Employee Stock Purchase Plan

Employee Stock Purchase Plan

The Employee Stock Purchase Plan is one of several programs we offer to help empower our employees to achieve their full financial potential. The ESPP gives you the opportunity to purchase shares of Cummins stock using after-tax payroll deductions.

What is ESPP?

The Employee Stock Purchase Plan gives you the opportunity to become a Cummins shareholder with the company will provide 25% matching contribution – increasing the value of your purchase. Read on to find out more and how to take advantage of this valuable benefit.

Benefits of the ESPP

There are many advantages of purchasing Cummins stock through the ESPP:

• You create a personal stake in Cummins’ financial success
• The company will provide a 25% matching contribution of your total purchase
• There are no brokerage fees on the purchase of shares
• It’s versatile, allowing you to access funds immediately or hold for the longer term with flexibility to modify your contributions and stop or start enrollment as needed
• You can elect to reinvest your dividends or receive it as cash
• You can change your contribution level or stop (or restart) purchasing shares any time during the year.

How do I enroll in ESPP?

Enroll at any time using OneSource Self Service. You will also use OneSource to change your contribution level or discontinue participation. After the initial stock purchase is made, you will receive a link to activate your account at Morgan Stanley.

Permanent active employees are eligible to participate in the ESPP and can elect to have 1 – 15% of your base salary withheld each pay period on an after-tax basis to purchase shares. Base salary for the ESPP includes commissions and any earnings paid in lieu of base salary or hourly wages such as vacation or holiday pay.

How does the purchase process work?

The employee contributions are withheld and combined with the Cummins match for the monthly purchase. The shares are purchased each month on the 5th for US participants through our third-party stock broker, Morgan Stanley. There are no brokerage fees, service charges, or administrative fees assessed until shares are sold.

• Note that if the 5th fall on a day when the market is closed, purchases will occur on the preceding business day.

Sales Considerations

• Sale Process: You must use your Morgan Stanley account to sell your shares. You can sell your shares online or by contacting Morgan Stanley by phone. You can watch a video on how to set up your online account here.
• Employee Responsibilities: You are responsible for commission fees at the time of sale. The fees you pay will be based on the number of shares sold. You are also responsible for taxes on any gains/losses as a result of your sale.
• Sale Proceeds: Proceeds from the sale of shares are delivered via US mail. For an additional fee, you can have the funds wired.
• Additional Information: If you leave Cummins, you will continue to be able to sell your shares through your Morgan Stanley account.

Tax Implications

There are various taxation points you should be aware of:

• The 25% employer contribution is generally subject to income and social security taxes.
• Dividends received are subject to dividend tax when you file your tax return
• Proceeds from the sale of stock may be subject to additional taxes at sale pursuant to local tax legislation.
• You need to complete the required tax certification through Morgan Stanley.

Who do I contact for help?

 Participation in the Cummins ESPP is voluntary. It is your decision to participate and there is no guarantee against loss. You should give the ESPP careful consideration, including the risks involved, before deciding whether or not to participate. If you are unsure, seek independent advice before participating. There are risks associated with investing in shares. The value of shares you purchase could go up or down. The value may also be influenced by changes in the stock market. Additional risks and uncertainties not presently known to us, or that we currently believe to be immaterial, may also adversely affect our business and, accordingly, the price of our shares. In addition, past financial performance of the Company may not be a reliable indicator of future performance. Historical trends should not be used to anticipate results or trend in future periods.

Am I able to designate a beneficiary for the shares I purchase through the ESPP Program?

No. Stock account holders cannot designate beneficiaries for ESPP.

Downloads

Data Protection Authorization Form for Employee Stock Purchase Plan
Morgan Stanley Registration Guide
ESPP Withholding and Investment Authorization Belgium
ESPP Summary
ESPP Plan Document
ESPP FAQs
ESPP Enrollment Guide – OneSource Self Services