Caterpillar Class Action Settlement of ERISA Class Action Lawsuit Over Caterpillar 401(k) Plan, the Caterpillar Inc. Tax Deferred Savings Plan, Caterpillar Inc. Tax Deferred Retirement Plan, and the Solar Turbines Savings and Investment Plan

If at any time between July 1, 1992 and September 10, 2009, inclusive, you had an account in one or more of the following Plans — the Caterpillar 401(k) Plan, the Caterpillar Inc. Tax Deferred Savings Plan, Caterpillar Inc. Tax Deferred Retirement Plan, and the Solar Turbines Savings and Investment Plan — your rights and the rights of your beneficiaries, alternate payees or attorneys-in-fact who are or become entitled to any portion of such an account may be affected by a class action settlement.

A class action settlement has been reached in a class action lawsuit pending against Caterpillar Inc., Benefit Funds Committee of Caterpillar Inc., Caterpillar Investment Management Ltd. (collectively “Caterpillar” or “Defendants”) in the United States District Court for the Central District of Illinois (styled Steve Martin, Carol Tegard and Allen Rose v. Caterpillar Inc., Benefit Funds Committee of Caterpillar Inc., Caterpillar Investment Management Ltd., Civil Action No. 07-1009 JBM/JAG), alleging, among other things, that Caterpillar violated its fiduciary duties under the Employee Retirement Income Security Act of 1974 (“ERISA”) by including as plan investment options certain mutual funds affiliated with Caterpillar, that certain defendants had the duty to monitor the investment options and failed to do so in violation of their fiduciary duties, that defendants knew or should have known that the Plans’ investments in the mutual funds affiliated with Caterpillar were not prudent retirement investments during the Class Period, that defendants acted imprudently and engaged in a “prohibited transaction” under ERISA by not preventing further investment in those Caterpillar-affiliated mutual funds, that defendants breached their fiduciary duties under ERISA by allowing service providers to the Plans to receive excess compensation and imprudently managing the Caterpillar Stock Fund, and that defendants failed to provide Plan participants with complete and accurate information about the mutual funds affiliated with Caterpillar, according to the Caterpillar ERISA class action settlement notice.

The proposed Caterpillar class action lawsuit settlement reportedly provides for the creation of a Qualified Settlement Fund of $16,500,000, which amount, after deduction for any Administrative Expenses, Taxes, Tax Expenses, Court-approved Attorneys’ Fees and costs, Class Representatives’ Compensation, and other expenses (the “Net Settlement Amount”) will be allocated to Settlement Class Members, in accordance with the settlement agreement.

According to the Caterpillar class action settlement notice, in order to be eligible for a distribution from the Net Settlement Amount, you must either be a (1) “Current Participant” (i.e., a Settlement Class Member who participated in one or more of the Plans during the Class Period and on September 10, 2009 had an Active Account in one or more of the Plans); (2) an “Authorized Former Participant” (i.e., a “Former Participant” who participated in one or more of the Plans during the Class Period and on September 10, 2009 did not have an Active Account in one or more of the Plans and who submitted a completed, satisfactory Former Participant Claim Form by the deadline), or (3) a beneficiary, alternate payee or attorney-in-fact of a Current Participant or Former Participant.

The Caterpillar 401(k) Plan, the Caterpillar Inc. Tax Deferred Savings Plan, Caterpillar Inc. Tax Deferred Retirement Plan, and the Solar Turbines Savings and Investment Plan class action settlement also reportedly provides that Caterpillar has agreed:

• not to engage any investment consultant as an investment manager for the Plans for at
  least 2 years and up to 5 years, unless the Independent Monitor determines that it is prudent to so engage any such investment consultant;
• to provide Plan participants with an Annual Disclosure regarding fees charged to their accounts for 2 years;
• not to offer retail mutual funds as core investment options in the Plans for at least 2 years and up to 5 years, unless the Independent Monitor determines that it is prudent to offer such funds as core investment options in the Plans;
• to continue to limit the level of cash or short-term investments in the Caterpillar Stock Fund for 2 years, unless the Independent Monitor determines that it is prudent to discontinue this restriction;
• not to set the recordkeeping fees paid to the Plans’ recordkeeper on a percentage of assets basis for at least 2 years and up to 5 years, unless the Independent Monitor determines that it is
  prudent to do so, except that the Plans may allocate recordkeeping expenses to participants on a percentage of assets basis;
• to allow an Independent Monitor to review the Plans’ IRS Forms 5500, Plan documents, Plan amendments, Summary Plan Descriptions, Summaries of Material Modifications, new service provider contracts such as for recordkeeping services, and the new, Annual Disclosures to Plan participants, to make sure the Plans are following the Settlement Agreement and not acting in
  a manner that is clearly inconsistent with their fiduciary duties; and
• to conduct a request for proposal (RFP) for recordkeeping services when the current contract with Hewitt Associates expires in no later than 2012. The time period for some of Caterpillar’s 2-year promises may be extended by an additional 2 years, under the circumstances provided by the Settlement Agreement.

The Caterpillar ERISA class action lawsuit settlement class reportedly consists of:

(a) All persons who, at any time between July 1, 1992 and September 10, 2009, inclusive, had an account in one or more of the following Plans — the Caterpillar 401(k) Plan, the Caterpillar Inc. Tax Deferred Savings Plan, Caterpillar Inc. Tax Deferred Retirement Plan, and the Solar Turbines Savings and Investment Plan — and their beneficiaries, alternate payees or attorneys-in-fact who are or become entitled to any portion of such an account; provided, however, that the Settlement Class shall not include: (b) any Defendant, or member of the Benefit Funds Committee of Caterpillar Inc. or the Investment Plan Committee of Caterpillar Inc. between July 1, 1992 and September 10, 2009, and as to each person within the scope of clause (b), his/her immediate family members, beneficiaries, alternate payees or attorneys-in-fact.

The deadline to object to the Caterpillar ERISA class action settlement is reportedly July 13, 2010.

The Court is reportedly scheduled to hold a settlement Fairness Hearing at 11 a.m. on August 12, 2010, at the United States District Court for the Central District of Illinois, 122 U.S. Courthouse, 100 N.E. Monroe Street, Peoria Illinois, 61602, in Courtroom D (Judge Joe Billy McDade) to consider whether the Caterpillar Settlement is fair, reasonable, and adequate.

For more information on the Caterpillar ERISA class action lawsuit settlement and/or for updates on the Caterpillar class action settlement, visit the Caterpillar ERISA settlement website:

caterpillarerisasettlement.com

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