SEC Filings

CUMMINS INC filed this Form 10-K on 02/11/2019
Entire Document

Guidelines for Enhanced SERP
For Executives Joining Cummins Mid-Career

General Criteria

The Company’s Chief Executive Officer (“CEO”) may designate an enhanced SERP benefit for an Executive (Officer or Executive Director) joining Cummins mid-career, provided that the Compensation Committee of the Board must approve such designation in the case of an Executive who is an executive officer of Cummins Inc. In determining whether an enhanced benefit is appropriate and, if so, the amount of such benefit, the CEO shall consider:
any existing pension benefits of the Executive from previous employers;
the recruiting and retention value of the enhanced benefit;
the amount of time that the Executive is expected to work before retiring from Cummins (as a rule, at least age 55; as a target, at least age 58); and
the amount of Service that the Executive will have upon likely retirement.

An enhanced benefit may also be used to assist the transition of other Officers, if the CEO determines that such a benefit is in the best interests of Cummins.
The enhanced retirement benefit formula is to be applied at the discretion of the CEO, who has the obligation to inform the Administrator of such benefits.
The CEO will define the benefit or formula applicable to each case in the future. Currently the CEO has authorized the following:
Grow benefit by double-accrual approach: 4% per year for each of the first 10 years of Service; 2% per year for next five years of Service, maximum 50% at 15 years of Service.

Replace “rule of 80” with “rule of 70”, which means eligible for unreduced benefits upon achieving at least age 58, at least 10 years of Service, but the total of the two must be at least 70. (This does not mean a full 50% benefit, but merely unreduced accrued benefit.)

Fully vested after five years of Service. (Normally vesting begins at five years and is not 100% until ten years of Service are completed).

The benefit starting at age 60 will not be less than 50% of Average Covered Compensation

Upon a Change of Control, the designated Executives:

become fully Vested, regardless of Service (no change from current Plan);