UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
WASHINGTON,
D.C. 20549
|
FORM
8-K
|
CURRENT
REPORT
|
Pursuant
to Section 13 or 15 (d) of the Securities Exchange Act of
1934
|
Date
of Report - December 7,
2005
(Date
of earliest event reported)
|
INGERSOLL-RAND
COMPANY LIMITED
(Exact
name of registrant as specified in its charter)
|
Bermuda
(State
or other jurisdiction of incorporation)
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1-985
(Commission
File Number)
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75-2993910
(I.R.S.
Employer Identification No.)
|
Clarendon
House
2
Church Street
Hamilton
HM 11, Bermuda
(Address
of principal executive offices, including zip code)
|
(441)
295-2838
(Registrant's
phone number, including area code)
N/A
(Former
name or former address, if changed since last report)
|
Check
the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant
under any
of the following provisions:
o
Written
communications pursuant to Rule 425 under the Securities Act (17
CFR
230.425)
o
Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
o
Pre-commencement communications pursuant to Rule 14d-2(b) under
the
Exchange Act (17 CFR 240.14d-2(b))
o
Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act
(17 CFR
240.13e-4(c))
|
Item
1.01. Entry into a Material Definitive Agreement.
Salary
of Executive Officer
On
December 7, 2005, the Compensation Committee (the “Compensation Committee”) of
the Board of Directors (the “Board”) of Ingersoll-Rand Company Limited (the
“Company”) approved an increase in the base annual salary of Christopher P.
Vasiloff, Senior Vice President of the Company, from $440,000 to $460,000,
effective December 1, 2005, after a review of performance and competitive
market
data.
Accelerated
Vesting of Certain Previously Awarded Stock Options
On
December 7, 2005, the Compensation Committee of the Board of Directors of
the
Company approved the acceleration of the vesting of all outstanding and unvested
stock options under the Company’s stock plans for active employees effective
December 31, 2005. As a result of the acceleration, 9.7 million stock options
will become exercisable, with exercise prices ranging from $19.53 to $39.85
and
a weighted average exercise price of $34.95. Included in the amount are stock
options for executive officers totaling 2.0 million, with a range of exercise
prices of $19.53 to $39.85 and a weighted average exercise price of $34.23.
The
stock options held by the independent directors of the Company are not impacted.
Options issued on or prior to December 31, 2002, are fully vested as of December
31, 2005, under the normal three-year vesting period for options and therefore
are not affected by the acceleration of vesting.
In
addition to the acceleration of the vesting date, the terms and conditions
of
the stock option agreements governing the stock options were changed to prohibit
transfers (including sales, gifts, pledges or other transfers of any kind)
of
any shares acquired through the exercise of these accelerated options until
the
earlier of (i) the original vesting date of the option or (ii) termination
of
employment, retirement, death or disability. In addition, in order to effectuate
the acceleration, the Incentive Stock Plan of 1998 was amended effective
December 31, 2005, to eliminate the provision requiring one year of employment
before options can be exercised. A copy of the amendment is attached hereto
as
Exhibit 4.1.
Typically,
the Company grants stock options that vest ratably over a three-year period.
The
Company has been using a method in its pro forma footnote disclosure that
recognizes retirement-eligible employees’ option compensation expense over the
normal vesting period until the employee retires. Upon retirement, the
compensation expense is fully recognized in the pro forma footnote disclosure.
After adoption of SFAS 123 (R) on January 1, 2006, compensation expense for
options issued prior to adoption will be calculated using the same method
employed in the prior pro forma footnote disclosure. However, this compensation
expense will be recognized in the income statement. For options issued
subsequent to January 1, 2006, compensation expense will be recognized in
the
income statement using the method prescribed by the new pronouncement.
Therefore, the total compensation expense associated with options issued
after
January 1, 2006, to retirement-eligible employees will be recognized immediately
in the income statement.
The
accelerated vesting enables the Company to eliminate the need to apply two
different methodologies in calculating compensation expense on a going-forward
basis. In addition, as a result of this action, the aggregate pretax expense
that would have been reflected in the Company’s consolidated financial
statements in future fiscal years will be reduced by $67.8 million ($41.2
million, $24.4 million, and $2.2 million in 2006, 2007, and 2008, respectively)
or $41.9 million after tax. As a result of the accelerated vesting, this
total
amount will instead be included in the pro forma footnote disclosure in 2005.
Item
8.01. Other Events.
Equity-Based
Savings Plans
The
number of the Company’s Class A common shares available for issuance under the
Registration Statement filed on Form S-8 (Registration No. 333-42133) on
December 12, 1997, which relates to certain of the Company’s equity-based
savings plans, increased by 6,100,000 shares as a result of the two-for-one
split of the Company’s Class A common shares on September 1, 2005.
Item
9.01. Financial Statements and Exhibits.
(c)
Exhibits
The
following exhibit is included herewith:
Exhibit
No.
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Description
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|
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4.1
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Amendment
to the Ingersoll-Rand Company Limited Amended and Restated Incentive
Stock
Plan of 1998, dated December 7,
2005.
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SIGNATURES
Pursuant
to the requirements of the Securities Exchange Act of 1934, the registrant
has
duly caused this report to be signed on its behalf by the undersigned hereunto
duly authorized.
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INGERSOLL-RAND
COMPANY LIMITED |
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(Registrant)
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|
|
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Date: December
9, 2005 |
By: |
/s/ Patricia
Nachtigal
|
|
Patricia
Nachtigal |
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Senior
Vice President and General Counsel |