EXHIBIT 10(iii)(s)
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January 20, 1997
Mr. Frank B. O'Brien
615 North Main Street
Chagrin Falls, OH 44022
Dear Frank:
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 Senior Vice President
and Chief Financial Officer of Ingersoll-Rand Company, reporting
to me as Chairman and Chief Executive Officer.
The following confirms the terms and conditions of our offer:
1. Your starting base salary will be at an annual rate of
$350,000, paid monthly.
2. You will participate in the Company's annual incentive plan.
You are eligible commencing with 1997, for awards of up to
80% of salary depending on both corporate and individual
performance. For 1997, your minimum bonus will be 40% of
your base salary.
3. Upon joining the Company, you will receive an award of non-
qualified stock options of 20,000 shares under our 1995
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 and potentially higher 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 12,000
shares, also administered under the terms of our 1995
Incentive Stock Plan.
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These awards vest in four annual installments, beginning in
March 1997, depending upon the achievement of a
predetermined performance target and your 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. You can be
considered for a larger award at any time based on your own
and the Company's performance.
5. You will receive a benefit under the Executive Supplementary
Retirement Agreement in an amount of $65,000 per year for
ten years subject to your retirement at age 62, and subject
to the provisions of this plan.
In addition, you will be eligible for a pension of 26% of
your final eligible compensation at age 62, assuming you
retire from the Company at that time. If you retire prior to
age 62, your benefit 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 average of your five highest
of your six most recent bonuses. Your 26% benefit will be
calculated taking into account all sources including our
qualified and non-qualified Pension Plan and Retirement
Accounts, the employer portion of Ingersoll-Rand's 40l(k)
Plan contributions, and your Social Security.
6. We will relocate you, your family and household goods to
this area. Your relocation expenses, including shipment of
household goods, real estate commissions and mortgage points
will be reimbursed according to our policy. 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. If, upon our
shared assessment of comparative living costs we identify
significant adverse variances or other relocation issues
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which would interfere with your transition to Northern New
Jersey, the Company will make a special allowance to
recognize the impact of such adverse variance, if any. This
amount would not be tax protected.
7. Your medical and life insurance coverage with Ingersoll-Rand
will commence on the first day of the month following 30
days of employment. Therefore, you may want to continue
your coverage with your current employer under COBRA to
avoid any gap in 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 one year of salary plus your last
annual bonus.
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.
Frank, I am personally looking forward to you joining Ingersoll-
Rand. This is a time of challenge and opportunity for our
company. I am confident your experience and leadership will help
us reach our goals and create a mutually rewarding long-term
relationship between us. I understand you plan to join us on
March 10. Welcome!
Sincerely,
/S/ James E. Perrella
James E. Perrella
Chairman
Accepted:
/S/ Frank B. O'Brien