EXHIBIT 10(iii)(b)
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INGERSOLL-RAND COMPANY
RETIREMENT PLAN FOR NON-EMPLOYEE DIRECTORS
ARTICLE I
PURPOSE
1.1 The purpose of this Plan is to provide retirement benefits
to Directors of the Company who meet the eligibility
requirements hereof.
ARTICLE II
DEFINITIONS
2.1 "Base Retainer" means the basic annual retainer for
non-employee Directors in effect as of an Eligible
Director's last date of Service. Base Retainer shall not
include any fees payable as a result of attendance at
meetings of the Board of Directors or its committees, or
other payments made for other services a Director may
render.
2.2 "Board of Directors" means the Board of Directors of
Ingersoll-Rand Company.
2.3 "Company" means Ingersoll-Rand Company.
2.4 "Compensation Committee" means the Compensation and
Nominating Committee of the Board of Directors.
2.5 "Director" means a duly-elected member of the Board of
Directors.
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EXHIBIT 10(iii)(b)
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2.6 "Eligible Director" means an individual who has served on
the Board of Directors on or after the Effective Date of
this Plan (as provided in Section 3.1), who is not an
Employee of the Company and who does not qualify to receive
a retirement benefit under any pension plan of the Company
or its subsidiaries other than this Plan.
2.7 "Employee" means a person employed by the Company or its
subsidiaries in any capacity other than as a Director.
2.8 "Plan" means this Retirement Plan for Non-Employee
Directors.
2.9 "Service" means service as an Eligible Director.
ARTICLE III
EFFECTIVE DATE
3.1 This Plan shall be effective as of September 1, 1994 (the
"Effective Date").
ARTICLE IV
PARTICIPATION
4.1 Each Eligible Director serving on the Board of Directors on
or after the Effective Date shall participate in this Plan.
4.2 Directors who retire or resign prior to the Effective Date
shall continue to be entitled to the retirement benefit, if
any, to which they were entitled under the provisions of the
predecessor program to this Plan.
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EXHIBIT 10(iii)(b)
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ARTICLE V
RETIREMENT BENEFITS/VESTING
5.1 An Eligible Director's annual retirement benefit under this
Plan shall be vested when he or she has completed five years
of Service and shall be equal to a percentage of that
Director's Base Retainer in accordance with the table below:
Completed Years Percentage of
of Service Base Retainer
5 years 50%
6 years 60%
7 years 70%
8 years 80%
9 years 90%
10 years or more 100%
In no event shall an Eligible Director's percentage of
benefit under this Plan exceed 100% of the Eligible
Director's Base Retainer.
5.2 Notwithstanding the provisions of Section 5.1, a Director
who was an Eligible Director on the Effective Date and who
subsequently retires as a Director upon attaining age 70 (or
age 72, in the case of Directors who had attained age 70 by
September 1, 1994) after completing at least five years of
Service (including for such purpose any period prior to the
Effective Date) shall be entitled to a benefit equal to 100%
of the Base Retainer.
ARTICLE VI
YEARS OF SERVICE
6.1 For purposes of this Plan, one year of Service shall mean
365 days of Service as an Eligible Director beginning with
an Eligible Director's initial election or appointment to
the Board of Directors.
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EXHIBIT 10(iii)(b)
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6.2 In the event of a break in Service, a Director's Service as
an Eligible Director before and after the break in Service
shall be combined to determine years of service for vesting
for purposes of Article V.
6.3 A Director's Service as an Eligible Director prior to the
Effective Date of this Plan shall count toward the vesting
rules of Article V.
ARTICLE VII
PAYMENT OF RETIREMENT BENEFITS
7.1 An Eligible Director who is retired and is entitled to
receive retirement benefits hereunder shall begin to receive
retirement benefits when the Eligible Director attains age
70, as more specifically provided in Section 7.2. An
Eligible Director who has retired and has met the vesting
requirements in Section 5.1 shall be entitled to receive
retirement benefits whether or not the Eligible Director is
a member of the Board of Directors on his or her 70th
birthday.
7.2 All retirement benefits hereunder shall be payable in
quarterly installments equal to one-fourth of the annual
amounts determined to be payable under this Plan. An
Eligible Director's vested retirement benefit hereunder, if
any, shall be payable for the life of the Eligible Director,
commencing on the first day of the calendar quarter next
following the Eligible Director's 70th birthday.
ARTICLE VIII
FUNDING
8.1 This Plan shall not be funded by the Company. All payments
required to be made hereunder shall be made from the general
funds of the Company as and when they become due.
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EXHIBIT 10(iii)(b)
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ARTICLE IX
PLAN ADMINISTRATION
9.1 The general administration of this Plan and the
responsibility for carrying out the provisions hereof shall
be vested in the Compensation Committee. The Compensation
Committee may adopt such rules and regulations as it may
deem necessary for the proper administration of this Plan,
which are not inconsistent with the provisions hereof, and
its decision in all matters shall be final, conclusive and
binding.
ARTICLE X
AMENDMENT AND TERMINATION
10.1 The Board of Directors reserves in its sole and exclusive
discretion the right at any time and from time to time to
amend this Plan in any respect or terminate this Plan
without restriction and without the consent of any Eligible
Director, provided, however, that no amendment or
termination of this Plan shall impair the right of any
Eligible Director to receive benefits which have become
vested pursuant to Article V or Article XI prior to such
amendment or termination.
ARTICLE XI
CHANGE OF CONTROL
11.1 For purposes hereof,
(a) "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.
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EXHIBIT 10(iii)(b)
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(b) "Associate" shall mean, when used to indicate a
relationship with a specified person, (i) any
corporation, partnership, or other organization of
which such specified person is an officer or partner,
(ii) 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, (iii) 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 (iv) 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.
(c) "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.
(d) "Change in Control" shall mean the occurrence of either
of the following:
(i) 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% 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
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EXHIBIT 10(iii)(b)
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the Continuing Directors determines in their sole
discretion that, for purposes of this Plan, a
Change in Control has not occurred; or
(ii) the Continuing Directors shall at any time fail to
constitute a majority of the members of the Board
of Directors.
(e) "Continuing Director" shall mean a Director who either
was a member of the Board of Directors on the Effective
Date or who became a member of the Board of Directors
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 of Directors 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 of Directors in which such person is named as
a nominee for Director, without due objection to such
nomination.
(f) "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 of
Directors, except, if the votes of such Continuing
Directors in favor of such action would be insufficient
to constitute an act of the Board of Directors 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 of Directors so long as there are at least three
Continuing Directors on the Board of Directors at the
time of such unanimous vote.
11.2 Upon the occurrence of a Change of Control, the following
changes to this Plan shall immediately and automatically
become effective:
(a) Section 7.2 is deleted and the following is inserted in
lieu thereof:
"All vested retirement benefits hereunder shall be
immediately payable upon a Change of Control in one
lump sum payment. The lump sum shall be the present
value actuarially determined with reference to the
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EXHIBIT 10(iii)(b)
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life expectancy of the Eligible Director whose benefits
have vested pursuant to this Plan and prevailing
interest rates.
(b) New Section 12.9 shall be added to read as follows:
"Notwithstanding any other provisions of this Plan to
the contrary:
(a) the vested benefit hereunder of any Eligible
Director as of the date of a Change of Control may
not be reduced;
(b) any Service accrued by an Eligible Director as of
the date of a Change of Control cannot be
reduced."
ARTICLE XII
MISCELLANEOUS PROVISIONS
12.1 Nothing contained in this Plan guarantees the continued
retention of a Director on the Board of Directors, nor does
this Plan limit the right to terminate a Director's Service
on the Board of Directors.
12.2 No retirement benefit payable hereunder may be assigned,
pledged, mortgaged or hypothecated and, to the extent
permitted by law, no such retirement benefit shall be
subject to legal process or attachment for the payment of
any claims against any person entitled to receive the same.
12.3 If an Eligible Director entitled to receive any retirement
benefit payments hereunder is adjudged by a court of
competent jurisdiction to be legally incapable of giving
valid receipt and discharge for such retirement benefit,
such payments shall be paid to such person or persons as the
duly appointed guardian or other legal representative of
such Eligible Director. Such payments shall, to the extent
made, be deemed a complete discharge for such payments under
this Plan.
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12.4 Payments made by the Company under this Plan to any Eligible
Director shall be subject to withholding as shall, at the
time for such payment, be required under any income tax or
other laws, whether of the United States or any other
jurisdiction.
12.5 All expenses and costs in connection with the operation of
this Plan shall be borne by the Company.
12.6 The provisions of this Plan will be construed according to
the laws of the State of New Jersey.
12.7 Unless the context clearly indicates a different meaning,
the masculine pronoun wherever used herein shall include the
feminine gender and the feminine the masculine and the
singular number as used herein shall include the plural and
the plural the singular.
12.8 The titles to articles of this Plan are for convenience of
reference only and in case of any conflict, the text of this
Plan, rather than such titles, shall control.
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