**Exhibit 10.5 **

**SECOND AMENDMENTTO THEIR DIRECTOR DEFERRED COMPENSATION AND STOCK AWARD PLAN**

**WHEREAS,**Ingersoll-Rand Company, a New Jersey corporation, adoptedthe IR Director Deferred Compensation and Stock Award Plan (the "Plan") whichwas originally effective on January 1, 1997; and

**WHEREAS,**Ingersoll-Rand Company reserved the right at any time and from time to time toamend the Plan in accordance with Section 8.1 of the Plan; and

**WHEREAS,**the Plan has been amended and restated mostrecently effective January 1, 2001; and

**WHEREAS,** Ingersoll-RandCompany desires to amend the Plan to make certain changes regarding investmentand payments in IR Stock;

**NOW, THEREFORE,**thePlan shall be amended, effective January 1, 2004, as set forth below:

1.         Section 2.1 is hereby amended to read as follows:

"**2.1            "Account Balance**" means, for each Plan Year, a credit on therecords of the Company equal to the sum of the value of a Participant'sConversion Account, Deferral Account, Deferred IR Stock Award Account, SupplementalContribution Account and IR Stock Account for such Plan Year.  The Account Balance shall be a bookkeepingentry only and shall be utilized solely as a device for the measurement anddetermination of the amounts to be paid in cash to a Participant, or to theParticipant's designated Beneficiary, pursuant to the Plan."

2.         Section2.11 is hereby amended to read as follows:

"**2.11**            **"InvestmentOption Subaccounts"** means the separate subaccounts, each of whichcorresponds to an investment option elected by the Participant with respect toa Participant's Conversion Accounts, Deferral Accounts, Deferred IR Stock AwardAccounts and Supplemental Contribution Accounts, as applicable."

3.         Section 2.18 is hereby amended to readas follows:

"**2.18            "Supplemental Contribution"** means an additional amount to be credited toa Participant's Supplemental Contribution Account equal to twenty percent (20%)of the Participant's Fees that are deferred under Section 3.1 of the Plan for aPlan Year by the Participant and is, at thetime of making the deferral election, deemed to be invested in theParticipant's IR Stock Account.

4.         Section 3.2 is hereby amended to add the following paragraphto the end thereof:

"Subject to Section 5.2, in making the designationspursuant to this Section, the Participant may specify that all or any vestedportion of the Participant's Supplemental Contribution Account be deemed to beinvested, in whole percentage increments, in one or more of the types ofinvestment options provided under the Plan. A Participant may change the designation made under this Section withrespect to amounts credited to the vested Participant's SupplementalContribution Account by filing an Election Form no later than the timespecified by the Secretary of the Company, to be effective as of the firstbusiness day of the following month.

Subject to Sections 5.4 and 5.6, in making thedesignations pursuant to this Section, the Participant may specify that all orany vested portion of the Participant's Deferred IR Stock Award Account and/orConversion Account be deemed to be invested, in whole percentage increments, inone or more of the types of investment options provided under the Plan.  A Participant may change the designationmade under this Section with respect to amounts credited to the Participant'svested Deferred IR Stock Award Account and/or Conversion Account by filing anElection Form no later than the time specified by the Secretary of the Company,to be effective as of the first business day of the following month."

5.         Section 5.2 is hereby amended to read as follows:

"**5.2**            "**SupplementalContribution Accounts**. TheCompany shall establish and maintain a separate Supplemental ContributionAccount for each Plan Year for each Participant who receives a SupplementalContribution for such Plan Year.  AllSupplemental Contributions shall be credited to the Participant's SupplementalContribution Account on the same date that the Participant's Deferral Amountfor which the Supplemental Contribution is being made is credited to theParticipant's Deferral Account pursuant to Section 5.1.  All of a Participant's SupplementalContributions shall be deemed to be invested in, and shall remain deemed to beinvested in, IR Stock in theParticipant's Supplemental Contribution Account until the Participant completesan Election Form to the effect that all or a portion of the Participant'svested Supplemental Contribution Account will be deemed to be invested in oneor more of the investment options under the Investment Option Subaccounts oruntil such amounts are distributed in cash from the Plan.

All Supplemental Contributions shall initially becredited to a Participant's Supplemental Contribution Account in units orfractional units of IR Stock.  The valueof each unit shall be determined each business day and shall equal the closingprice of one share of IR Stock on the New York Stock Exchange-CompositeTape.  On each date that SupplementalContributions are credited to a Participant's Supplemental ContributionAccount, the number of units to be credited shall be determined by dividing thenumber of units by the value of a unit on such date.

Dividends paid on IR Stock shall be reflected in aParticipant's Supplemental Contribution Account by the crediting of additionalunits or fractional units.  Suchadditional units or fractional units shall equal the value of the dividendsbased upon the closing price of one share of IR Stock on the New York StockExchange-Composite Tape on the date such dividends are paid.

To the extent a Participant completes an Election Formto make a deemed investment in one or more of the investment options under theInvestment Option Subaccounts, a Participant's vested Supplemental ContributionAccount shall be credited as follows:

(a)        On the day a Participant makes adeemed investment election in one of the Investment Option            Subaccounts, theCompany shall credit the Investment Option Subaccounts of the Participant's            Supplemental Contribution Account with anamount in accordance with the Participant's Election Form;            that is, the portionof the Participant's Supplemental Contribution Account that the Participant has           elected to be deemed to be invested in a certain type of investment optionshall be credited to the            Investment Option Subaccount corresponding to thatinvestment option.

(b)       Each business day, each Investment Option Subaccount of aParticipant's Supplemental Contribution          Account shall be adjusted for earnings or losses in an amount equal to thatdetermined by multiplying the           balance credited to such Investment OptionSubaccount as of the prior day plus contributions credited           that day to theInvestment Option Subaccount by the Return for the corresponding investmentoption."

6.        Section 5.3 is hereby amended to add the following paragraphto the end thereof:

"Notwithstanding the above, a Participant may elect to invest all or partof his IR Stock Account in one or more of the available Investment OptionSubaccounts under the Participant's Deferral Accounts, as set forth in Sections3.2 and 5.1, by completing the appropriate Election Form."

7.       Section5.4 is hereby amended to read as follows:

"**5.4**            **Deferred IRStock Award Amount**. Each  Non-employee Directorshall receive an annual award on the date of the first Board meeting after eachannual meeting of shareholders in the form of a promise by theCompanyto deliver 600 shares of IRStock, or such other amount as may from time to time be established byresolution of the Board.  Annual awardsof shares of IR Stock shall be credited to the Deferred IR Stock Award Accountof each Non-employee. 

A Participant's Deferred IR Stock Award Accounts shall be credited asfollows:

(a)        On the day an annual award of IR Stockis credited to a Participant's Deferred IR Stock Award            Account, the Companyshall credit the Deferred IR Stock Award Account with an amount equal to the           Participant's annual award of IR Stock.

(b)        Allawards of IR Stock pursuant to this Section and amounts credited pursuant toSection 5.5 shall be            credited to a Participant's Deferred IR Stock AwardAccount in units or fractional units. The value of            each unit shall be determined each business day and shallequal the closing price of one share of IR            Stock on the New York StockExchange-Composite Tape.  On each datethat awards of IR Stock are            credited to the Participant's Deferred IR StockAward Account, the number of units to be credited shall            be determined bydividing the amount of such IR Stock awarded by the value of a unit on suchdate.

Dividends paid on IR Stock shall be reflected in a Participant'sDeferred IR Stock Award Account by the crediting of additional units orfractional units.  Such additional unitsor fractional units shall equal the value of the dividends based upon theclosing price of one share of IR Stock on the New York Stock Exchange-CompositeTape on the date such dividends are paid.

To the extent a Participant completes an Election Formto make a deemed investment in one or more of the investment options under theInvestment Option Subaccounts, a Participant's vested Deferred IR Stock AwardAccount shall be credited as follows:

(a)        On the day a Participant makes adeemed investment election in one of the Investment Option            Subaccounts, theCompany shall credit the Investment Option Subaccounts of the Participant's           Deferred IR Stock Award Accountwith an amount in accordance with the Participant's Election Form;            that is, theportion of the Participant's Deferred IR Stock Award Account that theParticipant has            elected, to be deemed to be invested in a certain type ofinvestment option shall be credited to the            Investment Option Subaccountcorresponding to that investment option.

(b)        Each business day, eachInvestment Option Subaccount of a Participant's Deferred IR Stock Award            Account shall be adjustedfor 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 pluscontributions credited            that day to the Investment Option Subaccount by theReturn for the corresponding investment option."

8.         Section 5.6 is hereby amended to readas follows:

"**5.6**            **"Conversionof Deferred Compensation Account Balances. **A Non-employee Director's cash balance in the deferred compensationprogram as of December 31, 1996 was transferred to an equivalent balance in thePlan as of January 1, 1997.  Suchbalance was equal to the number of shares of IR Stock, including fractions,which could have been purchased with such cash account balance on January 2,1997 at the mean of the high and low prices of a share of IR Stock on the NewYork Stock Exchange - Composite Tape on such date, provided that if no sales ofshares of IR Stock were made on the New York Stock Exchange on that date, themean of the high and low prices reported for the preceding day on which salesof shares of IR Stock were made on the New York Stock Exchange.

A Non-employee Director'sbalance, as such balance is described in the previous paragraph, shall becredited to the Non-employee Director's Conversion Accountas of January1, 2001 in units or fractional units. The value of each unit shall be determined each business day and shallequal the closing price of one share of IR Stock on the New York StockExchange-Composite Tape.

Dividends paid on IR Stock shallbe reflected in a Non-employee Director's Conversion Account by the creditingof additional units or fractional units. Such additional units or fractional units shall equal the value of thedividends based upon the closing price of one share of IR Stock on the New YorkStock Exchange-Composite Tape on the date such dividends are paid.

To the extent a Participant completes an Election Formto make a deemed investment in one or more of the investment options under theInvestment Option Subaccounts, a Participant's vested Conversion Account shallbe credited as follows:

(a)        On the day a Participant makes adeemed investment election in one of the Investment Option            Subaccounts, theCompany shall credit the Investment Option Subaccounts of the Participant's            Conversion Account with an amount inaccordance with the Participant's Election Form; that is, the            portion of theParticipant's Conversion Account that the Participant has elected, to be deemedto be            invested in a certain type of investment option shall be credited to theInvestment Option Subaccount            corresponding to that investment option.

(b)        Eachbusiness day, each Investment Option Subaccount of a Participant's Conversion Account shall be            adjusted forearnings or losses in an amount equal to that determined by multiplying thebalance credited            to such Investment Option Subaccount as of the prior day pluscontributions credited that day to the            Investment Option Subaccount by theReturn for the corresponding investment option.

9.         Section 6.3 is herebyamended to read as follows:

"**6.3**            **Formof Payments**.  All amounts in aParticipant's Conversion Account, Deferral Account, Supplemental ContributionAccount, Deferred IR Stock Award Account and IR Stock Account payable to aParticipant or Beneficiary under the Plan shall be paid in cash.

All distributions from the Plan thatare to be paid in a specified number of annual installments shall be paid sothat the amount of each annual installment is determined by dividing the totalremaining number of units in the Participant's Account Balance to be paid inannual installments, by the number of years of annual installments remaining."

10.       Except as specificallyset forth herein, all other terms of the Plan shall remain in full force andeffect and are hereby ratified in all respects. 

**IN WITNESS WHEREOF**, theCompany has caused this amendment to be executed by its duly authorizedrepresentative on this 24th day of February, 2004.

**                                                                         INGERSOLL-RAND COMPANY**

                                                                        By:    /s/ Sharon Elliot                                                                                                                               Sharon Elliot                                                                                  Senior Vice President                                                                                  Human Resources