0001466258 false Ingersoll-Rand plc 0001466258 2019-12-05 2019-12-05 iso4217:USD xbrli:shares iso4217:USD xbrli:shares
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549

FORM 8-K

CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934

Date of report (Date of earliest event reported): December 5, 2019

INGERSOLL-RAND PUBLIC LIMITED COMPANY
(Exact Name of Registrant as Specified in Its Charter)

Ireland
(State or Other Jurisdiction
of Incorporation)
001-34400
(Commission
File Number)
98-0626632
(IRS Employer
Identification No.)

170/175 Lakeview Dr.
Airside Business Park
Swords, Co. Dublin
Ireland
(Address of principal executive offices, including zip code)
+(353) (0) 18707400
(Registrant’s Telephone Number, Including Area Code)

(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:
   
☐
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
   
☐
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
   
☐
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
   
☐
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Securities registered pursuant to Section 12(b) of the Act:
Title of each class
 
Trading Symbol
 
Name of each exchange on which registered
Ordinary Shares, Par Value $1.00 per Share
 
IR
 
New York Stock Exchange
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (17 CFR §230.405) or Rule 12b-2 of the Securities Exchange Act of 1934 (17 CFR §240.12b-2).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item 5.02     Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.

(b) On December 5, 2019, Susan K. Carter, Senior Vice President and Chief Financial Officer of Ingersoll-Rand plc (the “Company”) announced her plans to retire in 2020 in conjunction with the close of the Reverse Morris Trust (“RMT”) transaction with Gardner Denver Holdings, Inc. The announcement was included in a press release issued by the Company on December 10, 2019. A copy of the press release is attached hereto as Exhibit 99.1 and is incorporated by reference.

(c) On December 5, 2019, the Board of Directors of the Company appointed Christopher J. Kuehn, age 47, as Senior Vice President and Chief Financial Officer of the Company effective upon the retirement of Ms. Carter and also in conjunction with the close of the RMT transaction. Mr. Kuehn currently serves as Vice President and Chief Accounting Officer, a position he has held since he joined the Company in June 2015. Mr. Kuehn will continue to serve as Principal Accounting Officer of the Company until a successor is announced.  Mr. Kuehn previously served as Vice President, Corporate Controller & Chief Accounting Officer for Whirlpool Corporation, a global manufacturer and marketer of major home appliances, from April 2012 through May 2015, and as Chief Financial Officer, Thermal Equipment & Services Segment for SPX Corporation, a supplier of highly specialized, engineered solutions, from August 2008 through March 2012.

In connection with the appointment, Mr, Kuehn entered into an amended and restated employment agreement with the Company. Mr. Kuehn will receive a base salary of $680,000, his Annual Incentive Matrix Program target is set at 100% and his annual equity award target opportunity is set at $1,800,000. Mr. Kuehn is eligible to participate in other benefit programs available to the Company’s executive officers.

Mr. Kuehn will also enter into a Change in Control Agreement with the Company. In the event of a change in control, Mr. Kuehn will receive a severance payment equal to two and one-half times his base salary plus his AIM target.

The foregoing summary of Mr. Kuehn’s compensation is qualified in its entirety by reference to the complete employment agreement, a copy of which is attached hereto as Exhibit 10.1 and is incorporated by reference.

Item 9.01    Financial Statements and Exhibits.         

Exhibit
Description
   
10.1
   
99.1 Press Release of Ingersoll-Rand plc, dated December 10, 2019.
   
104
Cover Page Interactive Data File (embedded within the Inline XBRL document)



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.

 
INGERSOLL-RAND PUBLIC LIMITED COMPANY
(Registrant)
 
       
Date: December 10, 2019
By:
/s/ Evan M. Turtz  
    Evan M. Turtz  
    Senior Vice President, General Counsel and Secretary  
       




EXHIBIT INDEX

 
Exhibit
Description
   
10.1
   
99.1 Press Release of Ingersoll-Rand plc, dated December 10, 2019.
   
104
Cover Page Interactive Data File (embedded within the Inline XBRL document)
 



EXHIBIT 10.1

                                          Michael W. Lamach
                                          Chairman and Chief Executive Officer

Ingersoll-Rand plc
170/175 Lakeview Drive
Airside Business Park
Swords, Co. Dublin, Ireland
 
U.S . Mailing Address
800-E Beaty Street
P.O. Box 940
Davidson, NC 28036


December 5, 2019


Mr. Chris Kuehn


Dear Chris:

I am pleased to offer you the position of Senior Vice President and Chief Financial Officer reporting directly to me. This position will be located in Davidson, North Carolina and becomes effective as of the close of the transaction to separate the Industrial Segment, anticipated to be March 2, 2020. I look forward to your acceptance of this offer and the contributions you will make in this role.

The following summarizes the impact of this new assignment on your compensation and benefits.

1.
Your new base salary, effective as of the close of the transaction, will be set at an annual rate of $680,000 (Six Hundred Eighty Thousand U.S. dollars) paid monthly. This represents an increase of $170,000, or 33.3% above your current base salary of $510,000. This increase is inclusive of your 2020 merit and you will next be eligible for merit in 2021.

2.
Your Annual Incentive Matrix (“AIM”) target opportunity will increase from 65% to 100% of your base salary. When you take into account your new base salary and your new AIM target, your annualized cash incentive target will increase from $331,500 to $680,000 or by $348,500 (105.1%). The actual award that you may receive can range from 0% to 200% of the targeted amount depending upon your performance and the performance of the Company. For the 2020 plan year, as long as the transaction closes prior to April 1st, your AIM target award will be calculated with an effective date of January 1, 2020. If the transaction closes after April 1st, your 2020 AIM award will be prorated based on the date of the transaction.

3.
Effective as of the close of the transaction, your annual Long-Term Incentive (“LTI”) target will increase from $650,000 to $1,800,000 or by $1,150,000 (176.9%). Your LTI target value will be awarded in two parts:

 
●
Stock Options and Restricted Stock  Units (“RSU”s): Your annual equity (stock option and RSU) target will increase from $325,000 to $900,000, or by $575,000. At this time, based on the projected transaction close date of March 2nd, it is anticipated that your updated equity target will be  used to determine your award  granted  in 2020 and will be



INGERSOLL-RAND PUBLIC LIMITED COMPANY
REGISTERED OFFICE: 170/175 LAKEVIEW DRIVE, SWORDS, DUBLIN IRELAND
REGISTERED IN IRELAND WITH LIMITED LIABILITY REGISTERED NUMBER: 469272
DIRECTORS: K.E. ARNOLD (U.S.A.), A.C. BERZIN (U.S.A.), J. BRUTON. J L. COHON (U.S.A.), G.D. FORSEE (U.S.A.),
L.P. HUDSON (U.S.A.), M.W. LAMACH (U.S.A.), M.P. LEE, K.B. PEETZ (U S.A.), J.P. SURMA (US.A.), R.J. SWIFT (US.A.), T.L WHITE (U.S.A.)

Mr. Chris Kuehn
December 5, 2019


 
made in an equal proportion of stock options and RSUs. The award value will be converted into stock options and RSUs based on the fair market value of Ingersoll Rand's ordinary shares on the date the Compensation Committee of the Board of Directors (“the Committee”) approves the awards. Stock option and RSU awards generally vest ratably, one-third each year, over three years from the date of grant. Annual equity awards are contingent on and variable with your sustained performance and demonstrated leadership potential.
 
 
●
Performance Share Unit (“PSUs”): Your annual grant target under the Company's Performance Share Program (“PSP”) will increase from $325,000 to $900,000 or by $575,000. At this time, based on the projected transaction close date of March 2nd, it is anticipated that your updated equity target will be used to determine your award in 2020 and the target award value will be converted into PSUs based on the fair market value of Ingersoll Rand's ordinary shares on the date the Committee approves the award. PSUs are based on performance over a three-year period and settled in ordinary shares of the Company. At this time, the actual number of PSUs earned will be based on Ingersoll Rand’s Cash Flow Return on Invested Capital (“CROIC”) and Total Shareholder Return (“TSR”), both relative to the S&P 500 Industrials Index over the 2020 to 2022 performance period and can range from 0% to 200% of the target number of PSUs. PSP performance goals are subject to change for future performance periods at the discretion of the Committee.

 
Your minimum level of required share ownership will increase from 15,000 to 30,000 ordinary shares of the Company. You must achieve this increased ownership requirement within a five-year period from the Effective Date of this role.
 
When you consider each of the items above, your Total Annual Direct Compensation target has increased from $1,491,500 to $3,160,000 or by $1,668,500 (111.9%). Your revised compensation is summarized in the attached Compensation Adjustment Notice.

4.
You will be provided with a Change in Control Agreement (“CIC Agreement”), which provides economic security in the form of cash payments to the participant and enhanced coverage under certain benefit plans in the event of job loss caused by the sale of all or a substantial part of the Company. Your severance payment under a Change in Control (as defined in the CIC Agreement) would be equal to 2.5 times your base salary plus your AIM. The actual agreement will be sent to you shortly after you assume this new role.

5.
You will continue to be eligible to participate in the following programs:
 
a.
Executive Deferred Compensation Plan
 
b.
Executive Health Program
 
c.
Executive Long Term Disability (“LTD”) Plan
 
d.
Financial Counseling Program
 
e.
All employee benefit programs offered to Ingersoll Rand US based salaried employees in accordance with the terms and conditions of these programs


2
Mr. Chris Kuehn
December 5, 2019


Chris, we believe that you will make a significant contribution in this expanded role. To accept this offer, please sign the candidate acceptance below and return it to Lynn Castrataro, Vice President, Total Rewards. The Non-Competition Agreement that you signed on May 7, 2015 remains in effect. In addition, the Proprietary Agreement you executed online at an earlier date also remains in force. If you have any questions regarding the changes in your compensation or your benefits, please call Lynn at 704-990-3633.


Sincerely,


Michael W. Lamach
Chairman and Chief Executive Officer

cc:
Marcia Avedon
Lynn Castrataro



CANDIDATE  ACCEPTANCE


I accept your offer of employment with Ingersoll Rand as Senior Vice President and Chief Financial Officer and agree to the conditions herein and in the offer letter.



3

EXHIBIT 99.1




Contact:
 
Media:
Investors:
Perri Richman
Zac Nagle
(732) 319-1024, prichman@irco.com
(704) 990-3913, investorrelations@irco.com

Ingersoll Rand Announces
Chief Financial Officer Succession Plan


•
Senior vice president and chief financial officer Susan K. Carter announces plans to retire in 2020

•
Vice president and chief accounting officer Christopher J. Kuehn named as successor

SWORDS, Ireland, December 10, 2019 – Ingersoll-Rand plc (NYSE: IR) today announced that Susan K. Carter, senior vice president and chief financial officer of Ingersoll Rand, has communicated her planned retirement in 2020, in conjunction with the close of the Reverse Morris Trust (RMT) transaction with Gardner Denver Holdings, Inc. Christopher J. Kuehn will succeed Carter as senior vice president and chief financial officer of the pure-play climate company, effective upon the close of the transaction expected in early 2020. He will report directly to Chairman and CEO, Michael W. Lamach.

Carter has served as chief financial officer of Ingersoll Rand since 2013, including responsibility for business development. She was instrumental in the planning and execution of the RMT transaction, and will stay on through the transaction close to ensure the smooth completion of the deal and a seamless transition with Kuehn.

“Sue has played an instrumental leadership role in our financial success and in the execution of strategic acquisitions and transactions that have shaped our company and our future,” said Lamach. “Since Sue joined Ingersoll Rand, she has built a tremendous finance team with deep expertise across the board, developed strong investor relationships, and has significantly contributed to our strong shareholder value creation.”

Lamach added: “I’m grateful to Sue for her many contributions, including preparing for a chief financial officer succession plan that we are now executing with great confidence. On behalf of everyone at Ingersoll Rand, I congratulate Sue on a distinguished career and wish her all the best in her well-deserved retirement. I look forward to continuing to work closely with her until her retirement in 2020.”


“I have enjoyed the privilege of working with an extraordinary leadership team that has enhanced customer and shareholder value,” said Carter. “I love working at this great company and am fortunate to have developed a strong successor which enables my retirement. I have great confidence in Chris and the company’s ability to continue delivering strong financial results and shareholder returns.”

Since joining Ingersoll Rand in 2015, Kuehn has served as vice president and chief accounting officer, and as an elected officer of the company. Over time, he has assumed additional oversight responsibility for global financial planning and analysis, and finance within the company’s business units. Working closely with Carter, he has played an integral role in guiding and prioritizing the company’s investments, building strong accounting and finance organizations, and providing financial leadership to the company’s business and executive leadership teams.

Over his 25-year career, Kuehn has held a number of executive leadership positions, including vice president, corporate controller and chief accounting officer for Whirlpool Corporation. Prior to Whirlpool, he was the chief financial officer for the HVAC segment of SPX Corporation and held leadership positions with PricewaterhouseCoopers. Chris earned a B.S. in accounting from the University of New York College of Geneseo and an M.B.A. from the University of Rochester. He is also a CPA.

“At Ingersoll Rand, we pride ourselves on a strong pipeline of executive talent, and Chris is a great example,” said Lamach. “Over the past several years, he has proven to be a strong advisor to me and our businesses, and a credible voice with our financial partners. He will be an outstanding addition to our enterprise leadership team.”

# # #

About Ingersoll-Rand
Ingersoll Rand (NYSE: IR) advances the quality of life by creating comfortable, sustainable and efficient environments. Our people and our family of brands — including Club Car®, Ingersoll Rand®, Thermo King® and Trane® — work together to enhance the quality and comfort of air in homes and buildings; transport and protect food and perishables; and increase industrial productivity and efficiency. We are a global business committed to a world of sustainable progress and enduring results. For more information, visit www.ingersollrand.com.

This news release includes “forward-looking statements,” which are statements that are not historical facts. These forward-looking statements are based on our current expectations and are subject to risks and uncertainties, which may cause actual results to differ materially from our current expectations. Such factors include, but are not limited to, statements that relate to the proposed Reverse Morris Trust transaction with Gardner Denver Holdings, Inc. (GDI). These forward-looking statements are based on GDI’s and Ingersoll Rand’s current expectations and are subject to risks and uncertainties, which may cause actual results to differ materially from GDI’s and Ingersoll Rand’s current expectations. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those indicated or anticipated by such forward-looking statements. The inclusion of such statements



should not be regarded as a representation that such plans, estimates or expectations will be achieved. Important factors that could cause actual results to differ materially from such plans, estimates or expectations include, among others, (1) that one or more closing conditions to the transaction, including certain regulatory approvals, may not be satisfied or waived, on a timely basis or otherwise, including that a governmental entity may prohibit, delay or refuse to grant approval for the consummation of the proposed transaction, may require conditions, limitations or restrictions in connection with such approvals or that the required approval by the stockholders of GDI may not be obtained; (2) the risk that the proposed transaction may not be completed on the terms or in the time frame expected by Ingersoll Rand or GDI, or at all, (3) unexpected costs, charges or expenses resulting from the proposed transaction, (4) uncertainty of the expected financial performance of the combined company following completion of the proposed transaction; (5) failure to realize the anticipated benefits of the proposed transaction, including as a result of delay in completing the proposed transaction or integrating the businesses of GDI and Ingersoll Rand Industrial, or at all, (6) the ability of the combined company to implement its business strategy; (7) difficulties and delays in the combined company and ClimateCo achieving revenue and cost synergies; (8) inability of the combined company and ClimateCo to retain and hire key personnel; (9) the occurrence of any event that could give rise to termination of the proposed transaction; (10) the risk that stockholder litigation in connection with the proposed transaction or other settlements or investigations may affect the timing or occurrence of the proposed transaction or result in significant costs of defense, indemnification and liability, (11) evolving legal, regulatory and tax regimes; (12) changes in general economic and/or industry specific conditions; (13) actions by third parties, including government agencies; and (14) other risk factors detailed from time to time in Ingersoll Rand’s and GDI’s reports filed with the SEC, including Ingersoll Rand’s and GDI’s annual reports on Form 10-K and subsequent 10-Qs. We assume no obligation to update these forward-looking statements.