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SELECTED EXECUTIVE OFFICER EMPLOYMENT AGREEMENT
Mr. N. J. Pishotti
8674 Twighlight Tear Lane
Cincinnati, Ohio 45249
Dear Nick:
On the basis of our discussions and your recent interviews
with members of our management team, I am pleased to extend
this written confirmation of our offer to become Vice
President of Ingersoll-Rand Company, reporting to me as
Chairman and Chief Executive Officer. Your initial
assignment will be the advancement of our strategic sourcing
capabilities, providing leadership and direction to help
position Ingersoll-Rand achieve cost and inventory
reductions, and improved corporate performance.
The following confirms the terms and conditions of our
offer:
1. Your starting base salary will be at an annual rate of
$225,000, paid monthly.
2. Your annual bonus for the award year 1995 will be
guaranteed at a minimum of 50% of base salary.
Otherwise, in subsequent years, you will be eligible
for awards of up to 90% of salary depending on both
corporate and individual performance.
3. Upon joining the Company, you will receive an award of
non-qualified stock options of 18,000 shares with Stock
Appreciation Rights under our 1990 Incentive Stock
Plan. This award is subject to the usual terms and
conditions of awards under the Plan. You will be
considered a full participant, and be eligible to
receive further awards under the Plan in future years
as administered by the Compensation Committee of the
Board.
4. Ingersoll-Rand will provide you with a Stock Award of
10,000 shares, also administered under the terms of our
1990 Incentive Stock Plan.
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These awards vest in three annual installments,
beginning in January, 1996, based on a predetermined
performance target and continued employment. You will
receive an award agreement which explains vesting
requirements and other terms and conditions of your
award. Our stock awards also provide participants with
dividend equivalents, and represent an attractive
additional equity interest in our company.
5. You will receive a benefit under the Executive
Supplementary Retirement Agreement in an amount of
$45,000 per year for ten years beginning at age 65,
subject to the provisions of this plan.
You will be eligible for a full pension based on 65% of
your final eligible compensation at age 62. If you
retire prior to age 62, your retirement would be
subject to the terms and conditions of the company's
qualified retirement plan.
For purposes of retirement benefits, eligible
compensation is your final salary, plus the final five-
year average of annual bonuses received. Your full 65%
benefit will be calculated from all sources including
our qualified and non-qualified Pension Plan and
Retirement Accounts, the employer portion of Ingersoll-
Rand's and your former employer's 401(k) Plan
contributions, and your former employer's retirement
benefits.
These special additional benefits will necessarily be
provided outside the Corporate Retirement Plan of
Ingersoll-Rand, and for the most part will be paid from
the general funds of the company. For purposes of
benefit service, we will consider that you have accrued
a benefit of thirty percentage points of final
compensation upon joining us, and will accrue seven
percentage points per year of credited service, up to a
maximum of 65%.
6. We will relocate you, your family and household goods
to this area, and will pay you a $100,000 special
allowance upon your relocation to cover differences in
housing costs, mortgage interest and any other
disadvantages. Your relocation expenses, including
shipment of household goods, real estate commissions and
mortgage points will be reimbursed according to our
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policy; however, your special allowance will not be
subject to tax protection. Ingersoll-Rand's relocation
policy also provides for equity advances, at company
discretion, to facilitate home purchases prior to sale of
your existing residence. And, our program also includes
the possibility of home purchase should that be necessary
to effect a smooth transition.
7. Your medical and life insurance coverage with
Ingersoll-Rand will commence on the first day of the
month following 30 days of employment. You should
continue your current coverage with your former
employer under COBRA to avoid any gap in your coverage.
8. In the unlikely event that you are involuntarily
terminated by the company other than for cause (i.e.,
violation of law or serious breach of ethics), we will
provide you with a severance payment equal to 3 years
of salary plus your last annual bonus. In anticipation
of your retirement, your severance payment will decline
by one-third for each year of service beginning after
age 59.
9. Our offer is conditioned upon satisfactorily completing
a physical examination, which includes drug testing,
and fulfilling the requirements of the Immigration
Reform and Control Act of 1986.
We at Ingersoll-Rand have given this offer careful
consideration and we view it as an exciting opportunity for
you in your career progression. We are confident that you
have the capabilities to succeed with our company, and that
we will enjoy an important and mutually rewarding long-term
relationship. I hope you find our offer acceptable and will
join us preferably on or before April 3, 1995.
Assuming the foregoing is acceptable to you, please sign and
return a copy of this letter to me by March 10, 1995.
Sincerely,
Accepted: /S/ James E. Perrella
/S/ N. J. Pishotti James E. Perrella
Chairman
March 2, 1995
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