Unassociated Document


    Exhibit
      10.26


    


    INGERSOLL-RAND
      COMPANY

    


    ELECTED
      OFFICERS SUPPLEMENTAL PROGRAM II

    


    Effective
      January 1, 2005


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    


    


    Introduction

    


    Ingersoll-Rand
      Company (the “Company”) adopts this Ingersoll-Rand Company Elected Officers
      Supplemental Program II (the “Program”), effective January 1, 2005, to provide
      retirement benefits to certain key management individuals employed by the
      Company in addition to the benefits provided from other qualified and
      non-qualified plans maintained by the Company or any of its affiliates.
The
      Program shall be unfunded for tax purposes and for purposes of Title I of the
      Employee Retirement Income Security Act of 1974, as amended, (“ERISA”). To the
      extent Section 409A of the Internal Revenue Code of 1986, as amended, (the
      “Code”) applies to the Program, the terms of the Program are intended to comply
      with that Code section and any regulations or other administrative guidance
      issued thereunder, and the terms of the Program shall be interpreted and
      administered in accordance therewith.

    


    The
      Program is a continuation of the Ingersoll-Rand Company Elected Officers
      Supplemental Program (the “Predecessor Program”). The Predecessor Program became
      effective on June 30, 1995 and was amended and restated, effective January
      1,
      2003, and was thereafter amended. Effective December 31, 2004, the Company
      froze
      the Predecessor Program with respect to all deferrals (within the meaning of
      regulations and other administrative guidance issued under Code Section 409A)
      to
      the extent such deferrals would otherwise be subject to Code Section 409A
      (including amounts that were credited under the Predecessor Program as of
      December 31, 2004 but were not grandfathered with respect to Code Section 409A).
      

    


    The
      Company now hereby adopts the Program to provide for deferrals of amounts
      subject to Code Section 409A (including amounts that were credited under the
      Predecessor Program 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 Program to the extent such terms are not inconsistent
      with
      Code Section 409A. The Program shall apply to (i) amounts initially deferred
      hereunder on or after January 1, 2005 and (ii) amounts initially credited to
      the
      Predecessor Program before January 1, 2005 that, pursuant to the effective
      date
      rules of Code Section 409A, are subject to the provisions of Code Section
      409A.

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    


    INGERSOLL-RAND
      COMPANY

    ELECTED
      OFFICERS SUPPLEMENTAL PROGRAM II

    


    TABLE
      OF CONTENTS

    
      	
               

            	 	 	
               Page

            
	 	 	 	 
	
              INTRODUCTION

            	
               i

            
	 	 	 	 
	
              ARTICLE
                1 -
                DEFINITIONS

            	 
	 	 	 	 
	 	
              1.1

            	
              Actuarial
                Equivalent

            	
              1

            
	 	
              1.2

            	
              Board

            	
              1

            
	 	
              1.3

            	
              Change
                in Control

            	
              1

            
	 	
              1.4

            	
              Company

            	
              1

            
	 	
              1.5

            	
              Committee

            	
              1

            
	
               

            	
              1.6

            	
              Deferral
                Plan

            	
              1

            
	 	
              1.7

            	
              Effective
                Time

            	
              1
                

            
	 	
              1.8

            	
              Elected
                Officer

            	
              1

            
	 	
              1.9

            	
              Employee

            	
              1

            
	 	
              1.10

            	
              Estate
                Program

            	
              1

            
	 	
              1.11

            	
              Final
                Average Pay

            	
              1

            
	 	
              1.12

            	
              Merger
                Agreement

            	
              2

            
	 	
              1.13

            	
              Pension
                Plan

            	
              2

            
	 	
              1.14

            	
              Predecessor
                Program

            	
              2

            
	 	
              1.15

            	
              Program

            	
              2

            
	 	
              1.16

            	
              Year
                of Service

            	
              3

            
	 	 	 	 
	
              ARTICLE
                2 -
                ARTICIPATION

            	 
	 	 	 	 
	 	
              2.1
                

            	
              Commencement
                of Participation

            	
              4

            
	 	
              2.2

            	
              Duration
                of Participation

            	
              4

            
	 	 	 	 
	
              ARTICLE
                3 -
                AMOUNT
                OF BENEFIT

            	 
	 	 	 	 
	 	
              3.1

            	
              Amount
                of Benefit

            	
              5

            
	 	 	 	 
	
              ARTICLE
                4 -
                VESTING

            	 
	 	 	 	 
	 	
              4.1
                

            	
              Vesting

            	
              6

            
	 	
              4.2

            	
              Forfeiture
                for Cause

            	
              6

            


    

    



    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    


    INGERSOLL-RAND
      COMPANY


    TABLE
      OF CONTENTS (cont.)

     

     

    
      	
               

            	 	 	
              Page

            
	
              ARTICLE
                5 -
                DISTRIBUTIONS

            	 
	 	 	 	 
	 	
              5.1

            	
              Retirement

            	
              7

            
	 	
              5.2

            	
              Form
                of Distribution

            	
              8

            
	 	
              5.3

            	
              Disability

            	
              8

            
	 	
              5.4

            	
              Death

            	
              9

            
	 	
              5.5

            	
              Payment
                of Benefits

            	
              10

            
	 	
              5.6

            	
              Special
                Rule

            	
              10

            
	 	
              5.7

            	
              No
                Acceleration

            	
              10

            
	 	 	 	 
	 	 	 	 
	
              ARTICLE
                6 -
                FUNDING

            	 
	 	 	 	 
	 	
              6.1

            	
              Funding

            	
              11

            
	 	
              6.2

            	
              Company
                Obligation

            	
              11

            
	 	 	 	 
	
              ARTICLE
                7 -
                CHANGE
                IN CONTROL

            	 
	 	 	 	 
	 	
              7.1

            	
              Contributions
                to Trust

            	
              12

            
	 	
              7.2
                

            	
              Amendments

            	
              12

            
	 	 	 	 
	
              ARTICLE
                8 -
                MISCELLANEOUS

            	 
	 	 	 	 
	 	
              8.1

            	
              Amendment
                and Termination

            	
              13

            
	 	
              8.2

            	
              No
                Contract of Employment

            	
              13

            
	 	
              8.3

            	
              Withholding

            	
              13

            
	 	
              8.4

            	
              Loans

            	
              13

            
	 	
              8.5

            	
              Compensation
                and Nominating Committee

            	
              13

            
	 	
              8.6

            	
              Entire
                Agreement; Successors

            	
              14

            
	 	
              8.7

            	
              Severability

            	
              14

            
	 	
              8.8

            	
              Governing
                Law

            	
              14

            
	 	
              8.9

            	
              Participant
                as General Creditor

            	
              14

            
	
               

            	
              8.10

            	
              Nonassignability

            	
              14

            
	 	 	 	 
	
              APPENDIX
                A 

            	
              16

            


    

    


    



    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    


    



    ARTICLE
      1

    


    DEFINITIONS

    


    
      	
              1.1

            	
              “Actuarial
                Equivalent”
                means an amount having equal value to a single life annuity when
                computed
                on the basis of the mortality table specified in IRS Revenue Ruling
                2001-62 and an interest rate equal to the average of the monthly
                rates for
                ten-year Constant Maturities for US Treasury Securities for the
                twelve-month period immediately preceding the month prior to the
                month in
                which a determination of benefit occurs, such rate as published in
                Federal
                Reserve statistical release H.15(519).

            


    

    


    
      	1.2	
              “Board”
                means the Board of Directors of Ingersoll-Rand
                Company.

            


    

    


     

    
      	
              1.3

            	
              “Change
                in Control”
                shall have the same meaning as such term is defined in the most recent
                Company Incentive Stock Plan, unless a different definition is used
                for
                purposes of a change in control event in any severance or employment
                agreement between an Employer and an Employee, in which event as
                to such
                Employee such definition shall apply.  Notwithstanding any other
                provision in this Program to the contrary, none of the transactions
                contemplated by the Merger Agreement that 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
                and after
                the Effective Time, shall trigger, constitute or be deemed a Change
                in
                Control.  On and after the Effective Time, the term Change in Control
                shall refer solely to a Change in Control of Ingersoll-Rand Company
                Limited. 

            


    

     

    
      	
              1.4

            	
              “Company”
                means Ingersoll-Rand Company, and its successors or
                assigns.

            


    

    


    
      	1.5	
              “Committee”
                means the Compensation Committee of Ingersoll-Rand Company
                Limited.

            


    

    


    
      	
              1.6

            	
              “Deferral
                Plan”
                means the IR Executive Deferred Compensation Plan and/or the IR Executive
                Deferred Compensation Plan II.

            


    

     

    
      	1.7	
              "Effective
                Time" means
                the Effective Time as such term is defined in the Merger Agreement.
                

            


    

     

    
      	
              1.8

            	
              “Elected
                Officer”
                means an individual elected by the Board as an officer of the
                Company.

            


    

    


    
      	
              1.9

            	
              “Employee”
                means an individual eligible to participate in the Program as provided
                in
                Section 2.1. 

            


    

    


    
      	1.10	
              “Estate
                Program” means
                the Ingersoll-Rand Company Estate Enhancement
                Program.

            


    

    


    
      	
              1.11

            	
              “Final
                Average Pay”
                means, except as provided in Section 5.3 for purposes of disability,
                the
                sum of the following:

            


    


    
      
        
        

      

      
        1

        
          

        

      

      
        
        

      

    


    


    


    
      	 	
              (a)

            	
              for
                Employees actively employed by the Company or one of its affiliates
                on and
                after February 1, 2006, the average of each of the three highest
                bonus
                awards (whether the awards are paid to the Employee, are a Deferral
                Amount
                (as such term is defined in the Deferral Plan) or the Employee has
                elected
                to forgo a bonus award pursuant to the Estate Program) during the
                six most
                recent calendar years, including the year during which the Employee’s
                retirement or death occurs, or a Change in Control occurs, but excluding
                Supplemental Contributions (as such term is defined in the Deferral
                Plan)
                or any amounts paid from the Deferred Compensation Account (as such
                term
                is defined in the Deferral Plan) or any other account under the Deferral
                Plan including, but not limited to, amounts paid consisting of Deferral
                Amounts and Supplemental Contributions and their earnings, and any
                amounts
                paid by the Company pursuant to the Estate Program,
                and

            


    

    


    
      	 	
              (b)

            	
              the
                Employee’s annualized base salary in effect immediately prior to the date
                of determination (whether such base salary is paid to the Employee
                or is a
                Deferral Amount (as such term is defined in the Deferral
                Plan)).

            


    

    


    For
      any
      Employee who terminated employment with the Company or any of its affiliates
      prior to February 1, 2006, the phrase “five highest bonus awards” shall be
      substituted for the phrase “three highest bonus awards” in subsection
      (a).

     

    
      	1.12	
              "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 will become an indirect
                wholly-owned subsidiary of Ingersoll-Rand Company Limited.
                

            


    

     

    
      	
              1.13

            	
              “Pension
                Plan”
                means the Ingersoll-Rand Pension Plan Number One as in effect on
                January
                1, 2005 and as amended from time to
                time.

            


    

    


    
      	
              1.14

            	
              “Predecessor
                Program”
                means the Ingersoll-Rand Company Elected Officers Supplemental Program,
                as
                effective
                on June 30, 1995, as amended and restated, effective January 1, 2003,
                and
                as thereafter amended. 

            


    

    


    
      	
              1.15

            	
              “Program”
                means
                the Ingersoll-Rand Company Elected Officers Supplemental Program
                II as
                stated herein and as may be amended from time to
                time.

            


    

    



    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    


    
      	1.16	
              "Year
                of Service" shall
                be determined in accordance with the provisions of the qualified
                defined
                benefit pension plan(s) (as defined below) in which an individual
                participates while an Employee that are applicable to determining
                years of
                vesting service under such plan. 
                For purposes of this Section a qualified defined benefit pension
                plan
                means a plan (a) sponsored by the Company, any domestic entity in
                which
                the Company owns (directly or indirectly) a 50% or more interest,
                or any
                other entity designated by the Company and (b) which is defined in
                Code
                Section 414(j).  Notwithstanding any provision of the Program to the
                contrary, in the event an Employee earns one or more hours of service
                during a calendar year, he shall be credited with a Year of Service
                with
                respect to such year for purposes of the Program.
                

            


    

     

    Whenever
      the word “he”, “his,” or “him” is used in the Program, such word is intended to
      embrace within its purview the word “she” or “her”, as may be
      appropriate.

     

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

    ARTICLE
      2

    


    PARTICIPATION

    


    


    
      	2.1	
              Commencement
                of Participation

            


    

    


    An
      individual employed by the Company shall commence participation in the Program
      upon (a) becoming an Elected Officer of the Company and (b) being approved
      for
      participation by the Committee.

    


    
      	2.2	
              Duration
                of Participation

            


    

    


    An
      Employee shall continue to participate in the Program until the earlier of
      his
      termination of employment, death, or election to waive the benefit provided
      under the Program.


    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    


    ARTICLE
      3

    


    AMOUNT
      OF BENEFIT

    


    
      	3.1	
              Amount
                of Benefit

            


    

    


    Unless
      the Program has been modified pursuant to a written agreement between the
      Company and an Employee as described in Section 8.6, an Employee shall be
      entitled to receive a benefit under the Program equal to (a) minus the sum
      of
      (b), (c), and (d) below:

    


    
      	
            	(a)	
              the
                product of:

            


    

    


    
      	 	
              (i)

            	
              his
                Final Average Pay,

            


    

    


    
      	 	
              (ii)

            	
              his
                Years of Service (up to a maximum of 35 Years of
                Service),

            


    

    


    
      	 	
              (iii)

            	
              1.9%,
                and

            


    

    


    
      	 	
              (iv)

            	
              a
                factor, as of the Employee’s date of retirement, used to determine the
                lump sum that is the Actuarial
                Equivalent

            


    

    


    
      	
            	(b)	
              the
                amount set forth in Appendix A as attached
                hereto

            


    

    


    
      	
            	(c)	
              the
                benefit he would be entitled to receive under Section 5.2 of the
                Program
                but for his election to forgo such benefit pursuant to the Estate
                Program

            


    

    


    
      	
            	(d)	
              the
                benefit payable to the Employee under the Predecessor Program, expressed
                in the same form and with the same commencement date as the benefit
                payable to the Employee under this
                Program.

            


    

    


    



    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    


    ARTICLE
      4

    


    VESTING

    


    
      	4.1	
              Vesting

            


    

    


    An
      Employee shall become vested in the benefit provided under the Program upon
      the
      earliest of (i) the attainment of age 55 and the completion of 5 Years of
      Service, (ii) the attainment of age 62, (iii) death, or (iv) a Change in
      Control.

    


    
      	4.2	
              Forfeiture
                for Cause

            


    

    


    All
      benefits for which an Employee would otherwise be eligible hereunder may be
      forfeited, at the discretion of the Committee, prior to the occurrence of a
      Change in Control under the following circumstances:

    


    
      	 	
              (a)

            	
              The
                Employee is discharged by the Company for cause, which shall be a
                breach
                of the standards set forth in the Ingersoll Rand Company Code of
                Conduct;
                or

            


    

    


    
      	 	
              (b)

            	
              Determination
                by the Committee no later than 12 months after termination of employment
                that the Employee has engaged in serious or willful misconduct in
                connection with his employment with the Company;
                or

            


    

    


    
      	 	
              (c)

            	
              The
                Employee (whether while employed or for two years thereafter) without
                the
                written consent of the Company is employed by, becomes associated
                with,
                renders service to, or owns an interest in any business that is
                competitive with the Company or with any business in which the Company
                has
                a substantial interest as determined by the Committee; provided,
                however,
                that an Employee may own up to 1% of the publicly traded equity securities
                of any business, notwithstanding the
                foregoing.

            


    

    



    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

    


    ARTICLE
      5

    


    DISTRIBUTIONS

    


    5.1 Retirement

    


    Employee
      retirement distributions under the Program shall be as follows:

    


    
      	 	
              (a)

            	
              Retirement
                at Age 62 -
                An
                Employee shall be eligible to retire and receive the benefit under
                Section
                3.1 upon attaining age 62.

            


    

    


    
      	 	
              (b)

            	
              Retirement
                before
                Age 62 - An
                Employee may retire under the Program at any time after he becomes
                vested
                in accordance with Section 4.1.
                In
                the event he retires before age 62, he will receive a benefit under
                the
                Program in accordance with Section 5.5. Such benefit shall be equal
                to the
                benefit he would have received at age 62 under Section 3.1, provided
                however that:

            


    

    


    
      	
            	(i)	
              the
                amount determined under Section 3.1(a) shall be reduced by 0.429%
                for each month that the benefit commences prior to age
                62,

            


    

    


    
      	
            	(ii)	
              the
                benefit offset amount derived from defined benefit plans, as identified
                in
                Appendix A and as adjusted for retirement at the earliest date on
                which
                the Employee may retire and begin receiving a benefit under such
                defined
                benefit plans and as further adjusted, if necessary, to the Actuarial
                Equivalent of the benefit payable on the date benefits under the
                Program
                commence, shall be as determined under the applicable plans irrespective
                of whether the Employee elects to receive a benefit under such plans,
                and

            


    

    


    
      	
            	(iii)	
              for
                years prior to Social Security normal retirement age, the Social
                Security
                Primary Insurance Amount (as defined in Appendix A) shall be reduced
                by
                the same factors used by the Social Security Administration to adjust
                benefits
                payable at age 62 or later, and by .3% for each month that benefits
                under
                the Program commence prior to age
                62.

            


    

    


    
      	 	
              (c)

            	
              Retirement
                after
                Age 62 - If
                an Employee retires after age 62 as provided under (a) above, he
                will
                receive a benefit equal to the greater
                of:

            


    

    


    
      	
            	(i)	
              the
                benefit determined under Section 3.1 as of his date of retirement,
                or

            


    

    


    
      	
            	(ii)	
              the
                benefit he would have received had he retired at age 62, credited
                with
                interest from the date he attained age 62 until his date of retirement.
                For purposes of this subsection (ii),
                the
                interest rate will be equal to the average of the monthly rates for
                ten-year Constant Maturities for US Treasury Securities for the
                twelve-month period immediately preceding the month prior to the
                month in
                which a determination of benefit occurs, such rate as published in
                Federal
                Reserve statistical release H.15(519).


            


    


    
      
        
        

      

      
        7

        
          

        

      

      
        
        

      

    


    


    


    
      	5.2	
              Form
                of Distribution

            


    

    


    
      	 	
              (a)

            	
              Unless
                the Employee elects to make a deferral under subsection (b) below,
                benefits under the Program shall be payable solely in a single lump
                sum as
                determined under Section 3.1 as of his date of retirement. The lump
                sum
                amount, determined as of the date of the Employee’s retirement, shall be
                the Actuarial Equivalent of the benefit under Section 3.1 adjusted,
                if
                applicable, to reflect the provisions of Section 5.1. The lump sum
                distribution determined under this Section 5.2 shall be credited
                with
                interest at a rate equal to the average of the monthly rates for
                ten-year
                Constant Maturities for US Treasury Securities for the twelve-month
                period
                immediately preceding the month prior to the month in which a
                determination of benefit occurs, such rate as published in Federal
                Reserve
                statistical release H.15(519), from the Employee’s date of retirement
                until the date of distribution.

            


    

    


    
      	 	
              (b)

            	
              An
                Employee may file a deferral election under the Deferral Plan at
                least one
                year in advance of the Employee’s date of retirement to defer the payment
                of the lump sum determined under subsection (a) above for a period
                of not
                less than 5 years after the date on which the lump sum amount would
                have
                been paid had a deferral election not been made. In the event a valid
                deferral election is made under the Deferral Plan, the payment of
                the lump
                sum amount that otherwise would have been paid under this Section
                5.2
                shall be credited to the Deferral Plan as of the date the lump sum
                amount
                would have been paid had a valid deferral election not been made.
                

            


    

    


    
      	5.3	
              Disability

            


    

    


    An
      Employee who becomes disabled and who remains continuously disabled until
      attaining age 65 shall continue to accrue benefits under the Program as if
      he
      continued to be employed by the Company. Such Employee shall receive an
      immediate lump sum payment determined under Sections 3.1 and 5.2 of the Program
      as of the Employee’s 65th
      birthday.

    


    Notwithstanding
      any other provision of the Program to the contrary, when determining Final
      Average Pay for an Employee who is disabled under the provisions of this
      Section, Final Average Pay means the sum of:

    


    
      	 	
              (a)

            	
              the
                average of each of the three highest bonus awards (whether the awards
                are
                paid to the Employee, are a Deferral Amount (as such term is defined
                in
                the Deferral Plan) or the Employee has elected to forgo a bonus award
                pursuant to the Estate Program) during the six most recent calendar
                years,
                including the year during which the Employee’s disability occurs, (or, if
                the average of the three highest bonus awards would be greater, the
                six
                most recent calendar years prior to the year in which the Employee’s
                disability occurs), but excluding Supplemental Contributions (as
                such term
                is defined in the Deferral Plan) or any amounts paid from the Deferred
                Compensation Account (as such term is defined in the Deferral Plan)
                or any
                other account under the Deferral Plan including, but not limited
                to,
                amounts paid consisting of Deferral Amounts and Supplemental Contributions
                and their earnings, and any amounts paid by the Company pursuant
                to the
                Estate Program, and

            


    


    
      
        
        

      

      
        8

        
          

        

      

      
        
        

      

    


    


    


    
      	 	
              (b)

            	
              the
                Employee’s annualized base salary in effect as of the date he becomes
                disabled.

            


    

    


    An
      Employee who is no longer disabled under this Section and who returns to the
      employ of the Company or an affiliated company, shall be entitled to accrue
      benefits under this Section for the period of his disability.

    


    An
      Employee who is no longer disabled under this Section and who does not return
      to
      the employ of the Company or an affiliated company, shall not be entitled to
      accrue any benefits under this Section for any portion of the period of his
      disability.

    


    For
      purposes of the Program, an Employee shall be disabled if he is unable to
      continue to perform the duties of his position due to a physical or mental
      impairment. Notwithstanding the preceding, to the extent required under Code
      Section 409A, an Employee shall not be considered disabled for purposes of
      the
      Program unless such Employee is also considered disabled under Code Section
      409A.

    


    
      	5.4	
              Death

            


    

    


    In
      the
      event that an Employee dies prior to retirement, his beneficiary shall receive
      a
      lump sum payment determined under Sections 3.1 and 5.2 of the Program as of
      the
      date of the Employee’s death as if the Employee retired on the date of his
      death; provided that if the Employee’s death occurs prior to his attainment of
      age 55, his benefit shall be reduced by .3% for each month that the benefit
      commences before the Employee would have reached age 65; and further provided
      that, if an Employee elected to make a deferral election under Section 5.2(b),
      his beneficiary shall receive payment of any benefits at the time and in the
      form of payment elected by the deceased Employee. The Employee’s
      beneficiary(ies) and the percentage(s) of the benefit payable under the Program
      to such beneficiary(ies) shall be the same as the Employee’s beneficiary(ies)
      and percentage(s) under the Pension Plan. 

    



    
      
        
        

      

      
        9

        
          

        

      

      
        
        

      

    


    
      	5.5	
              Payment
                of Benefits

            


    

    


    Unless
      the Employee makes a deferral election as described in Section 5.2(b), the
      benefit under the Program
      shall
      be
      paid on the later of (i)
      the
      first
      business day that is six months after the Employee’s retirement or death, or
(ii)
      the
      first
      business day of the calendar year following the Employee’s retirement or
      death.

    


    In
      the
      event an Employee is disabled in accordance with Section 5.3, his benefit shall
      be paid on the first day of the month following the date that the Employee
      attains age 65.

    


    
      	5.6	
              Special
                Rule

            


    

    


    Notwithstanding
      any other provision of this Program, an Employee shall not be considered retired
      unless such Employee has separated from service (within the meaning of Code
      Section 409A and any regulations and other administrative guidance issued
      thereunder) with respect to the Company and all other entities with which the
      Company is required to be aggregated under Code Section 409A for purposes of
      determining whether an Employee has separated from service.

    


    
      	5.7	
              No
                Acceleration

            


    

    


    Except
      to
      the extent permitted under Code Section 409A, no benefits or payments under
      the
      Program shall be accelerated at any time.


    
      
        
        

      

      
        10

        
          

        

      

      
        
        

      

    


    ARTICLE
      6

    


    FUNDING

    


    
      	6.1	
              Funding

            


    

    


    Except
      as
      provided in Section 8.9 hereof, the Company, nor any of its affiliates shall
      have any obligation to fund the benefit that an Employee earns under the
      Program.

    


    
      	6.2	
              Company
                Obligation

            


    

    


    Notwithstanding
      the provisions of any trust agreement or similar funding
      vehicle
      to the contrary, the Company shall remain obligated to pay benefits under the
      Program. Nothing in the Program or any trust agreement shall relieve the Company
      of its liabilities to pay benefits under the Program except to the extent that
      such liabilities are met by the distribution of trust
      assets.


    
      
        
        

      

      
        11

        
          

        

      

      
        
        

      

    



    ARTICLE
      7

    


    CHANGE
      IN CONTROL

    


    
      	7.1	
              Contributions
                to Trust

            


    

    


    In
      the
      event that a Change in Control has occurred, the Company shall be obligated
      to
      establish a trust and to contribute to the trust an amount necessary to fund
      the
      accrued benefit earned by the Employee under the Program (assuming immediate
      benefit commencement) as of the last day of the calendar month immediately
      preceding the date the Board determines that a Change in Control has occurred.
      If the Employee shall not have attained age 55, his annual benefit shall be
      determined on the same basis used to determine his accrued benefit in the case
      of death as specified in Section 5.4.

    


    
      	7.2	
              Amendments

            


    

    


    Following
      a Change in Control of Ingersoll-Rand Company Limited, any amendment modifying
      or terminating the Program shall have no force or effect.


    
      
        
        

      

      
        12

        
          

        

      

      
        
        

      

    

     

    ARTICLE
      8

    


    MISCELLANEOUS

    


    
      	8.1	
              Amendment
                and Termination

            


    

    


    Except
      as
      provided in Section 7.2 hereof, the Program may, at any time and from time
      to
      time, be amended or terminated without the consent of any Employee or
      beneficiary, (a) by the Board, or (b)
      in
      the
      case of amendments which do not materially modify the provisions hereof, the
      Committee or such other committee appointed by the Board; provided, however,
      that no such amendment or termination shall reduce any benefits accrued under
      the terms of the Program prior to the date of termination or
      amendment.

    


    
      	8.2	
              No Contract
                of Employment

            


    

    


    The
      establishment of the Program or any modification hereof shall not give any
      Employee or other person the right to remain in the service
      of the
      Company or any of its subsidiaries, and all Employees and other persons shall
      remain subject to discharge to the same extent as if the Program had never
      been
      adopted.

    


    
      	8.3	
              Withholding

            


    

    


    The
      Company shall be entitled to withhold from any payment due under the Program
      any
      and all taxes of any nature required by any government to be withheld from
      such
      payment.

    


    
      	8.4	
              Loans

            


    

    


    No
      loans
      to Employees shall be permitted under the Program.

    


    
      	8.5	
              Compensation
                Committee

            


    

    


    The
      Program shall be administered by the Committee (or any successor committee)
      of
      the Board. The primary responsibility of the Committee is to administer the
      Program for the exclusive benefit of the Employees and their beneficiaries,
      subject to the specific terms of the Program. The Committee shall administer
      the
      Program 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 Program. Any
      such determination by the Committee shall be conclusive and binding upon all
      affected parties. Any denial by the Committee of a claim for benefits under
      the
      Program by an Employee or beneficiary shall be stated in writing by the
      Committee and delivered or mailed to the Employee or beneficiary. Such notice
      shall set forth the specific reasons for the Committee's decision. In addition,
      the Committee shall afford a reasonable opportunity to any Employee or
      beneficiary whose claim for benefits has been denied for a review of the
      decision denying this claim.


    
      
        
        

      

      
        13

        
          

        

      

      
        
        

      

    

    


    


    
      	8.6	
              Entire
                Agreement; Successors

            


    

    


    The
      Program, including any subsequently adopted amendments, shall constitute the
      entire agreement or contract between the Company and any Employee regarding
      the
      Program. There are no covenants, promises, agreements, conditions or
      understandings, either oral or written, between the Company and any Employee
      regarding the provisions of the Program, other than those set forth herein.
      Notwithstanding the previous sentence, to the extent any written agreement
      between the Company and an Employee modifies the provisions of the Program
      with
      respect to the Employee, such agreement shall be deemed to modify the provisions
      of the Program but only to the extent such agreement is approved by the
      Committee. The Program and any amendment hereof shall be binding on the Company,
      and the Employees 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.

    


    
      	8.7	
              Severability

            


    

    


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

    


    
      	8.8	
              Governing
                Law

            


    

    


    The
      laws
      of the State of New Jersey shall govern
      the
      Program.

    


    
      	
              8.9

            	
              Participant
                as General Creditor

            


    

    


    Benefits
      under the Program 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 Employee eligible to participate
      in
      the Program shall have any interest in such investment or reserve. To the extent
      that any person acquires a right to receive benefits under the Program, such
      rights shall be no greater than the right of any unsecured general creditor
      of
      the Company.

    


    
      	8.10	
              Nonassignability

            


    

    


    To
      the
      extent permitted by law, the right of any Employee or any beneficiary in any
      benefit hereunder shall not be subject to attachment or any other legal process
      for the debts of such Employee or beneficiary nor shall any such benefit be
      subject to anticipation, alienation, sale, transfer, assignment or
      encumbrance.

     

    
      
        
        

      

      
        14

        
          

        

      

      
        
        

      

    

     

    

      *
        * * * *
        * *

      


      


      IN
        WITNESS WHEREOF,
        the
        Company has caused this Program to be executed by its duly authorized
        representative on this 1st day of February 2006.

       

      
        	 	 	 
	
                 

              	INGERSOLL-RAND
                COMPANY
	 
 	 
 	 
 
	 	By:  	/s/ Timothy
                McLevish
	 	
                
Timothy
                McLevish
	 	Senior
                Vice President and Chief Financial
                Officer


      

      
 

      
        
          
          

        

        
          15

          
            

          

        

        
          
          

        

      

       

      APPENDIX
        A

    

    


    


    Unless
      otherwise specified in another Appendix attached hereto or another provision
      set
      forth in the Program, the sum of the following shall be used for purposes of
      Section 3.1(b) of the Program:

    


    
      	 	
              (a)

            	
              All
                employer-paid benefits under any qualified defined benefit plan (as
                defined in Code Section 414(j)) and associated supplemental plans
                sponsored by the Company. For purposes of this Paragraph (a), the
                amount
                of any pension payable under the Clark Equipment Company Retirement
                Program for Salaried Employees shall be determined without reduction
                by
                the lifetime pension equivalent of the Employee’s vested interest in his
                PPOA Account (as such term is defined in the I-R/Clark Leveraged
                Employee
                Stock Ownership Plan).

            


    

    


    For
      purposes of determining the benefit under Section 3.1 of the Program, the
      Employee’s benefit, if any, under any qualified defined benefit plan and
      associated supplemental plans described in the previous paragraph, shall be
      determined as a lump sum at the date of determination.

    


    
      	 	
              (b)

            	
              The
                Social Security Primary Insurance Amount (as defined below) estimated
                at
                age 65, multiplied by a fraction, the numerator of which is his Years
                of
                Service (up to a maximum of 35 Years of Service), and the denominator
                of
                which is 35.

            


    

    


    For
      purposes of the Program, “Social Security Primary Insurance Amount” means the
      amount of the Employee’s annual primary old age insurance determined under the
      Social Security Act in effect at the date of determination and payable in
      accordance with (i) or (ii) below.

    


    
      	
            	(i)	
              For
                benefits determined on or after age 65, payable for the year following
                his
                date of retirement.

            


    

    


    
      	
            	(ii)	
              For
                benefits determined before the Employee attains age 65, payable for
                the
                year following his retirement or death (or which would be payable
                when he
                first would have become eligible if he were then unemployed), assuming
                he
                will not receive after retirement (or death) any income that would
                be
                treated as wages for purposes of the Social Security
                Act.

            


    

    


    For
      purposes of determining the Social Security Benefit under paragraphs (i) and
      (ii) above, an Employee’s covered earnings under said Act for each calendar year
      preceding the Employee’s first full calendar year of employment shall be
      determined by multiplying his covered earnings subsequent to the year being
      determined by the ratio of the average per worker total wages as reported by
      the
      Social Security Administration for the calendar year being determined to such
      average for the calendar year subsequent to the year being
      determined.


    
      
        
        

      

      
        16

        
          

        

      

      
        
        

      

    


    


    


    The
      “Social Security Primary Insurance Amount” determined above shall be converted
      to a lump sum using the factor determined under Section 3.1(a)(iv).

    


    
      	 	
              (c)

            	
              An
                Employee’s accrued benefit under any qualified defined benefit pension
                plan (as defined in Code Section 414(j)) and any nonqualified pension
                plan
                with respect to any business that was acquired by the Company, or
                any of
                its affiliates (“Acquired Business”), (each such pension plan shall be
                referred to in this Paragraph (c) as a “Former Plan”), shall be used for
                purposes of Section 3.1(b) of the Program if the
                Employee:

            


    

    


    
      	
            	(i)	
              was
                an employee of the Acquired Business on the date it was acquired
                by the
                Company, or any of its affiliates,

            


    

    


    
      	
            	(ii)	
              became
                an employee of the Company, or any of its affiliates as a result
                of the
                acquisition of the Acquired Business,
                and

            


    

    


    
      	
            	(iii)	
              was
                granted vesting service under any qualified defined benefit pension
                plan
                (as defined in Code Section 414(j)) sponsored by the Company, any
                domestic
                entity in which the Company owns (directly or indirectly) a 50% or
                more
                interest, and any other entity designated by the Company for service
                performed while an employee of the Acquired
                Business.

            


    

    


    The
      Employee’s accrued benefit under the Former Plan shall be determined as a life
      annuity payable as of the date of determination, using the Former Plan’s early
      retirement factors, if applicable, and converted to a lump sum using the factor
      determined under Section 3.1(a)(iv).

    


    Notwithstanding
      anything to the contrary in this Paragraph (c), if the Committee determines
      that
      the accrued benefit under a Former Plan cannot reasonably be calculated due
      to
      lack of information about the Former Plan or otherwise, the provisions of this
      Paragraph (c) shall not apply with respect to such Former Plan.

     

     

    
      
        
        

      

      
        17