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10(iii)(a)
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MANAGEMENT INCENTIVE UNIT PLAN OF INGERSOLL-RAND COMPANY
As Amended Effective January 1, 1980
I. Purpose
The purpose of this Plan is to provide additional incentive
which will enable the Company to attract to and retain in its
employment over the years persons of outstanding competence, and
to promote the stockholder point of view among key employees of
the Company.
II. Definitions
(a) "Company" means Ingersoll-Rand Company or any company
successor thereto by merger, consolidation, or other
reorganization which has made provision for adoption of this Plan
and the assumption of the Company's obligations thereunder.
(b) "Subsidiary" means any corporation more than 50 per
cent of whose total combined voting stock of all classes is owned
by the Company or by another corporation qualifying as a
subsidiary within this definition.
(c) "Common Stock" means shares of the common stock of
Ingersoll-Rand Company.
(d) "Committee" means the committee appointed by the Board
of Directors of the Company pursuant to Article III hereof.
(e) "Common Stock Equivalents" shall provide the holder
with such of the rights and benefits of the actual owner of
shares of Common Stock as the Board of Directors may determine,
including the right to receive dividends and the right to receive
the amount of appreciation in value, if any, on such shares of
Common Stock from the date the grant of such Common Stock
Equivalents became effective until they become payable to the
Participant.
(f) "Disability" means such term as defined under the
pension, retirement or appropriate benefit plan or plans of the
Company or a Subsidiary applicable to the Participant.
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(g) "Dividend Equivalents" means a right to receive
immediately or on a deferred basis, whether or not subject to
forfeiture, an amount not exceeding one-half of the dividends
paid or payable on a share of Common Stock subject to a Unit.
(h) "Employee" means any person, including an officer of
the Company (whether or not he is also a director thereof), who
is (1) employed by the Company or a subsidiary on a full-time
basis, (2) primarily compensated for such employment by a regular
salary or by commissions on sales or both, and (3) in the opinion
of the Committee, is one of the key personnel of the Company in a
position to contribute materially to its continued growth and
development and to its future financial success. The term does
not include persons who are retained by the Company as
consultants only.
(i) "Participant" means an employee who is awarded
Management Incentive Units hereunder.
(j) "Retirement" means such term as defined under the
pension or retirement plan or plans of the Company or a
Subsidiary applicable to the Participant, pursuant to which he is
or will, upon such retirement, be entitled to receive retirement
benefits.
(k) "Termination Date" shall mean the date of termination
of a Participant's employment with the Company by death,
retirement, resignation, discharge or otherwise.
(l) "Fair Market Value" of the Common Stock shall be, as
applied to any date, the mean between the high and low sales
prices, regular way, of a share of Common Stock on such date as
reported on the Composite Tape, or, if no such sales were made on
such date, on the next preceding date on which there were such
sales of Common Stock as reported on the Composite Tape.
III. Administration and Eligibility
(a) The Board of Directors of the Company shall appoint a
Committee consisting of three or more members of the Board, who
shall serve at the pleasure of the Board of Directors, to
administer, construe and interpret this Plan. No member of the
Committee shall be liable for any act done or determination made
in good faith. No member of the Committee shall participate in
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any determination either to award himself Management Incentive
Units or to accelerate benefits to him pursuant to Article XI
hereof.
(b) The construction and interpretation by the Committee of
any provision of this Plan shall be final and conclusive. It
shall determine, subject to the provisions of this Plan:
(i) The Employees who shall participate in the Plan
from time to time; and
(ii) The number of Management Incentive Units
(sometimes herein called "Units") to be set aside
for each Participant.
(c) The Committee may, in its discretion, delegate its
duties to an officer or employee, or a committee composed of
officers or employees of the Company, except that it may not
delegate its authority to construe and interpret this Plan, or to
make the determinations specified in Items (i) and (ii) of
Paragraph (b) of this Article III, or in Articles XI and XII.
IV. Establishment of Management Incentive Units
The Company shall set up an appropriate record (hereinafter
called the "Incentive Ledger") and thereafter from time to time
enter therein an account in the name of each Participant, showing
the number of Units awarded to him by the Committee, and an
amount equivalent to the Fair Market Value of an equal number of
shares of Common Stock on the day such Units were awarded him.
Such latter amount shall not constitute a credit to the account
of a Participant, but is to be used solely in the computation of
credits, under certain circumstances, as hereinafter set forth.
V. Aggregate Number of Units
The aggregate number of Units standing in the Incentive
Ledger to the credit of Participants at any one time shall not
exceed 600,000, and the aggregate number of Units awarded to any
one Participant shall not exceed 10,000, provided, however, that
upon termination of employment of any Participant for any cause
including Retirement, any Units theretofore awarded to him shall
no longer be considered outstanding for the purposes of the
limitations of this Article V only.
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VI. Payment or Crediting of Amounts Related to Cash Dividends
So long as this Plan remains in effect, the Company shall
pay to each Participant throughout the term of his employment
with the Company or a subsidiary, amounts equal to one-half of
the dividends paid in cash from time to time on issued and
outstanding shares of Common Stock equal to the number of Units
in his account, so that the amount of each such payment will be
equivalent to one-half of the cash dividends which the
Participant would have received had he been the owner of the
number of shares of Common Stock equal to the number of Units in
his account, provided, however, that if the Committee in its sole
discretion shall at any time so direct as to any Participant,
such amounts shall thereafter not be paid to such Participant but
shall be credited to his account in the Incentive Ledger. No
such payment or credit shall be made with respect to any dividend
paid after a Participant's Termination Date or after any date of
termination of this Plan, even though the record date is prior
thereto.
VII. Credits to Accounts of Participants
(a) Subject to the provisions of Paragraphs (b) to (g),
inclusive, of this Article VII, there shall be credited to each
Participant's account in the Incentive Ledger an amount which
shall be equal to the excess, if any, of the aggregate Fair
Market Value on his Termination Date of that number of shares of
Common Stock which is equal to the number of Units then standing
to his credit over the aggregate Fair Market Value of such shares
on the date or dates the Units were awarded him; provided,
however, that after a Unit has been held by a Participant for
five years, instead of the foregoing credit provided in this
Paragraph (a), there shall be credited to the Participant's
account in the Incentive Ledger the same amounts with respect to
each Unit theretofore and thereafter paid or credited to the
Participant under the provisions of Article VI as of the dates of
such payments or credits under Article VI, so long as the Unit
continues to be held by the Participant. The provisions of this
Paragraph (a) of Article VII shall be applicable to former
Participants whose employment terminated before January 1, 1980
and who elected a Selected Value Date pursuant to Paragraph (c)
below which had not yet occurred at said date.
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(b) Subject to the provisions of Article X, upon
termination of a Participant's employment for any reason other
than death, Disability or Retirement, no credit under Paragraph
(a) of this Article VII shall be made to the Participant's
account except and to the extent that the Committee, in its sole
discretion, shall so authorize.
(c) Upon termination of a Participant's employment by
reason of death, Disability or Retirement within five years from
the date of grant, he or his Beneficiary or Beneficiaries
designated pursuant to Paragraph (b) of Article IX hereof shall
have the option, to be exercised in writing filed with the
Secretary of the Company on or before his Termination Date (or in
the event of his death, within thirty days thereafter), to have
his credit under the provisions of this Article VII determined by
using the Fair Market Value of the Common Stock as of a Selected
Value Date in lieu of his Termination Date; provided, however,
that such Fair Market Value may not exceed the highest price at
which a sale of the Common Stock was made on the New York Stock
Exchange between the date such employee became a Participant and
his Termination Date. The Selected Value Date shall be any date
within a three-year period immediately following his Termination
Date which he or his Beneficiary or Beneficiaries may designate
by notice in writing to the Secretary of the Company not less
than three days prior to the date so designated. If no such
designation is made, then his Selected Value Date shall be the
third anniversary of his Termination Date. If such option shall
be exercised, no credit shall be made to such Participant's
account in the Incentive Ledger under the provisions of this
Article VII until the Selected Value Date, except as provided in
Paragraphs (e) and (f) of this Article VII.
(d) Any Participant whose employment is terminated for any
reason other than death, Disability or Retirement within five
years from the date of grant shall have an option to choose a
Selected Value Date, as provided in Paragraph (c) of this Article
VII, only if the Committee, in its sole discretion, shall so
authorize.
(e) If the Board of Directors of the Company shall
terminate this Plan within five years from its effective date, no
credit under the provisions of this Article VII shall be made
thereafter to the account of any Participant; provided, however,
that if the date of such termination occurs after a Participant's
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Termination Date and prior to his Selected Value Date, then such
Participant shall be entitled to any credit resulting under the
provisions of this Article VII from the use of the Fair Market
Value of the Common Stock as of the date of termination of this
Plan in lieu of such Participant's Selected Value Date.
(f) If the Board of Directors of the Company shall
terminate this Plan more than five years after its effective
date, then each Participant who has not received a credit under
the provisions of this Article VII shall be entitled to any
credit resulting thereunder from the use of the Fair Market Value
of the Common Stock on the date of termination of this Plan in
lieu of each such Participant's Termination Date or Selected
Value Date, as the case may be, and any credit so resulting shall
be entered in the Incentive Ledger to the account of each such
Participant as of the date of termination of this Plan, but no
other credits shall be made thereafter to the account of any
Participant.
(g) Anything herein contained to the contrary
notwithstanding, the amount which may be credited to the account
of a Participant under the provisions of this Article VII shall
not exceed the aggregate of all amounts theretofore either paid
to such Participant or credited to his account under the
provisions of Article VI hereof.
VIII. Dividend Equivalents
(a) In lieu of the credits provided in Article VII, the
Committee may provide that an amount equivalent to not more than
one-half of the cash dividend which the Participant would have
received had he been the owner of a number of shares of Common
Stock equal to the number of Units in his account shall be
credited to his account in the Incentive Ledger as Dividend
Equivalents. Such determination may be made either at the time
of granting of a Unit or at any time thereafter, and if granted
after the award of such Unit, such determination may be made
retroactive to the date of the award of such Unit upon
cancellation of any amounts credited or reflected in the
Participant's account under Article VII. Such determination may
contain such provisions and be subject to such terms and
conditions as the Committee may direct. Dividend Equivalents may
be payable or credited either in cash or in Common Stock
Equivalents. If credited in Common Stock Equivalents, they shall
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be credited at the Fair Market Value of an equal number of shares
of Common Stock on the day of such crediting. The Committee may
provide that any amounts representing dividends earned by Common
Stock Equivalents may be paid either currently or in the future
in cash or that they may be represented by further Common Stock
Equivalents, or both. In the event that dividends on Common
Stock Equivalents are paid in further Common Stock Equivalents,
the latter shall be charged against the limit contained in
Article V. As used in the Plan the words Unit or Units shall
include Dividend Equivalents where appropriate in the context,
including, without limitation, references to a Participant's
account in the Incentive Ledger.
(b) Upon termination of a Participant's employment for any
reason other than death, Disability or Retirement, the
Participant's interest in amounts theretofore credited to his
account under Paragraph (a) of this Article VIII and not
theretofore vested under Article X shall be cancelled, except and
to the extent that the Committee, in its sole discretion, shall
otherwise determine. Upon termination of employment for any
reason where benefits have been vested pursuant to Article X,
such vested amounts shall be payable as provided in Article IX.
If such vested amounts have been credited to the account of the
Participant in Common Stock Equivalents, unless the Committee, in
its sole discretion, shall otherwise determine, no further
amounts with respect to dividends paid on a share of Common Stock
shall be credited with respect to such Common Stock Equivalents,
regardless of whether the record date for said dividend occurs
before or after the Participant's Termination Date, and the Fair
Market Value of said Common Stock Equivalents shall be determined
at said Termination Date. Amounts payable to the Participant
thereafter with respect to said Common Stock Equivalents under
Article IX shall not exceed the Fair Market Value as so
determined at the Participant's Termination Date. However, the
Committee, in its sole discretion, may permit said Common Stock
Equivalents to retain any or all their characteristics until
fully paid out following termination of employment.
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IX. Payment of Benefits
(a) Upon termination of a Participant's employment there
shall be paid to him, or in the event of his death, to the
Beneficiary or Beneficiaries designated under the provisions of
Paragraph (b) of this Article IX, the amount then standing to his
credit or thereafter credited to him in the Incentive Ledger
under the provisions of Article VI and Paragraph (a) of Article
XII hereof and the amounts vested under Article X. The amounts
so credited shall be payable in quarter-annual installments over
a ten-year period. In the case of termination of employment by
reason of death, Disability or Retirement, the payment of such
amounts shall commence within three months after the
Participant's Termination Date. In the event a Participant's
employment with the Company shall have terminated for any other
reason, the payment of such amounts shall commence upon the
occurrence of what would have been the Participant's normal
retirement date under the then existing pension plan of the
Company or a Subsidiary which had been applicable to him, unless
the Committee shall, in its sole discretion, determine to
commence payments earlier. The Committee may, in its sole
discretion, with the written consent of the Participant, if
living, and of each Beneficiary then designated by him or if the
Participant be not then living, with the written consent of each
of his Beneficiaries, or if none of them shall be then living,
with the written consent of the Participant's executors or
administrators, pay in one lump sum the amount payable or reduce
the period of time and the number of installments during which
the payments referred to in this Paragraph (a) of Article IX
shall be made. The aforesaid payments shall be made under such
terms and conditions as the Committee may direct.
(b) Each person upon becoming a Participant shall file with
the Secretary of the Company a notice in writing designating one
or more Beneficiaries to whom payments otherwise due the
Participant shall be made in the event of his death. In case of
a failure to designate a Beneficiary, or if all designated
Beneficiaries shall die before all payments have been made then
any remaining payments shall be made to the Participant's
executors or administrators.
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X. Vesting
(a) If the Committee, in its sole discretion, shall so
determine, amounts credited to a Participant's account in the
Incentive Ledger under Articles VII and VIII may vest in whole or
in part five years from the dates as of which such amounts are
credited. In the event that such amounts have been credited in
cash, the amount vested shall be the cash credit to the
Participant's account. If credited in Common Stock Equivalents,
the number of Common Stock Equivalents credited shall be the
amount vested. If the Committee, in its sole discretion, shall
so determine, amounts earned and credited on said vested Common
Stock Equivalents, both before and after the date of their
vesting, shall also vest in accordance with such terms and
conditions as the Committee may direct.
(b) All other amounts credited to the Participant's account
in the Incentive Ledger shall vest upon death, Disability or
Retirement, subject to the limitations of Article VII, if
applicable.
XI. Acceleration of Payment of Benefits
Anything herein contained to the contrary notwithstanding,
at any time after five years from the effective date of this Plan
the Committee may in its sole discretion, if it determines that
unusual circumstances exist and that it would be in the best
interest of a Participant and of the Company, accelerate the
payment of benefits to such Participant by paying to him in one
sum in cash:
(a) The amount, if any, credited to his account in the
Incentive Ledger under the provisions of Articles VI, VII and
VIII,
(b) The amount, if any, credited to his account in the
Incentive Ledger under the provisions of Paragraph (a) of Article
XII, and
(c) Under Article VII if applicable, an amount which shall
be equal to the excess of the aggregate Fair Market Value on the
date of such Committee action, of that number of shares of Common
Stock which is equal to the number of Units then standing to the
credit of such Participant over the aggregate Fair Market Value
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of such shares on the date or dates the Units were awarded to
him; provided, however, that the amount of such payment under
this clause (c) may not exceed the aggregate of all amounts
theretofore either paid to such Participant or credited to his
account under the provisions of Article VI hereof.
At the time of making such payment the Units in respect of which
such amount was paid shall be cancelled and the Participant shall
have no further rights with respect to such Units.
XII. Limitation of Rights
(a) The Committee may at any time prior to a Participant's
Termination Date cancel some or all of the Units standing to his
credit in the Incentive Ledger and thereafter the rights of such
Participant shall be limited to rights accruing in respect of
such number of Units, if any, as shall remain to his credit in
the Incentive Ledger; provided, however, that if such action
shall be taken later than five years after the effective date of
this Plan and within five years from the date of grant, there
shall be credited to the account of such Participant in the
Incentive Ledger with respect to amounts credited under Article
VII, an amount which shall be equal to the excess of the
aggregate Fair Market Value on the date of such Committee action,
of that number of shares of Common Stock which is equal to the
number of Units so cancelled over the aggregate Fair Market Value
of such shares on the date or dates the Units so cancelled were
awarded to him; and provided further, that the amount of such
credit may not exceed the aggregate of all amounts theretofore
either paid to such Participant or credited to his account under
the provisions of Article VI hereof in respect only of the number
of Units so cancelled; and in the event of such action five years
after the date of grant, there shall be credited to the account
of such Participant in the Incentive Ledger other amounts
credited under Articles VII and VIII.
(b) Nothing in this Plan contained shall be construed to:
(i) Give any employee of the Company or a subsidiary
any right to be awarded any Units except in the
sole discretion of the Committee;
(ii) Give a Participant any rights whatsoever with
respect to shares of Common Stock of the Company;
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(iii) Limit in any way the right of the Company or a
Subsidiary to terminate a Participant's employment
at any time; or
(iv) Be evidence of any agreement or understanding,
express or implied, that the Company or a
subsidiary will employ a Participant in any
particular position or at any particular rate of
remuneration, or for any period of time.
XIII. Adjustment in Number of Units
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 in the
aggregate number of Units which may be awarded under this Plan,
in the maximum number of Units which may be awarded to any one
Participant, and in the number of Units standing to the credit of
each Participant in the Incentive Ledger; provided, however, that
the Committee shall not be required to establish any fractional
Units.
XIV. Non-Alienation of Benefits
No right or benefit under this Plan shall be subject to
anticipation, alienation, sale, assignment, pledge, encumbrance
or charge, and any attempt to anticipate, alienate, sell, assign,
pledge, encumber or charge the same shall be void. No right or
benefit hereunder shall in any manner be liable for or subject to
the debts, contracts, liabilities or torts of the person entitled
to such benefits. If any Participant or Beneficiary hereunder
should become bankrupt or attempt to anticipate, alienate, sell,
assign, pledge, encumber or charge any right or benefit
hereunder, then such right or benefit shall, in the discretion of
the Committee, cease and determine, and in such event, the
Company may hold or apply the same or any part thereof for the
benefit of the Participant or Beneficiary, his or her spouse,
children or other dependents, or any of them, in such manner and
in such proportion as the Committee may deem proper.
XV. Amendment or Termination of Plan
(a) The Board of Directors may terminate this Plan at any
time.
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(b) The Board of Directors may amend this Plan at any time;
except that:
(i) The aggregate number of Units which may be awarded
to all Participants and the aggregate number of
Units which may be awarded to any one Participant
may not be increased except as provided in Article
XIII hereof; and
(ii) This Article XV may not be amended.
(c) Any amendment or termination of this Plan shall not
affect the rights of Participants or Beneficiaries to payments in
accordance with Article IX of amounts standing to the credit of
Participants in the Incentive Ledger at the time of such
amendment or termination.
XVI. Effective Date of Plan
This Plan shall become effective on such date as the Board
of Directors may determine.
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AMENDMENT TO THE MANAGEMENT
INCENTIVE UNIT PLAN OF INGERSOLL-RAND COMPANY
EFFECTIVE JANUARY 1, 1982
Article VI of the Management Incentive Unit Plan of
Ingersoll-Rand Company, as amended effective January 1, 1980, is
further amended by deleting the last sentence of such Article and
substituting the following:
"The Committee, in its sole discretion, shall
determine whether and to what extent a
Participant, following the Participant's
Termination Date, shall be paid or credited
with amounts equal to all or any part of the
dividends paid by the Company in cash, from
time to time, on issued and outstanding
shares of Common Stock, equal to the number
of Common Stock Equivalents in the
Participant's account."
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AMENDMENT TO THE MANAGEMENT
INCENTIVE UNIT PLAN OF INGERSOLL-RAND COMPANY
EFFECTIVE MARCH 1, 1987
The Management Incentive Unit Plan of Ingersoll-Rand
Company, as amended effective January 1, 1980, and January 1,
1982, is further amended by deleting Article IX in its entirety
and substituting the following new Article IX:
IX. Payment of Benefits
a) Upon termination of a Participant's employment there
shall be paid to him, or in the event of his death, to
the Beneficiary or Beneficiaries designated under the
provisions of Paragraph (b) of this Article IX, the
amount then standing to his credit or thereafter
credited to him in the Incentive Ledger under the
provisions of Article VI and Paragraph (a) of Article
XII hereof and the amounts vested under Article X. In
the case of termination of employment by reason of
death, disability or retirement, the payment of such
amounts shall be made in one lump sum to Participants
within one year following the Participant's Termination
Date. In the event a Participant's employment with the
Company shall have terminated for any other reason, the
payment of such amounts shall be made on what would
have been the Participant's normal retirement date
under the then existing pension plan of the Company or
a Subsidiary which had been applicable to him, unless
the Committee shall, in its sole discretion, determine
to commence payments earlier. The Committee may, in its
sole discretion, with the written consent of the
Participant, if living, or if the Participant be not
then living, with the written consent of each of his
Beneficiaries, or if none of them shall be then living,
with the written consent of the Participant's executors
or administrators, pay the amount payable in
installments or such other manner as it may determine.
(b) Each person upon becoming a Participant shall file with
the Secretary of the Company a notice in writing
designating one or more Beneficiaries to whom payment
otherwise due the Participant shall be made in the
event of his death. In case of a failure to designate a
Beneficiary, or if all designated Beneficiaries shall
have died before said payment has been made then it
shall be made to the Participant's executors or
administrators.
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Amendment of Management Incentive Unit Plan
of
Ingersoll-Rand Company
On June 3, 1987, the Board of Directors of the Company
adopted the following resolution:
RESOLVED, that the Amendment enacted by the
Board of Directors on February 4,
1987, to Article IX of the MIU Plan of
Ingersoll-Rand Company be, and hereby
is rescinded effective immediately.
92