IR EXECUTIVE DEFERRED COMPENSATION PLAN II

Executive Compensation Plan Agreement

You are currently viewing:

This Executive Compensation Plan Agreement involves

Ingersoll-Rand Company Limited

. RealDealDocs™ contains millions of easily searchable legal documents and clauses from top law firms. Search for free - click here.

Title: IR EXECUTIVE DEFERRED COMPENSATION PLAN II
Governing Law: New Jersey Date: 3/2/2009
Industry: Misc. Capital Goods Sector: Capital Goods

Exhibit 10.54

IR EXECUTIVE DEFERRED COMPENSATION PLAN II

[As Amended and Restated Effective January 1, 2009]

TABLE OF CONTENTS


SECTION 1 - STATEMENT OF PURPOSE		1

SECTION 2 - DEFINITIONS

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

SECTION 3 – ADMINISTRATION OF THE PLAN		6

(i)


SECTION 4 - PARTICIPATION, DEFERRAL ELECTION AND INVESTMENT ELECTION

4.1	Participation and Deferral Election	6
4.2	Investment Election	8
4.3	Duration of Elections	9

SECTION 5 - VESTING

5.1	Deferral Amounts	9
5.2	Supplemental Contributions	9
5.3	Discretionary Contributions	9

SECTION 6 - ACCOUNTS AND VALUATIONS

6.1	Deferral Accounts	10
6.2	Supplemental Contribution Accounts	10
6.3	Discretionary Contribution Accounts	11
6.4	IR Stock Accounts	12
6.5	Changes in Capitalization	13
6.6	Accounts are Bookkeeping Entries	13

SECTION 7 - DISTRIBUTION OF ACCOUNTS

7.1	Separation from Service with Five Years of Service, etc.	14
7.2	Scheduled Distributions Prior to Separation from Service	15
7.3	Separation from Service Prior to Completing Five (5) Years of Service	16
7.4	Unforeseeable Financial Emergency Distribution	16
7.5	Required Delay in Distributions	17
7.6	Prohibition of Accelerations	17
7.7	Medium of Payments	17
7.8	Taxes; Withholding	17
7.9	Distribution Provisions	18
7.10	Treatment of Installments; Date of Distribution	18
7.11	Timing of Initial Election Forms	18
7.12	Distribution of Certain Multi-Year Compensation	18

SECTION 8 - BENEFICIARY DESIGNATION		19

SECTION 9 - AMENDMENT AND TERMINATION OF PLAN

9.1	Amendment	19
9.2	Termination of Plan	19

(ii)


SECTION 10 - MISCELLANEOUS
10.1	Unsecured General Creditor	20
10.2	Entire Agreement; Successors	20
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	21
10.7	Captions	21
10.8	Applicable Law	21
10.9	Severability	21
10.10	Notice	21

(iii)

IR Executive Deferred Compensation Plan II

As Amended and Restated Effective January 1, 2009

SECTION 1

STATEMENT OF PURPOSE

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

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

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

The Company amended and restated the Plan in its entirety, effective August 1, 2007, to conform the terms of the Plan to the requirements of the regulations under Code Section 409A. This further amendment and restatement is effective January 1, 2009. The Plan applies to (i) amounts initially deferred hereunder on or after January 1, 2005, (ii) amounts initially credited to the Predecessor Plan before January 1, 2005 that, pursuant to the effective-date rules of Code Section 409A, are subject to the provisions of Code Section 409A, and (iii) investment earnings allocable to amounts described in (i) and (ii). Notwithstanding any other provision of this Plan, no amount will be deferred or credited under this Plan with respect to a Participant for a Plan Year if such amount is properly deferred or credited with respect to such Participant for such Plan Year under the Predecessor Plan.

SECTION 2

DEFINITIONS

2.1

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

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

2.3

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

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

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

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

2.7

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

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

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

2.10

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

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

2.12

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

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

2.14

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

2.15

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

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

2.17

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

2.18

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

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

2.20

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

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

2.22

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

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

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

2.25	“Plan Year” means a calendar year.

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

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

2.28	“ Separation from Service” means a separation from service under the general rules under Code Section 409A.

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

2.30

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

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

2.32

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

2.33

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

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

2.35

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

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.

SECTION 4

PARTICIPATION, DEFERRAL ELECTION AND INVESTMENT ELECTION.

4.1	Participation and Deferral Election . Any Eligible Employee may elect to participate in the Plan for a given Plan Year by filing a completed Election Form for the Plan Year in the manner prescribed by the Administrative Committee. The

Election Form must specify the percentage or dollar amount of any Deferral Amount otherwise payable for or during such Plan Year that will be deferred under the Plan. No Election Form shall be accepted by the Administrative Committee unless it provides that the Participant has elected to defer a combination of cash compensation and/or Stock Based Award equal to a minimum of $5,000.

Any election to defer a Deferral Amount for a Plan Year is irrevocable upon the filing of the Election Form, and must be properly completed and filed by the Participant no later than the December 31 immediately preceding the first Plan Year during which the services for which the compensated is paid or awarded are performed or:

(a)

In the case of a new Participant who is described in Code Section 409A(a)(4)(B)(ii), the 30th day after such new Participant first becomes eligible to participate in the Plan (provided that such election shall relate only to compensation for services performed subsequent to the date such Election Form is filed);

(b)

In the case of any compensating award that constitutes performance-based compensation for purposes of Code Section 409A; the June 30 immediately preceding the Plan Year in which such award would otherwise be paid or such earlier date established by the Administrative Committee; if, by reason of events occurring after the Participant’s Deferral Election, compensation ceases to be performance-based compensation for purposes of section 409A, any deferral election made under this paragraph (and not timely made under any other provision of this Section 4.1) shall be considered untimely and given no force or effect;

(c)

In the case of any compensatory award that, at the time the Participant obtains a legally binding right to the award, is subject to a substantial risk of forfeiture (within the meaning of Code Section 409A) for a period of at least 13 months, the 30th day after the Participant obtains a legally binding right to such award.

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

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

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

4.2

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

Subject to the right of the Administrative Committee to direct the types of investment options in which a Participant’s Discretionary Company Contributions will be deemed to be invested as described in Section 6.3, in the event a Participant re

SITE SEARCH

AGREEMENTS / CONTRACTS

CLAUSES

Search Contract Clauses >>

Browse Contract Clause Library>>

Get Email Updates