IR EXECUTIVE DEFERRED COMPENSATION PLAN

[As Amended and Restated Effective August 1, 2007]
 

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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
 
3
2.9
 
Compensation Committee
 
3
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
 
4
2.16
 
Early Distribution
 
4
2.17
 
Effective Time
 
4
2.18
 
Elected Officer
 
4
2.19
 
Election Form
 
4
2.20
 
Eligible Employee
 
4
2.21
 
ERISA
 
4
2.22
 
Investment Option Subaccounts
 
4
2.23
 
IR Stock
 
4
2.24
 
IR Stock Account
 
5
2.25
 
Merger Agreement
 
5
2.26
 
Participant
 
5
2.27
 
Participating Employer
 
5
2.28
 
Plan Year
 
5
2.29
 
Retirement
 
5
2.30
 
Return
 
5
2.31
 
Service
 
5
2.32
 
Supplemental Contribution
 
5
2.33
 
Supplemental Contribution Account
 
5
2.34
 
Trust
 
6
2.35
 
Unforeseeable Financial Emergency
 
6
       
 
SECTION 3 - ADMINISTRATION OF THE PLAN  
7

 
 
(i)

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SECTION 4 - PARTICIPATION, DEFERRAL ELECTION AND INVESTMENT ELECTION
 
 
       
 
4.1
 
Participation and Deferral Election
 
8
4.2
 
Investment Election
 
8
       
 
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 Company 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
 
Termination with Five Years of Service, Retirement, Disability and Death
 
15
7.2
 
Scheduled Distributions Prior to Termination of Employment
 
16
7.3
 
Termination of Employment Prior to Completing Five (5) Years of Service
 
17
7.4
 
Transfer of Employment
 
17
7.5
 
Hardship Distribution
 
17
7.6
 
Early Distributions (with forfeiture)
 
17
7.7
 
Form of Payments
 
18
7.8
 
Taxes; Withholding
 
18
7.9
 
Distribution Provisions
 
18
       
 
SECTION 8 - BENEFICIARY DESIGNATION  
19
       
 
SECTION 9 - AMENDMENT AND TERMINATION OF PLAN
 
 
       
 
9.1
 
Amendment
 
20
9.2
 
Termination of Plan
 
20
       
 
SECTION 10 - MISCELLANEOUS
 
 
       
 
10.1
 
Unsecured General Creditor
 
21

 
 
(ii)

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10.2
 
Entire Agreement; Successors
 
21
10.3
 
Non-Assignability
 
21
10.4
 
No Contract of Employment
 
21
10.5
 
Authorization and Source of Shares
 
21
10.6
 
Singular and Plural
 
22
10.7
 
Captions
 
22
10.8
 
Applicable Law
 
22
10.9
 
Severability
 
22
10.10
 
Notice
 
22

 
 
(iii)

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

SECTION 1

STATEMENT OF PURPOSE

The purpose of the IR Executive Deferred Compensation Plan (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. The Plan,
originally 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, and was again amended and restated effective
August 1, 2007.

Notwithstanding any other provision of the Plan to the contrary (including any
election made by any Participant under the Plan), (i) no amount shall be
deferred under the Plan if, pursuant to the effective date rules of Section
885(d) of the American Jobs Creation Act of 2004, Q&A-16 of IRS Notice 2005-1,
and Treasury Regulations section 1.409A-6(a), such amount would be subject to
Section 409A of the Internal Revenue Code of 1986, as amended (a
“Non-Grandfathered New Deferral Amount”), and (ii) any amount previously
deferred under the Plan that, pursuant to the effective date rules of Section
885(d) of the American Jobs Creation Act of 2004, Q&A-16 of IRS Notice 2005-1,
and Treasury Regulations section 1.409A-6(a), is subject to Section 409A of the
Internal Revenue Code of 1986, as amended (a “Non-Grandfathered Prior Deferral
Amount”) shall no longer be credited or payable under the Plan after December
31, 2004. Any Non- Grandfathered New Deferral Amount shall instead be deferred
under the IR Executive Deferred Compensation Plan II, and any Non-Grandfathered
Prior Deferral Amount shall instead be credited under the IR Executive Deferred
Compensation Plan II, as and to the extent provided under the terms of the IR
Executive Deferred Compensation Plan II.

1

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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 1998) or any sale, lease, exchange or
other transfer (in one transaction or a series of related transactions) of all,
or substantially all, of the assets of the Company, other than any sale, lease,
exchange or other transfer to any person or entity where the Company owns,
directly or indirectly, at least 80 percent of the outstanding voting securities
of such person or entity after any such transfer, 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.

Notwithstanding any other provision of this Section 2.7 or any other provisions
of the Plan to the contrary, none of the transactions contemplated by the Merger
Agreement which are undertaken by (i) Ingersoll-Rand Company or its affiliates
prior to or as of the Effective Time or (ii) Ingersoll-Rand Company Limited or
its affiliates on or after the Effective Time shall trigger, constitute or be
deemed a Change in Control. On and after the Effective Time, solely for purposes
of this Section 2.7, the term “Company” shall mean Ingersoll-Rand Company
Limited.
 
2

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2.8
“Code” means the Internal Revenue Code of 1986, as amended from time to time.

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

 
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 and Dividends on Stock Grants actually deferred
under the Plan by the Participant pursuant to Section 4 for any one Plan Year.
Effective May 29, 2003, Deferral Amount shall also mean, with respect to a
Participant who participates in the Ingersoll-Rand Company Elected Officers
Supplemental Program or the Ingersoll-Rand Company Supplemental Key Management
Plan, the amount that would be payable to the Participant under the
Ingersoll-Rand Company Elected Officers Supplemental Program, Ingersoll-Rand
Company Supplemental Key Management Plan, Ingersoll-Rand Company Supplemental
Employee Savings Plan and/or the Ingersoll-Rand Company Supplemental Pension
Plan but for the Participant’s deferral under Section 4 of the Plan and the
applicable provisions of the Ingersoll-Rand Company Supplemental Employee
Savings Plan and/or the Ingersoll-Rand Company Supplemental Pension Plan.

 
2.12
“Disability” means the Participant is eligible to receive benefits under a
long-term disability plan maintained by the Company or a Participating Employer.

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

 
3

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2.15
“Dividends on Stock Grants” means the dividends on deferred stock grants payable
to a Participant pursuant to the Ingersoll-Rand Company Incentive Stock Plan of
1998.

 
2.16
“Early Distribution” means an election by the Participant, pursuant to Section
7.6, to receive a distribution of amounts from the Participant’s Deferral
Account, IR Stock Account, vested Discretionary Company Contribution Account and
vested Supplemental Contribution Account with respect to a specific Plan Year
prior to the time at which such Participant would otherwise be entitled to such
amounts.

 
2.17
“Effective Time” means the Effective Time as such time is defined in the Merger
Agreement. 

 
2.18
“Elected Officer” means an officer of the Company elected to such position by
the Board of Directors of the Company.

 
2.19
“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 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.

 
2.20
“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.

 
2.21
“ERISA” means the Employee Retirement Income Security Act of 1974, as amended
from time to time.

 
2.22
“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.

 
2.23
“IR Stock” means the Class A common shares, par value $1.00 per share, of
Ingersoll-Rand Company Limited, a Bermuda company.

 
4

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2.24
“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.

 
2.25
“Merger Agreement” means that certain Agreement and Plan of Merger among the
Company, Ingersoll-Rand Company Limited, and IR Merger Corporation dated as of
October 31, 2001, pursuant to which the Company became an indirect wholly-owned
subsidiary of Ingersoll-Rand Company Limited.

 
2.26
“Participant” means an Eligible Employee participating in the Plan in accordance
with the provisions of Section 4.

 
2.27
“Participating Employer” means any direct or indirect parent, subsidiary or
affiliate of the Company.

 
2.28
“Plan Year” means a calendar year.

 
2.29
“Retirement” means termination of employment by a Participant after he or she
has attained age 65 (62 for Elected Officers) or termination at or after age 55
with at least five (5) years of Service.

 
2.30
“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.

 
2.31
“Service” means periods of service with the Company or a Participating Employer
as determined by the Administrative Committee in its sole and absolute
discretion.

 
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.

 
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.

 
5

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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 severe financial hardship to the
Participant resulting from a sudden and unexpected illness or accident of the
Participant or a dependent of the Participant, loss of the Participant’s
property due to casualty or other similar or extraordinary and unforeseeable
circumstances arising as a result of events beyond the control of the
Participant. The circumstances that would constitute an unforeseeable financial
emergency will depend upon the facts of each case, but, in any case, a hardship
benefit may not be made to the extent that such hardship is or may be relieved
(i) through reimbursement or compensation by insurance or otherwise, (ii) by
liquidation of the Participant's assets, to the extent the liquidation of assets
would not itself cause severe financial hardship, or (iii) by cessation of
Deferral Amounts under the Plan.

 
6

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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.
 
7

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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 during such Plan Year that will be deferred under the
Plan. Notwithstanding the previous sentence, an election to defer Dividends on
Stock Grants shall be equal to one hundred percent (100%) of the Dividends on
Stock Grants. The minimum total dollar amount of a Participant’s Deferral Amount
that a Participant may defer under the Plan for any Plan Year is $5,000. Any
election to defer a Deferral Amount is irrevocable upon the filing of the
Election Form, and must be properly completed and filed no later than the
November 30 immediately preceding such Plan Year, or such other date as the
Administrative Committee may specify. An Eligible Employee who fails to file a
properly completed Election Form by such date will be ineligible to defer a
Deferral Amount under the Plan for the following Plan Year. 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 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 Administrative
Committee shall have the right, in its sole and absolute discretion, to (i)
terminate any deferral election the Participant has made for the remainder of
the Plan Year in which the Participant's membership status changes, (ii) prevent
the Participant from making future deferral elections and/or (iii) immediately
distribute the Participant's then vested Account Balances and terminate the
Participant's participation in the Plan.

 
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.

 
8

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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.

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. 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.

9

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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.

 
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

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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 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 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. 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

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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.

 
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(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 or, (ii) 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
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.

 
(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.

 
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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.

 
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SECTION 7

DISTRIBUTION OF ACCOUNTS

 
7.1
Termination with Five Years of Service, Retirement, Disability and Death. A
Participant who terminates employment after completing at least five (5) years
of Service, reaches 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 annual installments over ten (10) years beginning as soon as
administratively practicable in the year following the Participant’s
termination, Retirement, Disability or death unless an optional form of benefit
payment is elected in accordance with the next sentence. For each Plan Year’s
Account Balance the Participant may elect an optional form of benefit payment in
the manner prescribed by the Administrative Committee, in its sole and absolute
discretion, from among the following:

 

 
(1)
A lump sum distribution to be paid as soon as administratively practicable in
the year following the Participant’s termination, Retirement, Disability or
death;

 

 
(2)
Annual installments over five (5) years commencing as soon as administratively
practicable in the year following the Participant’s termination, Retirement,
Disability or death;

 

 
(3)
Annual installments over fifteen (15) years commencing as soon as
administratively practicable in the year following the Participant’s
termination, Retirement, Disability or death; and

 

 
(4)
A lump sum distribution which shall be paid as soon as administratively
practicable in the year specified by the Participant on the Election Form. Such
specified time shall be no less than one (1) year and no more than five (5)
years following termination, Retirement, Disability or death.

 
A Participant may elect, on an Election Form, to change the form and/or extend
the timing of a distribution under this Section that he or she has previously
elected to any other form of distribution or time permitted under this Section,
provided that no such election shall be effective unless it is made at least one
(1) year before the Participant’s termination, Retirement, Disability or death,
as applicable.

In the event of the Participant’s termination of employment with the Company
with five (5) years of Service, Retirement, Disability or death prior to the
elected date for one or more scheduled distributions prior to termination of
employment 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) in the same form as elected by the
Participant under this Section.
 
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Notwithstanding any provision of the Plan to the contrary, if a Participant
terminates employment after completing five (5) years of Service, has reached
Retirement, incurs a Disability or dies while receiving annual installments
prior to termination of employment 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 terminated employment, reached Retirement, incurred a Disability or died.

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

 
7.2
Scheduled Distributions Prior to Termination of Employment. A Participant may
elect, on an Election Form, to receive a distribution of all or a portion of his
or her Deferral Account, IR Stock Account and vested Discretionary Company
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 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 and vested Discretionary Company Contribution Account
to be distributed is actually deferred. A Participant may elect, on an Election
Form, to extend the date for any distribution under this Section with respect to
any Plan Year, provided such election occurs at least one year before the date
of distribution most recently elected for that Plan Year by the Participant and
the extension is for a period of not less than two (2) years after the date of
distribution most recently elected for that Plan Year by the Participant. The
Participant shall have the right to extend the date for any distribution under
this Section for a Plan Year twice.

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 as soon as soon as administratively practicable in the 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 as soon as administratively
practicable in the year specified by the Participant on the Election Form.

A Participant may elect, on an Election Form, to change the form of payment for
any distribution under this Section for any Plan Year to any other form of
payment permitted under this Section, provided such election occurs at least one
(1) year before the date of distribution previously elected by the Participant.
 
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All distributions under this Section shall be made on a pro rata basis from the
Participant's Deferral Account(s), IR Stock Account(s) and vested Discretionary
Company Contribution Account(s), as applicable.

 
7.3
Termination of Employment Prior to Completing Five (5) Years of Service. If a
Participant’s employment with the Company terminates 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 as soon as
practicable in the year following the Participant's termination of employment.
If a Participant’s employment with the Company terminates prior to his or her
completing five (5) years of Service while receiving annual installments prior
to termination of employment 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 terminated
employment prior to completing five (5) years of Service. For purposes of this
Section, Disability, death and Retirement shall be deemed not to be a
termination of employment.

 
7.4
Transfer of Employment. Notwithstanding any provision of Sections 7.1, 7.2 or
7.3 to the contrary, a Participant shall not be considered to have terminated
employment during a Plan Year, if such Participant is continuously employed
during that Plan Year by the Company, a Participating Employer, or any
subsidiaries or affiliates of a Participating Employer, or any combination
thereof.

 
7.5
Hardship Distribution. In the event that the Administrative Committee, upon
written petition of the Participant (or the Participant’s Beneficiary) on an
Election Form filed with the Administrative Committee specifying the Plan
Year(s), from which payment shall be made, determines in its sole and absolute
discretion, that the Participant (or the Participant’s Beneficiary) has suffered
an Unforeseeable Financial Emergency, the Company may 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
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, an amount appropriate under the circumstances. All
distributions under this Section 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.

 
7.6
Early Distributions (with forfeiture). A Participant shall be permitted to
elect, on an Election Form, to receive an Early Distribution in whole
percentages of up to 100% of his or her Deferral Account(s), IR Stock Account(s)
and vested Discretionary Company Contribution Account(s) with respect to a
specified Plan Year(s), subject to the following restrictions:

 

 
(1)
10% of the amount elected by the Participant to be distributed as an Early
Distribution shall be permanently forfeited and such forfeited amount shall be
deducted from the amount to be distributed to the Participant.

 
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(2)
If a Participant receives an Early Distribution, the Participant will be
ineligible to participate in the Plan for the balance of the Plan Year in which
the Early Distribution is received and for the following Plan Year. All Early
Distributions shall be made on a pro rata basis from the Participant's Deferral
Account(s), IR Stock Account(s) and vested Discretionary Company Contribution
Account(s).

 

 
(3)
The Early Distribution shall be paid in a single lump sum as soon as
administratively practicable after the Early Distribution election is made.

 
7.7
Form 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; except
that, with respect to any fractional share, such fractional share shall be paid
in cash.

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. Effective January 1, 2004, 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. Except as provided in an agreement between the Company and the
Participant, the form and/or timing of a Discretionary Company Contribution
shall be determined by the Administrative Committee in its sole and absolute
discretion.

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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 value of the
remaining installments, if any, shall be paid to the estate of the Beneficiary
in a lump sum.
 
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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. Upon any termination of the Plan under this Section,
Base Salary, Cash Incentive Compensation Awards, Dividends on Stock Grants,
Discretionary Company Contributions and Supplemental Contributions shall
prospectively cease to be deferred and, with respect to all such amounts
previously deferred, the Company shall pay to the Participant, in a lump sum, as
soon as administratively practicable, the value of the Participant’s Account
Balances.

 
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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
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 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.

 
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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
 

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Marcia Avedon
Senior Vice President

 
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