IR EXECUTIVE DEFERRED COMPENSATION PLAN II

[As Amended and Restated Effective August 1, 2007]
 
 

--------------------------------------------------------------------------------

TABLE OF CONTENTS

SECTION 1 -
STATEMENT OF PURPOSE
1
     
SECTION 2 -
DEFINITIONS
       
2.1
Account Balance
2
2.2
Administrative Committee
2
2.3
Base Salary
2
2.4
Beneficiary
2
2.5
Beneficiary Designation Form
2
2.6
Cash Incentive Compensation Award
2
2.7
Change in Control
2
2.8
Code
2
2.9
Compensation Committee
2
2.10
Deferral Account
3
2.11
Deferral Amount
3
2.12
Disability
3
2.13
Discretionary Company Contribution
3
2.14
Discretionary Company Contribution Account
3
2.15
Dividends on Stock Grants
3
2.16
Elected Officer
3
2.17
Election Form
3
2.18
Eligible Employee
4
2.19
ERISA
4
2.20
Investment Option Subaccounts
4
2.21
IR Stock
4
2.22
IR Stock Account
4
2.23
Participant
4
2.24
Participating Employer
4
2.25
Plan Year
4
2.26
Retirement
4
2.27
Return
5
2.28
Separation from Service
5
2.29
Service
5
2.30
Stock Based Awards
5
2.32
Stock Grant
5
2.32
Supplemental Contribution
5
2.33
Supplemental Contribution Account
5
2.34
Trust
5
2.35
Unforeseeable Financial Emergency
5
     
SECTION 3 -
ADMINISTRATION OF THE PLAN
6

 
(i)

--------------------------------------------------------------------------------

 
SECTION 4 -
PARTICIPATION, DEFERRAL ELECTION AND INVESTMENT ELECTION
       
4.1
Participation and Deferral Election
7
4.2
Investment Election
8
4.3
Duration of Elections
9
     
SECTION 5 -
VESTING
       
5.1
Deferral Amounts
10
5.2
Supplemental Contributions
10
5.3
Discretionary Contributions
10
     
SECTION 6 -
ACCOUNTS AND VALUATIONS
       
6.1
Deferral Accounts
11
6.2
Supplemental Contribution Accounts
11
6.3
Discretionary Contribution Accounts
12
6.4
IR Stock Accounts
13
6.5
Changes in Capitalization
14
6.6
Accounts are Bookkeeping Entries
14
     
SECTION 7 -
DISTRIBUTION OF ACCOUNTS
 
 
   
7.1
Separation from Service with Five Years of Service, etc.
15
7.2
Scheduled Distributions Prior to Separation from Service
16
7.3
Separation from Service Prior to Completing Five (5) Years of Service
17
7.4
Unforeseeable Financial Emergency Distribution
17
7.5
Required Delay in Distributions
18
7.6
Prohibition of Accelerations
18
7.7
Medium of Payments
18
7.8
Taxes; Withholding
18
7.9
Distribution Provisions
18
7.10
Treatment of Installments; Date of Distribution
19
7.11
Timing of Initial Election Forms
19
7.12
Effective Date of Distribution Provisions
19
     
SECTION 8 -
BENEFICIARY DESIGNATION
20
     
SECTION 9 -
AMENDMENT AND TERMINATION OF PLAN
       
9.1
Amendment
21
9.2
Termination of Plan
21

 
(ii)

--------------------------------------------------------------------------------

 
SECTION 10 -
MISCELLANEOUS
       
10.1
Unsecured General Creditor
22
10.2
Entire Agreement; Successors
22
10.3
Non-Assignability
22
10.4
No Contract of Employment
22
10.5
Authorization and Source of Shares
22
10.6
Singular and Plural
23
10.7
Captions
23
10.8
Applicable Law
23
10.9
Severability
23
10.10
Notice
23

 
(iii)

--------------------------------------------------------------------------------

IR Executive Deferred Compensation Plan II
As Amended and Restated Effective August 1, 2007
 
SECTION 1

STATEMENT OF PURPOSE

The purpose of the IR Executive Deferred Compensation Plan II (the “Plan”) is to
further increase the mutuality of interest between Ingersoll-Rand Company (the
“Company”), its employees, the employees of a Participating Employer and members
of Ingersoll-Rand Company Limited by providing a select group of management and
highly compensated employees of the Company or a Participating Employer the
opportunity to elect to defer receipt of cash compensation. The Plan shall be
unfunded for tax purposes and for purposes of Title I of ERISA. To the extent
Code Section 409A applies to the Plan, the terms of the Plan are intended to
comply with that provision, and the terms of the Plan shall be interpreted and
administered in accordance therewith.

The Plan is a successor to the IR Executive Deferred Compensation Plan (the
“Predecessor Plan”). The Predecessor Plan, which previously was known as the
Ingersoll-Rand Company Executive Deferred Compensation and Stock Bonus Plan,
became effective on January 1, 1997, was amended and restated effective January
1, 2001.

On December 31, 2004, the Company froze the Predecessor Plan with respect to all
deferrals to the extent such deferrals would otherwise be subject to Code
Section 409A (including amounts that were credited under the Predecessor Plan as
of December 31, 2004 but were not grandfathered with respect to Code Section
409A). Also on December 31, 2004, the Company adopted the Plan to provide for
deferrals of amounts subject to Code Section 409A (including amounts that were
credited under the Predecessor Plan as of December 31, 2004 but were not
grandfathered with respect to Code Section 409A) on substantially the same terms
as those provided under the Predecessor Plan to the extent such terms are not
inconsistent with Code Section 409A.

The Company now hereby amends and restates the Plan in its entirety to conform
the terms of the Plan to the requirements under Code Section 409A. The Plan
shall apply to (i) amounts initially deferred hereunder on or after January 1,
2005, (ii) amounts initially credited to the Predecessor Plan before January 1,
2005 that, pursuant to the effective-date rules of Code Section 409A, are
subject to the provisions of Code Section 409A, and (iii) investment earnings
allocable to amounts described in (i) and (ii). Notwithstanding any other
provision of this Plan, no amount will be deferred or credited under this Plan
with respect to a Participant for a Plan Year if such amount is properly
deferred or credited with respect to such Participant for such Plan Year under
the Predecessor Plan.
 
1

--------------------------------------------------------------------------------

SECTION 2

DEFINITIONS

 
2.1
“Account Balance” means, for each Plan Year, a credit on the records of the
Company equal to the sum of the value of a Participant’s Deferral Account,
Supplemental Contribution Account, Discretionary Company Contribution Account
and IR Stock Account for such Plan Year. The Account Balance shall be a
bookkeeping entry only and shall be utilized solely as a device for the
measurement and determination of the amounts to be paid to a Participant, or to
the Participant’s designated Beneficiary, pursuant to the Plan.

 
2.2
“Administrative Committee” shall mean the committee appointed by the Chief
Executive Officer of the Company which will administer the Plan in accordance
with the duties delegated to it by the Compensation Committee or as set forth
herein.

 
2.3
“Base Salary” means a Participant’s annual base salary, excluding bonuses,
commissions, incentive compensation and all other remuneration for services
rendered to the Company or a Participating Employer and prior to a reduction for
any salary contributions to a plan established pursuant to Code Section 125 or
qualified pursuant to Code Section 401(k). 

 
2.4
“Beneficiary” means the person or persons designated as such in accordance with
Section 8.

 
2.5
“Beneficiary Designation Form” means the form established from time to time by
the Administrative Committee that a Participant completes and returns to the
Administrative Committee to designate one or more Beneficiaries.

 
2.6
“Cash Incentive Compensation Award” means any of the Participant’s annual cash
incentive compensation awards.

 
2.7
“Change in Control” means a “change in control of the Company” (as set forth in
the Company’s Incentive Stock Plan of 2007), unless a different definition is
used for purposes of any severance of employment agreement or change of control
arrangement between the Company and a Participant, in which event such
definition shall apply. Solely for purposes of this Section 2.7, the term
“Company” shall mean Ingersoll-Rand Company Limited.

 
2.8
“Code” means the Internal Revenue Code of 1986, as amended from time to time,
and the regulations and other administrative guidance issued thereunder.

 
2.9
“Compensation Committee” means the Compensation Committee of the Board of
Directors of Ingersoll-Rand Company Limited.

 
2

--------------------------------------------------------------------------------

 

 
2.10
“Deferral Account” means, for each Plan Year, (i) the sum of all of a
Participant’s Deferral Amounts, plus (ii) amounts credited in accordance with
all the applicable crediting provisions of the Plan that relate to the
Participant’s Deferral Account, less (iii) all distributions made to the
Participant or to the Participant’s Beneficiary pursuant to the Plan that relate
to the Participant’s Deferral Account.

 
2.11
“Deferral Amount” means the amount of a Participant’s Cash Incentive
Compensation Award, Base Salary, Stock Based Awards, and (for periods prior to
August 2, 2006) Dividends on Stock Grants actually deferred under the Plan by
the Participant pursuant to Section 4 for any one Plan Year.

 
2.12
“Disability” means, with respect to a Participant: (a) a condition under which
the Participant: (i) is unable to engage in any substantial gainful activity by
reason of any medically determinable physical or mental impairment that can be
expected to result in death or can be expected to last for a continuous period
of not less than twelve months; or (ii) is, by reason of any medically
determinable physical or mental impairment that can be expected to result in
death or can be expected to last for a continuous period of not less than twelve
months, receiving income replacement benefits for a period of not less than
three months under an accident and health plan covering employees of the Company
or a Participating Employer; or (b) any other condition under which the
Participant is considered “disabled” within the meaning of Code Section
409A(a)(2)(C).

 
2.13
“Discretionary Company Contribution” means an additional amount to be credited
to a Participant's Discretionary Company Contribution Account for a Plan Year.

 
2.14
“Discretionary Company Contribution Account” means, for each Plan Year, (i) the
sum of all of a Participant’s Discretionary Company Contributions, plus (ii)
amounts credited in accordance with all the applicable crediting provisions of
the Plan that relate to the Participant’s Discretionary Company Contribution
Account, less (iii) all distributions made to the Participant or to the
Participant’s Beneficiary pursuant to the Plan that relate to the Participant’s
Discretionary Company Contribution Account.

 
2.15
“Dividends on Stock Grants” means the dividends on deferred vested Stock Grants
payable to a Participant pursuant to the Ingersoll-Rand Company Incentive Stock
Plan of 1995 or the Ingersoll-Rand Company Incentive Stock Plan of 1998.
Notwithstanding the foregoing, effective August 2, 2006, no additional Dividends
on Stock Grants shall be credited under the Plan with respect to any
Participant.

 
2.16
“Elected Officer” means an officer of the Company elected to such position by
the Board of Directors of the Company.

 
2.17
“Election Form” means the form or forms established from time to time by the
Administrative Committee that a Participant completes, signs and returns to the
Administrative Committee or to the Plan’s recordkeeper to make an election under
the Plan. An Election Form also includes any other method approved by the
Administrative Committee, in its sole and absolute discretion, that a
Participant may use to make an election under the Plan. The terms and conditions
specified in the Election Form(s) are incorporated by reference herein and form
a part of the Plan. If there is a conflict between the Election Form and the
Plan, the terms of the Plan shall control and govern.

 
3

--------------------------------------------------------------------------------

 
2.18
“Eligible Employee” means an Elected Officer or an individual who is among a
select group of management and highly compensated employees of the Company or a
Participating Employer who has been selected by the Administrative Committee, in
its sole and absolute discretion, to participate in the Plan.

 
2.19
“ERISA” means the Employee Retirement Income Security Act of 1974, as amended
from time to time.

 
2.20
“Investment Option Subaccounts” means the separate subaccounts, each of which
corresponds to an investment option elected by the Participant or, as provided
in Section 6.3 regarding Discretionary Company Contributions, the Administrative
Committee, with respect to a Participant’s Deferral Accounts and/or
Discretionary Company Contribution Accounts, as applicable.

 
2.21
“IR Stock” means the Class A common shares, par value $1.00 per share, of
Ingersoll-Rand Company Limited, a Bermuda company.

 
2.22
“IR Stock Account” means, for each Plan Year, (i) the sum of all of a
Participant’s Deferral Amounts and Discretionary Company Contributions that are
deemed to be invested in IR Stock, plus (ii) amounts credited in accordance with
all the applicable crediting provisions of the Plan that relate to the
Participant’s IR Stock Account, less (iii) all distributions made to the
Participant or to the Participant’s Beneficiary pursuant to the Plan that relate
to the Participant’s IR Stock Account.

 
2.23
“Participant” means an Eligible Employee participating in the Plan in accordance
with the provisions of Section 4.

 
2.24
“Participating Employer” means any direct or indirect parent, subsidiary or
affiliate of the Company that is aggregated with the Company for purposes of
Code Section 409A.

 
2.25
“Plan Year” means a calendar year.

 
2.26
“Retirement” means, with respect to a Participant, Separation from Service after
he or she has attained age 65 (62 for Elected Officers) or Separation from
Service with at least five (5) years of Service.

 
4

--------------------------------------------------------------------------------

 
2.27
“Return” means, for each investment option, an amount equal to the net
investment return (including changes in value and distributions) for each such
investment option during each business day.

 
2.28
“Separation from Service” means a separation from service within the meaning of
Code Section 409A(a)(2)(A)(i).

 
2.29
“Service” means periods of service with the Company or a Participating Employer
as determined in accordance with Section 2.3 of the Ingersoll Rand Pension Plan
Number One.

 
2.30
“Stock Based Awards” means awards, in lieu of any incentive or variable
compensation to which a Participant is entitled from the Company or its
subsidiaries or ERISA affiliates, of (i) Class A common shares of Ingersoll-Rand
Company Limited, or (ii) restricted Class A common shares of Ingersoll-Rand
Company Limited, or (iii) awards that are valued in whole, or in part, by
reference to, or otherwise based on the fair market value of Class A common
shares of Ingersoll-Rand Company Limited.

 
2.31
“Stock Grant” means a grant of IR Stock made to a Participant under the
Company’s stock grant plan, which was frozen in February of 2000.

 
2.32
“Supplemental Contribution” means an additional amount to be credited to a
Participant’s Supplemental Contribution Account equal to twenty percent (20%) of
the Participant’s Cash Incentive Compensation Award that is deferred under
Section 6.1 of the Plan for a Plan Year by the Participant and is, at the time
of making the deferral election, elected to be invested in the Participant’s IR
Stock Account. Supplemental Contributions shall be available and credited only
to Participants whose job category indicates specified ownership guidelines as
determined by the Compensation Committee in its sole and absolute discretion.
Notwithstanding the foregoing, effective August 2, 2006, no additional
Supplemental Contributions shall be credited under the Plan with respect to any
Participant.

 
2.33
“Supplemental Contribution Account” means, for each Plan Year, (i) the sum of
all of a Participant’s Supplemental Contributions, plus (ii) amounts credited in
accordance with all the applicable crediting provisions of the Plan that relate
to the Participant’s Supplemental Contribution Account, less (iii) all
distributions made to the Participant or to the Participant’s Beneficiary
pursuant to the Plan that relate to the Participant’s Supplemental Contribution
Account.

 
2.34
“Trust” means the Ingersoll-Rand Company Deferred Compensation Trust Agreement,
dated as of January 1, 2001 between the Company and the trustee named therein,
as amended from time to time.

 
2.35
“Unforeseeable Financial Emergency” means: (a) a severe financial hardship to
the Participant resulting from an illness or accident of the Participant, the
Participant’s spouse, or a dependent (as defined in Code Section 152(a)) of the
Participant, loss of the Participant’s property due to casualty, or other
similar extraordinary and unforeseeable circumstances arising as a result of
events beyond the control of the Participant; or (b) such other definition of
“unforeseeable emergency” within the meaning of Code Section 409A(a)(2)(B)(ii).

5

--------------------------------------------------------------------------------

SECTION 3

ADMINISTRATION OF THE PLAN

The Plan shall be administered by the Compensation Committee (or any successor
committee). The Compensation Committee has delegated authority to the
Administrative Committee to administer the Plan in accordance with the
provisions of this Section. Notwithstanding the previous sentence, the
Compensation Committee shall retain authority for determining (i) a
Participant’s eligibility to receive Supplemental Contributions, and (ii)
eligibility for, and the amount of, Discretionary Company Contributions with
respect to Participants whose job category indicates specified ownership
guidelines as determined by the Compensation Committee.

The primary responsibility of the Administrative Committee is to administer the
Plan for the exclusive benefit of Participants and their Beneficiaries, subject
to the specific terms of the Plan. The Administrative Committee shall administer
the Plan in accordance with its terms to the extent consistent with applicable
law, and shall have the power to determine all questions arising in connection
with the administration, interpretation, and application of the Plan. Any such
determination by the Administrative Committee shall be conclusive and binding
upon all affected parties. Any denial by the Administrative Committee of a claim
for benefits under the Plan by a Participant or Beneficiary shall be stated in
writing by the Administrative Committee and delivered or mailed to the
Participant or Beneficiary. Such notice shall set forth the specific reasons for
the Administrative Committee's decision. In addition, the Administrative
Committee shall afford a reasonable opportunity to any Participant or
Beneficiary whose claim for benefits has been denied for a review of the
decision denying this claim.

6

--------------------------------------------------------------------------------

SECTION 4

PARTICIPATION, DEFERRAL ELECTION AND INVESTMENT ELECTION.

 
4.1
Participation and Deferral Election. Any Eligible Employee may elect to
participate in the Plan for a given Plan Year by filing a completed Election
Form for the Plan Year in the manner prescribed by the Administrative Committee.
The Election Form must specify the percentage or dollar amount of any Deferral
Amount otherwise payable for or during such Plan Year that will be deferred
under the Plan. No Election Form shall be accepted by the Administrative
Committee unless it provides that the Participant has elected to defer a
combination of cash and/or Stock Based Award equal to a minimum of $5,000.

Any election to defer a Deferral Amount for a Plan Year is irrevocable upon the
filing of the Election Form, and must be properly completed and filed by the
Participant no later than:

 
(a)
In the case of the Participant’s Base Salary payable for a Plan Year: (i) the
December 31 immediately preceding such Plan Year; or (ii) with respect to a new
Participant who is described in Code Section 409A(a)(4)(B)(ii), the 30th day
after such new Participant first becomes eligible to participate in the Plan
(provided that such election shall relate only to Base Salary for services
performed subsequent to the date such Election Form is filed);

 
(b)
In the case of the Participant’s Cash Incentive Compensation payable during a
Plan Year or Stock Based Awards granted during a Plan Year that constitute
performance-based compensation for purposes of Code Section 409A: (i) the June
30 immediately preceding such Plan Year; or (ii) with respect to a new
Participant who is described in Code Section 409A(a)(4)(B)(ii), the 30th day
after such new Participant first becomes eligible to participate in the Plan
(provided that such election shall relate only to Cash Incentive Compensation
and Stock Based Awards for services performed subsequent to the date such
Election Form is filed);

 
(c)
In the case of Stock Based Awards granted during a Plan Year that do not
constitute performance-based compensation for purposes of Code Section 409A: (i)
if, at the time the Participant obtains a legally binding right to such Stock
Based Awards, the Stock Based Awards are subject to a substantial risk of
forfeiture (within the meaning of Code Section 409A) for a period of at least 13
months, the 30th day after the Participant obtains a legally binding right to
such Stock Based Awards; and, (ii) otherwise (a) the December 31 immediately
preceding the Plan Year during which the services for which such Stock Based
Awards are granted will be performed, or (b) with respect to a new Participant
who is described in Code Section 409A(a)(4)(B)(ii), the 30th day after such new
Participant first becomes eligible to participate in the Plan (provided that
such election shall relate only to Stock Based Awards for services performed
subsequent to the date such Election Form is filed);

 
7

--------------------------------------------------------------------------------

An Eligible Employee who fails to file a properly completed Election Form by the
applicable date indicated above will be ineligible to defer under the Plan the
Deferral Amount to which such applicable date relates. In addition, the
Administrative Committee, in its sole and absolute discretion, may establish
from time to time such other enrollment requirements as it determines are
necessary or proper.

Notwithstanding anything to the contrary, the Administrative Committee, in its
sole and absolute discretion, shall determine from time to time the percentage
of Base Salary that may be deferred by Participants under the Plan in any Plan
Year. Once such a determination is made the percentage shall remain in effect
until the beginning of the first Plan Year after such percentage is changed by
the Administrative Committee.

If the Administrative Committee determines in good faith that a Participant no
longer qualifies as a member of a select group of management or highly
compensated employees, as membership in such group is determined in accordance
with ERISA Sections 201(2), 301(a)(3) and 401(a)(1), the Participant shall not
be permitted to make any future deferral election under this Section 4.1 for any
future Plan Year.

 
4.2
Investment Election. In accordance with procedures established by the
Administrative Committee in its sole and absolute discretion, prior to the time
a Participant’s Deferral Amounts are credited to a Participant’s Deferral
Account pursuant to Section 6.1, the Participant shall designate, on an Election
Form, the types of investment options in which the Participant’s Deferral
Amounts will be deemed to be invested for purposes of determining the amount of
earnings to be credited to the Participant’s Deferral Account and, with respect
to Deferral Amounts that are designated by the Participant to be deemed to be
invested in IR Stock, the IR Stock Account.

Subject to the right of the Administrative Committee to direct the types of
investment options in which a Participant’s Discretionary Company Contributions
will be deemed to be invested as described in Section 6.3, in the event a
Participant receives a Discretionary Company Contribution, the Participant
shall, at the time designated by the Administrative Committee, in its sole and
absolute discretion, designate, on an Election Form, the types of investment
options in which the Participant’s Discretionary Company Contributions will be
deemed to be invested for purposes of determining the amount of earnings to be
credited to the Participant’s Discretionary Company Contribution Account and,
with respect to Discretionary Company Contributions that are designated by the
Participant to be deemed to be invested in IR Stock, the IR Stock Account.
 
8

--------------------------------------------------------------------------------

In making the designations pursuant to this Section, the Participant may specify
that all or any portion of the Participant’s Deferral Amount and, subject to
Section 6.3, Discretionary Company Contributions be deemed to be invested, in
whole percentage increments, in one or more of the types of investment options
provided under the Plan as communicated from time to time by the Administrative
Committee. Subject to Section 6.4, a Participant may change the designation made
under this Section with respect to prior and/or future Deferral Amounts and/or,
subject to Section 6.3, prior and/or future Discretionary Company Contributions
by filing an Election Form no later than the time specified by the
Administrative Committee, in its sole and absolute discretion, to be effective
as of the first business day of the following month.

Notwithstanding any other provision of this Section 4.2, in no event may a
Participant designate that any Base Salary deferred under the Plan or any
earnings thereon be deemed to be invested in IR Stock, and in no event may a
Participant designate that any Stock Based Awards or earnings thereon be deemed
to be invested other than in IR Stock.

Except for Discretionary Company Contributions that the Administrative
Committee, pursuant to Section 6.3, has directed the investment options in which
a Participant’s Discretionary Company Contributions shall be deemed to be
invested, if a Participant fails to elect a type of investment option under this
Section, he or she shall be deemed to have elected the investment option
designated by the Administrative Committee as the default investment option.

 
4.3
Duration of Elections. Notwithstanding anything to the contrary: (a) any
election under Section 4.1 (including a failure to make an election) shall
remain in effect from Plan Year to Plan Year unless a written request to modify
or terminate that election for a subsequent Plan Year is submitted to the
Administrative Committee in accordance with Section 4.1; and (b) any election
under Section 4.2 (including a failure to make an election) shall remain in
effect from Plan Year to Plan Year unless a written request to modify or
terminate that election is submitted to the Administrative Committee, which
request shall be effective as to any Deferral Amount credited to the
Participant’s Deferral Account 30 or more days after such written request is
submitted to the Administrative Committee; provided that nothing in this Section
4.3(b) shall permit a Participant to make such a written request as to the
deemed investment of Stock Based Awards.

 
9

--------------------------------------------------------------------------------

SECTION 5

VESTING

 
5.1.
Deferral Amounts. A Participant shall be fully vested in his or her Deferral
Account.

 
5.2.
Supplemental Contributions. A Participant shall vest in his or her Supplemental
Contribution Account on the earliest of: (i) the fifth anniversary of the date
the Supplemental Contribution is credited to the Participant's Supplemental
Contribution Account; (ii) the date of the Participant's Retirement; (iii) the
Participant’s Disability; (iv) the Participant's death; (v) a Change in Control;
or (vi) a termination of the Plan pursuant to Section 9.2. Notwithstanding the
foregoing, effective August 2, 2006, a Participant shall be fully vested in his
or her Supplemental Contribution Account.

 
5.3.
Discretionary Contributions. A Participant shall vest in his or her
Discretionary Company Contribution Account on the earliest of: (i) the date
determined by the Administrative Committee; (ii) the date of the Participant’s
Disability; (iii) the date of the Participant’s death; (iv) a Change in Control;
or (v) a termination of the Plan pursuant to Section 9.2. Notwithstanding the
above, to the extent an agreement between the Company and the Participant
contains provisions governing vesting with regards to a Discretionary Company
Contribution made on behalf of the Participant, the terms of such agreement
shall apply.

 
10

--------------------------------------------------------------------------------

SECTION 6

ACCOUNTS AND VALUATIONS

 
6.1
Deferral Accounts. The Administrative Committee shall establish and maintain a
separate Deferral Account for each Participant for each Plan Year. All Deferral
Amounts, other than Stock Based Awards and Deferral Amounts that are deemed, at
the Participant’s election, to be invested in IR Stock shall be credited to the
Participant’s Deferral Account on the date when the Deferral Amount would
otherwise be paid to the Participant. All Stock Based Awards and Deferral
Amounts that are deemed, at the Participant’s election, to be invested in IR
Stock shall be credited to the Participant’s IR Stock Account as described in
Section 6.4.

Each Participant’s Deferral Accounts shall be divided into Investment Option
Subaccounts. A Participant’s Deferral Accounts shall be credited as follows:
 

 
(a)
On the day a Deferral Amount is credited to a Participant’s Deferral Account,
the Administrative Committee shall credit the Investment Option Subaccounts of
the Participant's Deferral Account with an amount equal to the Participant’s
Deferral Amount in accordance with the Participant's Election Form; that is, the
portion of the Participant's Deferral Amount that the Participant has elected to
be deemed to be invested in a certain type of investment option shall be
credited to the Investment Option Subaccount corresponding to that investment
option, and

 

 
(b)
Each business day, each Investment Option Subaccount of a Participant's Deferral
Account shall be adjusted for earnings or losses in an amount equal to that
determined by multiplying the balance credited to such Investment Option
Subaccount as of the prior day plus contributions credited that day to the
Investment Option Subaccount by the Return for the corresponding investment
option.

 
6.2
Supplemental Contribution Accounts. The Administrative Committee shall establish
and maintain a separate Supplemental Contribution Account for each Plan Year for
each Participant who receives a Supplemental Contribution for such Plan Year.
All Supplemental Contributions shall be credited to the Participant’s
Supplemental Contribution Account on the same date that the Participant’s
Deferral Amount applicable to a Cash Incentive Compensation Award for which the
Supplemental Contribution is being made is credited to the Participant’s
Deferral Account pursuant to Section 6.1. Effective August 2, 2006, no further
Supplemental Contributions shall be credited to a Participant’s Supplemental
Contribution Account. All of a Participant’s Supplemental Contributions shall be
deemed to be invested in, and shall remain deemed to be invested in, IR Stock in
the Participant’s Supplemental Contribution Account until such amounts are
distributed from the Plan.

All Supplemental Contributions shall initially be credited to a Participant’s
Supplemental Contribution Account in units or fractional units of IR Stock. The
value of each unit shall be determined each business day and shall equal the
closing price of one share of IR Stock on the New York Stock Exchange-Composite
Tape. On each date that Supplemental Contributions are credited to a
Participant’s Supplemental Contribution Account, the number of units to be
credited shall be determined by dividing the number of units by the value of a
unit on such date.
 
11

--------------------------------------------------------------------------------

Dividends paid on IR Stock shall be reflected in a Participant’s Supplemental
Contribution Account by the crediting of additional units or fractional units.
Such additional units or fractional units shall equal the value of the dividends
based upon the closing price of one share of IR Stock on the New York Stock
Exchange-Composite Tape on the date such dividends are paid.
 

 
6.3
Discretionary Company Contribution Accounts. The Administrative Committee shall
establish and maintain a separate Discretionary Company Contribution Account for
each Plan Year for each Participant who receives a Discretionary Company
Contribution for such Plan Year. All Discretionary Company Contributions, other
than those that are deemed, at the Participant’s election or as directed by the
Administrative Committee pursuant to the following paragraph, to be invested in
IR Stock shall be credited to the Participant’s Discretionary Company
Contribution Account on the date determined by the Administrative Committee in
its sole and absolute discretion. All Discretionary Company Contributions that
are deemed, at the Participant’s election or as directed by the Administrative
Committee, to be invested in IR Stock shall be credited to the Participant’s IR
Stock Account as described in Section 6.4.

Each Participant’s Discretionary Company Contribution Accounts shall be divided
into Investment Option Subaccounts. Notwithstanding the previous sentence, the
Administrative Committee may, in its sole and absolute discretion, at the time a
Discretionary Company Contribution is made, direct that a Participant’s
Discretionary Company Contribution be invested in any one or more of the
Investment Option Subaccounts (including the IR Stock Account) and that such
Discretionary Company Contribution remain invested in such Investment Option
Subaccounts until at least such time as the Administrative Committee, in its
sole and absolute discretion, determines that such Discretionary Company
Contribution, or portion thereof, may, except as otherwise provided in Section
6.4, be invested in Investment Option Subaccounts elected by the Participant. A
Participant’s Discretionary Company Contribution Accounts shall be credited as
follows:

 
(a)
On the day a Discretionary Company Contribution is credited to a Participant’s
Discretionary Company Contribution Account, the Administrative Committee shall
credit the Investment Option Subaccounts of the Participant's Discretionary
Company Contribution Account with an amount equal to the Participant’s
Discretionary Company Contribution in accordance with the Participant's Election
Form or as directed by the Administrative Committee; that is, the portion of the
Participant's Discretionary Company Contribution that the Participant has
elected, or that the Administrative Committee has directed, to be deemed to be
invested in a certain type of investment option shall be credited to the
Investment Option Subaccount corresponding to that investment option.

 
12

--------------------------------------------------------------------------------

 
(b)
Each business day, each Investment Option Subaccount of a Participant's
Discretionary Company Contribution Account shall be adjusted for earnings or
losses in an amount equal to that determined by multiplying the balance credited
to such Investment Option Subaccount as of the prior day plus contributions
credited that day to the Investment Option Subaccount by the Return for the
corresponding investment option.

To the extent an agreement between the Company and the Participant contains
provisions governing the deemed investment of Discretionary Company
Contributions made on behalf of the Participant, the deemed investment
provisions of such agreement shall apply.

 
6.4
IR Stock Accounts. The Administrative Committee shall establish and maintain a
separate IR Stock Account for each Plan Year for each Participant who (i) elects
to have all or a portion of his of her Deferral Amounts and/or Discretionary
Company Contributions for such Plan Year invested in IR Stock, (ii) elects to
defer Stock Based Awards pursuant to Section 4.1, or (iii) receives a
Discretionary Company Contribution which is directed, pursuant to Section 6.3,
by the Administrative Committee to be deemed to be invested in IR Stock. All
Deferral Amounts that are deemed, at the Participant’s election, to be invested
in IR Stock shall be credited to the Participant’s IR Stock Account on the date
when the Deferral Amount would otherwise be paid to the Participant. All Stock
Based Awards shall be credited to a Participant’s IR Stock Account at the time
such Stock Based Awards become vested. All Discretionary Company Contributions
that are deemed, whether at the Participant’s election or as directed by the
Administrative Committee, to be invested in IR Stock shall be credited to the
Participant’s IR Stock Account on the date determined by the Administrative
Committee in its sole and absolute discretion. Notwithstanding anything to the
contrary, IR Stock credited to a Participant’s IR Stock Account may not be
designated by the Participant to be deemed to be invested in any other
investment option and shall remain invested in IR Stock in such IR Stock Account
until distributed from the Plan. A Participant’s IR Stock Accounts shall be
credited as follows:

 
(a)
On the day a Deferral Amount or Discretionary Company Contribution is credited
to a Participant’s IR Stock Account, the Administrative Committee shall credit
the IR Stock Account with an amount equal to the Participant’s Deferral Amount
and/or Discretionary Company Contribution.

 
13

--------------------------------------------------------------------------------

 
(b)
All Deferral Amounts and Discretionary Company Contributions deemed to be
invested in IR Stock in accordance with the Participant’s Election Form or, with
respect to Discretionary Company Contributions as directed by the Administrative
Committee, shall be credited to a Participant's IR Stock Account in units or
fractional units. The value of each unit shall be determined each business day
and shall equal the closing price of one share of IR Stock on the New York Stock
Exchange-Composite Tape. On each date that Deferral Amounts and/or Discretionary
Company Contributions are credited to the Participant's IR Stock Account, the
number of units to be credited shall be determined by dividing the amount of
such Deferral Amounts and/or Discretionary Company Contributions by the value of
a unit on such date.

Dividends paid on IR Stock shall be reflected in a Participant's IR Stock
Account by the crediting of additional units or fractional units. Such
additional units or fractional units shall equal the value of the dividends
based upon the closing price of one share of IR Stock on the New York Stock
Exchange-Composite Tape on the date such dividends are paid.

 
6.5
Changes in Capitalization. If there is any change in the number or class of
shares of IR Stock through the declaration of a stock dividend or other
extraordinary dividends, or recapitalization resulting in stock splits, or
combinations or exchanges of such shares or in the event of similar corporate
transactions, the units in each Participant’s IR Stock Account and Supplemental
Contribution Account shall be equitably adjusted to reflect any such change in
the number or class of issued shares of IR Stock or to reflect such similar
corporate transaction.

 
6.6
Accounts are Bookkeeping Entries. Notwithstanding any other provision of the
Plan that may be interpreted to the contrary, the investment options, including
IR Stock, are to be used for measurement purposes only, and a Participant's
election of any such investment option, the allocation to his or her Account
Balances thereto, the calculation of additional amounts and the crediting or
debiting of such amounts to a Participant's Account Balances shall not be
considered or construed in any manner as an actual investment of his or her
Account Balances in any such investment option. In the event that the Company or
the trustee of the Trust, in its own discretion, decides to invest funds in any
or all of the investment options, no Participant shall have any rights in or to
such investments themselves. Without limiting the foregoing, a Participant's
Account Balances shall at all times be a bookkeeping entry only and shall not
represent any investment made on the Participant’s behalf by the Company or the
Trust. The Participant shall at all times remain an unsecured creditor of the
Company.

14

--------------------------------------------------------------------------------

SECTION 7

DISTRIBUTION OF ACCOUNTS

 
7.1
Separation from Service with Five Years of Service, Retirement, Disability and
Death. Except as otherwise provided in Section 7.5, effective August 1, 2007 or
as otherwise provided in Section 7.12, a Participant who has a Separation from
Service after completing at least five (5) years of Service, has a Retirement,
incurs a Disability, or dies shall be paid his or her vested Account Balances
(and after his or her death to his or her Beneficiary) in a lump sum in the Plan
Year following the Participant’s Separation from Service, Retirement, Disability
or death unless an optional form of benefit payment has been elected by the
Participant in accordance with the next sentence. For each Plan Year’s Account
Balance the Participant may elect, on an initial Election Form filed in
accordance with Section 4.11 by the time specified in Section 7.11, an optional
form of benefit payment from among the following:

 

 
(1)
Annual installments over five (5) years commencing in the Plan Year following
the Participant’s Separation from Service, Retirement, Disability or death;

 

 
(2)
Annual installments over ten (10) years commencing in the Plan Year following
the Participant’s Separation from Service, Retirement, Disability or death;

 

 
(3)
Annual installments over fifteen (15) years commencing in the Plan Year
following the Participant’s Separation from Service, Retirement, Disability or
death; and

 

 
(4)
A lump sum distribution payable in the Plan Year specified by the Participant on
such Election Form; provided, however, that such specified date shall be no less
than one (1) year and no more than five (5) years following the Participant’s
Separation from Service, Retirement, Disability or death.

 
Notwithstanding the foregoing, a Participant may irrevocably elect, on a
subsequent Election Form, to change the form and/or extend the timing of a
distribution under this Section to a lump sum distribution payable in the Plan
Year specified by the Participant on such Election Form, which Plan Year shall
not be later than ten (10) years following the Participant’s Separation from
Service, Retirement, Disability, or death, provided that, as and to the extent
required by Code Section 409A(a)(4)(C): (i) no such election shall take effect
until twelve months after the date on which such election was made; (ii) no such
election (other than an election related to a distribution payable by reason of
Disability or death) shall be effective unless it defers by a period of at least
five years the date on which such distribution would otherwise be made or begin;
and (iii) no such election related to a distribution payable at a specified time
or pursuant to a fixed schedule (within the meaning of Code Section
409A(a)(2)(A)(iv)) may be made within twelve months of the date such
distribution would otherwise be made. As and to the extent required under Code
Section 409A(a)(4)(C), the first day of the Plan Year in which a distribution
would otherwise be made or begin (but for an election made by the Participant
under this paragraph) shall be treated as the date the distribution would
otherwise be made or begin for purposes of the rules set forth in the preceding
sentence.
 
15

--------------------------------------------------------------------------------

In the event of the Participant’s Separation from Service with five (5) years of
Service, Retirement, Disability or death prior to the elected date for one or
more scheduled distributions under Section 7.2, the portion of the Participant’s
Account Balance associated with such distribution(s) shall be paid to the
Participant (and after his or her death to his or her Beneficiary) at the time
and in the form determined under this Section 7.1.

Notwithstanding any provision of the Plan to the contrary, if a Participant has
a Separation from Service after completing five (5) years of Service, has a
Retirement, incurs a Disability or dies while receiving annual installments
pursuant to Section 7.2, such annual installments shall continue to be paid to
the Participant (and after his or her death to his or her Beneficiary) in the
same manner as if the Participant had not a Separation from Service or
Retirement, incurred a Disability or died.

All distributions under this Section 7.1 shall be made on a pro rata basis from
the Participant's Account Balances.

 
7.2
Scheduled Distributions Prior to Separation from Service. For each Plan Year’s
Account Balance, a Participant may elect, on an initial Election Form filed in
accordance with Section 4.1 by the time specified in Section 7.11, to receive a
distribution of all or a portion of his or her Deferral Account, IR Stock
Account, vested Discretionary Company Contribution Account and vested
Supplemental Contribution Account with respect to a Plan Year(s) while still
employed by the Company. A Participant’s election for a distribution under this
Section 7.2 shall be permitted only if the date specified on the Election Form
by the Participant for such distribution (in the event of a lump sum) or the
commencement of such distribution (in the event of annual installments) is no
earlier than two (2) years from the last day of the Plan Year for which the
portion of the Deferral Account, IR Stock Account, vested Discretionary Company
Contribution Account, and vested Supplemental Contribution Account to be
distributed is actually deferred. At the time an election for a distribution
under this Section is made, the Participant shall also elect, on the Election
Form, the form of payment of the distribution. The Participant shall elect
either (i) a lump sum payment to be paid in the Plan Year specified by the
Participant on the Election Form or (ii) annual installments over two (2), three
(3), four (4) or five (5) years beginning in the Plan Year specified by the
Participant on the Election Form.

 
16

--------------------------------------------------------------------------------

A Participant may irrevocably elect, on a subsequent Election Form, to change
the form and/or extend the timing of a distribution under this Section, provided
that, as and to the extent required by Code Section 409A(a)(4)(C): (i) no such
election shall take effect until twelve months after the date on which such
election was made; (ii) no such election shall be effective unless it defers by
a period of at least five years the date on which such distribution would
otherwise be made or begin; and (iii) no such election may be made within twelve
months of the date such distribution would otherwise be made. As and to the
extent required under Code Section 409A(a)(4)(C), the first day of the Plan Year
in which a distribution would otherwise be made or begin (but for an election
made by the Participant under this paragraph) shall be treated as the date the
distribution would otherwise be made or begin for purposes of the rules set
forth in the preceding sentence. The Participant shall have the right to extend
the date for any distribution under this paragraph twice.

All distributions under this Section 7.2 shall be made on a pro rata basis from
the Participant's Deferral Account(s), IR Stock Account(s), vested Discretionary
Company Contribution Account(s), and vested Supplemental Contribution
Account(s), as applicable.

 
7.3
Separation from Service Prior to Completing Five (5) Years of Service. Except as
otherwise provided in Section 7.5, if a Participant has a Separation from
Service other than by reason of Retirement, Disability or death prior to his or
her completing five (5) years of Service, the vested portion of the
Participant’s Account Balances, if any, shall be distributed in a lump sum in
the Plan Year following the Participant's Separation from Service. If a
Participant has a Separation from Service other than by reason of Retirement,
Disability or death prior to his or her completing five (5) years of Service
while receiving annual installments pursuant to Section 7.2, such annual
installments shall continue to be paid to the Participant (and after his or her
death to his or her Beneficiary) in the same manner as if the Participant had
not Separated from Service prior to completing five (5) years of Service.

 
7.4
Unforeseeable Financial Emergency Distribution. In the event that the
Administrative Committee, upon written petition of the Participant on an
Election Form filed with the Administrative Committee specifying the Plan
Year(s) with respect to which payment shall be made, determines in its sole and
absolute discretion, that the Participant has suffered an Unforeseeable
Financial Emergency, the Company shall pay to the Participant (or the
Participant’s Beneficiary) in a lump sum from the Participant’s Deferral
Account(s), IR Stock Account(s), vested portion of the Discretionary Company
Contribution Account(s) and the vested portion of the Supplemental Contribution
Account(s) with respect to the specified Plan Year(s), as soon as practicable
following such determination, the amount necessary to satisfy such Unforeseeable
Financial Emergency plus the amount necessary to pay taxes reasonably
anticipated as a result of the distribution, after taking into account the
extent to which the Unforeseeable Financial Emergency is or may be relieved
through reimbursement or compensation by insurance or otherwise or by
liquidation of the Participant’s assets (to the extent the liquidation of such
assets would not itself cause severe financial hardship).

 
17

--------------------------------------------------------------------------------

 
All distributions under this Section 7.4 shall be made on a pro rata basis from
the Participant's Deferral Account(s), IR Stock Account(s), vested Discretionary
Company Contribution Account(s) and vested Supplementary Contribution
Account(s), as applicable.

 
7.5
Required Delay in Distributions. Notwithstanding any other provision of this
Plan to the contrary, no distribution shall be made to a Participant who is a
“specified employee,” as determined by the Company through procedures consistent
with and permitted under Code Section 409A(a)(2)(B)(i), by reason of such
Participant’s Separation from Service or Retirement prior to the date that is
six months after such Participant’s Separation from Service or Retirement. Any
amounts that would otherwise be paid during the six-month period following such
Participant’s Separation from Service or Retirement shall be paid on the first
date such amount may be paid under the preceding provisions of this Section 7.5.

 
7.6
Prohibition of Accelerations. Except to the extent that the Company is permitted
under Code Section 409A(a)(3) to exercise discretion to accelerate distributions
under the Plan, the time or schedule of any distribution hereunder shall not be
accelerated.

 
7.7
Medium of Payments. All amounts in a Participant’s Deferral Account and
Discretionary Company Contribution Account and payable to a Participant or
Beneficiary under the Plan shall be paid in cash. All amounts in a Participant’s
Supplemental Contribution Account and IR Stock Account and payable to a
Participant or Beneficiary under the Plan shall be paid in IR Stock.

All distributions from the Plan that are to be paid in a specified number of
annual installments shall be paid so that the amount of each annual installment
is determined by dividing the total remaining number of units in the
Participant’s Account Balance to be paid in annual installments by the number of
years of annual installments remaining.

 
7.8
Taxes; Withholding. To the extent required by law, the Company, or the trustee
of the Trust, shall withhold from payments made hereunder an amount equal to at
least the minimum taxes required to be withheld by the federal or any state or
local government. The amount to be withheld and the manner in which amounts
shall be withheld shall be determined in the sole discretion of the Company or
the trustee of the Trust.

 
7.9
Distribution Provisions. To the extent an agreement between the Company and a
Participant contains provisions governing the form and/or timing of a
distribution of a Discretionary Company Contribution made on behalf of the
Participant, the distribution provisions of such agreement shall apply to the
extent such provisions are not inconsistent with the requirements of Code
Section 409A.

 
18

--------------------------------------------------------------------------------

 
7.10
Treatment of Installments; Date of Distribution. For purposes of Code Section
409A, any series of installment payments payable to or with respect to a single
Participant shall be treated as a single payment under the Plan. Any
distribution due under the Plan shall be made by the last day of the Plan Year
in which such distribution, disregarding this sentence, is due under the Plan
(determined after the application of Section 7.5) or such other date as may be
permitted or required under Code Section 409A.

 
7.11
Timing of Initial Election Forms. Any election made on an initial Election Form
(but not a subsequent Election Form) referenced in Section 7.1 or 7.2 that
applies to a Deferral Amount or a Discretionary Company Contribution shall be
irrevocable (except to the extent such election is subject to a subsequent
election under Section 7.1 or 7.2 as permitted by Code Section 409A(a)(4)(C))
and must be made no later than the election deadline that applies under Section
4.1 to such Deferral Amount or, in the case of a Discretionary Company
Contribution, December 31 of the Plan Year preceding the Plan Year in which the
Participant performs the services to which such Discretionary Company
Contribution relates.

 
7.12
Effective Date of Distribution Provisions. Notwithstanding any other provision
of this Plan and in accordance with Code Section 409A, the provisions of the
Plan in effect as of July 31, 2007 shall apply through December 31, 2007 to the
extent that this amendment and restatement of the Plan as of August 1, 2007
would (a) cause an amount otherwise payable during 2007 not to be payable during
2007 or (b) cause an amount not otherwise payable during 2007 to be payable
during 2007.

 
19

--------------------------------------------------------------------------------

SECTION 8

BENEFICIARY DESIGNATION

A Participant shall have the right to designate a Beneficiary(ies) to receive
the Participant’s Account Balances in the event the Participant dies prior to
receiving all of his or her Account Balances. A Beneficiary designation shall be
made, and may be amended at any time, by the Participant by filing a written
designation with the Administrative Committee, on such form and in accordance
with such procedures as the Administrative Committee shall establish from time
to time. A Participant may change the designated Beneficiary under the Plan at
any time by providing such designation in writing to the Administrative
Committee.

If a Participant fails to designate a Beneficiary(ies), or if all designated
Beneficiaries predecease the Participant, the Participant’s Beneficiary(ies)
shall be deemed to be the Participant’s estate. If the Company is unable to
determine a Participant's Beneficiary or if any dispute arises concerning a
Participant's Beneficiary, the Company may pay benefits to the Participant's
estate. Upon such payment, the Company shall have no further liability
hereunder.

If any distribution to a Beneficiary is to be made in annual installments, and
the Beneficiary dies before receiving all such installments, the remaining
installments, if any, shall continue to be paid as installments to the estate of
the Beneficiary.

20

--------------------------------------------------------------------------------

SECTION 9

AMENDMENT AND TERMINATION OF PLAN

 
9.1
Amendment. The Plan may, at any time and from time to time, be amended without
the consent of any Participant or Beneficiary, (a) by the Compensation Committee
of the Board of Directors of the Company or (b) by the Administrative Committee
in the case of amendments which do not materially modify the provisions hereof;
provided, however, that no amendment shall reduce any benefits accrued under the
terms of the Plan prior to the date of amendment.

9.2
Termination of Plan

 
a.
Company's Right to Terminate. The Board of Directors of the Company may
terminate the Plan at any time and for any reason.

 
b.
Payments Upon Termination. As and to the extent permitted under Code Section
409A, all amounts deferred under the Plan with respect to a Participant shall be
paid to the Participant, in a lump sum, upon the Company’s termination and
liquidation of the Plan, provided that: (1) the termination and liquidation do
not occur proximate to a downturn in the financial health of the Company; (2)
the Company terminates and liquidates all agreements, methods, programs, and
other arrangements sponsored by the Company that would be aggregated with the
Plan and any other terminated and liquidated agreements, methods, programs, and
other arrangements under Code Section 409A if the Participant had deferrals of
compensation under all the agreements, methods, programs, and other arrangements
that are terminated and liquidated; (3) no payments in liquidation of the Plan
are made within 12 months of the date the Company takes all necessary action
irrevocably to terminate and liquidate the Plan other than payments that would
be payable under the terms of the Plan if the action to terminate and liquidate
the Plan had not occurred; (4) all payments are made within 24 months of the
date the Company takes all necessary action irrevocably to terminate and
liquidate the Plan; and (5) the Company does not adopt a new plan that would be
aggregated with the Plan or any other terminated and liquidated plan under Code
Section 409A if the Participant participated in both plans, at any time within
three years following the date the Company takes all necessary action
irrevocably to terminate and liquidate the Plan.

21

--------------------------------------------------------------------------------

SECTION 10

MISCELLANEOUS

 
10.1
Unsecured General Creditor. Benefits under the 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 obligations
hereunder for payment of benefits at its discretion, provided, however, that no
Participant or Beneficiary shall have any interest in such investment or
reserve. To the extent that any person acquires a right to receive benefits
under the Plan, such rights shall be no greater than the right of any unsecured
general creditor of the Company. No Participant shall have any rights or
privileges of a stockholder of the Company or of a member of Ingersoll-Rand
Company Limited under the Plan, including as a result of the crediting of units
to a Participant’s IR Stock Account or Supplemental Contribution Account, except
at such time as distribution is actually made from the Participant’s IR Stock
Account or Supplemental Contribution Account, as applicable.

 
10.2
Entire Agreement; Successors. The Plan, including the Election Form and any
subsequently adopted amendments to the Plan or Election Form, shall constitute
the entire agreement or contract between the Company and any Participant
regarding the Plan. There are no covenants, promises, agreements, conditions or
understandings, either oral or written, between the Company and any Participant
relating to the subject matter hereof, other than those set forth herein. The
Plan and any amendment hereof shall be binding on the Company and the
Participants 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.

 
10.3
Non-Assignability. To the extent permitted by law, the right of any Participant
or any Beneficiary in any benefit hereunder shall not be subject to attachment,
garnishment or any other legal process for the debts of such Participant or
Beneficiary; nor shall any such benefit be subject to anticipation, alienation,
sale, transfer, assignment, pledge or encumbrance.

 
10.4
No Contract of Employment. The establishment of the Plan or any modification
hereof shall not give any Participant or other person the right to remain in the
service of the Company, a Participating Employer, or any subsidiaries or
affiliates of a Participating Employer, and all Participants and other persons
shall remain subject to discharge to the same extent as if the Plan had never
been adopted.

 
10.5
Authorization and Source of Shares. Shares of IR Stock necessary to meet the
obligations of the Plan have been reserved and authorized pursuant to
resolutions adopted by the Board of Directors of the Company on December 4,
1996, and additional shares of IR Stock shall be reserved and authorized for
delivery under the Plan from time to time. These shares of IR Stock may be
provided from newly-issued or treasury shares.

 
22

--------------------------------------------------------------------------------

 
10.6
Singular and Plural. As the context may require, the singular may be read as the
plural and the plural as the singular.

 
10.7
Captions. The captions to the articles, sections, and paragraphs of the Plan are
for convenience only and shall not control or affect the meaning or construction
of any of its provisions.

 
10.8
Applicable Law. The Plan shall be governed and construed in accordance with the
laws of the State of New Jersey.

 
10.9
Severability. If any provisions of the Plan shall, to any extent, be invalid or
unenforceable, the remainder of the Plan shall not be affected thereby, and each
provision of the Plan shall be valid and enforceable to the fullest extent
permitted by law.

 
10.10
Notice. Any notice or filing required or permitted to be given to the
Administrative Committee shall be sufficient if in writing and hand delivered,
or sent by registered or certified mail, to the Company at 155 Chestnut Ridge
Road, Montvale, NJ 07645, directed to the attention of the Senior Vice
President, Human Resources. Such notice shall be deemed given as of the date of
delivery or, if delivery is made by mail, as of the date shown on the postmark
on the receipt for registration or certification. Any notice to the Participant
shall be addressed to the Participant at the Participant’s residence address as
maintained in the Company’s records. Any party may change the address for such
party here set forth by giving notice of such change to the other parties
pursuant to this Section.

IN WITNESS WHEREOF, the Company has caused this amendment and restatement to be
executed by its duly authorized representative as of August 1, 2007.
 

       
INGERSOLL-RAND COMPANY
 
   
   
  By:  
 /s/ Marcia Avedon
 

--------------------------------------------------------------------------------

Marcia Avedon
 
Senior Vice President

 
23

--------------------------------------------------------------------------------