EXHIBIT 10 iii(b)
IR DIRECTOR DEFERRED COMPENSATION
AND STOCK AWARD PLAN
[As Amended and Restated Effective January 1, 2001]
TABLE OF CONTENTS
SECTION 1 - STATEMENT OF PURPOSE 1
SECTION 2 - DEFINITIONS
2.1 Account Balance 2
2.2 Beneficiary 2
2.3 Beneficiary Designation Form 2
2.4 Board 2
2.5 Conversion Account 2
2.6 Deferral Account 2
2.7 Deferral Amount 2
2.8 Deferred IR Stock Award Account 3
2.9 Election Form 3
2.10 Fees 3
2.11 Investment Option Subaccounts 3
2.12 IR Stock 3
2.13 IR Stock Account 3
2.14 Participant 3
2.15 Plan Year 3
2.16 Retirement 4
2.17 Return 4
2.18 Supplemental Contribution 4
2.19 Supplemental Contribution Account 4
2.20 Trust 4
SECTION 3 - PARTICIPATION, DEFERRAL ELECTION AND INVESTMENT
ELECTION
3.1 Participation and Deferral Election 5
3.2 Investment Election 6
SECTION 4 - VESTING
4.1 Deferral Amounts 7
4.2 Supplemental Contributions 7
4.3 Conversion Account 7
4.4 Deferred IR Stock Award Account 7
SECTION 5 - ACCOUNTS AND VALUATIONS
5.1 Deferral Accounts 8
5.2 Supplemental Contribution Accounts 9
5.3 IR Stock Accounts 9
5.4 Deferred IR Stock Award Amount 11
5.5 Deferred Amounts upon Termination of the Retirement
Plan 12
5.6 Conversion of Deferred Compensation Account Balances 12
5.7 Valuation of Account Balance in Event of Change in
Control 13
5.8 Changes in Capitalization 13
5.9 Accounts are Boookkeeping Entries 13
SECTION 6 - DISTRIBUTON OF ACCOUNTS
6.1 Termination, Retirement and Death 15
6.2 Scheduled Distributions 16
6.3 Form of Payments of IR Stock 18
6.4 Change in Control 18
6.5 Taxes; Withholding 20
SECTION 7 - BENEFICIARY DESIGNATION 21
SECTION 8 - AMENDMENT AND TERMINATION OF PLAN
8.1 Amendment 22
8.2 Termination of Plan 22
SECTION 9 - MISCELLANEOUS
9.1 Unsecured General Creditor 23
9.2 Entire Agreement; Successors 23
9.3 Non-Assignability 23
9.4 Authorization and Source of Shares 24
9.5 Singular and Plural 24
9.6 Captions 24
9.7 Applicable Law 24
9.8 Severability 24
IR Director Deferred Compensation and Stock Award Plan
As Amended and Restated Effective January 1, 2001
SECTION 1
STATEMENT OF PURPOSE
The purpose of the IR Director Deferred Compensation and
Stock Award Plan (the "Plan") is to further increase the
mutuality of interest between Ingersoll-Rand Company (the
"Company"), its non-employee members of the Board ("Non-
employee Directors") and stockholders by providing its Non-
employee Directors the opportunity to elect to defer receipt
of cash compensation. The Plan, originally known as the
Ingersoll-Rand Company Directors Deferred Compensation and
Stock Award Plan, became effective on January 1, 1997 and
was amended and restated effective January 1, 2001.
SECTION 2
DEFINITIONS
2.1 "Account Balance" means, for each Plan Year, a credit on
the records of the Company equal to the sum of the
value of a Participant's Deferral Account, Supplemental
Contribution Account and IR Stock Account for such Plan
Year. The Account Balance shall be a bookkeeping entry
only and shall be utilized solely as a device for the
measurement and determination of the amounts to be paid
in cash or IR Stock, as applicable, to a Participant,
or to the Participant's designated Beneficiary,
pursuant to the Plan.
2.2 "Beneficiary" means the person or persons designated as
such in accordance with Section 7.
2.3 "Beneficiary Designation Form" means the form established
from time to time by the Company that a Participant
completes and returns to the Secretary of the Company
to designate one or more Beneficiaries.
2.4 "Board" means the Board of Directors of the Company.
2.5 "Conversion Account" means the sum of all of the shares
of IR Stock credited to a Participant pursuant to
Section 5.6.
2.6 "Deferral Account" means, for each Plan Year, (i) the sum
of all of a Participant's Deferral Amounts, plus (ii)
amounts credited in accordance with all the applicable
crediting provisions of the Plan that relate to the
Participant's Deferral Account, less (iii) all
distributions made to the Participant or to the
Participant's Beneficiary pursuant to the Plan that
relate to the Participant's Deferral Account.
2.7 "Deferral Amount" means the amount of Fees actually
deferred under the Plan by the Participant pursuant to
Section 3 for any one Plan Year.
2.8 "Deferred IR Stock Award Account" means, for each Plan
Year, the sum of all of a Participant's deferred stock
award amounts pursuant to Section 5.4 and deferred
amounts upon termination of the retirement plan
pursuant to Section 5.5.
2.9 "Election Form" means the form or forms established from
time to time by the Company that a Participant
completes, signs and returns to the Secretary of the
Company to make an election under the Plan. An
Election Form also includes any other method approved
by the Company that a Participant may use to make an
election under the Plan. The terms and conditions
specified in the Election Form(s) are incorporated by
reference herein and form a part of the Plan. If there
is a conflict between the Election Form and the Plan,
the terms of the Plan shall control and govern.
2.10 "Fees" means retainer and meeting fees payable to Non-
employee Directors.
2.11 "Investment Option Subaccounts" means the separate
subaccounts, each of which corresponds to an investment
option elected by the Participant with respect to a
Participant's Deferral Accounts.
2.12 "IR Stock" means the common stock of the Company.
2.13 "IR Stock Account" means, for each Plan Year, (i) the
sum of all of a Participant's Deferral Amounts that are
deemed to be invested in IR Stock, plus (ii) amounts
credited in accordance with all the applicable
crediting provisions of the Plan that relate to the
Participant's IR Stock Account, less (iii) all
distributions made to the Participant or to the
Participant's Beneficiary pursuant to the Plan that
relate to the Participant's IR Stock Account.
2.14 "Participant" means a Non-employee Director
participating in the Plan in accordance with the
provisions of Section 3.
2.15 "Plan Year" means a calendar year.
2.16 "Retirement" means retirement in accordance with the
Board's retirement policy for Non-employee Directors.
2.17 "Return" means, for each investment option, an amount
equal to the net investment return (including changes
in value and distributions) for each such investment
option during each business day.
2.18 "Supplemental Contribution" means an additional amount
to be credited to a Participant's Supplemental
Contribution Account equal to twenty percent (20%) of
the Participant's Fees that are deferred under the Plan
for a Plan Year.
2.19 "Supplemental Contribution Account" means, for each Plan
Year, (i) the sum of all of a Participant's
Supplemental Contributions, plus (ii) amounts credited
in accordance with all the applicable crediting
provisions of the Plan that relate to the Participant's
Supplemental Contribution Account, less (iii) all
distributions made to the Participant or to the
Participant's Beneficiary pursuant to the Plan that
relate to the Participant's Supplemental Contribution
Account.
2.20 "Trust" means the IR Grantor Trust Agreement, dated as
of January 1, 2001 between the Company and the trustee
named therein, as amended from time to time.
SECTION 3
PARTICIPATION, DEFERRAL ELECTION AND INVESTMENT ELECTION
3.1 Participation and Deferral Election. Non-employee
Directors may elect to participate in the Plan for a
given Plan Year by filing a completed Election Form for
the Plan Year in the manner prescribed by the Secretary
of the Company. The Election Form must specify the
percentage or dollar amount of any Deferral Amount
otherwise payable during such Plan Year that will be
deferred under the Plan. Notwithstanding anything to
the contrary, at the Non-employee Director's direction,
an election to participate in the Plan for a given Plan
Year may continue from Plan Year to Plan Year unless a
written request to modify or terminate that election
for a subsequent period is submitted to the Secretary
of the Company on or before the date 15 days prior to
the beginning of the subsequent Plan Year. Any
election to defer a Deferral Amount is irrevocable upon
the filing of the Election Form, and must be properly
completed and filed no later than the November 30
immediately preceding such Plan Year, or, with respect
to a new Non-employee Director, before the effective
date of his or her election to the Board, or such other
date as the Secretary of the Company may specify. A
Non-employee Director who fails to file a properly
completed Election Form by such date will be ineligible
to defer a Deferral Amount under the Plan for the
following Plan Year. In addition, the Company may
establish from time to time such other enrollment
requirements as it determines are necessary or proper.
If the Company determines in good faith that a
Participant no longer qualifies as a Non-employee
Director, the Company shall have the right to (i)
terminate any deferral election the Participant has
made for the remainder of the Plan Year in which the
Participant's membership status changes, (ii) prevent
the Participant from making future deferral elections
and/or (iii) immediately distribute the Participant's
then vested Account Balances, Conversion Account and
Deferred IR Stock Award Account and terminate the
Participant's participation in the Plan.
3.2 Investment Election. In accordance with procedures
established by the Company, prior to the time a
Participant's Deferral Amounts are credited to a
Participant's Deferral Account pursuant to Section 5.1,
the Participant shall designate, on an Election Form,
the types of investment options in which the
Participant's Deferral Amounts will be deemed to be
invested for purposes of determining the amount of
earnings to be credited to the Participant's Deferral
Account and, with respect to Deferral Amounts that are
designated by the Participant to be deemed to be
invested in IR Stock, the IR Stock Account.
Subject to Section 5.3, in making the designations
pursuant to this Section, the Participant may specify
that all or any portion of the Participant's Deferral
Amount be deemed to be invested, in whole percentage
increments, in one or more of the types of investment
options provided under the Plan. A Participant may
change the designation made under this Section with
respect to prior and/or future Deferral Amounts by
filing an Election Form no later than the time
specified by the Secretary of the Company, to be
effective as of the first business day of the following
month. If a Participant fails to elect a type of
investment option under this Section, he or she shall
be deemed to have elected the investment option
designated by the Company as the default investment
option.
SECTION 4
VESTING
4.1 Deferral Amounts. A Participant shall be fully vested in
his or her Deferral Account.
4.2 Supplemental Contributions. A Participant shall vest in
his or her Supplemental Contribution Account on the
earliest of: (i) the fifth anniversary of the date the
Supplemental Contribution is credited to the
Participant's Supplemental Contribution Account; (ii)
the date of the Participant's cessation of service on
the Board by reason of Retirement or death; (iii) a
Change in Control pursuant to Section 6.4; or (iv) a
termination of the Plan pursuant to Section 8.2.
4.3 Conversion Account. A Participant shall be fully vested
in his or her Conversion Account.
4.4 Deferred IR Stock Award Account. A Participant shall be
fully vested in his or her Deferred IR Stock Award
Account.
SECTION 5
ACCOUNTS AND VALUATIONS
5.1 Deferral Accounts. The Company shall establish and
maintain a separate Deferral Account for each
Participant for each Plan Year. All Deferral Amounts,
other than Deferral Amounts that are deemed, at the
Participant's election, to be invested in IR Stock
shall be credited to the Participant's Deferral Account
on the date when the Deferral Amount would otherwise be
paid to the Participant. All Deferral Amounts that are
deemed, at the Participant's election, to be invested
in IR Stock shall be credited to the Participant's IR
Stock Account as described in Section 5.3.
Each Participant's Deferral Accounts shall be divided
into Investment Option Subaccounts. A Participant's
Deferral Accounts shall be credited as follows:
(a) On the day a Deferral Amount is credited to a
Participant's Deferral Account, the Administrative
Committee shall credit the Investment Option Subaccounts
of the Participant's Deferral Account with an amount
equal to the Participant's Deferral Amount in accordance
with the Participant's Election Form; that is, the
portion of the Participant's Deferral Amount that the
Participant has elected to be deemed to be invested in a
certain type of investment option shall be credited to
the Investment Option Subaccount corresponding to that
investment option, and
(b) Each business day, each Investment Option Subaccount of
a Participant's Deferral Account shall be adjusted
for earnings or losses in an amount equal to that
determined by multiplying the balance credited to such
Investment Option Subaccount as of the prior day plus
contributions credited that day to the Investment Option
Subaccount by the Return for the corresponding investment
option selected by the Company.
5.2 Supplemental Contribution Accounts. The Company shall
establish and maintain a separate Supplemental
Contribution Account for each Plan Year for each
Participant who receives a Supplemental Contribution
for such Plan Year. All Supplemental Contributions
shall be credited to the Participant's Supplemental
Contribution Account on the same date that the
Participant's Deferral Amount for which the
Supplemental Contribution is being made is credited to
the Participant's Deferral Account pursuant to Section
5.1. Notwithstanding anything to the contrary, a
Participant may not designate the investment of
Supplemental Contributions and all of a Participant's
Supplemental Contributions shall be deemed to be
invested in, and shall remain deemed to be invested in,
IR Stock in the Participant's Supplemental Contribution
Account until distributed from the Plan.
All Supplemental Contributions shall be credited to a
Participant's Supplemental Contribution Account in
units or fractional units. The value of each unit
shall be determined each business day and shall equal
the closing price of one share of IR Stock on the New
York Stock Exchange-Composite Tape. On each date that
Supplemental Contributions are credited to a
Participant's Supplemental Contribution Account, the
number of units to be credited shall be determined by
dividing the amount of such Supplemental Contributions
by the value of a unit on such date.
Dividends paid on IR Stock shall be reflected in a
Participant's Supplemental Contribution Account by the
crediting of additional units or fractional units.
Such additional units or fractional units shall equal
the value of the dividends based upon the closing price
of one share of IR Stock on the New York Stock Exchange-
Composite Tape on the date such dividends are paid.
5.3 IR Stock Accounts. The Company shall establish and
maintain a separate IR Stock Account for each Plan Year
for each Participant who elects to have all or a
portion of his of her Deferral Amounts for such Plan
Year invested in IR Stock. All Deferral Amounts that
are deemed, at the Participant's election, to be
invested in IR Stock shall be credited to the
Participant's IR Stock Account on the date when the
Deferral Amount would otherwise be paid to the
Participant. Notwithstanding anything to the contrary,
IR Stock credited to a Participant's IR Stock Account
may not be designated by the Participant to be deemed
to be invested in any other investment option and shall
remain invested in IR Stock in such IR Stock Account
until distributed from the Plan. A Participant's IR
Stock Accounts shall be credited as follows:
(a) On the day a Deferral Amount is credited to a
Participant's IR Stock Account, the Company shall
credit the IR Stock Account with an amount equal
to the Participant's Deferral Amount.
(b) All Deferral Amounts deemed to be invested in IR
Stock in accordance with the Participant's
Election Form shall be credited to a Participant's
IR Stock Account in units or fractional units.
The value of each unit shall be determined each
business day and shall equal the closing price of
one share of IR Stock on the New York Stock
Exchange-Composite Tape. On each date that
Deferral Amounts are credited to the Participant's
IR Stock Account, the number of units to be
credited shall be determined by dividing the
amount of such Deferral Amounts by the value of a
unit on such date.
Dividends paid on IR Stock shall be reflected in a
Participant's IR Stock Account by the crediting of
additional units or fractional units. Such
additional units or fractional units shall equal
the value of the dividends based upon the closing
price of one share of IR Stock on the New York
Stock Exchange-Composite Tape on the date such
dividends are paid.
5.4 Deferred IR Stock Award Amount. Each Non-employee
Director shall receive an annual award on the date of
the first Board meeting after each annual meeting of
shareholders in the form of a promise by the Company to
deliver 600 shares of IR Stock, or such other amount as
may from time to time be established by resolution of
the Board. Annual awards of shares of IR Stock shall
be credited to the Deferred IR Stock Award Account of
each Non-employee.
A Participant's Deferred IR Stock Award Accounts shall
be credited as follows:
(a) On the day an annual award of IR Stock is credited
to a Participant's Deferred IR Stock Award
Account, the Company shall credit the Deferred IR
Stock Award Account with an amount equal to the
Participant's annual award of IR Stock.
(b) All awards of IR Stock pursuant to this Section and
amounts credited pursuant to Section 5.5 shall be
credited to a Participant's Deferred IR Stock
Award Account in units or fractional units. The
value of each unit shall be determined each
business day and shall equal the closing price of
one share of IR Stock on the New York Stock
Exchange-Composite Tape. On each date that awards
of IR Stock are credited to the Participant's
Deferred IR Stock Award Account, the number of
units to be credited shall be determined by
dividing the amount of such IR Stock awarded by
the value of a unit on such date.
Dividends paid on IR Stock shall be reflected in a
Participant's Deferred IR Stock Award Account by the
crediting of additional units or fractional units.
Such additional units or fractional units shall equal
the value of the dividends based upon the closing price
of one share of IR Stock on the New York Stock Exchange-
Composite Tape on the date such dividends are paid.
5.5 Deferred Amounts upon Termination of the Retirement
Plan. The shares of IR Stock credited to the deferred
compensation accounts (such crediting having occurred
prior to the Plan's amendment and restatement effective
January 1, 2001) of the Non-employee Directors pursuant
to the resolutions adopted by the Board on November 6,
1996, with respect to the elimination of retirement
payments to Non-employee Directors shall be credited to
the Deferred IR Stock Award Account of each Non-
Employee Director as of January 1, 2001.
5.6 Conversion of Deferred Compensation Account Balances. A
Non-employee Director's cash balance in the deferred
compensation program as of December 31, 1996 was transferred
to an equivalent balance in the Plan as of January 1, 1997.
Such balance was equal to the number of shares of IR Stock,
including fractions, which could have been purchased with
such cash account balance on January 2, 1997 at the mean of
the high and low prices of a share of IR Stock on the New York
Stock Exchange - Composite Tape on such date, provided that
if no sales of shares of IR Stock were made on the New York
Stock Exchange on that date, the mean of the high and low
prices reported for the preceding day on which sales of shares
of IR Stock were made on the New York Stock Exchange.
A Non-employee Director's balance, as such balance is
described in the previous paragraph, shall be credited
to the Non-employee Director's Conversion Account as of
January 1, 2001 in units or fractional units. The
value of each unit shall be determined each business
day and shall equal the closing price of one share of
IR Stock on the New York Stock Exchange-Composite Tape.
Dividends paid on IR Stock shall be reflected in a Non-
employee Director's Conversion Account by the crediting
of additional units or fractional units. Such
additional units or fractional units shall equal the
value of the dividends based upon the closing price of
one share of IR Stock on the New York Stock Exchange-
Composite Tape on the date such dividends are paid.
5.7 Valuation of Account Balance in Event of Change in
Control. In the event of a Change in Control pursuant
to Section 6.4, the value of each IR Stock unit deemed
to be invested in each IR Stock Account, Supplemental
Contribution Account, Conversion Account and Deferred
IR Stock Award Account shall be equal to the highest
Fair Market Value (as such term is defined in the
Company's Incentive Stock Plan of 1998) of one share of
IR Stock during the 60 days preceding the date on which
the Change in Control occurs.
In the event of a Change in Control pursuant to Section
6.4, the value of a Participant's Account Balances for
all investment options other than IR Stock shall be
determined as of the end of the month during which the
Change in Control occurs.
5.8 Changes in Capitalization. If there is any change in the
number or class of shares of IR Stock through the
declaration of a stock dividend or other extraordinary
dividends, or recapitalization resulting in stock
splits, or combinations or exchanges of such shares or
in the event of similar corporate transactions, the
units in each Participant's IR Stock Account,
Supplemental Contribution Account, Conversion Account
and Deferred IR Stock Award Account shall be equitably
adjusted to reflect any such change in the number or
class of issued shares of IR Stock or to reflect such
similar corporate transaction.
5.9 Accounts are Bookkeeping Entries. Notwithstanding any
other provision of the Plan that may be interpreted to
the contrary, the investment options, including IR Stock,
are to be used for measurement purposes only, and a
Participant's election of any such investment option, the
allocation to his or her Account Balances, Conversion Account
and Deferred IR Stock Award Account thereto, the calculation
of additional amounts and the crediting or debiting of such
amounts to a Participant's Account Balances, Conversion Account
and Deferred IR Stock Award Account shall not be considered or
construed in any manner as an actual investment in any such
investment option. In the event that the Company or
the trustee of the Trust, in its own discretion, decides to
invest funds in any or all of the investment options, no
Participant shall have any rights in or to such investments
themselves. Without limiting the foregoing, a Participant's
Account Balances, Conversion Account and Deferred IR Stock
Award Account shall at all times be a bookkeeping entry only
and shall not represent any investment made on the Participant's
behalf by the Company or the Trust. The Participant shall at
all times remain an unsecured creditor of the Company.
SECTION 6
DISTRIBUTION OF ACCOUNTS
6.1 Termination, Retirement and Death. A Participant who
terminates as a member of the Board, reaches Retirement
or dies shall be paid his or her vested Account
Balances, Conversion Account and Deferred IR Stock
Award Account (and after his or her death to his or her
Beneficiary) in annual installments over ten (10) years
beginning as soon as administratively practicable in
the year following the Participant's termination,
Retirement or death unless an optional form of benefit
payment is elected in accordance with the next
sentence. For each Plan Year's Account Balance and for
his or her Conversion Account and Deferred IR Stock
Award Account the Participant may elect an optional
form of benefit payment from among the following:
(1) A lump sum distribution to be paid as soon as
administratively practicable in the year following
the Participant's termination, Retirement or death;
(2) Annual installments over five (5) years commencing
as soon as administratively practicable in the year
following the Participant's termination, Retirement
or death;
(3) Annual installments over fifteen (15) years commencing
as soon as administratively practicable in the year
following the Participant's termination, Retirement
or death; and
(4) A lump sum distribution which shall be paid as soon as
administratively practicable in the year specified by
the Participant on the Election Form. Such specified
time shall be no less than one (1) year and no more
than five (5) years following termination, Retirement
or death.
A Participant may elect, on an Election Form, to change
the form and/or extend the timing of a distribution
under this Section that he or she has previously
elected to any other form of distribution or time
permitted under this Section, provided that no such
election shall be effective unless it is made at least
one (1) year before the Participant's termination,
Retirement or death, as applicable.
In the event of the Participant's termination,
Retirement or death prior to the elected date for one
or more scheduled distributions pursuant to Section
6.2, the portion of the Participant's Account Balance
associated with such distribution(s) shall be paid to
the Participant (and after his or her death to his or
her Beneficiary) in the same form as elected by the
Participant under this Section.
Notwithstanding any provision of the Plan to the
contrary, if a Participant terminates, has reached
Retirement or dies while receiving annual installments
pursuant to Section 6.2, such annual installments shall
continue to be paid to the Participant (and after his
or her death to his or her Beneficiary) in the same
manner as if the Participant had not terminated
employment, reached Retirement or died.
All distributions under this Section shall be made on a
pro rata basis from the Participant's Account Balances,
Conversion Account and Deferred IR Stock Award
Accounts.
6.2 Scheduled Distributions. A Participant may elect, on an
Election Form, to receive a distribution of all or a
portion of his or her Deferral Account and IR Stock
Account with respect to a Plan Year(s) while still a
Non-employee Director. A Participant's election for a
distribution under this Section shall be permitted only
if the date specified on the Election Form by the
Participant for such distribution (in the event of a
lump sum) or the commencement of such distribution (in
the event of annual installments) is no earlier than
two (2) years from the last day of the Plan Year for
which the portion of the Deferral Account and IR Stock
Account to be distributed is actually deferred. A
Participant may elect, on an Election Form, to extend
the date for any distribution under this Section with
respect to any Plan Year, provided such election occurs
at least one year before the date of distribution most
recently elected for that Plan Year by the Participant
and the extension is for a period of not less than two
(2) years after the date of distribution most recently
elected for that Plan Year by the Participant. The
Participant shall have the right to extend the date for
any distribution under this Section for a Plan Year
twice.
At the time an election for a distribution under this
Section is made, the Participant shall also elect, on
the Election Form, the form of payment of the
distribution. The Participant shall elect either (i) a
lump sum payment to be paid as soon as soon as
administratively practicable in the year specified by
the Participant on the Election Form or (ii) annual
installments over two (2), three (3), four (4) or five
(5) years beginning as soon as administratively
practicable in the year specified by the Participant on
the Election Form.
A Participant may elect, on an Election Form, to change
the form of payment for any distribution under this
Section for any Plan Year to any other form of payment
permitted under this Section, provided such election
occurs at least one (1) year before the date of
distribution previously elected by the Participant.
All distributions under this Section shall be made on a
pro rata basis from the Participant's Deferral
Account(s) and IR Stock Account(s), as applicable.
6.3 Form of Payments of IR Stock. Except as provided in
Sections 6.4, all amounts in a Participant's IR Stock
Account, Supplemental Contribution Account, Conversion
Account and Deferred IR Stock Award Account payable to
a Participant or Beneficiary under the Plan shall be
paid in IR Stock, with one share distributed for each
unit. All fractional shares shall be payable in cash.
All distributions from the Plan that are to be paid in
a specified number of annual installments shall be paid
so that the amount of each annual installment is
determined by dividing the total remaining number of
units in the Participant's Account Balance, Conversion
Account and Deferred IR Stock Award Account to be paid
in annual installments, by the number of years of
annual installments remaining.
6.4 Change in Control. In the event of a Change in Control, as
defined in this Section, all Account Balances, the Conversion
Account and the Deferred IR Stock Account shall be valued
pursuant to Section 5.7, and shall be distributed in cash in a
lump sum within forty five (45) days following the Change in
Control.
For purposes hereof,
(1)"Affiliate" shall mean, when used to indicate a
relationship with a specified person, a person that
directly, or indirectly through one or more
intermediaries, controls, or is controlled by, or is
under common control with, such specified person.
(2)"Associate" shall mean, when used to indicate a
relationship with a specified person, (a) any
corporation, partnership, or other organization of
which such specified person is an officer or partner,
(b) any trust or other estate in which such specified
person has a substantial beneficial interest or as to
which such specified person serves as trustee or in a
similar fiduciary capacity, (c) any relative or spouse
of such specified person, or any relative of such
spouse who has the same home as such specified person,
or who is a Director or officer of the Company or any
of its parents or subsidiaries, and (d) any person who
is a director, officer, or partner of such specified
person or of any corporation (other than the Company or
any wholly-owned subsidiary of the Company),
partnership or other entity which is an Affiliate of
such specified person.
(3)"Beneficial Owner" shall have the same meaning as
such term is defined by Rule 13d-3 under the Securities
Exchange Act of 1934 (or any successor provision at the
time in effect); provided, however, that any
individual, corporation, partnership, group,
association, or other person or entity which has the
right to acquire any of the Company's outstanding
securities entitled to vote generally in the election
of directors at any time in the future, whether such
right is contingent or absolute, pursuant to any
agreement, arrangement, or understanding or upon
exercise of conversion rights, warrants or options, or
otherwise, shall be deemed the Beneficial Owner of such
securities.
(4)"Change in Control" shall mean the occurrence of
either of the following:
(a)any individual, corporation, partnership,
group, association or other person or entity, together
with its Affiliates and Associates (other than a
trustee or other fiduciary holding securities under an
employee benefit plan of the Company), is or becomes
the Beneficial Owner of securities of the Company
representing 20 percent or more of the combined voting
power of the Company's then outstanding securities
entitled to vote generally in the election of
directors, unless a majority of the Continuing
Directors determines in their sole discretion that, for
purposes of this Plan, a Change in Control has not
occurred;
(b)the Continuing Directors shall at any time fail
to constitute a majority of the members of the Board;
or
(c)any sale, lease, exchange or other transfer
(in one transaction or a series of related
transactions) of all, or substantially all, of the
assets of the Company, other than any sale, lease,
exchange or other transfer to any person or entity
where the Company owns, directly or indirectly, at
least 80 percent of the outstanding voting securities
of such person or entity after any such transfer.
(5)"Continuing Director" shall mean a Director who
either was a member of the Board on April 24, 1998 or
who became a member of the Board subsequent to such
date and whose election, or nomination for election by
the Company's shareholders, was Duly Approved by the
Continuing Directors of the Board at the time of such
nomination or election, either by a specific vote or by
approval of the proxy statement issued by the Company
on behalf of the Board in which such person is named as
a nominee for Director, provided, however, that no
individual shall be considered a Continuing Director if
such individual initially assumed office as a result of
either an actual or threatened "Election Contest" (as
described in Rule 14a-11 promulgated under the
Securities Exchange Act of 1934, as amended) or other
actual or threatened solicitation of proxies or
consents other than by or on behalf of the Board (a
"Proxy Contest"), including by reason of any agreement
intended to avoid or settle any Election Contest or
Proxy Contest.
(6)"Duly Approved by the Continuing Directors" shall
mean an action approved by the vote of at least a
majority of the Continuing Directors then on the Board,
except, if the votes of such Continuing Directors in
favor of such action would be insufficient to
constitute an act of the Board if a vote by all of its
members were to have been taken, then such term shall
mean an action approved by the unanimous vote of the
Continuing Directors then on the Board so long as there
are at least three Continuing Directors on the Board at
the time of such unanimous vote.
6.5 Taxes; Withholding. To the extent required by law, the
Company, or the trustee of the Trust, shall withhold
from payments made hereunder an amount equal to at
least the minimum taxes required to be withheld by the
federal or any state or local government. The amount
to be withheld and the manner in which amounts shall be
withheld shall be determined in the sole discretion of
the Company or the trustee of the Trust.
SECTION 7
BENEFICIARY DESIGNATION
A Participant shall have the right to designate a
Beneficiary(ies) to receive the Participant's Account
Balances, Conversion Account and Deferred IR Stock Award
Account in the event the Participant dies prior to receiving
all of his or her Account Balances, Conversion Account and
Deferred IR Stock Award Account. A Beneficiary designation
shall be made, and may be amended at any time, by the
Participant by filing a written designation with the
Secretary of the Company, on such form and in accordance
with such procedures as the Company shall establish from
time to time. A Participant may change the designated
Beneficiary under this Plan at any time by providing such
designation in writing to the Secretary of the Company.
If a Participant fails to designate a Beneficiary(ies), or
if all designated Beneficiaries predecease the Participant,
the Participant's Beneficiary(ies) shall be deemed to be the
Participant's estate. If the Company is unable to determine
a Participant's Beneficiary or if any dispute arises
concerning a Participant's Beneficiary, the Company may pay
benefits to the Participant's estate. Upon such payment,
the Company shall have no further liability hereunder.
If any distribution to a Beneficiary is to be made in annual
installments, and the Beneficiary dies before receiving all
such installments, the value of the remaining installments,
if any, shall be paid to the estate of the Beneficiary in a
lump sum.
SECTION 8
AMENDMENT AND TERMINATION OF PLAN
8.1 Amendment. The Plan may, at any time and from time to
time, be amended without the consent of any Participant
or Beneficiary, by the Board (or an authorized
Committee of the Board); provided, however, that no
amendment shall reduce any benefits accrued under the
terms of the Plan prior to the date of amendment.
8.2 Termination of Plan
a. Company's Right to Terminate. The Board (or an
authorized Committee of the Board) may terminate
the Plan at any time and for any reason.
b. Payments Upon Termination. Upon any termination
of the Plan under this Section, Fees, Supplemental
Contributions and stock awards pursuant to Section
5.4 shall prospectively cease to be deferred and,
with respect to all such amounts previously
deferred, the Company shall pay to the
Participant, in a lump sum, unless otherwise
provided by the Board at the time of termination,
as soon as administratively practicable, the value
of the Participant's Account Balances, Conversion
Account and Deferred IR Stock Award Accounts.
SECTION 9
MISCELLANEOUS
9.1 Unsecured General Creditor. Benefits under the Plan
shall be payable by the Company out of its general
funds. The Company shall have the right to establish a
reserve or make any investment for the purposes of
satisfying its obligations hereunder for payment of
benefits at its discretion, provided, however, that no
Participant or Beneficiary shall have any interest in
such investment or reserve. To the extent that any
person acquires a right to receive benefits under this
Plan, such rights shall be no greater than the right of
any unsecured general creditor of the Company. No
Participant shall have any of the rights or privileges
of a stockholder of the Company under the Plan,
including as a result of the crediting of units to the
Participant's IR Stock Account, Supplemental
Contribution Account, Conversion Account or Deferred IR
Stock Award Account, except at such time as
distribution is actually made from the Participant's IR
Stock Account, Supplemental Contribution Account,
Conversion Account or Deferred IR Stock Award Account,
as applicable.
9.2 Entire Agreement; Successors. The Plan, including the
Election Form and any subsequently adopted amendments
to the Plan or Election Form, shall constitute the
entire agreement or contract between the Company and
any Participant regarding this Plan. There are no
covenants, promises, agreements, conditions or
understandings, either oral or written, between the
Company and any Participant relating to the subject,
matter hereof, other than those set forth herein. This
Plan and any amendment hereof shall be binding on the
Company and the Participants and, their respective
heirs, administrators, trustees, successors and
assigns, including but not limited to, any successors
of the Company by merger, consolidation or otherwise by
operation of law, and on all designated Beneficiaries
of the Participant.
9.3 Non-Assignability. To the extent permitted by law, the
right of any Participant or any Beneficiary in any
benefit hereunder shall not be subject to attachment or
any other legal process for the debts of such
Participant or Beneficiary; nor shall any such benefit
be subject to anticipation, alienation, sale, transfer,
assignment or encumbrance.
9.4 Authorization and Source of Shares. Shares of IR Stock
necessary to meet the obligations of the Plan have been
reserved and authorized pursuant to resolutions adopted
by the Board on December 4, 1996, and additional shares
of IR Stock shall be reserved and authorized for
delivery under the Plan from time to time. These
shares of IR Stock may be provided from newly-issued or
treasury shares.
9.5 Singular and Plural. As the context may require, the
singular may be read as the plural and the plural as
the singular.
9.6 Captions. The captions to the articles, sections, and
paragraphs of this Plan are for convenience only and
shall not control or affect the meaning or construction
of any of its provisions.
9.7 Applicable Law. This Plan shall be governed and
construed in accordance with the laws of the State of
New Jersey.
9.8 Severability. If any provisions of this Plan shall, to any
extent, be invalid or unenforceable, the remainder of this Plan
shall not be affected thereby, and each provision of this Plan
shall be valid and enforceable to the fullest extent permitted by
law.
IN WITNESS WHEREOF, the Company has caused this amendment and
restatement to be executed by its duly authorized representative
as of January 1, 2001.
INGERSOLL-RAND COMPANY
By: s/s Donald H. Rice
Donald H. Rice
Senior Vice President
Global Business Services and Human
Resources