RETIREMENT PLAN FOR NON-EMPLOYEE DIRECTORS
OF CUMMINS ENGINE COMPANY, INC.
(As Amended February 11, 1997)
1. Purpose. The Retirement Plan for Non-Employee Directors ("the Plan") was originally established to provide
term-certain pension payments, as set forth more fully herein, to eligible non- employee Directors of Cummins
Engine Company, Inc. ("the Company"). It was modified on February 11, 1997 to cease future benefit accruals
and to permit the conversion of existing accrued benefits into an equivalent value of phantom shares of Company
Common Stock. The Plan is intended to enhance the Company's ability to retain as Directors individuals with the
highest caliber of experience, ability and judgment.
2. Eligibility. Each Director of the Company who was not an employee or former employee of the Company with
vested rights under a pension plan sponsored by the Company, its subsidiaries or affiliates is eligible to participate
in the Plan as set forth below.
3. Participation. An eligible Director became a Participant in the Plan commencing with the sixth (6th) year of
service as a Director of the Company. No person who becomes a Director after February 11, 1997 shall be
eligible to participate in the Plan.
4. Vesting. Each eligible Director was fully vested in benefits accrued under the Plan immediately upon becoming
5. Pension Benefit Amount. Each Participant shall be entitled to receive an annual pension benefit, payable
annually, equal to the fees (excluding Committee fees) paid or payable to such Participant for services rendered
as a Director of the Company during the one-year period immediately preceding February 11, 1997.
6. Benefit Conversion Election. In lieu of the pension benefits described in paragraph 5, each Participant may
elect to convert the present value of his or her accrued pension benefits under the Plan into an equivalent value of
phantom units of the Company's Common Stock ("Stock Units"), with each unit equal in value to one share o