Exhibit 10.32
AGREEMENT
This AGREEMENT is made as of
, 200__, by and among INGERSOLL-RAND COMPANY, a New Jersey
corporation (the “Company”), INGERSOLL-RAND PLC, an
Irish company (“IR plc”) and
(the “Employee”). Unless otherwise indicated, terms
used herein and defined in Schedule A hereto shall have the
meanings assigned to them in said Schedule.
1. TERM/OPERATION OF
AGREEMENT.
This Agreement shall begin and be
effective on the date first set forth above and its initial term
shall last until December 1, 200__. This Agreement shall
continue thereafter from year to year prior to a Change in Control
Event unless terminated as of December 1, 200
or any subsequent anniversary
thereof by either party upon written notice to the other party
given at least 60 days prior to such renewal date. Notwithstanding
the foregoing, this Agreement may not be terminated on or after the
occurrence of a Change in Control Event and its terms shall
continue until the later of: the second anniversary of the
occurrence of a Change in Control Event; or after satisfaction of
all obligations hereunder. Additionally, the Employee’s
rights under this Agreement shall terminate in the event that the
Employee’s employment with the IR Group terminates for
reasons other than due to a “Termination” as defined in
Schedule A annexed hereto.
2. EMPLOYEE’S POSITION AND
RESPONSIBILITY .
The Employee will continue to serve
the IR Group upon the occurrence of a Change in Control Event in
accordance with the terms of this Agreement unless his employment
terminates under the terms hereof prior to the expiration of the
Agreement.
3. COMPENSATION AND OTHER
BENEFITS UPON CHANGE IN CONTROL EVENT .
Upon the occurrence of any Change in
Control Event, the Employee shall continue to receive basic annual
salary, bonus and fringe and other benefits as follows:
(a) Basic Annual Salary and
Bonus . The Employee’s basic annual salary shall continue
at a rate not less than the rate of annual salary, which has been
paid to the Employee immediately prior to the Change in Control
Event, with such annual increases (but not decreases) equal to the
greater of (i) salary increases as may be contemplated by any
applicable salary adjustment programs of the IR Group (or any
member thereof) in effect immediately prior to the Change in
Control Event and applicable to the Employee and such further
increases as shall be determined from time to time by the Board or
(ii) a percentage equal to the percentage increase (if any) in
the “Consumer Price Index for All Urban Consumers”
published by the United States Department of Labor’s Bureau
of Labor Statistics for the then most recently ended 12-month
period. In addition, the Employee shall be entitled to receive an
annual bonus in an amount not less than the highest annual bonus
received by, or accrued on behalf of, the Employee during the
period of (i) the three full Fiscal Years immediately
preceding the Change in Control Event, or, if a lesser period,
(ii) the number of full Fiscal Years immediately preceding the
Change in Control Event during which the Employee has been employed
by the IR Group (or any member thereof) (whether the bonus is paid
to, is accrued on behalf of, or
is a Deferral Amount (as such term
is defined, respectively, in the IR Executive Deferred Compensation
Plan and the IR Executive Deferred Compensation Plan II
(collectively, the “Executive Deferred
Plans”)).
(b) Compensation and Benefits;
Business Expenses . The Employee shall continue to be entitled
to receive benefits, including but not limited to pension (and
supplemental pension), savings plan (and supplemental savings
plan), leveraged employee stock ownership plan, stock award,
performance share, stock option, deferred compensation, and welfare
plans (as defined in section 3(1) of the Employee Retirement Income
Security Act of 1974, as amended, or otherwise) including, but not
limited to, life, medical, prescription drugs, dental, disability,
accidental death and travel accident coverage plans and
post-retirement welfare benefits on terms no less favorable than
those in effect under each such plan or program immediately prior
to the Change in Control Event, and at no less than the same
benefit levels (and no more than the same employee contribution
levels) then in effect under each such plan or program of the IR
Group (or any member thereof) as it exists immediately prior to the
Change in Control Event, and to receive all other compensation,
benefits and perquisites (or their equivalent) from time to time in
effect for the benefit of any executive, management or
administrative group for which the employment position then held by
the Employee entitles the Employee to participate. The Company
shall provide for the payment of, or reimburse the Employee for,
all travel and other out-of-pocket expenses reasonably incurred by
him in the performance of his or her duties hereunder.
4. PAYMENTS AND BENEFITS UPON
TERMINATION .
Subject to paragraph 8(k), the
Employee shall be entitled to the following payments and benefits
upon Termination:
(a) Salary and Bonus . The
Company shall pay to the Employee, in a cash lump sum on the
Termination Date, an amount equal to the sum of (i) the basic
annual salary, and any annual bonus in respect of a completed
fiscal year, which have not yet been paid to the Employee through
the Termination Date; (ii) an amount equal to the last annual
bonus received by, or awarded to, the Employee with respect to the
full Fiscal Year immediately preceding the Termination Date
multiplied by a fraction the numerator of which shall be the number
of full months the Employee was employed by the Company during the
Fiscal Year containing the Employee’s Termination Date and
the denominator of which shall be 12; and (iii) an amount
equal to the Employee’s basic annual salary multiplied by a
fraction, the numerator of which shall be the number of unused
vacation days to which the Employee is entitled as of the
Termination Date and the denominator of which shall be 365, and any
other amounts normally paid to an employee by the IR Group (or any
member thereof) upon termination of employment. For the purpose of
4(a)(ii), any partial month during which the Employee is employed
shall be deemed a full month.
(b) Severance . The Company
shall pay to the Employee, in a cash lump sum not more than 30 days
following the Termination Date, an amount equal to three times the
sum of (i) the basic annual salary in effect on the
Termination Date, or, if higher, the basic annual salary in effect
immediately prior to reduction of the Employee’s basic annual
salary after the Change in Control Event; and (ii) the
Employee’s target bonus for the year of termination or, if
higher, the average of the annual bonus received by, or
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accrued on behalf of, the Employee
during the period beginning three full Fiscal Years immediately
preceding the Change in Control Event and ending on the Termination
Date (whether the bonus is paid to, is accrued on behalf of, or is
a Deferral Amount (as such term is defined in the Executive
Deferred Plans)).
(c) Employee Benefit Plans .
For the three year period following the Termination Date, the IR
Group (or any member thereof) shall continue to cover the Employee
under those employee welfare plans (including, but not limited to,
life, medical, prescription drugs, dental, accidental death and
travel accident coverage, but not including any severance pay or
disability plan, other than that provided pursuant to this
Agreement or any pension plan) applicable to the Employee on the
Termination Date at the same benefit levels then in effect (or
shall provide their equivalent); provided , however ,
that if the Employee becomes employed by a new employer and
participates in a welfare plan of such employer that is at least as
favorable as the comparable plan of the IR Group (or any member
thereof), the Employee’s coverage hereunder under the
applicable welfare plan of the IR Group (or any member thereof) (or
the equivalent) shall continue only as secondary coverage to that
provided by the new employer until the three year period following
the Termination Date (but shall become primary coverage on or prior
to the expiration of the three year period following the
Termination Date if, for any reason, the Employee ceases to
participate in the new employer’s plan or if such new
employer’s plan becomes less favorable than the comparable
plan of the IR Group (or any member thereof)).
(d) Executive Deferred
Compensation Plans and Supplemental Employee Savings Plans .
The amount and payment of benefits under the Executive Deferred
Plans and the Ingersoll-Rand Company Supplemental Employee Savings
Plan (“ESP”) shall be determined in accordance with the
provisions set forth in the applicable plan document.
(e) Pension Benefits
.
(i) No later than 30 days following
the Termination Date, the Company shall pay the Employee an amount
(in one lump sum cash payment and in lieu of the benefit otherwise
provided under the applicable plan, program or agreement) equal to
the present value of the sum of the pension benefits the Employee
is entitled to receive under (A) the Ingersoll-Rand Company
Supplemental Pension Plan (the “Section 415 Excess
Plan”) and (B) the Ingersoll-Rand Company Elected
Officers Supplemental Program (the “Elected Officers
Supplemental Program” or the “Program”), each as
in effect immediately prior to the Change in Control Event
(collectively, the Section 415 Excess Plan and the Program
shall be referred to as the “Pension
Benefit”).
(ii) In calculating the portion of
the Pension Benefit under the Elected Officers Supplemental Program
for the purpose of determining the amount payable under this
Agreement, the Company shall: (A) credit the Employee with an
additional three Years of Service (as defined in the Program) (but
in no event shall the Employee be credited with more than 35 Years
of Service) and an additional three years of age but to an age no
greater than 65 for purposes of computing the amount of the Pension
Benefit; and (B) define “Final Average Pay” in
Section 1.10 of the Program as 1/3 of the severance amount
determined pursuant to paragraph 4(b) of this Agreement. If, after
crediting three years of age, the Employee is less than 55 years
old, the portion of his or her Pension Benefit under the Program
shall be reduced to reflect commencement prior to age 55 in
accordance with the applicable provisions of the
Program.
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(iii) This paragraph 4(e)(iii) shall
apply only in the event that the portion of the Pension Benefit
under the Elected Officers Supplemental Program, after application
of paragraph 4(e)(ii), is less than zero ($0.00). In calculating
the portion of the Pension Benefit under Section 1.1 of the
Section 415 Excess Plan for the purpose of determining the
amount payable under this Agreement, the Company shall credit the
Employee with three additional years of credited service (within
the meaning of the Company’s qualified defined benefit plan
in which the Employee actively participates immediately prior to
the Change in Control Event (the “Qualified Pension
Plan”), and including compensation, vesting and age credit)
and three additional years of age (provided that age shall not be
increased to more than 65) for purposes of the Section 415
Excess Plan but not the Qualified Pension Plan.
(iv) Reserved.
(v) The present value of the Pension
Benefit under the Elected Officers Supplemental Program and, only
in the event that paragraph 4(e)(iii) applies, the Section 415
Excess Plan, shall be calculated using (A) an interest rate
equal to the 10-year Treasury Note rate as used in the Elected
Officers Supplemental Program’s definition of Actuarial
Equivalent, (B) the mortality rate used to determine lump sum
values in the Elected Officers Supplemental Program, and
(C) actual age without the three year addition to
age.
(vi) In the event that the Change in
Control Event preceding the Termination Date does not constitute a
change in ownership or effective control, or in the ownership of a
substantial portion of the assets, within the meaning of
Section 409A(a)(2)(A)(v) of the Code, then the Pension
Benefits paid pursuant to this Section 4(e) shall be deferred
until such times(s) as payment of such amounts would have been made
without regard to the occurrence of such Change in Control
Event.
(f) Retiree Welfare Benefits
. For purposes of determining the Employee’s eligibility for
post-retirement benefits under any welfare plan maintained by the
IR Group (or any member thereof) prior to the occurrence of a
Change in Control Event, the Employee shall be credited with any
combination of additional years of service and age which together
shall not exceed 10 years, for the purpose of determining
eligibility for such benefits. If, after taking into account such
additional age and service, the Employee is eligible for any such
post-retirement welfare benefits (or would have been eligible under
the terms of such plans as in effect prior to the occurrence of the
Change in Control Event), the Employee shall receive, commencing on
the month following the date that is three years after the
Termination Date, post-retirement welfare benefits no less
favorable than the benefits the Employee would have received under
the terms and conditions of the applicable plans in effect
immediately prior to the occurrence of the Change in Control Event.
For the purpose of determining years of service under this
paragraph, years of service shall be determined in accordance with
the definition of “Year of Vesting Service” as set
forth under Section 1.42 of the Ingersoll-Rand Pension Plan
One (as in effect immediately prior to the Change in Control Event)
in addition to the additional years provided herein.
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(g) Reserved .
(h) Reserved .
(i) Outplacement Expenses .
For the period following the Termination Date until
December 31 of the second calendar year following the calendar
year during which the Termination Date occurred, the Company shall
reimburse the Employee for all reasonable expenses (up to 45% of
the Employee’s basic annual salary, but no more than
$100,000, during such period) actually incurred by the Employee for
professional outplacement services by qualified consultants
selected by the Employee. The outplacement expenses incurred by the
Employee during such period shall be reimbursed by the Company no
later than the last day of the third calendar year following the
calendar year during which the Termination Date occurs.
5. RESERVED .
6. EFFECT ON OTHER EMPLOYMENT
ARRANGEMENTS .
Except for any interests or rights
relating to benefit provisions (but not severance payments) such as
pension, stock option grants, stock awards, health and welfare
(including retiree medical) and perquisites that the Employee may
have under any other written employment agreement or arrangement
with the Company, or any member of the IR Group, the provisions of
this Agreement contain the entire understanding of the parties
hereto and, in the event of a Termination, shall supersede and
govern in all respects any prior employment or severance agreement
or understanding between the Company, or any member of the IR Group
and the Employee. For the avoidance of doubt, any pension
arrangement that the Employee may have under any employment
agreement or arrangement with the Company are in addition to the
provisions of paragraph 4(e) hereof.
7. CONFIDENTIALITY; COVENANT NOT
TO COMPETE .
(a) The Employee shall not, without
the Company’s prior written consent, either directly or
indirectly, (i) at any time during the Employee’s
employment with the Company or any member of the IR Group and for
three years after the Employee’s Termination, disclose any
Confidential Information pertaining to the business of the Company
or the IR Group, except when required to perform his or her duties
to the Company or any member of the IR Group, by law or judicial
process; or (ii) for the one year period after the
Employee’s Termination (the “Restricted Period”)
(A) be engaged in or have a financial interest (other than an
ownership position of less than 5% in any company whose shares are
publicly traded or any non-voting non-convertible debt securities
in any company) in any business which competes with any business of
the Company or any member of the IR Group, (B) solicit
customers or clients of the Company or any member of the IR Group
to terminate their relationship with the Company or any member of
the IR Group or otherwise solicit such customers or clients to
compete with any business of the Company or any member of IR Group
or (C) solicit or offer employment to, or otherwise hire, any
person who has been employed by the Company or any member of the IR
Group at any time during the twelve months immediately preceding
the termination of the Employee’s employment. If the Employee
is bound by any other agreement with the Company or any member of
the IR Group
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regarding the use or disclosure of
confidential information, the provisions of t
