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INGERSOLL-RAND COMPANY
SUPPLEMENTAL SAVINGS AND STOCK INVESTMENT PLAN
INTRODUCTION
Ingersoll-Rand Company (the "Company") maintains the
Ingersoll-Rand Company Savings and Stock Investment Plan (the
"Qualified Savings Plan") for employees employed by the Company
and certain subsidiaries and affiliates of the Company (the
"Employees"), under which benefits are subject to various
limitations imposed by Sections 401 and 415 of the Internal
Revenue Code of 1986, as amended (the "Code").
The purpose of this Ingersoll-Rand Company Supplemental Savings
and Stock Investment Plan (the "Supplemental Savings Plan") is to
provide a vehicle under which Employees can be paid benefits
which are supplemental to benefits payable under the Qualified
Savings Plan that are limited by operation of Sections 401 and
415 of the Code (or successor provisions).
It is intended that this Supplemental Savings Plan be treated as
"a plan which is unfunded and is maintained by an employer
primarily for the purpose of providing deferred compensation for
a select group of management or highly compensated employees"
within the meaning of the Employee Retirement Income Security Act
of 1974, as amended.
Unless otherwise indicated herein, capitalized terms shall have
the same meanings as they have under the Qualified Savings Plan.
This Supplemental Savings Plan shall be effective as of
January 1, 1989.
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SECTION 1
ELIGIBILITY
1.1 Eligibility. An Employee shall become eligible to
participate under this Supplemental Savings Plan for a
calendar year as of the date on which his total Company
Matching Contributions for such year under the Qualified
Savings Plan are less than such total Company Matching
Contributions would have been if the definition of
Compensation specified in the Qualified Savings Plan did not
exclude compensation in excess of the limitation provided
under Section 401(a)(17) of the Code; provided, however,
that an Employee shall be eligible to participate for a year
only if such Employee makes total Basic Before-Tax
Contributions and Basic After-Tax Contributions for the year
in the aggregate equal to the maximum amount permitted under
the Qualified Savings Plan.
SECTION 2
ACCOUNTS/SUPPLEMENTAL BENEFITS
2.1 Accounts. The Company shall establish on its books an
Account for each Employee who has become eligible to
participate in this Supplemental Savings Plan (each an
"Employee Account"). Such Employee Accounts shall be
credited with Supplemental Company Contributions in
accordance with Sections 2.2 and 2.3 hereof.
2.2 Supplemental Company Contributions. An Employee shall be
entitled to receive a Supplemental Company Contribution
(credited as provided in Section 2.3) for any year in which
the Employee's Compensation for the year exceeds the
limitation provided under Section 401(a)(17) of the Code.
The amount of Supplemental Company Contributions credited to
the Employee Account of an Employee who is eligible to
receive a benefit for a year shall equal (a) the Company
Matching Contributions for such year, calculated as if the
limitation described above did not apply (and assuming that
the Employee has made Basic Before-Tax Contributions and
Basic After-Tax Contributions under the Qualified Savings
Plan in the aggregate equal to the maximum amount permitted
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under such Plan), less (b) the Company Matching
Contributions made with respect to the Employee under the
Qualified Savings Plan.
2.3 Common Stock Equivalents.
(a) For purposes hereof, the following terms shall have the
Meanings set forth below:
(i) "Common Stock" means shares of the common stock of
the Company.
(ii) "Common Stock Equivalent" means the right to
receive dividends in respect of the Common Stock and the
right to receive the Fair Market Value of the Common Stock.
(iii) "Fair Market Value of the Common Stock" means the
mean between the high and low sales prices of one share of
Common Stock as reported on the New York Stock
Exchange-Composite Tape. If the Common Stock is not listed
or admitted to trading on the New York Stock Exchange, the
Fair Market Value of the Common Stock shall be the mean
between the high and low sales prices of one share of Common
Stock on the principal national securities exchange on which
the Common Stock is listed or admitted to trading, or, if
the Common Stock is not listed or admitted to trading on any
national securities exchange, the last quoted sale price, or
if not so quoted, the average of the high bid and low asked
prices in the over-the-counter market of the Common Stock,
as reported by the National Association of Securities
Dealers, Inc. Automated Quotations system or such other
system then in use, or, if on any such date the Common Stock
is not quoted by any such organization, the average of the
closing bid and asked prices of the Common Stock as
furnished by a professional market maker making a market in
the Common Stock selected by the Board of Directors of the
Company. If on any such date no market maker is making a
market in the Common Stock, the Fair Market Value of the
Common Stock shall be determined in good faith by the Board
of Directors of the Company.
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(b) All Supplemental Company Contributions shall be made by
crediting to the Employee Account of each Employee eligible
to participate in this Supplemental Savings Plan such number
of Common Stock Equivalents (and fractions thereof) as will
equal (i) the amount of Supplemental Company Contributions
to which such Employee is entitled pursuant to Section 2.2,
divided by (ii) the Fair Market Value of the Common Stock on
the date such Supplemental Company Contribution is made.
Crediting of Common Stock Equivalents shall occur on the
last business day of each month to the Employee Accounts of
eligible Employees.
(c) On the date of payment of each cash dividend in respect
of the Common Stock, each Employee Account shall be credited
with additional Common Stock Equivalents equal to (i) the
cash dividends which would be payable in respect of such
number of shares of Common Stock as equals the number of
Common Stock Equivalents then credited to such Employee
Account (prior to the crediting of such additional Common
Stock Equivalents) divided by (ii) the Fair Market Value of
the Common Stock on such date.
(d) In the event of any stock dividend on the Common Stock
or any split-up or combination of shares of the Common
Stock, appropriate adjustment shall be made by the Committee
(hereinafter defined) in the aggregate number of Common
Stock Equivalents credited to each Employee Account.
SECTION 3
VESTING
3.1 Vesting. Except as provided in Section 6 hereof, an
Employee shall vest in his Employee Account at the same time
that the Employee becomes vested in his Company Account
under the Qualified Savings Plan. An Employee shall forfeit
the non vested portion of his Employee Account upon his
termination of employment with the Company to the extent
provided in the Qualified Savings Plan.
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SECTION 4
DISTRIBUTIONS
4.1 Time of Distribution. The amounts payable to an Employee
hereunder shall be payable in a lump sum on the Employee's
Payment Date. An Employee's Payment Date shall be the later
of (a) the first business day of the calendar year following
the date the Employee's employment with the Company
terminates by reason of death, disability, retirement or
otherwise, or (b) the first business day of the sixth
calendar month following the date the Employee's employment
with the Company terminates by reason of death, disability,
retirement or otherwise.
Any such payment shall be made to the Employee, or to his
beneficiary under this Supplemental Savings Plan if he is
not then living. The Employee's beneficiary under this
Supplemental Savings Plan shall be the beneficiary under the
Qualified Savings Plan unless the Employee designates
another beneficiary in writing, and such written designation
has been received by the Committee. An Employee may change
the designated beneficiary under this Supplemental Savings
Plan at any time, by providing such designation in writing
to the Committee (as hereinafter defined).
4.2 Valuation Date. For purposes hereof, the Valuation Date
shall be the Valuation Date (as defined in the Qualified
Savings Plan) coincident with or next following the
termination of the Employee's employment with the Company by
reason of death, disability, retirement or otherwise,
provided, however, that the Employee may by written election
provided to the Committee prior to such date of termination
designate the Valuation Date to be the date which is the
fifth business day preceding the Payment Date.
4.3 Form of Benefits. Benefits payable under this Supplemental
Savings Plan shall be in the form of a cash lump-sum equal
to the product of (a) the number of Common Stock Equivalents
credited to such Employee's Account as of the date of such
Employee's termination of employment, multiplied by (b) the
Fair Market Value of the Common Stock on the Valuation Date.
The amount payable pursuant to this Section 4.3 shall accrue
interest at the prime rate announced from time to time by
Chase Manhattan Bank, N.A. until payment is made.
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4.4 Payment of Benefits. The benefits payable under this
Supplemental Savings Plan shall be paid to an Employee by
the Company, provided, however, that if the Company shall
have made a contribution to a trust established under
Section 5 hereof of all or a portion of the amount credited
to such Employee's Account under this Supplemental Savings
Plan (a) the amount paid to the Employee by the Company
hereunder shall be reduced by the amount distributed to such
Employee from such trust and (b) the amount distributed to
such Employee from such trust shall be limited by the amount
to which such Employee is entitled Pursuant to Section 4.3
hereof.
SECTION 5
TRUST FUND/INVESTMENT
5.1 Establishment of Trust. Except as provided in Section 6.1
hereof, the Company shall have no obligation to fund the
Employee Accounts hereunder. The Company may, however, in
its sole discretion, enter into a trust agreement and
establish a trust fund to assist it in meeting its
obligations under this Supplemental Savings Plan. The trust
agreement shall provide that all amounts contributed to the
trust, together with earnings thereon, shall be invested and
reinvested as provided therein.
5.2 Rights of Creditors. The assets held by the trust shall be
subject to the claims of general creditors of the Company in
the event of the Company's insolvency. The rights of an
Employee to the assets of such trust fund shall not be
superior to those of an unsecured creditor of the Company.
5.3 Disbursement of Funds. All contributions to the trust fund
shall be held and disbursed in accordance with the
provisions of the related trust agreement. No portion of
the trust fund may be returned to the Company other than in
accordance with the terms of the related trust agreement.
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5.4 Company Obligation. Notwithstanding any provisions of any
such trust agreement to the contrary, the Company shall
remain obligated to pay benefits under this Supplemental
Savings Plan. Nothing in this Supplemental Savings Plan or
any such trust agreement shall relieve the Company of its
liabilities to pay benefits under this Supplemental Savings
Plan except to the extent that such liabilities are met by
the distribution of trust assets.
SECTION 6
CHANGE OF CONTROL
6.1 Contributions to Trust. In the event the Company's Board of
Directors determines that a "change of control" of the
Company has occurred, the Company shall be obligated to
establish a trust and to contribute to the trust an amount
equal to the balance credited to each Employee's Account
established hereunder, such Accounts to be valued as of the
last day of the calendar month immediately preceding the
date the Board of Directors determines that a "change in
control" has occurred.
6.2 Amendments. Following a "change of control" of the Company,
any amendment modifying or terminating this Supplemental
Savings Plan shall have no force or effect.
6.3 Definition. For purposes hereof, a "change of control"
shall have the meaning designated in the Ingersoll-Rand
Benefit Trust Agreement, dated as of September 1, 1988, as
amended, between the Company and The Bank of New York, as
trustee, established by the Company for purposes of
satisfying certain obligations to executive employees of the
Company.
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SECTION 7
MISCELLANEOUS
7.1 Amendment and Termination. Except as provided in Section
6.2 hereof, this Supplemental Savings Plan may, at any time
and from time to time, be amended or terminated without the
consent of any Employee or beneficiary, (a) by the Board of
Directors of the Company, or (b) in the case of amendments
which do not materially modify the provisions hereof, the
Committee, provided, however, that no such amendment or
termination shall reduce any benefits accrued under the
terms of this Supplemental Savings Plan prior to the date of
termination or amendment.
7.2 No Contract of Employment. The establishment of this
Supplemental Savings Plan or any modification thereof shall
not give any Employee or other person the right to remain in
the service of the Company or any of its subsidiaries, and
all Employees and other persons shall remain subject to
discharge to the same extent as if the Supplemental Savings
Plan had never been adopted.
7.3 Limitation of Rights. Nothing in this Supplemental Savings
Plan shall be construed to give any Employee any rights
whatsoever with respect to shares of Common Stock.
7.4 Withholding. The Company shall be entitled to withhold from
any payment due under this Supplemental Savings Plan any and
all taxes of any nature required by any government to be
withheld from such payment.
7.5 Loans. No loans to Employees shall be permitted under this
Supplemental Savings Plan.
7.6 Compensation and Nominating Committee. This Supplemental
Savings Plan shall be administered by the Compensation and
Nominating Committee (or any successor committee) of the
Board of Directors of the Company (the "Committee"). The
Committee shall make all determinations as to the right of
any person to a benefit. Any denial by the Committee of the
claim for benefits under this Supplemental Savings Plan by
an Employee or beneficiary shall be stated in writing by the
Committee and delivered or mailed to the Employee or
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beneficiary. Such notice shall set forth the specific
reasons for the Committee's decision. In addition, the
Committee shall afford a reasonable opportunity to any
Employee or beneficiary whose claim for benefits has been
denied for a review of the decision denying the claim.
7.7 Entire Agreement; Successors. This Supplemental Savings
Plan, including any subsequently adopted amendments, shall
constitute the entire agreement or contract between the
Company and any Employee regarding this Supplemental Savings
Plan. There are no covenants, promises, agreements,
conditions or understandings, either oral or written,
between the Company and any Employee relating to the subject
matter hereof, other than those set forth herein. This
Supplemental Savings Plan and any amendment hereof shall be
binding on the Company and the Employees 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 Employee.
7.8 Severability. If any provision of this Supplemental Savings
Plan shall, to any extent, be invalid or unenforceable, the
remainder of this Supplemental Savings Plan shall not be
affected thereby, and each provision of this Supplemental
Savings Plan shall be valid and enforceable to the fullest
extent permitted by law.
7.9 Application of Plan Provisions. All relevant provisions of
the Qualified Savings Plan shall apply to the extent
applicable to the obligations of the Company under this
Supplemental Savings Plan. Benefits provided under this
Supplemental Savings Plan are independent of, and in
addition to, any payments made to Employees under any other
plan, program, or agreement between the Company and
Employees eligible to participate in this Supplemental
Savings Plan, or any other compensation payable to any
Employee by the Company or by any subsidiary or affiliate of
the Company.
7.10 Governing Law. The laws of the State of New Jersey shall
govern this Supplemental Savings Plan.
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7.11 Participant as General Creditor. Benefits under the
Supplemental Savings 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 obligation hereunder for payment
of benefits at its discretion, provided, however, that no
Employee eligible to participate in this Supplemental
Savings Plan shall have any interest in such investment or
reserve. To the extent that any person acquires a right to
receive benefits under this Supplemental Savings Plan, such
rights shall be no greater than the right of any unsecured
general creditor of the Company.
7.12 Nonassignability. To the extent permitted by law, the right
of any Employee or any beneficiary in any benefit hereunder
shall not be subject to attachment or other legal process
for the debts of such Employee or beneficiary; nor shall any
such benefit be subject to anticipation, alienation, sale,
transfer, assignment or encumbrance.
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