along
with your proxy card.
To
obtain an
admission ticket for your authorized proxy representative, see the
requirements specified in the “Admission & Ticket Request Procedure”
on page 47.
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Q:
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Can
I
change or revoke my proxy?
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A:
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For
stockholders of record:
You may
change or revoke your vote by submitting a written notice of revocation
with Caterpillar c/o the Corporate Secretary at 100 NE Adams Street,
Peoria, IL 61629 or by submitting another proxy on or before June
12, 2007
(including a proxy via the Internet or by telephone) that is dated
later
than the previously submitted vote.
For
holders in street name:
You may
change or revoke your voting instructions by following the specific
directions provided to you by your bank or
broker.
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Q:
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Is
my
vote confidential?
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A:
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Yes.
Proxy
cards, ballots and voting tabulations that identify stockholders
are kept
confidential. There are exceptions for contested proxy solicitations
or
when necessary to meet legal requirements. Innisfree M&A, the
independent proxy tabulator used by Caterpillar, counts the votes
and acts
as the inspector of election for the
meeting.
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Q:
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What
is the quorum for the meeting?
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A:
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A
quorum of
stockholders is necessary to hold a valid meeting and consists of
a
majority of the outstanding shares, present or represented by proxy.
For
Caterpillar, at least one-third of all stockholders must be present
in
person or by proxy at the annual meeting to constitute a quorum.
Abstentions and broker non-votes are counted as present for establishing
a
quorum. A broker non-vote occurs when a nominee holding shares for
a
beneficial owner does not vote on a particular proposal because the
nominee does not have discretionary voting power with respect to
that item
and has not received instructions from the beneficial
owner.
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Q:
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What
vote is necessary for action to be taken on
proposals?
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A:
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Directors
are
elected by a plurality vote of the shares present at the meeting,
meaning
that the director nominees with the most affirmative votes are elected
to
fill the available seats. All other actions require an affirmative
vote of
the majority of shares present at the meeting. Abstentions and broker
non-votes have the effect of a vote against matters other than director
elections.
Votes
submitted by mail, telephone or Internet will be voted by the individuals
named on the card (or the individual properly authorized) in the
manner
indicated. If you do not specify how you want your shares voted,
they will
be voted in accordance with management’s recommendations. If you hold
shares in more than one account, you must vote each proxy and/or
voting
instruction card you receive to ensure that all shares you own are
voted.
You may change your vote by voting in person at the annual meeting
or by
submitting another proxy prior
to the
polls closing. For all methods of voting, the last vote cast will
supersede
all previous
votes.
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Q:
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What
does it mean if I receive more than one proxy card?
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A:
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Whenever
possible, registered shares and plan shares for multiple accounts
with the
same registration will be combined into the same card. Shares with
different registrations cannot be combined and as a result, the
stockholder may receive more than one proxy card. For example, registered
shares held individually by John Smith will not be combined on the
same
proxy card as registered shares held jointly by John Smith and his
wife.
Street
shares
are not combined with registered or plan shares and may result in
the
stockholder receiving more than
one proxy
card. For example, street shares held by a broker for John Smith
will not
be combined with registered shares for John Smith.
If
you hold
shares in more than one account, you must vote each proxy and/or
voting
instruction card you receive to ensure that all shares you own are
voted.
If
you
receive more than one card for accounts that you believe could be
combined
because the registration is the same, contact our stock transfer
agent
(for registered shares) or your broker (for street shares) to request
that
the accounts be combined for future
mailings.
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Q:
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Who
pays for the solicitation of proxies?
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A:
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Caterpillar
pays the cost of soliciting proxies. Proxies will be solicited on
behalf
of the board of directors. This solicitation is being made by mail,
but
also may be made by telephone or in person. We have hired Innisfree
M&A Incorporated for $15,000, plus out-of-pocket expenses, to assist
in the solicitation. We will reimburse brokerage firms and other
custodians, nominees and fiduciaries for their reasonable out-of-pocket
expenses for sending proxy materials to stockholders and obtaining
their
votes.
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Q:
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When
are stockholder proposals due for the 2008 annual
meeting?
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A:
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To
be
considered for inclusion in the 2008 proxy statement, stockholder
proposals must be received in writing at our principal executive
offices
no later than December 19, 2007. Stockholder proposals should be
sent to
Caterpillar Inc. by mail c/o the Corporate Secretary at 100 NE Adams
Street, Peoria, Illinois 61629.
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Q:
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Are
there any matters to be voted on at the meeting that are not included
in
the proxy?
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A:
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We
do not
know of any matters to be acted upon at the meeting other than those
discussed in this statement. If any other matter is presented, proxy
holders will vote on the matter in their discretion.
Under
Caterpillar bylaws, a stockholder may bring a matter to vote upon
at the
annual meeting by giving adequate notice to Caterpillar Inc. by mail
c/o
the Corporate Secretary at 100 NE Adams Street, Peoria, Illinois
61629. To
be adequate, that notice must contain information specified in our
bylaws
and be received by us not less than 45 days nor more than 90 days
prior to
the annual meeting. If, however, less than 60 days notice of the
meeting
date is given to stockholders, notice of a matter to be brought before
the
annual meeting may be provided to us up to the 15th
day
following the date the notice of the annual meeting was provided.
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Q:
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Can
I
submit a question in advance of the annual
meeting?
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A:
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Stockholders
wishing to submit a question in advance of the annual meeting to
be
considered for a response during the annual meeting may do so by
sending
an email to the Corporate Secretary at Directors@CAT.com
or by mail
c/o the Corporate Secretary at 100 NE Adams Street, Peoria, Illinois
61629.
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Class
I
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§ |
W.
FRANK BLOUNT, 68,
Chairman
and CEO of JI Ventures, Inc. (venture capital) and TTS Management
Corporation (private equity management). Prior to his current positions,
Mr. Blount served as Chairman and CEO of Cypress Communications Inc.
(telecommunications). Other directorships: Alcatel-Lucent S.A.; Entergy
Corporation; and Hanson PLC. Mr. Blount has been a director of the
company
since 1995.
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JOHN
R. BRAZIL,
61,
President of Trinity University (San Antonio, Texas). Dr. Brazil
has been
a director of the company since
1998.
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EUGENE
V. FIFE,
66,
Managing Principal of Vawter Capital LLC (private investment). Mr.
Fife
served as the interim CEO and President of Eclipsys Corporation
(healthcare information technology) from April to November of 2005.
He
currently serves as the non-executive Chairman of Eclipsys Corporation.
Mr. Fife has been a director of the company since
2002.
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§ |
GAIL
D. FOSLER,
59,
Executive Vice President and Chief Economist of The Conference Board
(research and business membership). Prior to her current position,
Ms.
Fosler was Senior Vice President of The Conference Board. Other
directorship: Baxter International Inc. Ms. Fosler has been a director
of
the company since 2003.
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PETER
A. MAGOWAN,
65,
President and Managing General Partner of the San Francisco Giants
(major
league baseball team). Other directorships: DaimlerChrysler AG. Mr.
Magowan has been a director of the company since
1993.
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Class
II
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§ |
DANIEL
M. DICKINSON,
45,
Managing Partner of Thayer Capital Partners (private equity investment).
Other
directorships: BFI Canada Income Fund. Mr.
Dickinson
became a director of the company effective December 13,
2006.
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§ |
DAVID
R. GOODE,
66, former
Chairman, President and CEO of Norfolk Southern Corporation (holding
company engaged principally in surface transportation). Other
directorships: Delta Air Lines, Inc. and Texas Instruments Incorporated.
Mr. Goode has been a director of the company since
1993.
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§ |
JAMES
W. OWENS,
61,
Chairman and CEO of Caterpillar Inc. (machinery, engines, and financial
products). Prior to his current position, Mr. Owens served as Vice
Chairman and as Group President of Caterpillar. Other directorships:
Alcoa
Inc. and International Business Machines Inc. Mr. Owens has been
a
director of the company since 2004.
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§ |
CHARLES
D. POWELL,
65,
Chairman of Safinvest Limited (asset and investment management) and
LVMH
Services Limited (luxury goods) and Magna Holdings (real estate
investment). Prior to his current positions, Lord Powell was Chairman
of
Phillips Fine Art Auctioneers (art, jewelry, and furniture auction)
and
Chairman of Sagitta Asset Management Limited (asset management).
Other
directorships: LVMH Moet-Hennessy Louis Vuitton; Mandarin Oriental
International Ltd.; Northern Trust Global Services Limited, Textron
Corporation; Schindler Holding Ltd.; and Yell Group plc. Lord Powell
has
been a director of the company since
2001.
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JOSHUA
I. SMITH,
66,
Chairman and Managing Partner of the Coaching Group, LLC (management
consulting). Other directorships: Federal Express Corporation and
The
Allstate Corporation. Mr. Smith has been a director of the company
since
1993.
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Class
III
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JOHN
T. DILLON,
68, former
Chairman and CEO of International Paper (paper and forest products).
Mr.
Dillon serves as Vice Chairman of Evercore Capital Partners (advisory
and
investment firm) and Senior Managing Director of the firm’s investment
activities and private equity business. Other directorships: E. I.
du Pont
de Nemours and Company, Kellogg Co., and Vertis Inc. Mr. Dillon has
been a
director of the company since 1997.
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JUAN
GALLARDO,
59,
Chairman
and
CEO
of Grupo
Embotelladoras Unidas S.A. de C.V. (bottling). Former Vice Chairman
of
Home Mart de Mexico, S.A. de C.V. (retail trade), Chairman and
CEO
of
Grupo
Azucarero Mexico, S.A. de C.V. (sugar mills), and former Chairman
of
Mexico Fund Inc. (mutual fund). Other directorships: Lafarge SA and
Grupo
Mexico, S.A. de C.V. Mr. Gallardo has been a director of the company
since
1998.
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§ |
WILLIAM
A. OSBORN, 59,
Chairman
and CEO of Northern Trust Corporation (multibank holding company)
and The
Northern Trust Company (bank). Other directorships: Tribune Company.
Mr.
Osborn has been a director of the company since
2000.
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§ |
EDWARD
B. RUST, JR., 56,
Chairman,
President and CEO of State Farm Mutual Automobile Insurance Company
(insurance). He is also President and CEO of State Farm Fire and
Casualty
Company, State Farm Life Insurance Company and other principal State
Farm
affiliates as well as Trustee and President of State Farm Mutual
Fund
Trust and State Farm Variable Product Trust. Other directorships:
Helmerich & Payne, Inc. and The McGraw-Hill Companies, Inc. Mr. Rust
has been a director of the company since
2003.
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The
nature of
the related person’s interest in the
transaction
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The
material
terms of the transaction, including, without limitation, the amount
and
type of transaction
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The
importance of the transaction to the related
person
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The
importance of the transaction to the
company
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Whether
the
transaction would
impair the
judgment of the
director or
executive officer to act in the best interest of the
company
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The
alternatives to entering into the
transaction
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Whether
the
transaction is on terms comparable to those available to third parties,
or
in the case of employment relationships, to employees
generally
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The
potential
for the transaction to lead to an actual or apparent conflict of
interest
and any safeguards imposed to prevent such actual or apparent
conflicts
and
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§ |
The
overall
fairness of the transaction to the
company
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(1) |
has
no
material relationship with the company, either directly or as a partner,
stockholder or officer of an organization that has a relationship
with the
company, and does not have any relationship that precludes independence
under the NYSE director independence standards;
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(2) |
is
not
currently, or within the past five years, employed by the company
(or an
immediate family member is not currently, or for the past five years,
employed as an executive officer of the company);
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(3) |
is
not a
current employee, nor is an immediate family member a current executive
officer of, a company that has made payments to, or received payments
from, the company for property or services in an amount which, in
any of
the past five years, exceeds the greater of $1 million or 2 percent
of the
consolidated gross revenues of that company;
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(4) |
has
not
received, nor has an immediate family member received, direct remuneration
in excess of $100,000 from the company in any twelve-month period
within
the past five years other than director and committee fees and pension
or
other forms of deferred compensation for prior services;
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(5) |
is
not
currently nor for the past five years, and an immediate family member
is
not currently nor for the past five years, affiliated with or employed
by
a present or former auditor (or an affiliate of such auditor) of
the
company;
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(6) |
is
not part
of an interlocking directorate in which an executive officer of the
company simultaneously served on the compensation committee of another
company that employed the director as an executive officer during
the last
five years;
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(7) |
is
free of
any relationships with the company that may impair, or appear to
impair
his or her ability to make independent judgments; and
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(8) |
is
not
employed by a nonprofit organization where a substantial portion
of
funding for the past five years (representing at least a greater
of $1
million or 2 percent of the organization’s annual consolidated gross
revenues) comes from the company or the Caterpillar Foundation.
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Committee
Membership
(as
of
February 14, 2007)
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Audit
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Compensation
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Governance
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Public
Policy
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W.
Frank
Blount
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Ö*
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John
R.
Brazil
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Ö
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Daniel
M.
Dickinson
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Ö
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John
T.
Dillon
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Ö
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Eugene
V.
Fife
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Ö*
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Gail
D.
Fosler
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Ö
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Juan
Gallardo
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Ö
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David
R.
Goode
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Ö
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Peter
A.
Magowan
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Ö
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William
A.
Osborn
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Ö*
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James
W.
Owens
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Charles
D.
Powell
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Ö*
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Edward
B.
Rust, Jr.
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Ö
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Joshua
I.
Smith
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Ö
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* Chairman of committee |
§ |
Direct
Telephone: 309-494-4393 (English
only)
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§ |
Call
Collect
Helpline: 770-582-5275 (language translation
available)
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§ |
Confidential
Fax: 309-494-4818
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Pre-Approval
Limits
(in
thousands)
|
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Type
of Service
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Per
Project
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Aggregate
Limit
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Audit
Services
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$
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500
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$
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17,000
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Audit
Related Services
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500
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3,000
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Tax
Services
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500
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15,000
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All
Other Services
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500
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1,000
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By
the current members of the
Audit
Committee consisting of:
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Eugene
V. Fife (Chairman)
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John
T. Dillon
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John
R. Brazil
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David
R. Goode
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2005
Actual
|
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2006
Actual
|
|||||
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Audit
Fees
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$
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15.7
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$
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20.2
|
1
|
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Audit
Related Fees2
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3.0
|
|
|
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3.0
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Tax
Compliance Fees3
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2.3
|
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|
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2.2
|
|
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Tax
Planning and Consulting
Fees4
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6.4
|
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2.6
|
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All
Other Fees5
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0.1
|
|
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0.2
|
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TOTAL
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$
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27.5
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$
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28.2
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1
Actual 2006 “Audit Fees” exceeded the “Pre-Approval” limit due to
acquisitions and additional statutory audit requirements. Each of
these
services were approved in accordance with the company’s Interim
Pre-Approval Process as previously described.
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2
“Audit Related Fees” principally includes agreed upon procedures for
securitizations, attestation services requested by management, accounting
consultations, internal control reviews and examination of employee
benefit plan financial statements. Total fees paid directly by the
benefit
plans, and not by the company, were $.3 and $.4 in 2005 and 2006,
respectively.
|
||||||||
3
“Tax Compliance Fees” includes, among other things, statutory tax return
preparation and review and advising on the impact of changes in local
tax
laws.
|
||||||||
4
“Tax Planning and Consulting Fees” includes, among other things, tax
planning and advice and assistance with respect to transfer pricing
issues.
|
||||||||
5
“All Other Fees” principally includes subscriptions to knowledge
tools and attendance at training
classes/seminars.
|
§ |
Presides
at
all meetings of the board at which the Chairman & CEO is not present,
including executive sessions of the independent directors, and has
the
authority to call meetings of the independent directors if
necessary
|
§ |
Meets
separately with the Chairman & CEO immediately following the meetings
of the independent directors, and essentially acts as a liaison between
the Chairman & CEO and independent directors by providing guidance and
feedback and reviewing action items from those
meetings
|
§ |
Reviews,
discusses and provides input to the Chairman & CEO and typically
approves board meeting agendas, schedules and general information
provided
to directors prior to board
meetings
|
§ |
Is
available
for consultation and direct communication with major
stockholders
|
§ |
Provides
the
Chairman & CEO with the results of the annual performance review in
conjunction with the Chairman of the Compensation
Committee
|
By
the current members of the
Governance
Committee consisting of:
|
|||
W.
Frank Blount (Chairman)
|
|||
Gail
D. Fosler
|
|||
Peter
A. Magowan
|
§ |
JOHN
T. DILLON,
68, former
Chairman and CEO of International Paper (paper and forest products).
Mr.
Dillon serves as Vice Chairman of Evercore Capital Partners (advisory
and
investment firm) and Senior Managing Director of the firm’s investment
activities and private equity business. Other directorships: E. I.
du Pont
de Nemours and Company, Kellogg Co., and Vertis Inc. Mr. Dillon has
been a
director of the company since 1997.
|
§ |
JUAN
GALLARDO,
59, Chairman
and
CEO
of
Grupo
Embotelladoras Unidas S.A. de C.V. (bottling). Former Vice Chairman
of
Home Mart de Mexico, S.A. de C.V. (retail trade), Chairman and
CEO
of
Grupo
Azucarero Mexico, S.A. de C.V. (sugar mills), and former Chairman
of
Mexico Fund Inc. (mutual fund). Other directorships: Lafarge SA and
Grupo
Mexico, S.A. de C.V. Mr. Gallardo has been a director of the company
since
1998.
|
§ |
WILLIAM
A. OSBORN, 59,
Chairman
and CEO of Northern Trust Corporation (multibank holding company)
and The
Northern Trust Company (bank). Other directorships: Tribune Company.
Mr.
Osborn has been a director of the company since
2000.
|
§ |
EDWARD
B. RUST, JR., 56,
Chairman,
President and CEO of State Farm Mutual Automobile Insurance Company
(insurance). He is also President and CEO of State Farm Fire and
Casualty
Company, State Farm Life Insurance Company and other principal State
Farm
affiliates as well as Trustee and President of State Farm Mutual
Fund
Trust and State Farm Variable Product Trust. Other directorships:
Helmerich & Payne, Inc. and The McGraw-Hill Companies, Inc. Mr. Rust
has been a director of the company since
2003.
|
§ |
An
independent Board Chair - separated from the CEO - is the preferable
form
of corporate governance.
|
§ |
It
is the
role of the Chief Executive Officer and management to run the business
of
the company.
|
§ |
An
independent Chair and vigorous Board will bring greater focus to
ethical
imperatives, and be better able to forge solutions for shareholders
and
consumers.
|
§ |
Separating
the roles of Chair and CEO at Caterpillar would result in greater
independence and accountability which would allow the company to
have
greater focus and thereby better address issues of environmental,
social
and health impacts of the company’s
products.
|
§ |
Reputational
risk associated with an exponential growth in negative media coverage
and
international protests targeting the company.
|
§ |
A
highly
publicized debate among religious institutional shareholders regarding
divestment from Caterpillar.
|
§ |
Lawsuits
by
the Federal government (EEOC) alleging sexual and racial
discrimination.
|
§ |
Membership
in
a trade association that funded a political candidate criticized
for
running “racist” ads in a state election campaign.
|
§ |
Facilities
that were cited by OSHA as having some of the worst health and safety
records.
|
§ |
Three
product
recalls between 2001 and February
2006.
|
§ |
History
of
labor difficulties.
|
§ |
Lack
of
disclosure - Innovest Strategic Advisors reports that “Caterpillar is one
of the lowest rated companies in the sector because of its very limited
disclosures….”
|
§ |
Innovest
further states that CAT’s “environmental strategies and management systems
are one of the worst in this sector”, and the CAT’s “commitment to
sustainable development appears to fall far behind sector
leaders”.
|
(as
of December 31,
2006)
|
|
Voting
Authority
|
Dispositive
Authority
|
|
|
||
|
|
|
|
|
||
Name
and Address
|
Sole
|
Shared
|
Sole
|
Shared
|
Total
Amount
of
Beneficial Ownership
|
Percent
of Class
|
|
|
|
|
|
|
|
Capital
Research and Management Company
333
South Hope
Street
Los
Angeles,
CA 90071
|
1,340,000
|
0
|
36,406,000
|
0
|
36,406,000
|
5.6
|
(as
of December 31,
2006)
|
Blount
|
73,663
|
1
|
|
Magowan
|
335,553
|
10
|
Brazil
|
38,137
|
2
|
|
Oberhelman
|
820,710
|
11
|
Burritt
|
134,074
|
3
|
|
Osborn
|
45,948
|
12
|
Dickinson
|
783
|
|
|
Owens
|
1,866,781
|
13
|
Dillon
|
81,647
|
4
|
|
Powell
|
42,035
|
14
|
Fife
|
43,334
|
5
|
|
Rust
|
26,267
|
15
|
Fosler
|
23,334
|
6
|
|
Shaheen
|
883,081
|
16
|
Gallardo
|
265,443
|
7
|
|
Smith
|
48,189
|
17
|
Goode
|
101,917
|
8
|
|
Vittecoq
|
525,631
|
18
|
Levenick
|
473,055
|
9
|
|
Wunning
|
520,971
|
19
|
All
directors
and executive officers as a group
|
6,720,773
|
20
|
||||
|
||||||
1
Blount - Includes 61,334 shares subject to stock options exercisable
within 60 days. In addition to the shares listed above, a portion
of
compensation has been deferred pursuant to the Directors’ Deferred
Compensation Plan (DDCP) representing an equivalent value as if such
compensation had been invested on December 31, 2006, in 1,097 shares
of
common stock.
|
||||||
2
Brazil - Includes 29,334 shares subject to stock options exercisable
within 60 days. In addition to the shares listed above, a portion
of
compensation has been deferred pursuant to DDCP representing an equivalent
value as if such compensation had been invested on December 31, 2006,
in
380 shares of common stock.
|
||||||
3
Burritt - Includes 100,200 shares subject to stock options exercisable
within 60 days. In addition to the shares listed above, a portion
of
compensation has been deferred pursuant to the Supplemental Employees’
Investment Plan (SEIP) and/or the Deferred Employees’ Investment Plan
(DEIP) representing an equivalent value as if such compensation had
been
invested on December 31, 2006, in 858 shares of common
stock.
|
||||||
4
Dillon - Includes 69,334 shares subject to stock options exercisable
within 60 days. In addition to the shares listed above, a portion
of
compensation has been deferred pursuant to DDCP representing an equivalent
value as if such compensation had been invested on December 31, 2006,
in
547 shares of common stock.
|
||||||
5
Fife - Includes 21,334 shares subject to stock options exercisable
within
60 days.
|
||||||
6
Fosler - Includes 21,334 shares subject to stock options exercisable
within 60 days.
|
||||||
7
Gallardo - Includes 61,334 shares subject to stock options exercisable
within 60 days. In addition to the shares listed above, a portion
of
compensation has been deferred pursuant to DDCP representing an equivalent
value as if such compensation had been invested on December 31, 2006,
in
1,709 shares of common stock.
|
||||||
8
Goode - Includes 69,334 shares subject to stock options exercisable
within
60 days. In addition to the shares listed above, a portion of compensation
has been deferred pursuant to DDCP representing an equivalent value
as if
such compensation had been invested on December 31, 2006, in 34,261
shares
of common stock.
|
||||||
9
Levenick - Includes 439,042 shares subject to stock options exercisable
within 60 days.
|
||||||
10 Magowan
- Includes 69,334 shares subject to stock options exercisable within
60
days. In addition to the shares listed above, a portion of compensation
has been deferred pursuant to DDCP representing an equivalent value
as if
such compensation had been invested on December 31, 2006, in 12,470
shares
of common stock.
|
||||||
11 Oberhelman
- Includes 760,132 shares subject to stock options exercisable within
60
days. In addition to the shares listed above, a portion of compensation
has been deferred pursuant to SEIP and/or DEIP representing an equivalent
value as if such compensation had been invested on December 31, 2006,
in
27,016 shares of common stock.
|
||||||
12 Osborn
- Includes 37,334 shares subject to stock options exercisable within
60
days. In addition to the shares listed above, a portion of compensation
has been deferred pursuant to DDCP representing an equivalent value
as if
such compensation had been invested on December 31, 2006, in 101
shares of
common stock.
|
||||||
13 Owens
- Includes 1,598,000 shares subject to stock options exercisable
within 60
days. In addition to the shares listed above, a portion of compensation
has been deferred pursuant to SEIP and/or DEIP representing an equivalent
value as if such compensation had been invested on December 31, 2006,
in
6,406 shares of common stock.
|
||||||
14 Powell
- Includes 37,334 shares subject to stock options exercisable within
60
days. In addition to the shares listed above, a portion of compensation
has been deferred pursuant to DDCP representing an equivalent value
as if
such compensation had been invested on December 31, 2006, in 101
shares of
common stock.
|
||||||
15 Rust
- Includes 21,334 shares subject to stock options exercisable within
60
days. In addition to the shares listed above, a portion of compensation
has been deferred pursuant to DDCP representing an equivalent value
as if
such compensation had been invested on December 31, 2006, in 5,525
shares
of common stock.
|
||||||
16 Shaheen
- Includes 677,202 shares subject to stock options exercisable within
60
days. In addition to the shares listed above, a portion of compensation
has been deferred pursuant to SEIP and/or DEIP representing an equivalent
value as if such compensation had been invested on December 31, 2006,
in
48,134 shares of common stock.
|
||||||
17 Smith
- Includes 37,334 shares subject to stock options exercisable within
60
days. In addition to the shares listed above, a portion of compensation
has been deferred pursuant to DDCP representing an equivalent value
as if
such compensation had been invested on December 31, 2006, in 1,202
shares
of common stock.
|
||||||
18 Vittecoq
- Includes 455,328 shares subject to stock options exercisable within
60
days.
|
||||||
19 Wunning
- Includes 466,000 shares subject to stock options exercisable within
60
days. In addition to the shares listed above, a portion of compensation
has been deferred pursuant to SEIP and/or DEIP representing an equivalent
value as if such compensation had been invested on December 31, 2006,
in
19,418 shares of common stock.
|
||||||
20 Group
includes directors, named executive officers (NEOs) and two additional
executive officers subject to Section 16 filing requirements (executive
group). Amount includes 5,360,392 shares subject to stock options
exercisable within 60 days and 117,006 shares for which voting and
investment power is shared. The executive group beneficially owns
1.04
percent of the company’s outstanding common stock, however, each
individual within the group beneficially owns less than one percent.
None
of the shares held by the executive group have been
pledged.
|
§ |
We
have a
thorough compensation review
process.
|
§ |
We
have a
competitive compensation plan that aligns executive performance and
stockholder interests.
|
§ |
We
consistently and appropriately provide equity grants and do not backdate
or re-price grants.
|
§ |
We
believe
the best way to compensate our executives is to base their rewards
on
performance.
|
§ |
We
have no
special executive severance packages. Our only Change in Control
provisions are found within existing compensation plans and apply
to all
participants in those plans.
|
§ |
James
W.
Owens, Chairman and CEO
|
§ |
Stuart
L.
Levenick, Group President
|
§ |
Douglas
R.
Oberhelman, Group President
|
§ |
Gerald
L.
Shaheen, Group President
|
§ |
Gerard
R.
Vittecoq, Group President
|
§ |
Steven
H.
Wunning, Group President
|
§ |
David
B.
Burritt, Vice President and Chief Financial Officer
|
1. |
Base
salary should decrease as a percentage of total direct compensation
as
salary grade levels increase. As
employees
move to higher levels of responsibility with more direct influence
over
the company’s performance, they have a higher percentage of pay at
risk.
|
2. |
The
ratio of long-term incentive compensation to short-term incentive
compensation should increase as salary grade levels increase.
Caterpillar
expects executives to focus on the company’s long-term success. The
compensation program is designed to motivate executives to take actions
that are best for the company’s long-term
viability.
|
3. |
Equity
compensation should increase as salary grade levels increase.
Employees
in
positions that most directly affect corporate performance should
have as
their main priority profitably growing the company. Receiving part
of
their compensation in the form of equity reinforces the link between
their
actions and stockholders’ investment. Equity ownership encourages
executives to behave like owners and provides a clear link with
stockholders’ interests.
|
§ |
Caterpillar’s
financial performance
|
§ |
The
accomplishment of Caterpillar’s long-term strategic
objectives
|
§ |
The
CEO’s
individual goals
|
§ |
The
development of Caterpillar’s top management
team
|
§ |
Achievement
of individual and company
objectives
|
§ |
Contribution
to the company’s performance
|
§ |
Leadership
accomplishments
|
Hewitt
Core Group 1
|
||
§ 3M
Company
|
§ H.J.
Heinz Company
|
§ The
Procter & Gamble Company*
|
§ Alcoa
Inc.
|
§ Hewlett-Packard
Company
|
§ Rockwell
International Company
|
§ Altria
Group, Inc.
|
§ Honeywell
International Inc.
|
§ Sara
Lee Corporation
|
§ BP
p.l.c.
|
§ Johnson
Controls, Inc.
|
§ United
Technologies Corporation
|
§ The
Coca-Cola Company
|
§ Lockheed
Martin Corporation
|
§ Weyerhaeuser
Company
|
§ Eli
Lilly and Company
|
§ Motorola,
Inc.
|
§ Whirlpool
Corporation
|
§ General
Electric Company
|
§ Pfizer
Inc.
|
§ Xerox
Corporation
|
§ The
Goodyear Tire & Rubber Company
|
||
*
The Procter
& Gamble Company purchased Gillette, which was part of the HCG1 in
2005.
|
Total
Cash Compensation Structure Changes
Base
Salary Midpoint
|
||
Percent
Increase from
2005
to 2006
|
||
|
||
CEO
|
10%
|
|
Group
Presidents
|
5%
|
|
Vice
Presidents
|
5%
|
Total
Cash Compensation Structure Changes
ESTIP
or STIP Target Opportunity
|
||||
2006
|
2005
|
|||
|
|
|||
CEO
(ESTIP)
|
135%
|
110%
|
||
Group
Presidents (ESTIP)
|
100%
|
80%
|
||
Vice
Presidents (STIP)
|
90%
|
70%
|
§ |
60% Profit
Per Share (PPS)
|
§ |
20% Enterprise
Quality (Product Quality)
|
§ |
20% Enterprise
Velocity (Inventory
Turnover)
|
Performance
Level
|
Payout
Factor
|
|
|
Greater
than
Threshold but Less than Target
|
30%
-
99.99%
|
Target
to
Maximum
|
100%
-
200%
|
Maximum
and
Greater
|
200%
|
2006
ESTIP
|
Payout
|
Measurement
|
|
|
|
PPS
|
Yes
|
The
PPS target
was $4.96. Caterpillar reported PPS at $5.17 at the end of
2006
|
Enterprise
Quality
|
No
|
Based
on a
single quality measure
|
Enterprise
Velocity
|
No
|
Measured
by
inventory turnover during 2006
|
§ |
Percentage
of
pay at risk is to remain at market competitive
levels
|
§ |
Employees
are
rewarded for the delivery of results against measurable
goals
|
§ |
Awards
drive
behavior aligned with both enterprise and business unit
results
|
§ |
The
company’s
payout objective under the plans is to be at target on average over
a
period of years
|
§ |
60% Profit
Per Share (PPS)
|
§ |
10% Enterprise
Quality (Product Quality)
|
§ |
10% Enterprise
Velocity (Inventory
Turnover)
|
§ |
20% 6
Sigma Value Proposition
|
2006
STIP
|
Payout
|
Measurement
|
|
|
|
PPS
|
Yes
|
The
PPS target
was $4.96. Caterpillar reported PPS at $5.17 at the end of
2006
|
Enterprise
Quality
|
No
|
Based
on a
single quality measure
|
Enterprise
Velocity
|
No
|
Measured
by
inventory turnover during 2006
|
6
Sigma Value Proposition
|
Yes
|
Measured
by
the net after-tax incremental benefit resulting from 6 Sigma projects
completed in 2006 in Mr. Burritt’s
unit
|
Long-Term
Cash Performance Plan Structure Changes
|
||||
2006
|
2005
|
|||
|
|
|||
LTCPP
Target Opportunity:
|
||||
CEO
|
170%
|
160%
|
||
Group
Presidents
|
110%
|
105%
|
||
Vice
Presidents
|
90%
|
85%
|
§ |
Selected
performance and retention-based grants can be made to officers and
other
key employees, as well as prospective
employees
|
§ |
Restricted
shares have three to five year vesting schedules
|
§ |
Restricted
shares are forfeited if the grantee leaves Caterpillar prior to
vesting
|
S&P
Peer Group
|
||
§ 3M
Company
|
§ General
Electric Company
|
§ Navistar
International Corporation
|
§ Cummins
Inc.
|
§ Honeywell
International Inc.
|
§ PACCAR
Inc
|
§ Danaher
Corporation
|
§ Illinois
Tool Works Inc.
|
§ Pall
Corporation
|
§ Deere
& Company
|
§ Ingersoll-Rand
Company Limited
|
§ Parker-Hannifin
Corporation
|
§ Dover
Corporation
|
§ ITT
Industries, Inc.
|
§ Textron
Inc.
|
§ Eaton
Corporation
|
§ Johnson
Controls, Inc.
|
§ United
Technologies Corporation
|
Performance
Level
|
Payout
Factor
|
|
|
Greater
than
Threshold but Less than Target
|
50%
- 99.99
%
|
Target
to
Maximum
|
100%
-
150%
|
Maximum
and
Greater
|
150%
|
2004-2006
LTCPP Measures
|
|||
Relative
PPS Growth
|
ROE
|
||
|
|
||
Threshold
|
25th
percentile
|
20%
|
|
Target
|
50th
percentile
|
25%
|
|
Maximum
|
75th
percentile
|
30%
|
2006-2008
LTCPP Cycle
|
|||
Relative
PPS Growth
|
ROE
|
||
|
|
||
Threshold
|
25th
percentile
|
20%
|
|
Target
|
50th
percentile
|
30%
|
|
Maximum
|
75th
percentile
|
40%
|
§ |
Exceeded
financial goals while improving the quality of
earnings
|
§ |
Delivered
double-digit profit growth and record sales
|
§ |
Focused
the
organization on improving quality, market leadership and velocity
while
encoding 6 Sigma
|
§ |
Championed
the new corporate Values in Action - realized record levels of employee
engagement
|
§ |
Hosted
worldwide dealer and supplier meetings to roll out the company’s new
strategy - Vision 2020
|
§ |
Increased
presence in China
|
§ |
Sustained
improvement toward World Class Safety
performance
|
§ |
Published
Caterpillar’s first-ever Sustainability
Report
|
§ |
Provided
corporate leadership for investor
relations
|
§ |
Coordinated
highly successful worldwide dealer meeting and rollout of Vision
2020
Strategy to dealerships
|
§ |
Developed
a
five-point dealer quality commitment
program
|
§ |
Displayed
leadership for major growth initiatives in Asia Pacific
region
|
§ |
Instrumental
in relationship building with key
suppliers
|
§ |
Provided
strong leadership for corporate finance and accounting
activities
|
§ |
Drove
significant profitability improvement in the engine
business
|
§ |
Actively
involved in relationship building with key customers, dealers and
suppliers
|
§ |
Delivered
steady improvement of ACERT® engine
quality
|
§ |
Drove
innovation with significant increase in new product
introductions
|
§ |
Actively
engaged in defining global product manager
positions
|
§ |
Maintained
strong dealer and key customer
relationships
|
§ |
Instrumental
in launching the Product/Technology
Council
|
§ |
Championed
manufacturing excellence and product
quality
|
§ |
Worked
diligently to refine quality metrics that drive the appropriate
behavior
|
§ |
Corporate
leader for external benchmarking on process
disciplines
|
§ |
Actively
involved with EAME regional dealers
|
§ |
Provided
strong leadership for driving growth of service
businesses
|
§ |
Instrumental
in organizing Remanufacturing Services into a separate
division
|
§ |
Implemented
the revised dealer business systems strategy which received favorable
response and lowered Caterpillar
expenses
|
§ |
Key
contributor in the Progress Rail
acquisition
|
§ |
Led
efforts
to drive synergies and cost reduction across service
divisions
|
§ |
Delivered
record level 6 Sigma benefits supporting Vision
2020
|
§ |
Led
transparency initiative with investor relations and launched global
transformation efforts for accounting, tax, treasury, investor relations
and strategic support
|
§ |
Met
or
exceeded all unit financial and non-financial
metrics
|
§ |
Contributions
are made on a pre-tax basis
|
§ |
Participants
can contribute up to 70 percent of their base salary and STIP
awards
|
§ |
Contributions
are limited by the tax code
|
§ |
Company
matches 100 percent of the first 6 percent of pay that is contributed
to
the savings plan
|
§ |
All
contributions vest immediately
|
§ |
Contributions
are made on a pre-tax basis
|
§ |
Participants
contribute 6 percent of base salary that exceeds the IRS compensation
limit
|
§ |
Company
matches 100 percent of the employees’ 6 percent
contributions
|
§ |
All
contributions vest immediately
|
§ |
Base
salary
deferrals earn matching contributions at a rate of 6 percent of the
deferral amount
|
§ |
STIP
deferrals up to 6 percent are matched
dollar-for-dollar
|
§ |
Deferrals
of
LTCPP awards are not eligible for an employer matching
contribution
|
§ |
All
contributions vest immediately
|
§ |
Limited
personal use of company aircraft is provided for security purposes
and to
enable the NEOs to devote additional time to Caterpillar business.
A
spouse may accompany the named executive officer traveling for business
purposes on company aircraft.
|
§ |
Home
security
systems are provided to ensure the safety of our NEOs.
|
§ |
The
NEOs are
provided an annual financial counseling
allowance.
|
§ |
Mr.
Owens
participates in the Director’s Charitable Award program, which is provided
to all directors of the company, and is funded by life insurance
arrangements for which the company pays the premiums. Mr. Owens derives
no
direct financial benefit from the program.
|
§ |
Someone
becomes the “beneficial owner” (as defined in Rule 13d-3 under the
Exchange Act), directly or indirectly, of the company’s securities, which
gives them 15 percent or more of the combined voting power of the
company’s then outstanding common stock. However, if the board issues a
resolution that overrides the situation because the resolution is
in the
best interests of company stockholders, it cancels the change of
control.
|
§ |
The
majority
of the board ceases to be comprised of individuals who were on the
board
at the beginning of any consecutive two-year period.
|
§ |
The
company’s
stockholders approve a merger or consolidation that reduces the
voting
securities of the company outstanding to less than half of the
combined
voting power of the company or surviving entity outstanding immediately
after the merger or consolidation.
|
§ |
Company
stockholders approve a plan of complete liquidation of the company
or an
agreement for the sale or disposition by the company of all or
substantially all of its assets.
|
§ |
The
amount of
the bonus or incentive compensation was calculated based upon the
achievement of certain financial results that were subsequently the
subject of a restatement
|
§ |
The
executive
engaged in intentional misconduct that caused or partially caused
the need
for the restatement
|
§ |
The
amount of
the bonus or incentive compensation that would have been awarded
to the
executive had the financial results been properly reported would
have been
lower than the amount actually
awarded
|
Name
and
Principal
Position
|
Year
|
Salary
|
Bonus1
|
Stock
Awards2
|
Option
Awards3
|
Non-Equity
Incentive Plan
Compensation4
|
Change
in Pension Value and Nonqualified Deferred Compensation
Earnings5
|
All
Other Compensation6
|
Total
|
||||||||||||||
|
|
|
|
|
|
|
|
|
|
||||||||||||||
J.W.
Owens
|
2006
|
$
|
1,350,003
|
|
$
|
300,000
|
|
$
|
—
|
$
|
7,029,846
|
$
|
3,723,703
|
|
$
|
2,171,992
|
|
$
|
243,077
|
|
$
|
14,818,621
|
|
Chairman
&
CEO
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||
S.L.
Levenick
|
2006
|
|
641,253
|
|
|
120,000
|
|
|
16,090
|
|
1,076,445
|
|
1,441,021
|
|
|
487,228
|
|
|
83,084
|
|
|
3,865,121
|
|
Group
President
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||
D.R.
Oberhelman
|
2006
|
|
721,248
|
|
|
183,000
|
|
|
16,090
|
|
1,082,596
|
|
1,633,854
|
|
|
575,150
|
|
|
122,180
|
|
|
4,334,118
|
|
Group
President
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||
G.L.
Shaheen
|
2006
|
|
721,248
|
|
|
135,000
|
|
|
—
|
|
2,226,118
|
|
1,633,854
|
|
|
557,644
|
|
|
99,411
|
|
|
5,373,275
|
|
Group
President
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||
G.R.
Vittecoq5
|
2006
|
|
753,981
|
|
|
114,870
|
|
|
—
|
|
2,226,118
|
|
1,707,398
|
|
|
1,532,982
|
|
|
40,159
|
|
|
6,375,508
|
|
Group
President
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||
S.H.
Wunning
|
2006
|
|
657,747
|
|
|
130,000
|
|
|
—
|
|
2,226,118
|
|
1,501,523
|
|
|
621,107
|
|
|
78,674
|
|
|
5,215,169
|
|
Group
President
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||
D.B.
Burritt
|
2006
|
|
405,750
|
|
|
40,000
|
|
|
—
|
|
328,059
|
|
861,783
|
|
|
275,049
|
|
|
56,047
|
|
|
1,966,688
|
|
Vice
President
& CFO
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||
1 Amounts
include lump sum discretionary bonus (LSDB) payments authorized by
the
Compensation Committee of the board, lump sum discretionary award
(LSDA)
paid under STIP and variable base pay (VBP) that must be re-earned
annually. For 2006 performance, NEOs earned the following: Mr. Owens
—
$300,000/LSDB; Mr. Levenick — $120,000/LSDB; Mr. Oberhelman —
$135,000/LSDB and $48,000/VBP; Mr. Shaheen — $100,000/LSDB and
$35,000/VBP; Mr. Vittecoq — $82,050/LSDB and $32,820/VBP; Mr. Wunning —
$130,000/LSDB; and Mr. Burritt — $40,000/LSDA. All amounts reported for
Mr. Vittecoq were paid in Swiss Franc, and have been converted to
US
dollars using the exchange rate in effect on December 31, 2006 (1
Swiss
Franc = .82050 US Dollar).
|
|||||||||||||||||||||||
2 Mr.
Levenick and Mr. Oberhelman were awarded 1,000 shares of restricted
stock
on March 1, 2006. The fair market value (average of high and low
trading
price) of Caterpillar stock on the award date was $73.945 per share.
The
amount shown is based upon the amortized expense recognized for financial
reporting purposes.
|
|||||||||||||||||||||||
3 The
following SARs were granted to NEOs on February 17, 2006: Mr. Owens
—
300,000; Mr. Levenick — 105,000; Mr. Oberhelman — 110,000; Mr. Shaheen —
95,000; Mr. Vittecoq — 95,000; Mr. Wunning — 95,000; and Mr. Burritt —
48,000. The amounts shown reflect the expense recognized for financial
reporting purposes in accordance with FAS123R and not the compensation
realized by the named executive officer. Assumptions made in the
calculation of these amounts are included in Note 2 to the company’s
financial statements for the fiscal year ended December 31, 2006
included
on Form 10-K filed with the SEC on February 23, 2007.
|
|||||||||||||||||||||||
4 The
amounts in this column reflect cash payments made to NEOs under ESTIP
or
STIP in 2007 with respect to 2006 performance and under the LTCPP
with
respect to performance over a three year plan cycle from 2004 through
2006
as follows: Mr. Owens — $1,223,703/ESTIP and $2,500,000/LTCPP; Mr.
Levenick — $430,508/ESTIP and $1,010,513/LTCPP; Mr. Oberhelman —
$484,110/ESTIP and $1,149,744/LTCPP; Mr. Shaheen — $484,110/ESTIP and
$1,149,744/LTCPP; Mr. Vittecoq —$505,579/ESTIP and $1,201,819/LTCPP; Mr.
Wunning — $441,554/ESTIP and $1,059,969/LTCPP; and Mr. Burritt —
$391,288/STIP and $470,495/LTCPP. All amounts reported for Mr. Vittecoq
were paid in Swiss Franc, and have been converted to US dollars using
the
exchange rate in effect on December 31, 2006 (1 Swiss Franc = .82050
US
Dollar).
|
|||||||||||||||||||||||
5 Because
NEOs do not receive “preferred or above market” earning on compensation
deferred into SEIP and/or DEIP, the amount shown represents only
the
change between the actuarial present value of each officer’s total
accumulated pension benefit between November 30, 2005 and November
30,
2006. For Mr. Vittecoq, who is covered under a Swiss pension plan,
the
actuarial present value of his pension benefit change was calculated
between September 30, 2005 and September 30, 2006. The amount assumes
the
pension benefit is payable at each NEO’s earliest unreduced retirement age
based upon the officer’s current compensation.
|
|||||||||||||||||||||||
6 All
Other Compensation consists of the following items detailed in a
separate
table appearing on page 37: matching contributions to the company’s 401(k)
plan, matching contributions to SEIP and/or DEIP, travel on corporate
aircraft, financial counseling, home security and life insurance
premiums
for the Director’s Charitable Award program.
|
2006
All Other Compensation Table
|
Name
|
Matching
Contributions
401(k)
|
Matching
Contributions SEIP & DEIP
|
Financial
Counseling
|
Corporate
Aircraft2
|
Tax
Gross-Up
on Corporate Aircraft
|
Home
Security3
|
Director’s
Charitable Award Insurance
Premiums4
|
ISE
Allowances5
|
Total
All Other Compensation
|
||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
J.
W.
Owens
|
$
|
13,200
|
$
|
150,876
|
$
|
14,000
|
$
|
5,805
|
$
|
3,694
|
$
|
25,491
|
$
|
30,011
|
$
|
—
|
$
|
243,077
|
|||||||||
S.
L.
Levenick
|
13,200
|
55,541
|
8,000
|
1,376
|
603
|
2,150
|
—
|
2,214
|
83,084
|
||||||||||||||||||
D.
R.
Oberhelman
|
13,200
|
68,314
|
6,925
|
4,610
|
3,004
|
26,127
|
—
|
—
|
122,180
|
||||||||||||||||||
G.
L.
Shaheen
|
13,200
|
68,435
|
345
|
10,042
|
6,542
|
847
|
—
|
—
|
99,411
|
||||||||||||||||||
G.
R.
Vittecoq1
|
N/A
|
30,159
|
10,000
|
—
|
—
|
—
|
—
|
—
|
40,159
|
||||||||||||||||||
S.
H.
Wunning
|
13,200
|
57,474
|
8,000
|
—
|
—
|
—
|
—
|
—
|
78,674
|
||||||||||||||||||
D.
B.
Burritt
|
13,200
|
29,127
|
11,000
|
—
|
—
|
2,720
|
—
|
—
|
56,047
|
||||||||||||||||||
|
|||||||||||||||||||||||||||
1 Mr.
Vittecoq participates in a non-U.S. Employee Investment
Plan.
|
|||||||||||||||||||||||||||
2 Amounts
reported under Corporate Aircraft represent limited personal use
of
company aircraft by the Officer, or by the Officer’s spouse who
accompanies the officer on a business trip. Company aircraft is provided
for security purposes, and allows the NEOs to devote additional time
to
Caterpillar business. CEO approval is required for personal use of
corporate aircraft. The amounts shown are based upon the Standard
Industry
Fare Level (SIFL) formula.
|
|||||||||||||||||||||||||||
3 Amounts
reported for Home Security represent the cost provided by an outside
security provider for hardware and monitoring service.
|
|||||||||||||||||||||||||||
4 Mr.
Owens received no direct compensation for serving on the board, but
is
entitled to participate in the Director’s Charitable Award Program. Amount
reported includes company paid life insurance premium and administrative
fees for Mr. Owens.
|
|||||||||||||||||||||||||||
5 Mr.
Levenick was an International Service Employee (ISE) based in Japan
until
his return to the U.S. in July 2004. The 2006 amount contains a U.S.
tax
gross-up on moving expenses.
|
Grants
of Plan-Based Awards in 2006
|
|
|
Estimated
Future Payouts Under
Non-Equity
Incentive Plan
Awards1
|
|
|
|
|
|||||||||||||
|
|
|
|
|
|
|
|||||||||||||
Name
|
Grant
Date
|
Threshold
|
Target
|
Maximum
|
All
Other
Stock
Awards: Number of Shares of
Stock
or
Units2
|
All
Other Option Awards: Number of Securities Underlying
Options
|
Exercise
or Base Price of Option Awards ($/share)
|
Grant
Date Fair Value of Stock and Option Awards
($)3
|
|||||||||||
|
|
|
|
|
|
|
|
|
|||||||||||
J.W.
Owens
|
|
$
|
1,175,836
|
|
$
|
2,351,673
|
|
$
|
2,500,000
|
|
—
|
|
—
|
|
|
—
|
|
—
|
|
|
02/17/2006
|
|
—
|
|
|
—
|
|
|
—
|
|
—
|
|
300,000
|
|
$
|
72.05
|
|
7,029,846
|
|
|
|||||||||||||||||||
S.L.
Levenick
|
|
|
359,198
|
|
|
718,396
|
|
|
1,077,594
|
|
—
|
|
—
|
|
|
—
|
|
—
|
|
|
02/17/2006
|
|
—
|
|
|
—
|
|
|
—
|
|
—
|
|
105,000
|
|
|
72.05
|
|
2,460,446
|
|
|
03/01/2006
|
|
—
|
|
|
—
|
|
|
—
|
|
1,000
|
|
—
|
|
|
—
|
|
73,945
|
|
|
|||||||||||||||||||
D.R.
Oberhelman
|
|
|
399,894
|
|
|
799,788
|
|
|
1,199,682
|
|
—
|
|
—
|
|
|
—
|
|
—
|
|
|
02/17/2006
|
|
—
|
|
|
—
|
|
|
—
|
|
—
|
|
110,000
|
|
|
72.05
|
|
2,577,610
|
|
|
03/01/2006
|
|
—
|
|
|
—
|
|
|
—
|
|
1,000
|
|
—
|
|
|
—
|
|
73,945
|
|
|
|||||||||||||||||||
G.L.
Shaheen
|
|
|
399,894
|
|
|
799,788
|
|
|
1,199,682
|
|
—
|
|
—
|
|
|
—
|
|
—
|
|
|
02/17/2006
|
|
—
|
|
|
—
|
|
|
—
|
|
—
|
|
95,000
|
|
|
72.05
|
|
2,226,118
|
|
|
|||||||||||||||||||
G.R.
Vittecoq
|
|
|
417,880
|
|
|
835,760
|
|
|
1,253,640
|
|
—
|
|
—
|
|
|
—
|
|
—
|
|
|
02/17/2006
|
|
—
|
|
|
—
|
|
|
—
|
|
—
|
|
95,000
|
|
|
72.05
|
|
2,226,118
|
|
|
|||||||||||||||||||
S.H.
Wunning
|
|
|
367,352
|
|
|
734,704
|
|
|
1,102,056
|
|
—
|
|
—
|
|
|
—
|
|
—
|
|
|
02/17/2006
|
|
—
|
|
|
—
|
|
|
—
|
|
—
|
|
95,000
|
|
|
72.05
|
|
2,226,118
|
|
|
|||||||||||||||||||
D.B.
Burritt
|
|
|
185,963
|
|
|
371,925
|
|
|
557,888
|
|
—
|
|
—
|
|
|
—
|
|
—
|
|
|
02/17/2006
|
|
—
|
|
|
—
|
|
|
—
|
|
—
|
|
48,000
|
|
|
72.05
|
|
1,124,775
|
|
|
|||||||||||||||||||
1 The
amounts reported in this column are awards under the LTCPP based
upon an
executive’s base salary throughout the three-year cycle, a predetermined
percentage of that salary, and Caterpillar’s achievement of specified
performance levels (relative profit per share growth and return
on equity)
over the three-year period. The threshold amount will be earned
if 50
percent of the targeted performance level is achieved. The target
amount
will be earned if 100 percent of the targeted performance level
is
achieved. The maximum award amount will be earned at 150 percent
of
targeted performance level. Base salary levels for 2006 were used
to
calculate the estimated dollar value of future payments for the
2006 to
2008 performance cycle. Individual payouts to any named executive
officer
will be capped at $2.5 million dollars. The CD&A discusses in greater
detail the performance metrics utilized in the LTCPP
cycle.
|
|||||||||||||||||||
2 On
March 1, 2006, 1,000 restricted shares were granted to both Mr.
Levenick
and Mr. Oberhelman. The fair market value of the shares on the
grant date
was $73.945 per share. The shares vest over a five-year period,
with one
third vesting after three years from the grant date, one third
vesting on
the fourth year from the grant date, and final third vesting on
the fifth
year from the grant date.
|
|||||||||||||||||||
3 The
amounts shown do not reflect realized compensation by the NEO.
The amounts
shown represent the value of the SAR award based upon the fair
value on
the grant date of February 17, 2006 as determined in accordance
with
FAS123R. The exercise price for all SARs granted to the NEOs is
100
percent of the fair market value (average of high and low trading
price)
of Caterpillar stock on the grant date. All SARs granted to the
NEOs will
vest after three years from the grant date. Plan provisions exist
for
accelerated vesting in the event of terminations due to long-service
separation (age 55 with 10 or more years of company service), death,
total
disability or change in control. The actual realizable value of
the SAR
will depend on the fair market value of Caterpillar stock at the
time of
exercise. The grant price was based upon the average of the high
and low
price for Caterpillar stock on the grant date of February 17, 2006.
The
closing price on the grant date was the same value as the average
price,
$72.05.
|
Outstanding
Equity Awards at 2006 Fiscal Year-End
|
Number
of Securities Underlying Unexercised SARs/Options
|
|
|||||||||||
Name
|
Exercisable
|
Unexercisable
|
SAR
/
Option
Exercise
Price
|
SAR
/
Option
Expiration
Date
1
|
Number
of Shares or Units of Stock That Have Not
Vested2
|
Market
Value of Shares or Units of Stock That Have Not
Vested3
|
||||||
|
|
|
|
|
|
|
||||||
J.W.
Owens
|
100,000
|
—
|
$
|
27.8438
|
06/09/2008
|
—
|
—
|
|||||
100,000
|
—
|
31.1719
|
06/08/2009
|
—
|
—
|
|||||||
108,000
|
—
|
19.2032
|
06/12/2010
|
—
|
—
|
|||||||
108,000
|
—
|
26.7650
|
06/12/2011
|
—
|
—
|
|||||||
122,000
|
—
|
25.3575
|
06/11/2012
|
—
|
—
|
|||||||
140,000
|
—
|
27.1425
|
06/10/2013
|
—
|
—
|
|||||||
460,000
|
—
|
38.6275
|
06/08/2014
|
—
|
—
|
|||||||
460,000
|
—
|
45.6425
|
02/18/2015
|
—
|
—
|
|||||||
—
|
300,000
|
72.05
|
02/17/2016
|
—
|
—
|
|||||||
—
|
—
|
—
|
—
|
20,000
|
$
|
1,226,600
|
||||||
|
||||||||||||
S.L.
Levenick
|
13,330
|
—
|
27.8438
|
06/09/2008
|
—
|
—
|
||||||
13,712
|
—
|
31.1719
|
06/08/2009
|
—
|
—
|
|||||||
48,000
|
—
|
26.7650
|
06/12/2011
|
—
|
—
|
|||||||
54,000
|
—
|
25.3575
|
06/11/2012
|
—
|
—
|
|||||||
54,000
|
—
|
27.1425
|
06/10/2013
|
—
|
—
|
|||||||
126,000
|
—
|
38.6275
|
06/08/2014
|
—
|
—
|
|||||||
130,000
|
—
|
45.6425
|
02/18/2015
|
—
|
—
|
|||||||
—
|
105,000
|
72.05
|
02/17/2016
|
—
|
—
|
|||||||
—
|
—
|
—
|
—
|
1,000
|
61,330
|
|||||||
|
||||||||||||
D.R.
Oberhelman
|
38,132
|
—
|
25.8281
|
06/10/2007
|
—
|
—
|
||||||
42,000
|
—
|
27.8438
|
06/09/2008
|
—
|
—
|
|||||||
42,000
|
—
|
31.1719
|
06/08/2009
|
—
|
—
|
|||||||
48,000
|
—
|
19.2032
|
06/12/2010
|
—
|
—
|
|||||||
48,000
|
—
|
26.7650
|
06/12/2011
|
—
|
—
|
|||||||
122,000
|
—
|
25.3575
|
06/11/2012
|
—
|
—
|
|||||||
140,000
|
—
|
27.1425
|
06/10/2013
|
—
|
—
|
|||||||
140,000
|
—
|
38.6275
|
06/08/2014
|
—
|
—
|
|||||||
140,000
|
—
|
45.6425
|
02/18/2015
|
—
|
—
|
|||||||
—
|
110,000
|
72.05
|
02/17/2016
|
—
|
—
|
|||||||
—
|
—
|
—
|
—
|
9,000
|
551,970
|
|||||||
|
||||||||||||
G.L.
Shaheen
|
38,410
|
—
|
27.8438
|
06/09/2008
|
—
|
—
|
||||||
96,792
|
—
|
31.1719
|
06/08/2009
|
—
|
—
|
|||||||
122,000
|
—
|
25.3575
|
06/11/2012
|
—
|
—
|
|||||||
140,000
|
—
|
27.1425
|
06/10/2013
|
—
|
—
|
|||||||
140,000
|
—
|
38.6275
|
06/08/2014
|
—
|
—
|
|||||||
140,000
|
—
|
45.6425
|
02/18/2015
|
—
|
—
|
|||||||
—
|
95,000
|
72.05
|
02/17/2016
|
—
|
—
|
|||||||
|
||||||||||||
G.R.
Vittecoq
|
19,360
|
—
|
31.1719
|
06/08/2009
|
—
|
—
|
||||||
23,968
|
—
|
19.2032
|
06/12/2010
|
—
|
—
|
|||||||
48,000
|
—
|
26.7650
|
06/12/2011
|
—
|
—
|
|||||||
54,000
|
—
|
25.3575
|
06/11/2012
|
—
|
—
|
|||||||
54,000
|
—
|
27.1425
|
06/10/2013
|
—
|
—
|
|||||||
126,000
|
—
|
38.6275
|
06/08/2014
|
—
|
—
|
|||||||
130,000
|
—
|
45.6425
|
02/18/2015
|
—
|
—
|
|||||||
—
|
95,000
|
72.05
|
02/17/2016
|
—
|
—
|
|||||||
—
|
—
|
—
|
—
|
1,365
|
83,715
|
|||||||
|
||||||||||||
S.H.
Wunning
|
48,000
|
—
|
19.2032
|
06/12/2010
|
—
|
—
|
||||||
48,000
|
—
|
26.7650
|
06/12/2011
|
—
|
—
|
|||||||
60,000
|
—
|
25.3575
|
06/11/2012
|
—
|
—
|
|||||||
54,000
|
—
|
27.1425
|
06/10/2013
|
—
|
—
|
|||||||
126,000
|
—
|
38.6275
|
06/08/2014
|
—
|
—
|
|||||||
130,000
|
—
|
45.6425
|
02/18/2015
|
—
|
—
|
|||||||
—
|
95,000
|
72.05
|
02/17/2016
|
—
|
—
|
|||||||
|
||||||||||||
D.B.
Burritt
|
23,100
|
—
|
27.1425
|
06/10/2013
|
—
|
—
|
||||||
23,100
|
—
|
38.6275
|
06/08/2014
|
—
|
—
|
|||||||
54,000
|
—
|
45.6425
|
02/18/2015
|
—
|
—
|
|||||||
—
|
48,000
|
72.05
|
02/17/2016
|
—
|
—
|
|||||||
|
||||||||||||
1 SARs
granted in 2006 are exercisable three years after the grant date.
The SARs
were granted with a 10-year term, subject to earlier termination
in the
event of separation from service.
|
||||||||||||
2 Mr.
Owens received a 20,000 restricted share grant on March 1, 2005.
Mr.
Levenick received a 1,000 restricted share grant on March 1, 2006.
Mr.
Oberhelman received a 6,000 restricted share grant on April 1,
2004, a
2,000 restricted share grant on March 1, 2005, and a 1,000 restricted
share grant on March 1, 2006. Mr. Vittecoq received a 1,900 restricted
share equivalent grant on March 3, 2003. Where applicable, grants
awarded
have been adjusted to reflect a 2 for 1 stock split which occurred
in July
2005.
|
||||||||||||
3 The
market value of the remaining non-vested restricted shares (or
equivalent
shares in the case of Mr. Vittecoq) is calculated using the closing
price
of Caterpillar common stock on December 29, 2006 ($61.33 per share).
|
2006
Option Exercises and Stock Vested
|
|
Option
Awards1
|
Stock
Awards2
|
||||||||||
|
|
|||||||||||
Name
|
Number
of Shares
Acquired
on Exercise
|
Value
Realized
on
Exercise
|
Number
of Shares
Acquired
on Vesting
|
Value
Realized
on
Vesting
|
||||||||
|
|
|
|
|
||||||||
J.W.
Owens
|
|
100,000
|
|
$
|
4,157,690
|
|
|
—
|
|
$
|
—
|
|
S.L.
Levenick
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
D.R.
Oberhelman
|
|
15,842
|
|
|
758,022
|
|
|
2,332
|
|
|
172,440
|
|
G.L.
Shaheen
|
|
154,542
|
|
|
5,324,635
|
|
|
—
|
|
|
—
|
|
G.R.
Vittecoq
|
|
—
|
|
|
—
|
|
|
665
|
|
|
49,763
|
|
S.H.
Wunning
|
|
58,920
|
|
|
2,166,304
|
|
|
2,332
|
|
|
172,440
|
|
D.B.
Burritt
|
|
50,832
|
|
|
1,921,023
|
|
|
—
|
|
|
—
|
|
|
||||||||||||
1 Upon
exercise, option holders may surrender shares to pay the option exercise
price and satisfy income tax-withholding requirements. The amounts
shown
are gross amounts absent netting for shares surrendered.
|
||||||||||||
2 Upon
release of the restricted stock, shares are surrendered to satisfy
income
tax-withholding requirements. The amounts shown are gross amounts
absent
netting for shares surrendered. Mr. Vittecoq received a cash payment
for
the value of his equivalent restricted shares. Equivalent restricted
shares are issued to Mr. Vittecoq as they provide a tax efficient
vehicle
under Swiss tax law.
|
2006
Pension Benefits
|
Name
|
Plan
Name1
|
Number
of Years of Credited Service2
|
Present
Value of
Accumulated
Benefit3
|
Payments
During Last Fiscal Year
|
|||
|
|
|
|
|
|||
J.W.
Owens
|
RIP
|
34.25
|
$
|
1,837,348
|
|
—
|
|
SPBP
|
34.25
|
8,884,360
|
—
|
||||
|
|||||||
S.L.
Levenick
|
RIP
|
29.42
|
|
944,755
|
|
—
|
|
SPBP
|
29.42
|
1,836,373
|
—
|
||||
|
|||||||
D.R.
Oberhelman
|
RIP
|
31.42
|
|
1,118,197
|
|
—
|
|
SPBP
|
31.42
|
2,733,148
|
—
|
||||
|
|||||||
G.L.
Shaheen
|
RIP
|
35.00
|
|
1,998,347
|
|
—
|
|
SPBP
|
35.00
|
5,861,834
|
—
|
||||
|
|||||||
G.R.
Vittecoq
|
Caprevi,
Prevoyance
|
30.92
|
|
7,062,864
|
|
—
|
|
|
|||||||
S.H.
Wunning
|
RIP
|
33.50
|
|
1,322,949
|
|
—
|
|
SPBP
|
33.50
|
2,403,180
|
—
|
||||
|
|||||||
D.B.
Burritt
|
RIP
|
28.33
|
|
900,361
|
|
—
|
|
SPBP
|
28.33
|
453,473
|
—
|
||||
|
|||||||
1
RIP is a noncontributory U.S. qualified defined benefit pension plan
and
SPBP is a U.S. non-qualified pension plan. The benefit formula is
1.5
percent for each year of service (capped at 35 years) multiplied
by the
final average earnings during the highest five of the final ten years
of
employment. Final average earnings include base salary, short-term
incentive compensation and deferred compensation. If an employee’s annual
retirement income benefit under the qualified plan exceeds the internal
revenue code limitations, the excess benefits are paid from SPBP.
SPBP is
not funded. The formula used to calculate the benefit payable in
SPBP is
the same as that which is used under RIP. Mr. Vittecoq participates
in
Caprevi, Prevoyance Caterpillar, a Swiss pension benefit plan. The
Swiss
plan requires participants to contribute approximately 7 percent
of
pensionable income to the plan. The benefit formula is 1.75 percent
for
each year of service multiplied by the final average earnings for
the
highest three years of a participant’s career. Final average earnings
consist of base salary and short-term incentive pay, reduced by a
prescribed percentage to arrive at “salary considered for contribution.”
The benefit is payable in a 50 percent lump sum payment and 50 percent
annuity.
|
|||||||
2
Mr. Shaheen has accumulated 39 years of service with the company.
Amounts
payable under both RIP and SPBP are based upon a maximum of 35 years
of
service. All RIP and SPBP participants may receive their benefit
immediately following termination of employment, or may defer benefit
payments until any time between early retirement age and normal retirement
age. Normal retirement age is defined as age 65 with 5 years of service.
Early retirement is defined as: any age with 30 years of service,
age 55
with 15 years of service, age plus service = 85 points, or age 60
with 10
years of service. If a participant elects early retirement, benefits
are
reduced by 4 percent, per year, before age 62. Currently, Mr. Owens,
Mr.
Oberhelman, and Mr. Wunning are eligible for early retirement, with
a 4
percent reduction. Mr. Shaheen is eligible for early retirement with
no
reduction. Mr. Vittecoq is eligible under the Swiss pension plan
for an
early retirement benefit with a 4 percent reduction before age
60.
|
|||||||
3
The amount in this column represents the actuarial present value
for each
NEO’s accumulated pension benefit at November 30, 2006, assuming benefits
are payable at each NEO’s earliest unreduced retirement age based upon
current level of pensionable income. The interest rate of 5.53 percent
and
the RP2000 mortality table used in the calculations are based upon
the U.S
FAS 87 disclosure at November 30, 2006. Mr. Vittecoq’s lump sum present
value accumulated benefi |