Stockholder Proposal re: Sale of Equipment to Israel

Sale of Equipment to Israel

2005 – Caterpillar Inc.

WHEREAS;

Caterpillar's Code of Worldwide Business Conduct states that “Caterpillar accepts the responsibilities of global citizenship” and recognizes that Caterpillar's “commitment to financial success must also take into account social, economic, political, and environmental priorities”;

The Code of Worldwide Business Conduct recognizes that “Caterpillar prospers not only by our customers' acceptance of our products and services, but also by the public's acceptance of our conduct”;

Through the Code of Worldwide Business Conduct Caterpillar has made a commitment to “respond to public inquiries … with prompt, courteous, honest answers”;

It is a matter of public record that since 1967, the Israeli government has used Caterpillar equipment, including specially modified D9 and D10 bulldozers to destroy over 7,000 buildings in the West Bank and Gaza Strip, leaving 50,000 men, women and children homeless;

It is a matter of public record that since September 2000, the Israeli government has used Caterpillar equipment to destroy more than 3,000 homes, hundreds of public buildings and private commercial properties and vast areas of agricultural land.

It is a matter of public record that the Israel Defense Forces (IDF) have used Caterpillar equipment to uproot hundreds of thousands of olive trees as well as orchards of dates, prunes, lemons and oranges causing widespread economic hardship and environmental degradation in rural areas of Palestine;

Caterpillar's involvement in the above-described abuses has attracted the attention of the international community: Amnesty International has issued a call to Caterpillar to “take measures - within the company sphere of influence - to guarantee that its bulldozers are not used to commit human rights violations, including the destruction of homes, land and other properties” and the Office of the UN High Commissioner on Human Rights has written to the Caterpillar president that “allowing the delivery of your. . . bulldozers to the Israeli army. . . in the certain knowledge that they are being used for such action, might involve complicity or acceptance on the part of your company to actual and potential violations of human rights ...”;

Public campaigns in the United States and Europe are advocating boycotts of Caterpillar industrial and consumer products;

Spokesmen for Caterpillar, Inc. have acknowledged that Caterpillar is aware of the IDF's use of Caterpillar equipment to destroy civilian homes, infrastructure and agricultural resources but has, nevertheless, refused either to condemn these practices or to take actions necessary to halt the sale or transfer of Caterpillar equipment to the IDF;

THEREFORE BE IT RESOLVED: The shareholders request that the Board of Directors appoint a committee of outside directors to issue a report, omitting confidential information and prepared at reasonable cost, by October 1, 2005, addressing the following:

The process for review and evaluation used to determine whether the sale (either directly or through intermediaries, including agencies of the United States government) of Caterpillar equipment to the IDF comports with Caterpillar's Code of Worldwide Business Conduct.