EXHIBIT
10(iii)(f)
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AGREEMENT
AGREEMENT made as of July 19, 1983, between
INGERSOLL-RAND COMPANY, a New Jersey corporation (the "Company"),
and (the "Employee"). Unless otherwise
indicated, terms used herein and defined in Schedule A hereto
shall have the meanings assigned to them in said Schedule.
The Company and the Employee agree as follows:
1. OPERATION OF AGREEMENT.
This Agreement shall be effective immediately upon its
execution and shall continue thereafter from year to year unless
terminated as of any anniversary of the date hereof by either
party upon written notice to the other party given at least 60
days, but not more than 90 days, prior to such anniversary date.
None of the provisions of this Agreement shall become operative
unless and until a Change of Control Event has occurred and,
following such a Change of Control Event, this Agreement shall
terminate only upon the expiration of the Employment Term (as
defined below) or as otherwise expressly provided herein,
notwithstanding the first sentence of this paragraph 1.
2. EMPLOYMENT TERM.
The term of employment of the Employee pursuant to this
Agreement (the "Employment Term") shall begin on the date of any
Change of Control Event (the "Effective Date") and shall end on
the earlier of the fifth anniversary of the Effective Date or the
death or Permanent Disability of the Employee.
3. EMPLOYEE'S POSITION AND RESPONSIBILITIES.
The Employee will continue to serve the Company during
the Employment Term in the same capacity as he serves the Company
immediately prior thereto, or in such other comparable executive,
administrative or management capacities, requiring substantially
equivalent expertise and responsibility, as the Board of
Directors or chief executive officer of the Company shall
determine and deem suitable and in the best interests of the
Company.
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During the Employment Term the Employee shall devote
his entire business time and attention exclusively to the
business and affairs of the Company and shall use his best
efforts to promote the interests of the Company. The
participation of the Employee in outside directorships and civic
activities not otherwise inconsistent with Company policy shall
not be deemed a violation of this paragraph 3.
4. COMPENSATION AND OTHER BENEFITS.
The Company and the Employee agree that, upon the
occurrence of any Change of Control Event, the Employee shall
receive a basic annual salary, bonus and fringe benefits as
follows:
(a) Basic Annual Salary and Bonus. The Employee's
basic annual salary shall be at a rate not less than the
annual salary being paid to the Employee immediately prior
to The Effective Date, with such increases (but not
decreases) as may be contemplated by any salary adjustment
programs of the Company in effect immediately prior to the
Effective Date and applicable to the Employee and such
further increases as shall be determined from time to time
by the Board of Directors. In addition, the Employee shall
be entitled to receive bonus and other similar management
incentive compensation payments on terms and at levels no
less favorable than the terms and levels of any bonus or
similar management incentive compensation plan or program
applicable to the Employee immediately prior to the
Effective Date, or, if no such plan or program exists at
that time, then in an annual amount not less than the
average of the bonus and other similar management incentive
compensation payments received by (or owing to) the Employee
for the five full fiscal years immediately preceding the
Effective Date.
(b) Fringe Benefits; Business Expenses. The Employee
shall be entitled to participate in any benefit plans and
programs, including but not limited to pension (and
supplemental pension), profit-sharing, stock option, and
insurance plans (including life insurance, medical and
disability income insurance and accident and personal
liability insurance) which were applicable to him
immediately prior to the Effective Date, on terms no less
favorable than those in effect immediately prior to the
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Effective Date, and at no less than the same benefit levels
then in effect (or shall be entitled to their equivalent),
and to receive all other fringe benefits (or their
equivalent) from time to time in effect for the benefit of
any executive, management or administrative group for which
the employment position then held by the Employee entitles
the Employee to participate. The Company shall provide for
the payment of or reimburse the Employee for all travel and
other out-of-pocket expenses reasonably incurred by him in
the performance of his duties hereunder.
(c) Letter of Credit. If so requested by the Employee
at any time following the Effective Date and a Significant
Transfer, the Company shall obtain promptly, and in any
event within 60 days following such request, an irrevocable
standby letter of credit (the "Letter of Credit") in favor
of the Employee from a commercial bank or trust company in
the United States with capital, surplus and undivided
profits of at least $50,000,000. Such Letter of Credit
shall be in the amount equivalent to the undiscounted amount
of all benefits that may become payable to the Employee
pursuant to paragraph 5(f), determined on the basis of the
Employee's actuarial life expectancy as of the date of the
Employee's request, and shall provide that amounts shall be
paid to the Employee by such bank or trust company upon
certification by the Employee that such amounts are due and
payable hereunder and have not been paid by the Company.
The Company agrees that it will cause the Letter of Credit
to be maintained in full force and effect at all times until
the earlier of (i) the fifteenth anniversary of the
Effective Date, and (ii) the date on which all payments by
the Company that may be required pursuant to paragraph 5(f)
have been made. The Employee acknowledges that nothing
herein is intended to preclude the Company from contesting
the right of the Employee to retain payments received
pursuant to the Letter of Credit. In the event of a final,
nonappealable determination by a court having jurisdiction
that the Employee is not entitled to retain any payment
received pursuant to the Letter of Credit, the Employee
shall promptly reimburse the Company in an amount equal to
such payment and, in the event the Employee fails to so
reimburse the Company, an amount equal to such payment may
be credited by the Company against payments thereafter made
by the Company to the Employee pursuant to paragraph 5(f).
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(d) Management Incentive Award Plan. The Company and
the Employee further agree that immediately upon the
occurrence of any Change of Control Event, all amounts
theretofore credited to the Employee under the Company's
Management Incentive Award Plan, as amended (the "Incentive
Plan"), shall become fully vested and all such amounts
thereafter credited shall become fully vested immediately
upon such crediting.
5. PAYMENTS AND BENEFITS UPON TERMINATION.
Upon any Termination of the Employment Term (other than
by the Company for Cause or as a result of the death or Permanent
Disability of the Employee), the Employee's Common Stock
Equivalents under the Incentive Plan shall, for purposes of
payments pursuant thereto, be valued at the highest of (i) the
closing sale price of the Common Stock on the New York Stock
Exchange on the Effective Date, (ii) the closing sale price of
the Common Stock on the New York Stock Exchange on the date of
Termination and (iii) the highest closing sale price of the
Common Stock on the New York Stock Exchange during the 30 trading
days immediately preceding the acquisition of more than 50% of
the outstanding Common Stock by any person or group (including
affiliates of such person or group). If, as of any valuation
date, the Common Stock is not traded on the New York Stock
Exchange, valuations shall be based on the closing sale price of
the Common Stock on the principal national securities exchange on
which the Common Stock is traded or, if the Common Stock is not
traded on any national securities exchange, the closing bid price
of the Common Stock in the over-the-counter market.
The Employee shall be entitled to the following
payments and benefits upon Termination:
(a) Salary and Bonus. The Company shall remain liable
for, and shall continue to pay (on the respective payment
dates that the following otherwise would have been payable
except for Termination), for a period of three years
following Termination (or, if Termination occurs more than
24 months after the Effective Date, three years less the
amount of time that elapsed between the expiration of such
24 month period and the date of Termination): (i) the base
annual salary in effect on the date of Termination and an
annual amount equal to the average of the bonuses and
similar management incentive compensation payments received
by (or owing to) the Employee for the five full fiscal
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years immediately preceding the Effective Date; minus (ii)
any amount received pursuant to paragraph 5(f) or the
Pension Plans (as defined in paragraph 5(f)) in respect of
the period for which a payment is being made pursuant to
clause (i).
(b) Lump Sum Payment Option. In lieu of the payments
pursuant to paragraph 5(a), the Employee may elect by
written notice to the Company (given at any time prior to
notice of termination of the Employment Term by the Company
or the occurrence of any event entitling the Employee to
terminate the Employment Term for Good Reason) to receive a
lump sum settlement amount, such amount to be paid by the
Company on the thirtieth day following Termination, equal to
the excess of (i) the discounted value of the base annual
salary and bonus or similar management incentive
compensation payments the Employee would have received under
the provisions of paragraph 5(a) over (ii) the discounted
value of any amounts which the Employee is entitled to
receive pursuant to paragraph 5(f) or the Pension Plans in
respect of the periods for which payment is made under
paragraph 5(b)(i), determined by discounting such net
payments at a rate equal to the lesser of the rate (on the
date of Termination) at which the Federal Reserve Bank of
New York extends short-term adjustment credits to depository
institutions in accordance with Section 201.3 of Regulation
A under the Federal Reserve Act (or any successor provision)
or 10% per annum.
(c) Employee Benefit Plans. The Company shall
continue, for a period equal to the greater of one year
following the date of Termination or the period specified in
the applicable employee benefit plan, to cover the Employee
under those employee benefit plans (including, but not
limited to, pension, life, health and disability coverage,
but not including any severance pay plan or program other
than that provided pursuant to this Agreement) which were
applicable to him on the date of Termination at the same
benefit levels then in effect (or shall provide their
equivalent).
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(d) Employee Stock Options and SARs. The Company
shall pay to the Employee, in cash on the thirtieth day
following the date of Termination, an amount equal to the
aggregate market value (measured as of the close of trading
on the date of Termination) of 100% of the Employee's then
outstanding and unpaid stock awards under the Company's
Incentive Stock Plan of 1980 and any substantially similar
plans of the Company hereafter adopted (at which time such
stock awards shall be cancelled and of no further force or
effect). In addition, all options to purchase shares of
Common Stock of the Company ("Common Stock") and all stock
appreciation rights held by the Employee immediately prior
to Termination shall become exercisable at any time on and
after the date of Termination, whether or not otherwise
exercisable in accordance with the terms of the employee
benefit plans pursuant to which such options and stock
appreciation rights were granted.
(e) Savings and Stock Investment Plan. The Company
shall pay to the Employee, in cash as soon as practicable
following the determination thereof, an amount equal to the
value (measured as of the date of Termination) of all
contributions to the Company's Savings and Stock Investment
Plan (and earnings and appreciation attributable thereto)
that theretofore were made by the Company on behalf of the
Employee and are forfeited as a result of the Termination.
(f) Retirement Benefits. Commencing on the last day
of the calendar month in which the Employee attains age 55,
the Employee shall be entitled to receive, without reduction
for early payment, an amount per month equal to the excess
of (i) such pension benefits as he would have received
commencing on the last day of the calendar month in which
the Employee attained age 65 under the Pension Plan for
Employees of Ingersoll-Rand Company and the supplemental
pension arrangements approved by the Board of Directors of
the Company at a meeting held on November 5, 1975
(collectively, the "Pension Plans"), as in effect
immediately prior to the Effective Date, after crediting the
Employee with five additional Years of Credited Service
(within the meaning of the Pension Plans) or, if less, the
number of full years remaining prior to the Employee's 65th
birthday, over (ii) the benefits to which the Employee is
entitled for such month pursuant to the Pension Plans.
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(g) Waiver. At any time, the Employee may, by a
written notice to the Company, waive either or both of (i)
the right to require the Company to obtain the Letter of
Credit pursuant to paragraph 4(c) and (ii) the right to
elect a lump sum settlement pursuant to paragraph 5(b). Any
such waiver shall be irrevocable and shall relieve the
Company of any obligation to obtain such Letter of Credit or
to make such lump sum settlement, as the case may be.
(h) Mitigation. Subject to paragraph 4(c), all
payments or benefits required by the terms of this paragraph
5 shall be made or provided without offset, deduction, or
mitigation on account of income the Employee may receive
from other employment or otherwise.
(i) Death of the Employee. In the event of the
Employee's death subsequent to Termination, all payments
called for hereunder shall be paid to the Employee's
designated beneficiary or beneficiaries, or to his estate if
he has not designated a beneficiary or beneficiaries.
6. ACCELERATION.
All payments due or required to be made to the Employee
under this Agreement shall become immediately due and payable
without any offset, deduction or mitigation on account of any
income the Employee may receive from other employment or
otherwise (but subject to paragraph 4(c)), and without further
notice or demand, upon the occurrence of any of the following
events of default: (i) the failure of the Company to make any
such payment when due or as accelerated, which failure continues
for five days after the due date thereof; or (ii) (A) the filing
of a petition by or against the Company for adjudication as a
bankrupt under the Bankruptcy Reform Act, as now or hereafter
amended or supplemented, or for reorganization within the meaning
of Chapter 11 of Title 11 of the United States Code, or the
filing of any petition for similar relief, (B) the commencement
of any action or proceeding for the appointment of a receiver or
a trustee of all or substantially all the property of the
Company, (C) the taking of possession of any property of the
Company by any governmental or judicial officer or agency
pursuant to statutory authority for the dissolution,
rehabilitation, reorganization, or liquidation of the Company,
(D) the dissolution or the commencement of any action or
proceeding, whether voluntary or involuntary, for the dissolution
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or liquidation of the Company, or (E) the making by the Company
of any assignment for the benefit of creditors; provided that the
Company shall have ninety days within which to effect the
dismissal of any involuntary proceeding of a type referred to
above that is commenced against it. In the event of any
acceleration in accordance with this paragraph 6, the Employee
shall thereupon be released, relieved and discharged of any and
all future obligations under this Agreement other than those
provided in paragraph 8 herein. If any provision of this
Agreement causes any payment or benefit to become subject to
Federal income tax prior to the date on which such payment or
benefit is payable to the Employee, then any such payment or
benefit becoming so taxable shall be paid to the Employee
promptly following receipt of a notice of proposed deficiency
from the Internal Revenue Service that tax is due on such unpaid
payment or benefit.
7. VESTED BENEFITS.
Except to the extent expressly provided herein, no
provision of this Agreement shall affect or limit any interests
or rights vested in the Employee under any other agreement or
arrangement with the Employee or under any pension,
profit-sharing, insurance or other benefit plans of the Company
which may be in effect and in which the Employee may be
participating at any time.
8. CONFIDENTIALITY.
The Employee agrees to hold in confidence any and all
confidential information known to him concerning the Company and
its businesses so long as such information is not otherwise
publicly disclosed.
9. NON-COMPETITION.
During the Employment Term, the Employee will not,
without the prior written consent of the Company, accept
employment as an officer, employee, agent or consultant of a
business that is directly competitive within any metropolitan
area to the business of the Company. Nothing contained herein,
however, shall prohibit the Employee from investing in any
securities of the Company without limitation as to value or
amount, or of any other entity in amounts not exceeding five
percent of any single class of such securities outstanding.
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10. MISCELLANEOUS.
(a) Legal Expenses. The Company shall pay all costs
and expenses, including attorneys' fees, of the Company and,
at least quarterly, the Employee, in connection with any
legal proceedings, whether or not instituted by the Company,
relating to the interpretation or enforcement of this
Agreement. In the event that the provisions of this
paragraph shall be determined to be invalid or unenforceable
in any respect, such declaration shall not affect the
remaining provisions of this Agreement, which shall continue
in full force and effect.
(b) Notices. Any notice or other communication
provided for in this Agreement or contemplated hereby shall
be sufficiently given if given in writing and delivered by
certified mail, return receipt requested, and addressed, in
the case of the Company, to the Company at:
200 Chestnut Ridge Road
Woodcliff Lake, New Jersey 07675
Attention: Chairman of the Board of Directors
and, in the case of the Employee, to the Employee at:
Either party may designate a different address by giving
notice of change of address in the manner provided above.
(c) Waiver. No waiver or modification in whole or in
part of this Agreement, or any term or condition hereof,
shall be effective against any party unless in writing and
duly signed by the party sought to be bound. Any waiver of
any breach of any provision hereof or any right or power by
any party on one occasion shall not be construed as a waiver
of, or a bar to, the exercise of such right or power on any
other occasion or as a waiver of any subsequent breach.
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(d) Binding Effect; Successors. This Agreement shall
be binding upon and shall inure to the benefit of the
Company and the Employee and their respective heirs, legal
representatives, successors and assigns. If the Company
shall be merged into or consolidated with another entity,
the provisions of this Agreement shall be binding upon and
inure to the benefit of the entity surviving such merger or
resulting from such consolidation. The Company will require
any successor (whether direct or indirect, by purchase,
merger, consolidation or otherwise) to all or substantially
all of the business or assets of the Company, by agreement
in form and substance satisfactory to the Employee, to
expressly assume and agree to perform this Agreement in the
same manner and to the same extent that the Company would be
required to perform it if no such succession had taken
place. The provisions of this paragraph shall continue to
apply to each subsequent employer of the Employee hereunder
in the event of any subsequent merger, consolidation or
transfer of assets of such subsequent employer.
(e) Controlling Law. This Agreement shall be governed
by and construed in accordance with the laws of the State of
New Jersey applicable to contracts made and to be performed
therein.
IN WITNESS WHEREOF, the Company and the Employee have
executed this Agreement as of the day and year first above
written.
INGERSOLL-RAND COMPANY
By /S/ Thomas A. Holmes
Thomas A. Holmes
Chairman of the Board
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Schedule A
CERTAIN DEFINITIONS
As used in this Agreement, and unless the context
requires a different meaning, the following terms have the
meanings indicated:
"Change of Control Event" means any one of the
following: (a) a change is proposed by the stockholders of the
Company as to the number of members, or incumbent membership, of
the Company's Board of Directors such that the incumbent members
of said Board of Directors immediately prior to such change would
no longer constitute at least two-thirds of the Board of
Directors after such change and such proposal is enacted; or the
Board of Directors as constituted immediately prior to any action
by the Company's stockholders with respect to such proposal
determines that such proposal, if enacted, would constitute a
change in control of the Company and such proposal is enacted;
(b) any determination is made by the Board of Directors of the
Company that there has been a change in the control of the
Company because a person (as such term is used in Section 13(d)
of the Securities Exchange Act of 1934, as amended (the Exchange
Act)), together with its affiliates (as such term is defined in
Rule 12b-2 of the General Rules and Regulations under the
Exchange Act), has become, at any date hereafter, the beneficial
owner (as such term is defined in Rule 13d-3 of the General Rules
and Regulations under the Exchange Act), directly or indirectly,
of 5% or more of the voting power of the Company's then
outstanding securities; (c) any person (other than any employee
stock ownership trust or similar entity created by the Company
for the benefit of its employees), together with its affiliates,
has become, at any date hereafter, the beneficial owner, directly
or indirectly, of 20% or more of the voting power of the
Company's then outstanding securities entitled generally to vote
for the election of the Company's directors; or (d) the approval
by the stockholders of the Company of the merger or consolidation
of the Company with any other corporation, unless the incumbent
members of the Board of Directors of the Company as constituted
immediately prior to such merger or consolidation shall
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constitute at least a majority of the directors of the surviving
corporation of such merger or consolidation and any parent (as
such term is defined in Rule 12b-2 of the General Rules and
Regulations under the Exchange Act) of such corporation. Any
determination of the occurrence of any Change of Control Event
made in good faith by the Board of Directors of the Company, on
the basis of information available at the time to it, shall be
conclusive and binding on the Employee for all purposes of this
Agreement.
"Cause" means willful misconduct on the part of the
Employee that is materially detrimental to the Company as
determined in good faith by the Company's Board of Directors.
"Good Reason" means (a) any assignment to the Employee
of any duties other than those contemplated by, or any limitation
of the responsibilities of the Employee in any respect not
contemplated by, paragraph 3 and the continuance thereof for a
period of thirty days after written notice from the Employee, (b)
any failure to pay, or any reduction of, the Employee's
compensation or other benefits provided for in paragraph 4(a) or
4(b), (c) the relocation of the principal place of the Employee's
employment to a location that is more than 35 miles further from
the Employee's residence than such principal place of employment
immediately prior to the Effective Date, or the imposition of
travel requirements on the Employee not substantially consistent
with such travel requirements existing immediately prior to the
Effective Date, (d) the failure of the Company to obtain the
assumption of, and the agreement to perform, this Agreement by
any successor as contemplated in paragraph 11(d), (e) the failure
of the Company to perform any of its obligations under paragraph
4(c), or (f) the failure of the Company to perform any of its
other obligations under this Agreement and the continuation of
such failure for a period of thirty days after written notice
from the Employee.
"Permanent Disability", as applied to the Employee,
means that (a) he has been totally incapacitated by bodily injury
or disease so as to be prevented thereby from engaging in any
occupation or employment for remuneration or profit, (b) such
total incapacity shall have continued for a period of six
consecutive months and (c) such total incapacity will, in the
opinion of a qualified physician, be permanent and continuous
during the remainder of the Employee's life.
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"Significant Transfer" means the sale, lease, transfer
or other disposition during any two consecutive fiscal years by
the Company (including subsidiaries thereof), in one or more
transactions (excluding transactions in the ordinary course of
business), of assets having an aggregate net book value in excess
of 15% of the Company's shareowners' equity as of the
commencement of such two-year period.
"Termination" means the termination of the Employment
Term following the occurrence of any Change of Control Event,
upon ten days' prior written notice, by the Employee for Good
Reason or by the Company without Cause; provided, that such term
shall not include any termination of the Employment Term as a
result of the death or Permanent Disability of the Employee.
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