INGERSOLL RAND CO, 424B5, 1998-03-19

INGERSOLL RAND CO
424B5, 1998-03-19
GENERAL INDUSTRIAL MACHINERY & EQUIPMENT

Previous: FLEET FINANCIAL GROUP INC, 10-K, 1998-03-19

Next: INTEK DIVERSIFIED CORP, SC 13D/A, 1998-03-19

Filed Pursuant to Rule 424(b)(5)
Under The Securities Act of 1933,
As Amended.
Registration Statement File
No. 333-38367

PROSPECTUS SUPPLEMENT
(To Prospectus dated March 17, 1998)
14,000,000 FELINE PRIDES SM
(Consisting of 12,600,000 Income PRIDES SM and 1,400,000 Growth PRIDES SM)
INGERSOLL-RAND COMPANY
1,400,000 Capital Securities
Ingersoll-Rand Financing I
(Liquidation Amount $25 per Capital Security)
fully and unconditionally guaranteed to
the extent set forth herein by
Ingersoll-Rand Company

The securities offered hereby are 14,000,000 FELINE PRIDES SM ("FELINE
PRIDES") of Ingersoll-Rand Company, a New Jersey corporation ("Ingersoll-Rand
Company" or the "Company"), and 1,400,000 6.22% Capital Securities (the
"Capital Securities" and, together with the FELINE PRIDES, the "Securities")
of Ingersoll-Rand Financing I, a statutory business trust created under the
laws of the State of Delaware (the "Trust"), having a stated liquidation
amount per Capital Security equal to $25. Initially, 12,600,000 of the

(continued on next page)

See "Risk Factors" beginning on page S-22 of this Prospectus
Supplement for certain information relevant to an investment in the
Securities.

Prior to the offering made hereby, there has been no public market for
the Securities. The Income PRIDES and the Growth PRIDES have been approved
for listing on the New York Stock Exchange ("NYSE"), subject to official
notice of issuance. On March 17, 1998, the last reported sale price of the
Common Stock on the NYSE was $48 1/4 per share.

THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION, NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED
UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS SUPPLEMENT OR THE
PROSPECTUS TO WHICH IT RELATES. ANY REPRESENTATION TO THE CONTRARY
IS A CRIMINAL OFFENSE.
Price to Public<F1>
$25.00 per Income PRIDES
$21.13 per Growth PRIDES
$25.00 per Capital Security

Underwriting Proceeds to
Commission<F2> Company<F3>
<S> <C> <C>

Total(4) . . . . $10,500,000 $339,500,000
<FN>
(1) Plus, as applicable, accrued distributions, interest and Contract
Adjustment Payments, if any, from March 23, 1998.
(2) The Company and the Trust have agreed to indemnify the Underwriter against
certain liabilities under the Securities Act of 1933, as amended. See
"Underwriting."
(3) Before deducting expenses payable by the Company estimated at $700,000;
such amount does not include $29,579,550 used to purchase the Treasury
Securities component of the 1,400,000 Growth PRIDES.
(4) The Company and the Trust have granted to the Underwriter 30-day options
<PAGE>
to purchase up to an additional 1,890,000 Income PRIDES, 210,000 Growth
PRIDES and 210,000 Capital Securities, to cover over-allotments, if any;
provided, however, that the Underwriter must purchase, proportionately,
at least as many Capital Securities as Growth PRIDES and must purchase,
proportionately, at least as many Growth PRIDES as Income PRIDES. If such
options are exercised in full, the total Underwriting Commission and
Proceeds to Company will be $12,075,000 and $390,425,000 (such amount
does not include approximately $34,016,483 used to purchase the Treasury
Securities component of the Growth PRIDES), respectively. See
"Underwriting."
</TABLE>

The Securities are offered by the Underwriter, subject to prior sale,
when, as and if issued to and accepted by it, and subject to approval of
certain legal matters by counsel for the Underwriter and certain other
conditions. The Underwriter reserves the right to withdraw, cancel or modify
such offer and to reject orders in whole or in part. It is expected that
delivery of the Securities offered hereby will be made in New York, New York
on or about March 23, 1998.

Merrill Lynch & Co.

The date of this Prospectus Supplement is March 17, 1998.
Service Mark of Merrill Lynch & Co., Inc.

________________________
SM Service Mark of Merrill Lynch & Co., Inc.<PAGE>
(cover continued from previous page)

Capital Securities will be issued and held as a component of the FELINE
PRIDES. The FELINE PRIDES offered hereby will initially consist of (A)
12,600,000 units (referred to as "Income PRIDES SM") with a Stated Amount, per
Income PRIDES, of $25 (the "Stated Amount") and (B) at least 1,400,000 units
(referred to as "Growth PRIDES" SM) with a face amount, per Growth PRIDES,
equal to the Stated Amount; to the extent the number of Growth PRIDES offered
hereby is increased, the number of separate Capital Securities offered hereby
will be increased by at least that number. Each Income PRIDES will initially
consist of a unit comprised of (a) a stock purchase contract (a "Purchase
Contract") under which (i) the holder will purchase from the Company not
later than May 16, 2001 (the "Purchase Contract Settlement Date"), for $25, a
number of newly issued shares of common stock, $2 par value per share (the
"Common Stock"), of the Company equal to the Settlement Rate described
herein, and (ii) the Company will pay the holder unsecured contract
adjustment payments ("Contract Adjustment Payments") at the rate of .53% of
the Stated Amount per annum and (b) either beneficial ownership of a Capital
Security or upon the occurrence of a Tax Event Redemption (as defined herein)
prior to the Purchase Contract Settlement Date, the Applicable Ownership
Interest (as defined herein). Each Growth PRIDES will initially consist of a
unit comprised of (a) a Purchase Contract under which (i) the holder will
purchase from the Company on the Purchase Contract Settlement Date, for $25,
a number of newly issued shares of Common Stock of the Company, equal to the
Settlement Rate, and (ii) the Company will pay the holder Contract Adjustment
Payments, at the rate of .78% of the Stated Amount per annum, and (b) a 1/40
undivided beneficial interest in a zero-coupon U.S. Treasury Security (CUSIP
No. 912820 BA 4) having a principal amount equal to $1,000 and maturing on
May 15, 2001 (the "Treasury Securities"). The Company will, directly or
indirectly, own all the common securities (the "Common Securities" and,
together with the Capital Securities, the "Trust Securities") representing
undivided beneficial ownership interests in the assets of the Trust. The
Trust exists for the sole purpose of issuing the Trust Securities and
investing the proceeds thereof in an equivalent amount of Debentures of the
Company, due May 16, 2003 and initially bearing interest at 6.22% (the
"Debentures"). As long as the FELINE PRIDES are in the form of Income PRIDES
or Growth PRIDES, the related Capital Securities or the Treasury Portfolio or
a Treasury Security, as applicable, will be pledged to the Collateral Agent
(as defined herein), to secure the holder's obligation to purchase Common
Stock under the related Purchase Contracts.

The number of shares of Common Stock issuable upon settlement of each
Purchase Contract on the Purchase Contract Settlement Date (the "Settlement
Rate") will be calculated as follows: (a) if the Applicable Market Value (as
defined herein) is equal to or greater than $58.38 (the "Threshold
Appreciation Price," which is approximately 21% above the last reported sale
price of the Common Stock set forth on the cover page of this Prospectus
Supplement (the "Reference Price")), the Settlement Rate will be .4282; (b)
if the Applicable Market Value is less than the Threshold Appreciation Price
but greater than the Reference Price, the Settlement Rate will be equal to
the Stated Amount divided by the Applicable Market Value; and (c) if the
Applicable Market Value is less than or equal to the Reference Price, the
Settlement Rate will be .5181.

Aggregate payments of 6.75% of the Stated Amount per annum will be made
or accrue on each Income PRIDES quarterly in arrears on February 16, May 16,
August 16 and November 16 of each year, commencing May 16, 1998, until the
<PAGE>
Purchase Contract Settlement Date. These payments will consist of cumulative
cash distributions on the related Capital Securities or Treasury Portfolio,
as applicable, payable at the rate of 6.22% of the stated liquidation amount
per annum, and Contract Adjustment Payments payable by the Company at the
rate of .53% of the Stated Amount per annum, subject in the case of Capital
Securities and Contract Adjustment Payments, to the Company's right to defer
payment of such amounts. Contract Adjustment Payments, payable by the Company
at the rate of .78% of the Stated Amount per annum, will be made or accrued
on each Growth PRIDES quarterly in arrears on February 16, May 16, August 16
and November 16 of each year, commencing May 16, 1998, until the Purchase
Contract Settlement Date, subject to the Company's right to defer such
payments. In addition, original issue discount ("OID") will accrue on the
related Treasury Security. Holders of each Capital Security will receive
cumulative cash distributions, payable quarterly in arrears, on February 16,
May 16, August 16 and November 16 of each year, commencing May 16, 1998 at
the rate of 6.22% of the stated liquidation amount per annum. Such quarterly
distributions on the Capital Securities will constitute a portion of the
quarterly distribution on the related Income PRIDES. The ability of the Trust
to make the quarterly distributions on the Capital Securities will be solely
dependent upon the receipt of corresponding interest payments from the
Company on the Debentures. The Company will have the right at any time, and
from time to time, limited to a period not extending beyond the maturity date
of the Debentures, to defer the interest payments due on the Debentures. As a
consequence of such deferral, quarterly distributions on the Capital
Securities and the Income PRIDES (to the extent that a portion of the
quarterly distribution on the Income PRIDES is comprised of the quarterly
distributions on the Capital Securities) would be deferred, but would
continue to accrue with interest compounded quarterly. The Company will have
the right at any time, and from time to time, limited to a period not
extending beyond the Purchase Contract Settlement Date, to defer Contract
Adjustment Payments. As a consequence of such deferral, such portion of the
cumulative quarterly distributions on the Income PRIDES that is comprised of
the Contract Adjustment Payments and the quarterly cash distributions on the
Growth PRIDES would be deferred; however, such deferred Contract Adjustment
Payments, if any, would continue to accrue at the rate of 7% per annum,
compounded quarterly.

The distribution rate on the Capital Securities and the interest rate on
the related Debentures outstanding on and after the Purchase Contract
Settlement Date will be reset on the third Business Day (as defined herein)
immediately preceding the Purchase Contract Settlement Date to a rate per
annum (the "Reset Rate") to be determined by the Reset Agent (as defined
herein) equal to the sum of (x) a spread amount (the "Reset Spread") and (y)
the rate of interest on the Two-Year Benchmark Treasury (as defined herein).

The payment of distributions and certain redemptions out of monies held
by the Trust and payments on liquidation of the Trust will be guaranteed by
the Company (the "Guarantee") to the extent described herein and under
"Description of the Guarantee."

The Company's obligations in respect of the Debentures and the Guarantee
generally will be senior unsecured obligations of the Company. The Contract
Adjustment Payments will be subordinated and junior in right of payment only
to the Company's obligations under the Senior Indebtedness (as defined
herein). "Senior Indebtedness" means indebtedness of any kind of the Company
unless the instrument under which such indebtedness is incurred expressly
<PAGE>
provides that it is in parity or subordinate in right of payments to the
Contract Adjustment Payments.

If the holder of an Income PRIDES has not notified the Purchase Contract
Agent (as defined herein), of its intention to settle the related Purchase
Contract with separate cash, the Remarketing Agent (as defined herein),
pursuant to the terms of the Remarketing Agreement (as defined herein), will
use its reasonable efforts to remarket the related Capital Security (bearing
the Reset Rate) on the third Business Day immediately preceding the Purchase
Contract Settlement Date for settlement on the Purchase Contract Settlement
Date at a price of approximately 100.5% of such Capital Security's stated
liquidation amount plus accrued and unpaid distributions (including deferred
distributions, if any) thereon. The proceeds from such remarketing, in an
amount equal to the aggregate stated liquidation amount of such Capital
Securities, will automatically be applied to satisfy in full such holder's
obligation to purchase Common Stock under the related Purchase Contract. In
addition, after deducting as a remarketing fee (the "Remarketing Fee") an
amount not exceeding 25 basis points (.25%) of the aggregate stated
liquidation amount of the remarketed securities, from any amount received in
connection with such remarketing in excess of the aggregate stated
liquidation amount of such Capital Securities plus any accrued and unpaid
distributions (including deferred distributions, if any), the Remarketing
Agent will remit the remaining portion of the proceeds, if any, to the
Purchase Contract Agent for the benefit of such holder. If, despite using its
reasonable efforts the Remarketing Agent fails to remarket the Capital
Securities (other than to the Company) at a price not less than 100% of their
aggregate stated liquidation amount plus accrued and unpaid distributions
(including deferred distributions, if any), the remarketing will be deemed to
have failed (a "Failed Remarketing") and the Company will exercise its rights
as a secured party to dispose of the Capital Securities in accordance with
applicable law and satisfy in full, from the proceeds of such disposition,
such holder's obligation to purchase Common Stock under the related Purchase
Contracts; provided, that if the Company exercises such rights as a secured
Party with respect to such Capital Securities, any accrued and unpaid
distributions (including any deferred distributions, if any) on such Capital
Securities will be paid in cash by the Company to the holder of record of
such Capital Securities. Holders of Capital Securities which are not
components of Income PRIDES may elect, in the manner described herein, to
have their Capital Securities remarketed by the Remarketing Agent.

On or prior to the fifth Business Day immediately preceding the Purchase
Contract Settlement Date, each holder (including an Underwriter) of an Income
PRIDES may substitute for the related Capital Securities, Treasury
Securities, thereby creating Growth PRIDES. Such Treasury Securities will be
pledged with the Collateral Agent to secure the holder's obligation to
purchase Common Stock under the related Purchase Contracts. In the event that
Contract Adjustment Payments are at a higher rate for Growth PRIDES than for
Income PRIDES, holders of Income PRIDES wishing to recreate Growth PRIDES
will also be required to deliver cash in an amount equal to the excess of the
Contract Adjustment Payments that would have accrued since the last Payment
Date through the date of substitution on the Growth PRIDES being created by
such holders, over the Contract Adjustment Payments that have accrued over
the same time period on the related Incoming PRIDES.

If a Failed Remarketing has occurred, each holder of Trust Securities
(or, following the distribution of the Debentures upon a dissolution of the
Trust as described herein, the holders of such Debentures) holding such Trust
<PAGE>
Securities (or Debentures, as the case may be) following the Purchase
Contract Settlement Date will have the right, in the case of the Trust
Securities, to require the Trust to distribute their pro rata share of the
Debentures to The First National Bank of Chicago, as exchange agent (the
"Exchange Agent") and the Exchange Agent will put such Debentures to the
Company on behalf of such holders, (or, in the case of the persons who hold
the Debentures directly, such persons will have the right to put their
Debentures directly to the Company) on June 1, 2001, upon at least three
Business Days' prior notice, at a price equal to the principal amount
thereof, plus accrued and unpaid interest (including deferred interest), if
any, thereon.

On the Business Day immediately preceding the Purchase Contract
Settlement Date, unless a holder of Income PRIDES or Growth PRIDES (i) has
settled the related Purchase Contracts through the early delivery of cash to
the Purchase Contract Agent in the manner described herein, (ii) in the case
of Income PRIDES, has settled the related Purchase Contracts with separate
cash on the Business Day immediately preceding the Purchase Contract
Settlement Date pursuant to prior notification to the Purchase Contract
Agent, (iii) has had the Capital Securities related to such holder's Purchase
Contract remarketed in the manner described herein in connection with
settling such Purchase Contracts, or (iv) an event described under
"Description of the Purchase Contracts--Termination" has occurred, then (A)
in the case of Income PRIDES (unless a Tax Event Redemption has occurred) the
Company will exercise its rights as a secured party to dispose of the Capital
Securities in accordance with applicable law and (B) in the case of Growth
PRIDES or Income PRIDES (in the event that a Tax Event Redemption has
occurred), the principal amount of the related Treasury Securities or the
appropriate Applicable Ownership Interest of the Treasury Portfolio, as
applicable, when paid at maturity, will automatically be applied, pursuant to
the exercise of such rights by the Company to satisfy in full such holder's
obligation to purchase Common Stock under the related Purchase Contracts.

In the event that a holder of either Income PRIDES or Growth PRIDES
effects the early settlement of the related Purchase Contracts through the
delivery of cash or settles (in the case of Income PRIDES) such Purchase
Contracts with cash on the Business Day immediately preceding the Purchase
Contract Settlement Date, the related Capital Securities, the appropriate
Applicable Ownership Interest of the Treasury Portfolio or Treasury
Securities, as the case may be, will be released to the holder as described
herein.

The Company will have the right at any time to dissolve the Trust and,
after satisfaction of liabilities to creditors, cause the Debentures to be
distributed to the holders of the Trust Securities. If the Debentures are
distributed to the holders of the Capital Securities, the Company will use
its best efforts to cause the Debentures to be listed on such exchange on
which the Capital Securities are then listed, including, if applicable, the
New York Stock Exchange.

The Debentures (and, thus, the Trust Securities) are redeemable at the
option of the Company, in whole but not in part, upon the occurrence and
continuation of a Tax Event (as defined herein) under the circumstances
described herein (a "Tax Event Redemption"). If the Company so redeems all of
the Debentures, the Trust must redeem all of the Trust Securities at a
redemption price (the "Redemption Price") per Trust Security equal to the
Redemption Amount (as defined herein) plus accrued and unpaid distributions
<PAGE>
including deferred distributions, if any, thereon to the date fixed for
redemptions and pay in cash such Redemption Price to the holders of such
Trust Securities. If such Tax Event Redemption occurs prior to the Purchase
Contract Settlement Date, the Redemption Price payable in liquidation of the
Income PRIDES holders' interests in the Trust or in the Debentures will be
distributed to the Collateral Agent, who in turn will apply an amount equal
to the Redemption Amount of such Redemption Price to purchase, on behalf of
the holders of Income PRIDES, the Treasury Portfolio and remit the remaining
portion, if any, of such Redemption Price to the Purchase Contract Agent for
payment to the holder of such Income PRIDES. See "Description of the
Debentures--Tax Event Redemption." Such Treasury Portfolio will be
substituted for the Capital Securities and will be pledged to the Collateral
Agent to secure such Income PRIDES holders' obligations to purchase the
Common Stock under their Purchase Contracts.

CERTAIN PERSONS PARTICIPATING IN THIS OFFERING MAY ENGAGE IN
TRANSACTIONS THAT STABILIZE, MAINTAIN, OR OTHERWISE AFFECT THE PRICE OF THE
SECURITIES AND THE COMMON STOCK OF THE COMPANY. SUCH TRANSACTIONS MAY INCLUDE
STABILIZING TRANSACTIONS, THE PURCHASE OF SECURITIES TO COVER SYNDICATE SHORT
POSITIONS AND THE IMPOSITION OF PENALTY BIDS. FOR A DESCRIPTION OF THESE
ACTIVITIES, SEE "UNDERWRITING."
<PAGE>
PROSPECTUS SUPPLEMENT SUMMARY

The following summary information is qualified in its entirety by the
more detailed information and consolidated financial statements of the
Company appearing elsewhere in the accompanying Prospectus, this Prospectus
Supplement or in the documents incorporated herein or in the accompanying
Prospectus by reference. A listing of the pages on which certain definitions
of capitalized terms used in this Prospectus Supplement Summary and elsewhere
in this Prospectus Supplement are defined is set forth in the "Index of Terms
for Prospectus Supplement" herein. Except as otherwise noted, all information
in this Prospectus Supplement assumes no exercise of the Underwriter's
over-allotment options.

The Company

Ingersoll-Rand was organized in 1905 under the laws of the State of New
Jersey as a consolidation of Ingersoll-Sergeant Drill Company and the Rand
Drill Company, whose businesses were established in the early 1870s. Over the
years, the Company has supplemented its original business, which consisted
primarily of the manufacture and sale of rock drilling equipment, with
additional products which have been developed internally or obtained through
acquisition.

Ingersoll-Rand manufactures and sells primarily nonelectrical machinery
and equipment. Principal products include the following:

Agricultural sprayers
Air balancers
Air compressors & accessories
Air dryers
Air logic controls
Air motors
Air and electric tools
Architectural hardware trim
Asphalt compactors
Asphalt pavers
Automated production systems
Automotive components
Ball bearings
Blasthole drills
Blowers
Centrifugal pumps
Compact hydraulic excavators
Construction equipment
Diaphragm pumps
Directional drills
Door closers
Door control hardware
Door locks, latches & locksets
Doors and door frames (steel)
Drilling equipment and accessories
Electrical security systems
Engineered pumps
Engine-starting systems
Exit devices
Extrusion pump systems
Fastener-tightening systems
<PAGE>
Fluid-handling equipment
Foundation drills
Golf cars
Hoists
Hydraulic breakers
Lubrication equipment
Material handling equipment
Mining equipment
Multistage pumps
Needle roller bearings
Parts-washing systems
Paving equipment
Pneumatic breakers
Pneumatic cylinders
Pneumatic valves
Portable compressors
Portable generators
Portable light towers
Reciprocating pumps
Road-building machinery
Rock drills
Rock stabilizers
Roller bearings
Rotary drills
Rotary pumps
Rough-terrain forklifts
Skid-steer loaders
Soil compactors
Spray-coating systems
Submersible pumps
Transport temperature control systems
Utility vehicles
Vacuum pumps
Vertical turbine pumps
Waterjet-cutting systems
Water-well drills
Winches
<PAGE>
These products are sold primarily under the Company's name and also
under other names including ABG, Aro, Beebe, Blaw-Knox, Bobcat, Carryall,
Centac, Charles Maire, Club Car, Crawlair, Cyclone, Ecoair, Elite, Dixie-
Pacific Fafnir, Falcon, Glynn-Johnson, Ingersoll-Dresser Pumps, Jeumont-
Schneider Pumps, Kilian, Klemm, LCN, McCartney, Melroe, Montabert, NREC,
Newman Tonks, Normbau, Pacific, Phoenix, Pleuger, Promaxx, Samiia, Schlage,
Sensor I, Sierra, Spra-Coupe, Steelcraft, Tensor I, Thermo King, Torrington,
Von Duprin, Worthington and Zimmerman.

The Company employs approximately 47,000 people. It has over 100
manufacturing plants throughout the world.

During the last three years, the Company has been involved in an
aggressive acquisition and divestment program. The larger acquisitions
included the following:

-- the May 1995 acquisition of Clark Equipment Company for
approximately $1.5 billion.

-- the April 1997 acquisition of Newman Tonks Group PLC ("Newman
Tonks") for approximately $370 million. Newman Tonks is based in
the United Kingdom and is a leading manufacturer, specifier and
supplier of a wide range of branded architectural products in the
building industry.

-- the October 1997 acquisition of Thermo King Corporation ("Thermo
King") for approximately $2.56 billion. Thermo King designs,
manufactures and distributes transport temperature control systems
and service parts for a variety of mobile applications, including
trailers, truck bodies, sea-going containers, buses and light rail
cars.

The larger divestitures included:

-- the February 1997 sale of the Company's Clark-Hurth Group to Dana
Corporation for approximately $260 million.

-- the March 1996 sale of the Company's Pulp Machinery Division for
approximately $122 million to Beloit Corporation, a subsidiary of
Harnischfeger Industries, Inc.

-- the December 1996 sale of the remainder of the Process Systems
Group for approximately $58 million to Gencor Industries, Inc.

The Company's principal executive offices are at 200 Chestnut Ridge
Road, Woodcliff Lake, New Jersey 07675 (telephone 201-573-0123).

The Trust

The Trust is a statutory business trust created under Delaware law
pursuant to (i) a trust agreement, executed by the Company, as depositor (the
"Sponsor"), and certain of the trustees of the Trust (the "Ingersoll-Rand
Trustees") and (ii) the filing of a certificate of trust with the Secretary
of State of the State of Delaware on August 18, 1997. Such trust agreement
will be amended and restated in its entirety (as so amended and restated, the
"Declaration") substantially in the form filed as an exhibit to the
<PAGE>
Registration Statement of which this Prospectus Supplement forms a part. The
Declaration will be qualified as an indenture under the Trust Indenture Act
of 1939, as amended (the "Trust Indenture Act"). The Trust exists for the
exclusive purposes of (i) issuing the Trust Securities representing undivided
beneficial ownership interests in the assets of the Trust, (ii) investing
the gross proceeds of the Trust Securities in the Debentures and (iii)
engaging in only those other activities necessary or incidental thereto. See
"The Trust."

The Offering

Securities Offered . . . . . . . . . 14,000,000 FELINE PRIDES, consisting
of 12,600,000 Income PRIDES and at
least 1,400,000 Growth PRIDES, and
at least 1,400,000 separate Capital
Securities. 12,600,000 Capital
Securities will be initially issued
and held as a component of the
Income PRIDES.

Issuers . . . . . . . . . . . . . . . Ingersoll-Rand Company and
Ingersoll-Rand Financing I.

Stated Amount . . . . . . . . . . . . $25 per FELINE PRIDES.

Listing of the Income
PRIDES and Growth PRIDES . . . . . The Income PRIDES and the Growth
PRIDES have been approved for
listing on the NYSE, subject to
official notice of issuance. If
Capital Securities are separately
traded to a sufficient extent that
the applicable exchange listing
requirements are met, the Company
will endeavor to cause such
securities to be listed on such
exchange on which the Income PRIDES
and the Growth PRIDES are then
listed, including, if applicable,
the NYSE. See "Underwriting."

NYSE Symbol of Common Stock . . . . . "IR"

Use of Proceeds . . . . . . . . . . . All of the proceeds from the sale of
the Income PRIDES, the Capital
Securities which are not components
of the Income PRIDES and the Common
Securities will be invested by the
Trust in Debentures of the Company.
The Company currently anticipates
using substantially all of the net
proceeds from the sale of the
Debentures (net of purchase of the
Common Securities), estimated to be
approximately $338.8 million (after
deducting the underwriting
commission and expenses), to repay
<PAGE>
commercial paper indebtedness having
an average interest rate of
approximately 5.7% incurred in
connection with the acquisition of
Thermo King. All of the proceeds
from the sale of the Growth PRIDES
will be used to purchase the
underlying Treasury Securities to be
transferred to holders of the Growth
PRIDES pursuant to the terms
thereof, and the Company will
receive no proceeds from the sale of
the Growth PRIDES.

Components of FELINE PRIDES . . . . . The 14,000,000 FELINE PRIDES offered
hereby will initially consist of (A)
12,600,000 units referred to as
Income PRIDES and (B) at least
1,400,000 units referred to as
Growth PRIDES; to the extent the
number of Growth PRIDES offered
hereby is increased, the number of
separate Capital Securities offered
hereby will be increased by at least
that number. Each Income PRIDES will
initially consist of a unit
comprised of (a) a Purchase Contract
under which (i) the holder will
purchase from the Company on the
Purchase Contract Settlement Date,
for an amount of cash equal to the
Stated Amount, a number of newly
issued shares of Common Stock of the
Company equal to the Settlement
Rate, and (ii) the Company will pay
Contract Adjustment Payments at the
rate of .53% of the Stated Amount
per annum to the holder, and (b)
either a beneficial interest in a
6.22% Capital Security, having a
stated liquidation amount equal to
$25 representing an undivided
beneficial ownership interest in the
assets of the Trust or, upon the
occurrence of a Tax Event Redemption
prior to the Purchase Contract
Settlement Date, the appropriate
Applicable Ownership Interest in the
Treasury Portfolio.

The Company may at any time dissolve
the Trust and, after satisfaction of
liabilities to creditors of the
Trust, if any, cause the Debentures
to be distributed to the holders of
the Capital Securities. References
herein to Capital Securities, unless
the context otherwise requires, mean
<PAGE>
(i) the Capital Securities or (ii)
the Debentures which have been
delivered to the holders of the
Capital Securities upon dissolution
of the Trust.

In addition, as described below,
upon the occurrence of a Tax Event
(as defined herein) prior to the
Purchase Contract Settlement Date,
the Company may at its option cause
the Debentures (and, thus, the
Capital Securities) to be redeemed
at the Redemption Price and the
Treasury Portfolio will be
substituted for the redeemed Capital
Securities in the manner described
herein to secure the Income PRIDES
holders' obligations under their
related Purchase Contracts. The
distribution rate and the payment
dates for the Capital Securities
will be the same as the interest
rate and the payment dates for the
Debentures, which will be the sole
assets of the Trust.

As long as a FELINE PRIDES is in the
form of an Income PRIDES, the
related Capital Securities, or the
Treasury Portfolio, as applicable,
will be pledged pursuant to a pledge
agreement, to be dated as of
March 23, 1998 (the "Pledge
Agreement"), between the Company and
The Chase Manhattan Bank, as
collateral agent for the Company
(together with any successor thereto
in such capacity, the "Collateral
Agent"), to secure the holder's
obligation to purchase Common Stock
under the related Purchase Contract.

Each Growth PRIDES will consist of a
unit with a face amount of $25
comprised of (a) a Purchase Contract
under which (i) the holder will
purchase from the Company not later
than the Purchase Contract
Settlement Date for an amount of
cash equal to the Stated Amount of
such Growth PRIDES a number of newly
issued shares of Common Stock equal
to the Settlement Rate and (ii) the
Company will pay the holder Contract
Adjustment Payments at the rate of
.78% of the Stated Amount per annum
to the holder; and (b) a 1/40
<PAGE>
undivided beneficial ownership
interest in a Treasury Security
having a principal amount at
maturity equal to $1,000 and
maturing on the Business Day
immediately preceding the Purchase
Contract Settlement Date.

The FELINE PRIDES will be issued
under a Purchase Contract Agreement,
to be dated as of March 23, 1998
(the "Purchase Contract Agreement"),
between the Company and The Bank of
New York, as agent for the holders
of the FELINE PRIDES (together with
any successor thereto in such
capacity, the "Purchase Contract
Agent").

Creating Growth PRIDES . . . . . . . Each holder of an Income PRIDES may
substitute for the related Capital
Securities or the Applicable
Ownership Interest of the Treasury
Portfolio held by the Collateral
Agent zero-coupon U.S. Treasury
Securities in an amount per Income
PRIDES equal to the Stated Amount
per Capital Security. Such
substitution may be made on or prior
to the fifth Business Day
immediately preceding the Purchase
Contract Settlement Date but only in
integral multiples of 40 Income
PRIDES; provided, however, if the
Treasury Portfolio has become a
component of the Income PRIDES,
holders of Income PRIDES may make
such substitutions only in integral
multiples of 1,600,000 Income PRIDES
at any time on or prior to the
second Business Day immediately
preceding the Purchase Contract
Settlement Date. Holders of Income
PRIDES wishing to create Growth
PRIDES also will be required to
deliver cash in an amount equal to
the excess of the Contract
Adjustment Payments that would have
accrued since the last Payment Date
through the date of substitution on
the Growth PRIDES being created by
such holders, over the Contract
Adjustment Payments that have
accrued over the same time period on
the related Income PRIDES.
<PAGE>
Creating Income PRIDES . . . . . . . On or prior to the fifth Business
Day immediately preceding the
Purchase Contract Settlement Date, a
holder of Growth PRIDES will have
the right to create Income PRIDES by
delivering 40 Growth PRIDES to the
Purchase Contract Agent plus 40
Capital Securities to the Collateral
Agent in exchange for 40 Income
PRIDES and the release of the
related Treasury Security to such
holder; provided, however, if a Tax
Event Redemption has occurred prior
to the Purchase Contract Settlement
Date and the Treasury Portfolio has
become a component of the Income
PRIDES, holders of Growth PRIDES may
make such substitution (but using
the Applicable Ownership Interest of
the Treasury Portfolio rather than
Capital Securities) only in integral
multiples of 1,600,000 Growth PRIDES
at any time on or prior to the
second Business Day immediately
preceding the Purchase Contract
Settlement Date. Such Capital
Securities or the appropriate
Applicable Ownership Interest of the
Treasury Portfolio, as the case may
be, will be pledged with the
Collateral Agent to secure the
holder's obligation to purchase
Common Stock under the related
Purchase Contracts.

Current Payments . . . . . . . . . . Holders of Income PRIDES will be
entitled to receive aggregate cash
distributions at a rate of 6.75% of
the Stated Amount, payable quarterly
in arrears, consisting of cumulative
cash distributions on the related
Capital Securities payable at the
rate of 6.22% of the Stated Amount
per annum, or on the Treasury
Portfolio, payable at the rate of
6.22% of the Stated Amount per
annum, as applicable, and Contract
Adjustment Payments, payable by the
Company at the rate of .53% of the
Stated Amount per annum, subject (in
the case of both the distributions
on the Capital Securities and of the
Contract Adjustment Payments), to
the Company's right to defer the
payment of such amounts. The ability
of the Trust to make the quarterly
distributions on the related Capital
<PAGE>
Securities will be solely dependent
upon the receipt of corresponding
interest payments from the Company
on the Debentures. The Company's
obligations with respect to the
Debentures will be senior and
unsecured and will rank on a parity
in right of payment with all other
senior unsecured obligations of the
Company. If a Tax Event Redemption
has occurred, quarterly
distributions to the holders of
Income PRIDES will not be deferred.

Holders of Growth PRIDES will be
entitled to receive quarterly cash
distributions of Contract Adjustment
Payments, payable by the Company at
the rate of .78% of the Stated
Amount per annum, subject to the
Company's rights of deferral
described herein. In addition, OID
would continue to accrue on the
related Treasury Securities. See
"Risk Factors--Right to Defer
Current Payments."

Contract Adjustment Payments . . . . Contract Adjustment Payments will be
fixed at a rate per annum of .53% of
the Stated Amount per Purchase
Contract in the case of Income
PRIDES, and .78% of the Stated
Amount per Purchase Contract, in the
case of Growth PRIDES. The Contract
Adjustment Payments, will be
subordinated and junior in right of
payment to the Senior Indebtedness.
See "Description of the Purchase
Contracts--Contract Adjustment
Payments."

Option to Defer Current Payments . . The Company has the right at any
time, and from time to time, limited
to a period not extending beyond the
maturity date of the Debentures, to
defer the interest payments due on
the Debentures. As a consequence of
such deferral, the corresponding
quarterly distributions to holders
of Capital Securities and Income
PRIDES would be deferred (but
despite such deferral, would
continue to accumulate quarterly and
would accrue interest thereon
compounded quarterly at the rate of
6.22% per annum through and
including May 15, 2001, and at the
Reset Rate thereafter). The Company
<PAGE>
also has the right to defer the
payment of Contract Adjustment
Payments on the related Purchase
Contracts until no later than the
Purchase Contract Settlement Date;
however, such deferred Contract
Adjustment Payments will bear
additional Contract Adjustment
Payments at the rate of 7% per annum
(such deferred Contract Adjustment
Payments together with such
additional Contract Adjustment
Payments shall be referred to as the
"Deferred Contract Adjustment
Payments"). See "Description of the
Purchase Contracts -- Contract
Adjustment Payments." If interest
payments on the Debentures or the
Contract Adjustment Payments are
deferred, the Company has agreed,
among other things, not to declare
or pay any dividend on or repurchase
its capital stock (subject to
certain exceptions) during the
period of such deferral. If a Tax
Event Redemption has occurred prior
to the Purchase Contract Settlement
Date and the Treasury Portfolio has
become a component of the Income
PRIDES, quarterly distributions on
the appropriate Applicable Ownership
Interest of the Treasury Portfolio
as a portion of the cumulative
quarterly distributions to the
holders of Income PRIDES will not be
deferred.

In the event that the Company elects
to defer the payment of Contract
Adjustment Payments on the related
Purchase Contracts until the
Purchase Contract Settlement Date,
each holder of the related Income
PRIDES or Growth PRIDES will receive
on the Purchase Contract Settlement
Date in respect of such Deferred
Contract Adjustment Payments, in
lieu of a cash payment, a number of
shares of Common Stock equal to (x)
the aggregate amount of Deferred
Contract Adjustment Payments payable
to such holder divided by (y) the
Applicable Market Value (as defined
herein). See "Description of the
Purchase Contracts--Option to Defer
Contract Adjustment Payments."
<PAGE>
Payment Dates . . . . . . . . . . . . Subject to the deferral provisions
described herein, the current
payments described above in respect
of the Income PRIDES and Growth
PRIDES will be payable quarterly in
arrears on February 16, May 16,
August 16 and November 16 of each
year, commencing May 16, 1998,
through and including (i) in the
case of the Contract Adjustment
Payments, the earlier of the
Purchase Contract Settlement Date or
the most recent such quarterly date
on or prior to any early settlement
of the related Purchase Contracts
and (ii) in the case of Capital
Securities that are components of
Income PRIDES, the most recent such
quarterly date on or prior to the
earlier of the Purchase Contract
Settlement Date and the date the
liquidation amount of such Capital
Security, together with all
accumulated and unpaid distributions
thereon (each, a "Payment Date") is
paid in full.

Remarketing . . . . . . . . . . . . . Unless a Tax Event Redemption has
occurred, pursuant to a remarketing
agreement (the "Remarketing
Agreement") dated as of March 23,
1998, among the Company, the Trust,
the Purchase Contract Agent and a
nationally recognized investment
banking firm chosen by the Company
(the "Remarketing Agent"), and
subject to the terms of a
Remarketing Underwriting Agreement
to be dated as of the third Business
Day immediately preceding the
Purchase Contract Settlement Date
among such parties (the "Remarketing
Underwriting Agreement"), the
Capital Securities of such Income
PRIDES holders who have failed to
notify the Purchase Contract Agent
on or prior to the fifth Business
Day immediately preceding the
Purchase Contract Settlement Date of
their intention to settle the
related Purchase Contracts with
separate cash will be remarketed on
the third Business Day immediately
preceding the Purchase Contract
Settlement Date. The Remarketing
Agent will use its reasonable
efforts to remarket such Capital
<PAGE>
Securities (bearing the Reset Rate)
on such date for settlement on the
Purchase Contract Settlement Date at
a price of approximately 100.5% of
the aggregate stated liquidation
amount of such Capital Security,
plus accrued and unpaid
distributions (including any
deferred distributions), if any,
thereon. The portion of the proceeds
from such remarketing equal to the
aggregate stated liquidation amount
of such Capital Securities will be
automatically applied to satisfy in
full such Income PRIDES holders'
obligations to purchase Common Stock
under the related Purchase
Contracts. In addition, after
deducting as the Remarketing Fee an
amount not exceeding 25 basis points
(.25%) of the aggregate stated
liquidation amount of the remarketed
securities from any amount of such
proceeds in excess of the aggregate
stated liquidation amount of the
remarketed Capital Securities plus
any accrued and unpaid distributions
(including any deferred
distributions), the Remarketing
Agent will remit the remaining
portion of the proceeds, if any, for
the benefit of such holder. Income
PRIDES holders, whose Capital
Securities are so remarketed will
not otherwise be responsible for any
Remarketing Fee in connection
therewith. If, despite using its
reasonable efforts, the Remarketing
Agent cannot remarket the related
Capital Securities (other than to
the Company) of such holders of
Income PRIDES at a price not less
than 100% of the aggregate stated
liquidation amount of such Capital
Securities plus accrued and unpaid
distributions, including deferred
distributions, if any, resulting in
a Failed Remarketing, the Company
will exercise its rights as a
secured party to dispose of the
Capital Securities in accordance
with applicable law and to satisfy
in full, from the proceeds of such
disposition, such holder's
obligation to purchase Common Stock
under the related Purchase
Contracts; provided, that if the
<PAGE>
Company exercises such rights as a
secured party with respect to such
Capital Securities, any accrued and
unpaid distributions (including any
deferred distributions) on such
Capital Securities will be paid in
cash by the Company to the holder of
record of such Capital Securities.
The Company will cause a notice of
such Failed Remarketing to be
published on the second Business Day
immediately preceding the Purchase
Contract Settlement Date. It is
currently anticipated that Merrill
Lynch, Pierce, Fenner & Smith
Incorporated will be the Remarketing
Agent. See "Description of the
Purchase Contracts--Remarketing."

Settlement of Purchase Contracts . . The Purchase Contract Settlement
Date is May 16, 2001. On the
Business Day immediately preceding
the Purchase Contract Settlement
Date, unless a holder of Income
PRIDES or Growth PRIDES (i) has
settled the related Purchase
Contracts through the early delivery
of cash to the Purchase Contract
Agent in the manner described
herein, (ii) in the case of Income
PRIDES, has settled the related
Purchase Contracts with separate
cash on the Business Day prior to
the Purchase Contract Settlement
Date pursuant to prior notification
to the Purchase Contract Agent,
(iii) in the case of Income Prides,
has had the Capital Securities
related to such holder's Purchase
Contracts remarketed in the manner
described herein in connection with
settling such Purchase Contracts
(and such remarketing has not
"failed" (as described herein)), or
(iv) an event described under
"Description of the Purchase
Contracts -- Termination" has
occurred, (A) in the case of Income
PRIDES (unless a Tax Event
Redemption has occurred), the
Company will exercise its rights as
a secured party to dispose of the
related Capital Securities in
accordance with the applicable law,
and (B) in the case of Growth PRIDES
or Income PRIDES (if a Tax Event
Redemption has occurred) the
<PAGE>
principal amount of the related
Treasury Securities or the
appropriate Applicable Ownership
Interest of the Treasury Portfolio,
as applicable, when paid at
maturity, will automatically be
applied pursuant to the exercise of
such rights by the Company to
satisfy in full such holder's
obligation to purchase Common Stock
under the related Purchase
Contracts.

In the event that a holder of either
Income PRIDES or Growth PRIDES
effects the early settlement of the
related Purchase Contracts through
the delivery of cash or, in the case
of an Income PRIDES, settles such
Purchase Contracts with cash on the
Business Day immediately preceding
the Purchase Contract Settlement
Date, the related Capital
Securities, the appropriate
Applicable Ownership Interest of the
Treasury Portfolio or the Treasury
Securities, as the case may be, will
be released to such holder as
described herein.

Settlement Rate . . . . . . . . . . . The number of newly issued shares of
Common Stock issuable upon
settlement of each Purchase Contract
on the Purchase Contract Settlement
Date (the "Settlement Rate") will be
calculated as follows (subject to
adjustment under certain
circumstances): (a) if the
Applicable Market Value is equal to
or greater than the Threshold
Appreciation Price of $58.38 which
is approximately 21% above the
Reference Price, the Settlement Rate
will be .4282; (b) if the Applicable
Market Value is less than the
Threshold Appreciation Price but
greater than the Reference Price,
the Settlement Rate will be equal to
the Stated Amount divided by the
Applicable Market Value; and (c) if
the Applicable Market Value is less
than or equal to the Reference
Price, the Settlement Rate (which
will be equal to the Stated Amount
divided by the Reference Price) will
be .5181. "Applicable Market Value"
means the average of the Closing
<PAGE>
Price (as defined herein) per share
of Common Stock on each of the
twenty consecutive Trading Days (as
defined herein) ending on the third
Trading Day immediately preceding
the Purchase Contract Settlement
Date. See "Description of the
Purchase Contracts--General."

Early Settlement . . . . . . . . . . A holder of Income PRIDES may settle
the related Purchase Contracts on or
prior to the fifth Business Day
immediately preceding the Purchase
Contract Settlement Date in the
manner described herein, but only in
integral multiples of 40 Income
PRIDES; provided, however, if a Tax
Event Redemption has occurred prior
to the Purchase Contract Settlement
Date and the Treasury Portfolio has
become a component of the Income
PRIDES, holders of Income PRIDES may
settle early only in integral
multiples of 1,600,000 Income
PRIDES, at any time on or prior to
the second Business Day immediately
preceding the Purchase Contract
Settlement Date. A holder of Growth
PRIDES may settle the related
Purchase Contracts on or prior to
the second Business Day immediately
preceding the Purchase Contract
Settlement Date in the manner
described herein (in either case, an
"Early Settlement"). Upon Early
Settlement, (i) the holder's rights
to receive Deferred Contract
Adjustment Payments, if any, on the
Purchase Contracts being settled
will be forfeited, (ii) the holder's
right to receive additional Contract
Adjustment Payments, if any, in
respect of such Purchase Contracts
will terminate and (iii) no
adjustment will be made to or for
the holder on account of Deferred
Contract Adjustment Payments, or any
amount accrued in respect of
Contract Adjustment Payments. See
"Description of the Purchase
Contracts--Early Settlement."

Termination . . . . . . . . . . . . . The Purchase Contracts and the
rights and obligations of The
Company and the holders of the
FELINE PRIDES thereunder (including
the right thereunder to receive
<PAGE>
accrued or Deferred Contract
Adjustment Payments, if any, and the
obligation to purchase Common Stock)
will automatically terminate upon
the occurrence of certain events of
bankruptcy, insolvency or
reorganization with respect to the
Company. Upon such termination, the
Collateral Agent will release the
related Capital Securities, the
appropriate Applicable Ownership
Interest of the Treasury Portfolio
or Treasury Securities, as the case
may be, held by it to the Purchase
Contract Agent for distribution to
the holders, subject in the case of
the Treasury Portfolio to the
Purchase Contract Agent's
disposition of the subject
securities for cash, and the payment
of such cash to the holders, to the
extent that the holder would
otherwise have been entitled to
receive less than $1,000 of any such
security. Upon such termination,
there may be a delay before such
release and distribution. In the
event that the Company becomes the
subject of a case under the United
States Bankruptcy Code of 1978, as
amended (the "Bankruptcy Code"),
such delay may occur as a result of
the automatic stay under the
Bankruptcy Code and continue until
such automatic stay has been lifted.
The Company expects any such delay
to be limited. See "Description of
the Purchase Contracts--
Termination."

Voting and Certain Other Rights . . . Holders of Capital Securities will
not be entitled to vote to appoint,
remove or replace, or to increase or
decrease the number of Regular
Trustees (as defined herein) and
will generally have no voting rights
except in the limited circumstances
described under "Description of
Capital Securities -- Voting Rights."
Holders of Purchase Contracts
forming part of the Income PRIDES or
Growth PRIDES in their capacities as
such holders will have no voting or
other rights in respect of the
Common Stock.
<PAGE>
Capital Securities

Amount and Designation . . . . . 6.22% Capital Securities
(liquidation amount $25 per Capital
Security), representing undivided
beneficial ownership interests in
the assets of the Trust.

Distributions . . . . . . . . . Distributions on the Capital
Securities that are components of
Income PRIDES will constitute a
portion of the distributions on the
Income PRIDES, will be cumulative,
will accrue from the first date of
issuance of the Capital Securities
and will be payable initially at the
annual rate of 6.22% of the
liquidation amount of $25 per
Capital Security to but excluding
the Purchase Contract Settlement
Date, and in the case of Capital
Securities that remain outstanding
on and after the Purchase Contract
Settlement Date, from the Purchase
Contract Settlement Date to but
excluding May 16, 2003, at the Reset
Rate, in each case, when, as and if
funds are available for payment.
Subject to the distribution deferral
provisions, distributions will be
payable quarterly in arrears on each
February 16, May 16, August 16 and
November 16, commencing May 16,
1998.

Market Rate Reset . . . . . . . The applicable quarterly
distribution rate on the Trust
Securities and the interest rate on
the Debentures on and after the
Purchase Contract Settlement Date,
will be reset on the third Business
Day immediately preceding the
Purchase Contract Settlement Date to
the Reset Rate determined by the
Reset Agent as the rate the Trust
Securities should bear in order for
a Trust Security to have an
approximate market value of 100.5%
of the Stated Amount on the third
Business Day immediately preceding
the Purchase Contract Settlement
Date, provided, that the Company may
limit such Reset Rate to be no
higher than the rate on the Two-Year
Benchmark Treasury plus 200 basis
points (2%). Such market value may
be less than 100.5%, including where
<PAGE>
the Reset Spread is limited to the
maximum of 2%. The Reset Rate will
be determined by Merrill Lynch,
Pierce, Fenner & Smith Incorporated
as the Reset Agent. See "Description
of the Trust Preferred Securities--
Market Rate Reset."

Optional Remarketing . . . . . . Pursuant to the Remarketing
Agreement and subject to the terms
of Remarketing Underwriting
Agreement, on or prior to the fifth
Business Day immediately preceding
the Purchase Contract Settlement
Date, but no earlier than the
Payment Date immediately preceding
the Purchase Contract Settlement
Date, holders of separate Capital
Securities that are not components
of Income PRIDES may elect to have
their Capital Securities remarketed,
by delivering their Capital
Securities along with a notice of
such election to The Chase Manhattan
Bank, as custodial agent (the
"Custodial Agent"). Holders of
Capital Securities electing to have
their Capital Securities remarketed
will also have the right to withdraw
such election on or prior to the
fifth Business Day immediately
preceding the Purchase Contract
Settlement Date.

Distribution Deferral Provisions The ability of the Trust to pay
distributions on the Capital
Securities will be solely dependent
on the receipt of interest payments
from the Company on the Debentures.
The Company will have the right at
any time, and from time to time, to
defer the interest payments due on
the Debentures for successive
extension periods (the "Extension
Periods") limited, in the aggregate,
to a period not extending beyond the
maturity date of the Debentures. The
corresponding quarterly distributions
on the Capital Securities would be
deferred by the Trust (but would
continue to accumulate quarterly
and would accrue interest, compounded
quarterly, at the rate of 6.22% per
annum through and including May 15,
2001, and at the Reset Rate
thereafter) until the end of any
<PAGE>
such Extension Period. If a deferral
of an interest payment occurs, the
holders of the Capital Securities
will be required to accrue interest
income for United States federal
income tax purposes in advance of
the receipt of any corresponding
cash distribution with respect to
such deferred interest payment. See
"Risk Factors -- Right to Defer
Current Payments," "Description of
the Capital Securities --
Distributions" and "Certain Federal
Income Tax Consequences -- Income
PRIDES -- Capital Securities --
Interest Income and Original Issue
Discount."

Rights Upon Deferral of
Distribution . . . . . . . . . During any period in which interest
payments on the Debentures are
deferred, interest will accrue on
the Debentures (compounded
quarterly) and the corresponding
quarterly distributions on the
Capital Securities will continue to
accumulate at the rate of 6.22% per
annum through and including May 15,
2001, and at the Reset Rate
thereafter, compounded quarterly.

Liquidation Amount . . . . . . . In the event of any liquidation of
the Trust, and after satisfaction of
liabilities to creditors of the
Trust, if any, holders will be
entitled to receive Debentures in an
aggregate principal amount equal to
the aggregate stated liquidation
amount of the Capital Securities.

Put Option Upon a Failed
Remarketing . . . . . . . . . . If a Failed Remarketing has
occurred, each holder of Trust
Securities (or, following the
distribution of the Debentures upon
a dissolution of the Trust as
described herein, the holders of
such Debentures), holding such Trust
Securities (or Debentures, as the
case may be), following the Purchase
Contract Settlement Date will have
the right, in the case of Trust
Securities, to require the Trust to
distribute their pro rata share of
the Debentures to the Exchange Agent
who will put such Debentures to the
Company on behalf of such holders
(or, in the case of persons who hold
<PAGE>
the Debentures directly, such
persons shall have the right to put
such Debentures directly to the
Company) on June 1, 2001, upon at
least three Business Days' prior
notice, at a price equal to the
principal amount, plus accrued and
unpaid interest (including deferred
interest), if any, thereon.

Distribution of Debentures . . . In certain circumstances involving
an Investment Company Event, the
Trust would be dissolved, with the
result that, after satisfaction of
liabilities to creditors of the
Trust, if any, Debentures with an
aggregate principal amount equal to
the aggregate stated liquidation
amount of the Capital Securities
would be distributed to the holders
of the Capital Securities on a pro
rata basis including the Collateral
Agent. In such event an Income
PRIDES would thereafter consist of
beneficial ownership of a Debenture
with a principal amount equal to $25
and the related Purchase Contract,
and such Debenture would be
otherwise treated as if it were a
Capital Security. See "Description
of the Capital Securities --
Distribution of Debentures."

Tax Event Redemption . . . . . . The Debentures (and, thus, the Trust
Securities) are redeemable, at the
option of the Company, on not less
than 30 days or more than 60 days
prior written notice in whole but
not in part upon the occurrence and
continuation of a Tax Event under
the circumstances described herein
at a Redemption Price equal to, for
each Debenture, the Redemption
Amount together with accrued and
unpaid distributions (including
deferred distributions). See
"Description of the Debentures -- Tax
Event Redemption." If the Company
so redeems all of the Debentures,
the Trust must redeem all of the
Trust Securities and pay in cash
such Redemption Price to the holders
of such Trust Securities. If such
Tax Event Redemption occurs prior to
the Purchase Contract Settlement
Date, the Redemption Price payable
in liquidation of any Income PRIDES
<PAGE>
holders' interest in the Trust will
be distributed to the Collateral
Agent, who in turn will apply an
amount equal to the Redemption
Amount of such Redemption Price to
purchase the Treasury Portfolio on
behalf of the holders of Income
PRIDES and remit the remaining
portion, if any, of such Redemption
Price to the Purchase Contract Agent
for payment to holders of such
Income PRIDES. The Treasury
Portfolio will be substituted for
the Capital Security and will be
pledged with the Collateral Agent to
secure such Income PRIDES holders'
obligations to purchase the Common
Stock under their Purchase
Contracts.

Other than in the event of a Tax
Event Redemption, the Company will
not have the ability to redeem the
Debentures prior to their stated
maturity date. See "Description of
the Debentures -- Tax Event Redemption
of Capital Securities."

Guarantee . . . . . . . . . . . The Company will irrevocably and
unconditionally guarantee pursuant
to the Guarantee, generally on a
senior unsecured basis, the payment
in full of (i) distributions on the
Trust Securities to the extent the
Trust has funds available therefor,
(ii) the redemption price of Trust
Securities in respect of which the
related Debentures have been
repurchased by the Company on the
Purchase Contract Settlement Date,
to the extent the Trust has funds
available therefor, and (iii)
generally, the liquidation amount of
the Trust Securities or the
Redemption Price upon a Tax Event
Redemption, to the extent the Trust
has assets available for
distribution to holders of Trust
Securities in the event of a
dissolution of the Trust. The
Company's obligations under the
Guarantee will be a senior unsecured
obligation of the Company and will
rank on a parity with all of the
Company's other senior unsecured
obligations. See "Description of the
Guarantee."
<PAGE>
Debentures . . . . . . . . . . . . . Unless a Tax Event Redemption has
occurred, the Debentures will mature
on May 16, 2003, and will bear
interest initially at the rate of
6.22% per annum, payable quarterly
in arrears on each February 16, May
16, August 16 and November 16
commencing May 16, 1998. The
interest rate on the Debentures, and
the distribution rate on the Capital
Securities that remain outstanding
after the Purchase Contract
Settlement Date will be reset on the
third Business Day immediately
preceding the Purchase Contract
Settlement Date to the Reset Rate
determined by the Reset Agent. See
"Description of Debentures --
Interest." Interest payments on the
Debentures may be deferred from time
to time by the Company for
successive Extension Periods not
extending, in the aggregate, beyond
the stated maturity date of the
Debentures. During any Extension
Period, interest at the rate of
6.22% per annum through and
including May 15, 2001, and at the
Reset Rate thereafter would continue
to accrue and compound quarterly.
Upon the termination of any
Extension Period and the payment of
all amounts then due, the Company
may commence a new Extension Period,
provided such new Extension Period
does not extend beyond the stated
maturity date of the Debentures. No
interest shall be due during an
Extension Period until the end of
such period. During an Extension
Period, the Company will be
prohibited (subject to certain
exceptions) from paying dividends on
or purchasing any of its capital
stock and making certain other
restricted payments until quarterly
interest payments are resumed and
all amounts then due on the
Debentures are paid. The Debentures
will be senior unsecured obligations
of the Company and will rank on a
parity with all of the Company's
other senior unsecured obligations.
See "Description of the Debentures."

<PAGE>
Federal Income Tax Consequences
Related to the Income PRIDES,
Growth PRIDES and Capital
Securities . . . . . . . . . . . . Provided the Company does not
exercise its right to defer interest
on the Debentures, a beneficial
owner of Income PRIDES and Capital
Securities will include in gross
income its pro rata share of the
stated interest on the Debentures
when such interest income is paid or
accrued in accordance with its
regular method of tax accounting.
The Company intends to report the
Contract Adjustment Payments as
income to holders of Income PRIDES
and Growth PRIDES, but holders
should consult their tax advisors
concerning the possibility that the
Contract Adjustment Payments may be
treated as loans, purchase price
adjustments, rebates or option
premiums rather than being
includible in income on a current
basis. A beneficial owner of Growth
PRIDES will be required to include
in gross income its allocable share
of any OID with respect to the
Treasury Securities as it accrues on
a constant yield to maturity basis.
If a Tax Event Redemption has
occurred, a beneficial owner of
Income PRIDES will be required to
include in gross income its
allocable share of OID on the
Treasury Portfolio as it accrues on
a constant yield to maturity basis.
See "Certain Federal Income Tax
Consequences."
<PAGE>
Explanatory Diagrams

For illustrative purposes only, the following diagrams demonstrate some
of the key features of Purchase Contracts, Income PRIDES and Growth PRIDES
and the transformation of Income PRIDES into Growth PRIDES and Capital
Securities.

The following diagrams and the related text are not complete, are
general in nature and are qualified in their entirety by more detailed
information appearing elsewhere in the accompanying Prospectus, this
Prospectus Supplement and in documents which are on file with the
Commission.

FELINE PRIDES Purchase Contract

- Income PRIDES and Growth PRIDES both include a Purchase Contract
under which the investor agrees to purchase shares of Common Stock
of the Company at the end of three years. In addition, such
Purchase Contracts include specified Contract Adjustment Payments
shown in the diagrams on the following pages.

GRAPHIC CHART

<PAGE>
Income PRIDES

- Income PRIDES consist of two components as described below:

GRAPHIC CHART

- The investor owns the Capital Security but will pledge it to the
Company to secure its obligations under the Purchase Contract.

Growth PRIDES

- Growth PRIDES consist of two components as described below:

GRAPHIC CHART

- The investor owns the Zero-Coupon Treasury Security but will pledge
it to the Company to secure its obligations under the Purchase
Contract.

Capital Securities

- Capital Securities have the terms described below:

GRAPHIC CHART

- The holder of Capital Securities that are a component of Income
PRIDES has an option at the end of year 3 to either:

Cash settle each Purchase Contract for $25 and receive Capital
Securities whose rate has been reset at the end of year 3, or

Cash settle each Purchase Contract by allowing the Capital
Securities to be included in the remarketing process.

- The holder of Capital Securities that are separate and not a
component of Income PRIDES has the option at the end of year 3 to
either:

Continue to hold the Capital Securities whose rate has been
reset at the end of year 3, or

Deliver the Capital Securities to the Custodial Agent to be
included in the remarketing process.
<PAGE>
Transforming Income PRIDES into Growth PRIDES and Capital Securities

- To create a Growth PRIDES, the investor separates an Income PRIDES
into its components--the Purchase Contract and the Capital
Security--and then combines the Purchase Contract with a specific
Zero-Coupon Treasury Security which matures concurrently with the
settlement of the Purchase Contract.

- The investor owns the Zero-Coupon Treasury Security but will pledge
it to the Company to secure its obligations under the Purchase
Contract.

- The Zero-Coupon Treasury Security together with the Purchase
Contract constitute a Growth PRIDES. The Capital Securities which
are no longer a component of the Income PRIDES are tradeable as
separate securities.

GRAPHIC CHART

- The investor can also transform Growth PRIDES and Capital Securities
into Income PRIDES.

- The transformation of Income PRIDES into Growth PRIDES and Capital
Securities, and the transformation of Growth PRIDES and Capital
Securities into Income PRIDES, require certain minimum amounts of
securities, as more fully provided herein.
<PAGE>
RISK FACTORS

Potential purchasers of the FELINE PRIDES offered hereby should
carefully consider the risk factors set forth herein under "Risk Factors" as
well as other information contained in this Prospectus Supplement, the
accompanying Prospectus and the documents incorporated by reference therein.

Investment in FELINE PRIDES Requires Holders to Purchase Common Stock; Risk
of Decline in Equity Value

Although holders of the FELINE PRIDES will be the beneficial owners of
the related Capital Securities, Treasury Portfolio or Treasury Securities, as
the case may be, prior to the Purchase Contract Settlement Date, unless a
holder of FELINE PRIDES settles the related Purchase Contracts through the
delivery of cash to the Purchase Contract Agent in the manner described below
or the Purchase Contracts are terminated (upon the occurrence of certain
events of bankruptcy, insolvency or reorganization with respect to the
Company), the proceeds derived from the remarketing of the Capital
Securities or the principal of the related Treasury Securities, or the
applicable Appropriate Ownership Interest of the Treasury Portfolio, when
paid at maturity, as the case may be, will automatically be applied to the
purchase of a specified number of shares of Common Stock on behalf of such
holder. Thus, unless a holder of Income PRIDES has cash settled, following
the Purchase Contract Settlement Date, the holder will own shares of Common
Stock rather than a beneficial interest in Capital Securities, Treasury
Securities or the Treasury Portfolio, as the case may be. See "Description of
the Purchase Contracts--General." There can be no assurance that the market
value of the Common Stock receivable by the holder on the Purchase Contract
Settlement Date will be equal to or greater than the Stated Amount of the
FELINE PRIDES held by such holder. If the Applicable Market Value of the
Common Stock is less than the Reference Price, then the aggregate market
value of the Common Stock issued to the holder in settlement of each Purchase
Contract on the Purchase Contract Settlement Date (assuming that such market
value is the same as the Applicable Market Value of such Common Stock) will
be less than the Stated Amount paid for the FELINE PRIDES and the market
value per share of such Common Stock will be less than the effective price
per share paid by each holder for such Common Stock on the date hereof, in
which case an investment in the Securities will result in a loss.
Accordingly, a holder of the FELINE PRIDES assumes the risk that the market
value of the Common Stock may decline, and that such decline could be
substantial.

Limitations on Opportunity for Equity Appreciation

The opportunity for equity appreciation afforded by an investment in the
FELINE PRIDES is less than the opportunity for equity appreciation afforded
by a direct investment in the Common Stock because the market value of the
Common Stock to be received by a holder of Purchase Contracts on the Purchase
Contract Settlement Date (assuming that such market value is the same as the
Applicable Market Value of such Common Stock) will only exceed the Stated
Amount if the Applicable Market Value of the Common Stock exceeds the
Threshold Appreciation Price (which represents an appreciation of 21% over
the Reference Price). Moreover, in such event, holders of FELINE PRIDES would
receive on the Purchase Contract Settlement Date only 83% (the percentage
equal to the Reference Price divided by the Threshold Appreciation Price) of
the shares of Common Stock that such holders would have received if they had
<PAGE>
made a direct investment in the Common Stock on the date hereof, and
therefore would receive on the Purchase Contract Settlement Date only 83% of
the appreciation in the value of the Common Stock in excess of the Threshold
Appreciation Price.

Factors Affecting Trading Prices

The trading prices of Income PRIDES and Growth PRIDES in the secondary
market will be directly affected by the trading prices of the Common Stock in
the secondary market, the general level of interest rates and the credit
quality of the Company. It is impossible to predict whether the price of the
Common Stock or interest rates will rise or fall. Trading prices of the
Common Stock will be influenced by the Company's operating results and
prospects and by economic, financial and other factors and market conditions
that can affect the capital markets generally, including the level of, and
fluctuations in, the trading prices of stocks generally and sales of
substantial amounts of Common Stock in the market subsequent to the offering
of the Securities or the perception that such sales could occur. Fluctuations
in interest rates may give rise to opportunities of arbitrage based upon
changes in the relative value of the Common Stock underlying the Purchase
Contracts and of the other components of the FELINE PRIDES. Any such
arbitrage could, in turn, affect the trading prices of the Income PRIDES,
Growth PRIDES, Capital Securities and Common Stock.

Voting and Certain Other Rights

Holders of Capital Securities will not be entitled to vote to appoint,
remove or replace or to increase or decrease the number of Ingersoll-Rand
Trustees, and generally will have no voting rights except in the limited
circumstances described under "Description of the Capital Securities--Voting
Rights." Holders of FELINE PRIDES will not be entitled to any rights with
respect to the Common Stock (including, without limitation, voting rights and
rights to receive any dividends or other distributions in respect thereof)
unless and until such time as the Company shall have delivered shares of
Common Stock for FELINE PRIDES on the Purchase Contract Settlement date or as
a result of Early Settlement, as the case may be, and unless the applicable
record date, if any, for the exercise of such rights occurs after such date.
For example, in the event that an amendment is proposed to the Articles of
Incorporation or By-Laws of the Company and the record date for determining
the stockholders of record entitled to vote on such amendment occurs prior to
such delivery, holders of FELINE PRIDES will not be entitled to vote on such
amendment.

Dilution of Common Stock

The number of shares of Common Stock that holders of the FELINE PRIDES
are entitled to receive on the Purchase Contract Settlement Date or as a
result of Early Settlement is subject to adjustment for certain events
arising from stock splits and combinations, stock dividends and certain other
actions of the Company that modify its capital structure. See "Description of
the Purchase Contracts--Anti-Dilution Adjustments." Such number of shares of
Common Stock to be received by such holders on the Purchase Contract
Settlement Date or as a result of Early Settlement will not be adjusted for
other events, such as offerings of Common Stock for cash or in connection
with acquisitions. The Company is not restricted from issuing additional
Common Stock during the term of either the Purchase Contracts or the Capital
Securities and has no obligation to consider the interests of the holders of
<PAGE>
FELINE PRIDES for any reason. Additional issuances may materially and
adversely affect the price of the Common Stock and, because of the
relationship of the number of shares to be received on the Purchase Contract
Settlement Date to the price of the Common Stock, such other events may
adversely affect the trading price of Income PRIDES or Growth PRIDES.

Possible Illiquidity of the Secondary Market

It is not possible to predict how Income PRIDES, Growth PRIDES or
Capital Securities will trade in the secondary market or whether such market
will be liquid or illiquid. Income PRIDES and Growth PRIDES are novel
securities and there is currently no secondary market for either Income
PRIDES or Growth PRIDES. The Income PRIDES and Growth PRIDES have been
approved for listing on the NYSE. If Capital Securities are separately traded
to a sufficient extent that applicable exchange listing requirements are met,
the Company will endeavor to cause such securities to be listed on such
exchange on which the Income PRIDES and Growth PRIDES are then listed,
including, if applicable, the NYSE. There can be no assurance as to the
liquidity of any market that may develop for the Income PRIDES, the Growth
PRIDES or the Capital Securities, the ability of holders to sell such
securities or whether a trading market, if it develops, will continue. In
addition, in the event that holders of Income PRIDES or Growth PRIDES were to
substitute Treasury Securities for Capital Securities or Capital Securities
for Treasury Securities, thereby converting their Income PRIDES to Growth
PRIDES or their Growth PRIDES to Income PRIDES, as the case may be, the
liquidity of Income PRIDES or Growth PRIDES could be adversely affected.
There can be no assurance that the Income PRIDES or Growth PRIDES will not be
delisted from the NYSE or that trading in the Income PRIDES or Growth PRIDES
and Capital Securities will not be suspended as a result of the election by
holders to create Income PRIDES or Growth PRIDES through the substitution of
collateral, which could cause the number of Income PRIDES or Growth PRIDES to
fall below the requirement for listing securities on the NYSE that at least
1,000,000 Income PRIDES or Growth PRIDES be outstanding at any time.

Pledged Securities Encumbered

Although the beneficial owners of FELINE PRIDES will be the beneficial
owners of the related Capital Securities, Treasury Portfolio or Treasury
Securities (together, the "Pledged Securities"), as applicable, those Pledged
Securities will be pledged with the Collateral Agent to secure the
obligations of the holders under the related Purchase Contracts. Thus, rights
of the holders to their Pledged Securities will be subject to the Company's
security interest. Additionally, notwithstanding the automatic termination of
the Purchase Contracts, in the event that the Company becomes the subject of
a case under the Bankruptcy Code, the delivery of the Pledged Securities to
holders of the FELINE PRIDES may be delayed by the imposition of the
automatic stay of Section 362 of the Bankruptcy Code.

Investment Company Event Distribution

Upon the occurrence of an Investment Company Event, the Trust will be
dissolved (except in the limited circumstances described in the following
sentence) with the result that Debentures with an aggregate principal amount
equal to the aggregate stated liquidation amount of the Capital Securities
would be distributed to the holders of the Capital Securities on a pro rata
basis. Such dissolution and distribution shall be conditioned on the Company
being unable to avoid such Investment Company Event within a 90-day period by
<PAGE>
taking some ministerial action or pursuing some other reasonable measure that
will have no adverse effect on the Trust, the Company or the holders of the
Capital Securities, and will involve no material cost. In addition, the
Company will have the right at any time to dissolve the Trust. See
"Description of the Capital Securities--Distribution of the Debentures."

There can be no assurance as to the impact on the market prices for
Income PRIDES of a distribution of the Debentures in exchange for Capital
Securities upon a dissolution of the Trust. Because Income PRIDES will
consist of Debentures and related Purchase Contracts upon the occurrence of
the dissolution of the Trust as a result of an Investment Company Event or
otherwise, prospective purchasers of Income PRIDES are also making an
investment decision with regard to the Debentures and should carefully review
all the information regarding the Debentures contained herein. See
"Description of the Capital Securities--Distribution of the Debentures" and
"Description of the Debentures--General."

Tax Event Redemption

The Debentures (and, thus, the Trust Securities) are redeemable, at the
option of the Company, on not less than 30 days or more than 60 days prior
written notice, in whole but not in part, at any time prior to the Purchase
Contract Settlement Date upon the occurrence and continuation of a Tax Event
under the circumstances described herein at a Redemption Price equal to, for
each Debenture, the Redemption Amount plus accrued and unpaid distributions
(including deferred distributions). See "Description of the Debentures--Tax
Event Redemption." If the Company so redeems all of the Debentures, the
Trust must redeem all of the Trust Securities and pay in cash such Redemption
Price to the holder of such Trust Securities. If the Tax Event Redemption has
occurred prior the Purchase Contract Settlement Date, the Redemption Price
payable in liquidation of the Income PRIDES holders' interest in the Trust
will be distributed to the Collateral Agent, who in turn will apply an amount
equal to the Redemption Amount of such Redemption Price to purchase the
Treasury Portfolio on behalf of the holders of Income PRIDES. Holders of
Capital Securities not held in the form of Income PRIDES will receive
redemption payments directly. The Treasury Portfolio will be substituted for
the Capital Securities and will be pledged with the Collateral Agent to
secure such Income PRIDES holders' obligations to purchase the Company's
Common Stock under their Purchase Contracts. There can be no assurance as to
the impact on the market prices for the Income PRIDES of the substitution of
the Treasury Portfolio as collateral in replacement of any Capital Securities
so redeemed. See "Description of the Capital Securities--Optional
Redemption." A Tax Event Redemption will be a taxable event to the
beneficial owners of the Capital Securities. See "Certain Federal Income Tax
Consequences--Tax Event Redemption of Capital Securities."

Right to Defer Current Payments

The Company may, at its option, defer the payment of Contract Adjustment
Payments on the Purchase Contracts until the Purchase Contract Settlement
Date. However, deferred installments of Contract Adjustment Payments will
bear Deferred Contract Adjustment Payments at the rate of 7% per annum
(compounding on each succeeding Payment Date) until paid. If the Purchase
Contracts are settled early or terminated (upon the occurrence of certain
events of bankruptcy, insolvency or reorganization with respect to the
Company), the right to receive Contract Adjustment Payments and Deferred
Contract Adjustment Payments, if any, will also terminate.
<PAGE>
In the event that the Company elects to defer the payment of Contract
Adjustment Payments on the Purchase Contracts until the Purchase Contract
Settlement Date, each holder of Purchase Contracts will receive on the
Purchase Contract Settlement Date in respect of the Deferred Contract
Adjustment Payments, in lieu of a cash payment, a number of shares of Common
Stock equal to (x) the aggregate amount of Deferred Contract Adjustment
Payments payable to such holder divided by (y) the Applicable Market Value.
See "Description of the Purchase Contracts--Contract Adjustment Payments."

The Company also will have the right under the Indenture to defer
payments of interest on the Debentures by extending the interest payment
period at any time, and from time to time, on the Debentures. As a
consequence of such an extension, quarterly distributions on the Capital
Securities, held either as a component of the Income PRIDES or held
separately, would be deferred (but despite such deferrals would accumulate at
a rate of 6.22% per annum through and including May 15, 2001, and at the
Reset Rate thereafter, compounded on a quarterly basis) by the Trust during
any such Extension Period. Such right to extend the interest payment period
for the Debentures will be limited such that an Extension Period may not
extend beyond the stated maturity of the Debentures. During any such
Extension Period, (a) the Company shall not declare or pay dividends on, make
distributions with respect to, or redeem, purchase or acquire, or make a
liquidation payment with respect to, any of its capital stock (other than (i)
purchases or acquisitions of capital stock of the Company in connection with
the satisfaction by the Company of its obligations under any employee benefit
plans or the satisfaction by the Company of its obligations pursuant to any
contract or security outstanding on the date of such event requiring the
Company to purchase capital stock of the Company, (ii) as a result of a
reclassification of the Company's capital stock or the exchange or conversion
of one class or series of the Company's capital stock for another class or
series of the Company's capital stock, (iii) the purchase of fractional
interests in shares of the Company's capital stock pursuant to the conversion
or exchange provisions of such capital stock or the security being converted
or exchanged, (iv) dividends or distributions in capital stock of the Company
(or rights to acquire capital stock) or repurchases or redemptions of capital
stock solely from the issuance or exchange of capital stock or (v)
redemptions or repurchases of any rights outstanding under a shareholder
rights plan or the declaration thereunder of a dividend of rights in the
future), (b) the Company shall not make any payment of interest, principal or
premium, if any, on or repay, repurchase or redeem any debt securities issued
by the Company that rank junior to the Debentures and (c) the Company shall
not make any guarantee payments with respect to the foregoing (other than
payments pursuant to the Guarantee). Prior to the termination of any such
Extension Period, the Company may further extend the interest payment period;
provided, that such Extension Period may not extend beyond the stated
maturity of the Debentures. Upon the termination of any Extension Period and
the payment of all amounts then due, the Company may commence a new Extension
Period, subject to the above requirements. See "Description of the Capital
Securities--Distributions" and "Description of the Debentures--Option to
Extend Interest Payment Period."

The Company believes, and intends to take the position, that as of the
issue date of the Debentures, the likelihood that it will exercise its right
to defer payments of stated interest on the Debentures is remote and that,
therefore, the Debentures should not be considered to have been issued with
original issue discount ("OID") as a result of the Company's right to defer
payments of stated interest on the Debentures until such time that the
<PAGE>
Company actually exercises such deferral right. There is no assurance that
the Internal Revenue Service will agree with such position. See "Certain
Federal Income Tax Consequences--Capital Securities--Interest Income and
Original Issue Discount."

Should the Company exercise its right to defer payments of interest by
extending the interest payment period, each beneficial owner of Capital
Securities held either as a component of the Income PRIDES or held separately
would be required to include such beneficial owner's share of the stated
interest on the Capital Securities in gross income, as OID, on daily economic
accrual basis, regardless of such owner's method of tax accounting and in
advance of receipt of the cash attributable to such income. As a result, each
such beneficial owner of Capital Securities would recognize income for United
States federal income tax purposes in advance of the receipt of cash
attributable to such income, and would not receive the cash from the Trust
related to such income if such holder disposes of its Capital Securities
prior to the record date for the date on which distributions of such amounts
are made. See "Certain Federal Income Tax Consequences--Capital Securities--
Interest Income and Original Issue Discount." The Company has no current
intention of exercising its right to defer payments of interest by extending
the interest payment period on the Debentures. However, should the Company
exercise such right in the future, the market price of the Capital Securities
is likely to be affected. A holder that disposes of its Capital Securities
during an Extension Period, therefore, might not receive the same return on
its investment as a holder that continues to hold its Capital Securities. In
addition, as a result of the existence of the Company's right to defer
interest payments, the market price of the Capital Securities (which
represent an undivided beneficial ownership interest in the assets of the
Trust) may be more volatile than the market price of other securities that
are not subject to such deferral. See "Certain Federal Income Tax
Consequences--Capital Securities--Interest Income and Original Issue
Discount."

United States Federal Income Tax Consequences

No statutory, judicial or administrative authority directly addresses
the treatment of the FELINE PRIDES or instruments similar to the FELINE
PRIDES for United States federal income tax purposes. As a result, certain
United States federal income tax consequences of the purchase, ownership and
disposition of FELINE PRIDES are not entirely clear. See "Certain Federal
Income Tax Consequences."

Purchase Contract Agreement not Qualified Under Trust Indenture Act; Limited
Obligations of Purchase Contract Agent

Although the Capital Securities constituting a part of the Income PRIDES
will be issued pursuant to the Declaration, which will be qualified under the
Trust Indenture Act, the Purchase Contract Agreement will not be qualified as
an indenture under the Trust Indenture Act and the Purchase Contract Agent
will not be required to qualify as a trustee thereunder. Accordingly, holders
of FELINE PRIDES will not have the benefit of the protections of the Trust
Indenture Act. The protections generally afforded the holder of the security
issued under an indenture that has been qualified under the Trust Indenture
Act include disqualification of the indenture trustee for "conflicting
interests" as defined under the Trust Indenture Act, provisions preventing a
trustee that is also a creditor of the issuer from improving its own credit
position at the expense of the security holders immediately prior to or after
<PAGE>
a default under such indenture and the requirement that the indenture trustee
deliver reports at least annually with respect to certain matters concerning
the indenture trustee and the securities. Under the terms of the Purchase
Contract Agreement, the Purchase Contract Agent will have only limited
obligations to the holders of FELINE PRIDES. See "Certain Provisions of the
Purchase Contract Agreement and the Pledge Agreement--Information Concerning
the Purchase Contract Agent."

Rights Under the Guarantee

The Guarantee will be qualified as an indenture under the Trust
Indenture Act. The Guarantee Trustee will act as indenture trustee under the
Guarantee for the purposes of compliance with the provisions of the Trust
Indenture Act. The Guarantee Trustee will hold the Guarantee for the benefit
of the holders of the Trust Securities. The Guarantee guarantees to the
holders of the Trust Securities, generally on a senior unsecured basis, the
payment of (i) any accrued and unpaid distributions that are required to be
paid on the Trust Securities, to the extent the Trust has funds available
therefor, (ii) the redemption price, including all accumulated and unpaid
distributions to the date of redemption, of Trust Securities in respect of
which the related Debentures have been repurchased by the Company on the
Purchase Contract Settlement Date, to the extent the Trust has funds
available therefor, and (iii) upon a voluntary or involuntary dissolution of
the Trust (other than in connection with the distribution of Debentures to
the holders of Capital Securities), the lesser of (a) the aggregate of the
liquidation amount and all accrued and unpaid distributions on the Trust
Securities to the date of payment to the extent the Trust has funds available
therefor or (b) the amount of assets of the Trust remaining available for
distribution to holders of the Trust Securities in liquidation of the Trust.
The majority in liquidation amount of the Trust Securities will have the
right to direct the time, method and place of conducting any proceeding for
any remedy available to the Guarantee Trustee or to direct the exercise of
any trust or power conferred upon the Guarantee Trustee under the Guarantee.
Notwithstanding the foregoing, any holder of the Trust Securities may
institute a legal proceeding directly against the Company to enforce such
holder's rights under the Guarantee without first instituting a legal
proceeding against the Trust, the Guarantee Trustee or any other person or
entity. If the Company were to default on its obligation to pay amounts
payable on the Debentures or otherwise, the Trust would lack funds for the
payment of distributions or amounts payable on redemption of the Trust
Securities or otherwise, and, in such event, holders of the Trust Securities
would not be able to rely upon the Guarantee for payment of such amounts.
Instead, holders of the Trust Securities would rely on the enforcement (1) by
the Institutional Trustee of its rights as registered holder of the
Debentures against the Company pursuant to the terms of the Indenture and the
Debentures or (2) by such holder of the Institutional Trustee's or such
holder's own rights against the Company to enforce payments on the
Debentures. See "--Enforcement of Certain Rights by Holders of Capital
Securities," "Description of the Debentures" and "Description of the
Guarantee." The Declaration provides that each holder of Trust Securities,
by acceptance thereof, agrees to the provisions of the Guarantee and the
Indenture.

Enforcement of Certain Rights by Holders of Capital Securities

If a Declaration Event of Default (as defined herein) occurs and is
continuing, the holders of Capital Securities would rely on the enforcement
<PAGE>
by the Institutional Trustee of its rights as registered holder of the
Debentures against the Company. In addition, the holders of a majority in
liquidation amount of the Capital Securities will have the right to direct
the time, method, and place of conducting any proceeding for any remedy
available to the Institutional Trustee or to direct the exercise of any trust
or power conferred upon the Institutional Trustee under the Declaration,
including the right to direct the Institutional Trustee to exercise the
remedies available to it as the holder of the Debentures. The Indenture
provides that the Debt Trustee (as defined herein) shall give holders of
Debentures notice of all defaults or events of default within 30 days after
occurrence. However, except in the cases of a default or an event of default
in payment on the Debentures, the Debt Trustee will be protected in
withholding such notice if its officers or directors in good faith determine
that withholding of such notice is in the interest of such holders.

If the Institutional Trustee fails to enforce its rights under the
Debentures in respect of an Indenture Event of Default (as defined herein)
after a holder of record of Capital Securities has made a written request,
such holder of record of Capital Securities may, to the extent permitted by
applicable law, institute a legal proceeding against the Company to enforce
the Institutional Trustee's rights under the Debentures. In addition, if the
Company fails to pay interest or principal on the Debentures on the date such
interest or principal is otherwise payable, and such failure to pay is
continuing, a holder of Capital Securities may directly institute a
proceeding for enforcement of payment to such holder of the principal of or
interest on the Debentures having a principal amount equal to the aggregate
stated liquidation amount of the Capital Securities of such holder (a "Direct
Action") after the respective due date specified in the Debentures. In
connection with such a Direct Action, the Company shall have the right under
the Indenture to set off any payment made to such holder by the Company. The
holders of Capital Securities will not be able to exercise directly any other
remedy available to the holders of the Debentures. See "Description of the
Capital Securities--Declaration Events of Default."

Limited Rights of Acceleration

The Institutional Trustee, as holder of the Debentures, may accelerate
payment of the principal and accrued and unpaid interest on the Debentures
only upon the occurrence and continuation of a Declaration Event of Default
or Indenture Event of Default, which generally are limited to payment
defaults, breach of certain covenants, certain events of bankruptcy,
insolvency and reorganization of the Company and certain events of
dissolution of the Trust. See "Description of the Capital Securities--
Declaration Events of Default." Accordingly, there is no right to
acceleration upon default by the Company of its payment obligations under the
Guarantee.

Trading Price of the Capital Securities

The Capital Securities may trade at a price that does not fully reflect
the value of accrued but unpaid interest with respect to the underlying
Debentures. A holder who disposes of his Capital Securities between record
dates for payments of distributions thereon will be required to include
accrued but unpaid interest on the Debentures through the date of disposition
in income as ordinary income (i.e., interest or, possibly, OID), and to add
such amount to his adjusted tax basis in his pro rata share of the underlying
Debentures deemed disposed of. To the extent the selling price is less than
<PAGE>
the holder's adjusted tax basis, a holder will recognize a loss. See "Certain
Federal Income Consequences--Capital Securities--Interest Income and Original
Issue Discount" and "--Sales, Exchanges or Other Dispositions of Capital
Securities."
<PAGE>
THE COMPANY

Ingersoll-Rand manufactures and sells primarily nonelectrical machinery
and equipment. Principal products include the following:

Agricultural sprayers
Air balancers
Air compressors & accessories
Air dryers
Air logic controls
Air motors
Air and electric tools
Architectural hardware trim
Asphalt compactors
Asphalt pavers
Automated production systems
Automotive components
Ball bearings
Blasthole drills
Blowers
Centrifugal pumps
Compact hydraulic excavators
Construction equipment
Diaphragm pumps
Directional drills
Door closers
Door control hardware
Door locks latches & locksets
Doors and door frames (steel)
Drilling equipment and accessories
Electric security systems
Engineered pumps
Engine-starting systems
Exit devices
Extrusion pump systems
Fastener-tightening systems
Fluid-handling equipment
Foundation drills
Golf cars
<PAGE>
Hoists
Hydraulic breakers
Lubrication equipment
Material handling equipment
Mining equipment
Multistage pumps
Needle roller bearings
Parts-washing systems
Paving equipment
Pneumatic breakers
Pneumatic cylinders
Pneumatic valves
Portable compressors
Portable generators
Portable light towers
Reciprocating pumps
Road-building machinery
Rock drills
Rock stabilizers
Roller bearings
Rotary drills
Rotary pumps
Rough-terrain forklifts
Skid-steer loaders
Soil compactors
Spray-coating systems
Submersible pumps
Transport temperature control systems
Utility vehicles
Vacuum pumps
Vertical turbine pumps
Waterjet-cutting systems
Water-well drills
Winches
<PAGE>
These products are sold primarily under the Company's name and also
under other names including ABG, Aro, Beebe, Blaw-Knox, Bobcat, Carryall,
Centac, Charles Maire, Club Car, Crawlair, Cyclone, Ecoair, Elite, Dixie-
Pacific Fafnir, Falcon, Glynn-Johnson, Ingersoll-Dresser Pumps, Jeumont-
Schneider Pumps, Kilian, Klemm, LCN, McCartney, Melroe, Montabert, NREC,
Newman Tonks, Normbau, Pacific, Phoenix, Pleuger, Promaxx, Samiia, Schlage,
Sensor I, Sierra, Spra-Coupe, Steelcraft, Tensor I, Thermo King, Torrington,
Von Duprin, Worthington and Zimmerman.

The Company employs approximately 47,000 people. It has over 100
manufacturing plants throughout the world.

During the last three years, the Company has been involved in an
aggressive acquisition and divestment program. The larger acquisitions
included the following:

-- the May 1995 acquisition of Clark Equipment Company for
approximately $1.5 billion.

-- the April 1997 acquisition of Newman Tonks for approximately $370
million. Newman Tonks is based in the United Kingdom and is a
leading manufacturer, specifier and supplier of a wide range of
branded architectural products in the building industry.

-- the October 1997 acquisition of Thermo King for approximately $2.56
billion. Thermo King designs, manufactures and distributes
transport temperature control systems and service parts for a
variety of mobile applications, including trailers, truck bodies,
sea-going containers, buses and light rail cars.

The larger divestitures included:

-- the February 1997 sale of the Company's Clark-Hurth Group to Dana
Corporation for approximately $260 million.

-- the March 1996 sale of the Company's Pulp Machinery Division for
approximately $122 million to Beloit Corporation, a subsidiary of
Harnischfeger Industries, Inc.

-- the December 1996 sale of the remainder of the Process Systems
Group for approximately $58 million to Gencor Industries, Inc.

The Company's principal executive offices are at 200 Chestnut Ridge
Road, Woodcliff Lake, New Jersey 07675 (telephone 201-573-0123).
<PAGE>
SUMMARY HISTORICAL AND PRO FORMA
FINANCIAL INFORMATION OF THE COMPANY

The following summary historical and pro forma consolidated financial
data of the Company should be read in conjunction with (i) the Company's
historical financial statements and notes thereto and (ii) the pro forma
financial information of the Company. Such information is contained in the
Company's Annual Report on Form 10-K and the Company's Current Report on Form
8-K, dated March 9, 1998, and incorporated herein by reference. See
"Incorporation of Certain Documents by Reference" in the Prospectus.

[CAPTION]
<TABLE>
At and For the Years Ended December 31,

Pro Forma
1995 1996 1997 1997<F1>

(In millions except per share amounts)
<S> <C> <C> <C> <C>
Income Statement Data:
Net sales . . . . . . . . . . . . . . . . . . . . . . $5,729.0 $6,702.9 $7,103.3 $7,965.4
Cost of goods sold . . . . . . . . . . . . . . . . . 4,310.2 5,029.9 5,263.7 5,928.0
Administrative, selling and service engineering
expenses . . . . . . . . . . . . . . . . . . . . . . 921.8 989.5 1,079.3 1,169.1
Operating income . . . . . . . . . . . . . . . . . . 497.0 683.5 760.3 868.3
Interest expense . . . . . . . . . . . . . . . . . . (86.6) (119.9) (136.6) (256.2)
Other income (expense), net . . . . . . . . . . . . . 11.2 0.6 (2.1) (16.8)
Dresser-Rand income . . . . . . . . . . . . . . . . . 22.0 23.0 9.4 9.4
Minority interests . . . . . . . . . . . . . . . . . (14.5) (18.9) (17.3) (18.7)
Earnings before income taxes . . . . . . . . . . . . 429.1 568.3 613.7 586.0
Provision for income taxes . . . . . . . . . . . . . 158.8 210.3 233.2 195.9
Net earnings . . . . . . . . . . . . . . . . . . . . $ 270.3 $ 358.0 $ 380.5 $ 390.1
Basic earnings per share<F2> . . . . . . . . . . . . $ 1.70 $ 2.22 $ 2.33 $ 2.39
Diluted earnings per share<F2> . . . . . . . . . . . $ 1.69 $ 2.21 $ 2.31 $ 2.37
Average number of common shares outstanding for
basic earnings per share<F2> . . . . . . . . . . . . 159.104 161.239 163.207 163.207
Average number of common shares outstanding for
diluted earnings per share<F2> . . . . . . . . . . . 159.599 162.270 164.825 164.825

Balance Sheet Data:
Total assets . . . . . . . . . . . . . . . . . . . . $5,563.3 $5,621.6 $8,415.6
Current liabilities . . . . . . . . . . . . . . . . . $1,329.2 $1,290.2 $2,327.8
Long-term debt . . . . . . . . . . . . . . . . . . . $1,304.4 $1,163.8 $2,528.0
Minority interest . . . . . . . . . . . . . . . . . . $ 182.3 $ 127.9 $ 127.9
Shareholders' equity . . . . . . . . . . . . . . . . $1,795.5 $2,090.8 $2,341.4
<C>
<FN>

(1) Pro forma income statement data reflects the pro forma income statement adjustments required to present the estimated combined
results of the Company and Thermo King as if the acquisition of Thermo King took place on January 1, 1997.

(2) Earnings per share and outstanding share amounts have been adjusted for the 3-for-2 stock split paid on September 2, 1997, in
the form of a 50% stock dividend.
</TABLE>
<PAGE>
THE TRUST

The Trust is a statutory business trust created under Delaware law
pursuant to (i) the trust agreement dated as of August 18, 1997, executed by
the Sponsor and certain of the Ingersoll-Rand Trustees and (ii) the filing of
a certificate of trust with the Secretary of State of the State of Delaware
on August 18, 1997. Such trust agreement will be amended and restated in its
entirety substantially in the form filed as an exhibit to the Registration
Statement of which this Prospectus Supplement forms a part. The Declaration
will be qualified as an indenture under the Trust Indenture Act. Although
upon issuance of the Capital Securities, the holders of Income PRIDES will be
the beneficial owners of the related Capital Securities, such Capital
Securities will be pledged with the Collateral Agent to secure the
obligations of the holders under the related Purchase Contracts. See
"Description of the Purchase Contracts--Pledged Securities and Pledge
Agreement" and "Description of the Capital Securities--Book-Entry Only
Issuance--The Depository Trust Company." The Company will directly or
indirectly acquire Common Securities in an aggregate liquidation amount equal
to 3% of the total capital of the Trust. The Trust exists for the exclusive
purposes of (i) issuing the Trust Securities representing undivided
beneficial ownership interests in the assets of the Trust, (ii) investing the
proceeds of the Trust Securities in the Debentures and (iii) engaging in only
those other activities necessary or incidental thereto. The Trust has a term
of approximately seven years, but may dissolve earlier as provided in the
Declaration.

The number of Ingersoll-Rand Trustees initially is five. Three of the
Ingersoll-Rand Trustees (the "Regular Trustees") are persons who are
employees or officers of or who are affiliated with the Company. Pursuant to
the Declaration, the fourth trustee is The First National Bank of Chicago, a
financial institution that is unaffiliated with the Company, which trustee
serves as institutional trustee under the Declaration and as indenture
trustee for the purposes of compliance with the provisions of the Trust
Indenture Act (the "Institutional Trustee"). The fifth trustee, First Chicago
Delaware Inc., a corporation that is unaffiliated with the Company, will
serve as the Delaware Trustee, until removed or replaced by the holder of the
Common Securities. For purposes of compliance with the provisions of the
Trust Indenture Act, The First National Bank of Chicago will also act as the
indenture trustee (the "Guarantee Trustee") under the Guarantee. See
"Description of the Guarantee" and "Description of the Capital Securities--
Voting Rights."

The Institutional Trustee will hold title to the Debentures for the
benefit of the holders of the Trust Securities and the Institutional Trustee
will have the power to exercise all rights, powers and privileges under the
Indenture as the holder of the Debentures. In addition, the Institutional
Trustee will maintain exclusive control of a segregated noninterest bearing
bank account (the "Property Account") to hold all payments made in respect of
the Debentures for the benefit of the holders of the Trust Securities. The
Institutional Trustee will make payments of distributions and payments on
liquidation, redemption and otherwise to the holders of the Trust Securities
out of funds from the Property Account. The Guarantee Trustee will hold the
Guarantee for the benefit of the holders of the Capital Securities. The
Company, as the direct or indirect holder of all the Common Securities, will
have the right to appoint, remove or replace any Ingersoll-Rand Trustee and
to increase or decrease the number of Ingersoll-Rand Trustees; provided,
<PAGE>
however, that the number of Ingersoll-Rand Trustees shall be at least two, at
least one of which shall be a Regular Trustee. The Company will pay all fees
and expenses related to the Trust and the offering of the Trust Securities.
See "Description of the Debentures--Miscellaneous."

The rights of the holders of the Capital Securities, including economic
rights, rights to information and voting rights, are set forth in the
Declaration, the Trust Act and the Trust Indenture Act. See "Description of
the Capital Securities."

The principal place of business of the Trust is c/o Ingersoll-Rand
Company, 200 Chestnut Ridge Road, Woodcliff Lake, New Jersey 07675 and its
telephone number shall be (201) 573-0123.
<PAGE>
USE OF PROCEEDS

All of the proceeds from the sale of the Income PRIDES, the Capital
Securities which are not components of the Income PRIDES and the Common
Securities will be invested by the Trust in Debentures of the Company. The
Company currently anticipates using substantially all of the net proceeds
from the sale of the Debentures (net of purchase of the Common Securities),
estimated to be approximately $338.8 million (after deducting the under
writing commission and expenses), to repay commercial paper indebtedness
having an average interest rate of approximately 5.7% incurred in connection
with the acquisition of Thermo King. All of the proceeds from the sale of the
Growth PRIDES will be used to purchase the underlying Treasury Securities to
be transferred to holders of the Growth PRIDES pursuant to the terms thereof,
and the Company will receive no proceeds from the sale of the Growth PRIDES.

PRICE RANGE OF COMMON STOCK AND DIVIDENDS

The Common Stock is listed and traded on the NYSE, the London Stock
Exchange and the Amsterdam Stock Exchange under the symbol "IR". The
following table sets forth, for the periods indicated, the high and low sales
prices in dollars per share of the Common Stock, as adjusted for the 3-for-2
stock split paid on September 2, 1997, as reported in the NYSE Composite
Transactions Tape and the cash dividend per share paid on the Common Stock.
[CAPTION]
<TABLE>
Market Price

Cash Dividend
High Low Per Share

<S> <C> <C> <C>
1996
First Quarter . . . . . . . . . . . . . . . . . . . . . . . . . $28-9/16 $23-3/8 $0.123
Second Quarter . . . . . . . . . . . . . . . . . . . . . . . . 29-9/16 24-13/16 0.123
Third Quarter . . . . . . . . . . . . . . . . . . . . . . . . . 31-5/8 25-1/4 0.137
Fourth Quarter . . . . . . . . . . . . . . . . . . . . . . . . 31-3/4 27-1/16 0.137

1997
First Quarter . . . . . . . . . . . . . . . . . . . . . . . . . $32-7/8 $28-9/16 $0.137
Second Quarter . . . . . . . . . . . . . . . . . . . . . . . . 41-3/4 27-13/16 0.137
Third Quarter . . . . . . . . . . . . . . . . . . . . . . . . . 45-9/16 37-1/2 0.150
Fourth Quarter . . . . . . . . . . . . . . . . . . . . . . . . 46-1/4 34-11/16 0.150

1998
First Quarter (through March 17, 1998) . . . . . . . . . . . . $49 $36-1/2 $0.150
</TABLE>

A recent closing sale price for the Common Stock as reported on the NYSE
Composite Transactions Tape is set forth on the cover page of this Prospectus
Supplement.

Subject to the rights of holders of the Company's preference stock,
without par value (the "Preference Stock"), the Board of Directors may, in
its discretion, out of funds legally available for the payment of dividends
<PAGE>
and at such times and in such manner as determined by the Board of Directors,
declare and pay dividends on the Common Stock.
<PAGE>
CONDENSED CONSOLIDATED CAPITALIZATION

The following table summarizes (i) the actual capitalization of the
Company and its consolidated subsidiaries at December 31, 1997, and (ii) such
capitalization as adjusted to reflect (a) the sale of the FELINE PRIDES and
Capital Securities offered hereby (based on an assumed aggregate public
offering price of $25 per Security), (b) the concurrent purchase by the Trust
from the Company of the Debentures and (c) an assumed application of the
proceeds from the foregoing, after estimated underwriting commissions and
estimated expenses of this offering, to repay short-term acquisition debt.

[CAPTION]
<TABLE>
As of December 31, 1997

Pro Forma
Adjustments
Historical for
Amounts at Issuance of Pro Forma as
December 31, 1997 Feline Prides Adjusted

(In Millions)

<S> <C> <C> <C>
Loans payable . . . . . . . . . . . . . . . . . . . . . . . . . $ 925.1 $ (390.4)<F1> $ 534.7
Long-term debt . . . . . . . . . . . . . . . . . . . . . . . . 2,528.0 -- 2,528.0
Total debt . . . . . . . . . . . . . . . . . . . . . . . . . 3,453.1 (390.4) 3,062.7

Minority interest . . . . . . . . . . . . . . . . . . . . . . . 127.9 -- 127.9

Company obligated mandatorily redeemable preferred securities
of subsidiary trust holding solely debentures of the Company -- 402.5<F2> 402.5

Shareholders' Equity:
Common Stock, $2 par value . . . . . . . . . . . . . . . . . . 334.8 -- 334.8
Capital in excess of par value . . . . . . . . . . . . . . . . 92.4 16.9<F(3)> 75.5
Earnings retained for use in the business . . . . . . . . . . . 2,156.5 2,156.5
2,583.7 (16.9) 2,566.8
Less-Unallocated LESOP shares, at cost . . . . . . . . . . . . (41.4) -- (41.4)
-Treasury stock, at cost . . . . . . . . . . . . . . . . . . (44.5) -- (44.5)
-Foreign currency equity adjustment . . . . . . . . . . . . . (156.4) -- (156.4)
Total shareholders' equity . . . . . . . . . . . . . . . . . 2,341.4 (16.9) 2,324.5
Total capitalization . . . . . . . . . . . . . . . . . . . . $5,922.4 $ (4.8) $5,917.6

<FN>
(1) Reflects the use of the anticipated net proceeds from the issuance of the FELINE PRIDES to reduce short-term acquisition debt.
(2) Assumes Underwriter's over-allotment options are exercised in full. If such options are not exercised, the following line
items under the "Pro Forma As Adjusted" column will change to equal the amounts indicated: Loans payable -$585.6; Total debt -
$3,113.6; Company obligated mandatorily redeemable preferred securities of subsidiary trust -$350.0; Capital in excess of par
value -$77.7; Total shareholders' equity -$2,326.7 and Total capitalization -$5,918.2
(3) Reflects certain issuance costs of the FELINE PRIDES and the present value of the Contract Adjustment Payments.
</TABLE>
<PAGE>
ACCOUNTING TREATMENT

The financial statements of the Trust will be reflected in the Company's
consolidated financial statements, with the Capital Securities shown on the
Company's balance sheet under the caption "Company obligated mandatorily
redeemable preferred securities of subsidiary trust holding solely debentures
of the Company." The financial statement footnotes to the Company's
consolidated financial statements will reflect that the sole asset of the
Trust will be the Debentures. Distributions on the Capital Securities will be
reflected as a charge to the Company's consolidated income, identified as
Minority Interest in Net Income of Consolidated Subsidiaries, whether paid or
accrued.

The Purchase Contracts are forward transactions in the Common Stock.
Upon settlement of a Purchase Contract, the Company will receive the Stated
Amount on such Purchase Contract and will issue the requisite number of
shares of Common Stock. The Stated Amount thus received will be credited to
shareholders' equity, allocated between the Common Stock and paid-in capital
accounts. The present value of the Contract Adjustment Payments will
initially be charged to equity, with an offsetting credit to liabilities.
Subsequent Contract Adjustment Payments will be allocated between this
liability account and interest expense based on a constant rate calculation
over the life of the transaction.

Prior to the issuance of shares of Common Stock upon settlement of the
Purchase Contracts, it is anticipated that the FELINE PRIDES will be
reflected in the Company's earnings per share calculations using the treasury
stock method. Under this method, the number of shares of Common Stock used in
calculating earnings per share is deemed to be increased by the excess, if
any, of the number of shares issuable upon settlement of the Purchase
Contracts over the number of shares that could be purchased by the Company in
the market (at the average market price during the period) using the proceeds
receivable upon settlement. Consequently, it is anticipated there will be no
dilutive effect on the Company's earnings per share except during periods
when the average market price of Common Stock is above the Threshold
Appreciation Price.
<PAGE>
DESCRIPTION OF THE FELINE PRIDES

The following descriptions of certain terms of the FELINE PRIDES offered
hereby supplements, and to the extent inconsistent therewith replaces, the
description of the general terms and provisions of the Securities set forth
in the accompanying Prospectus, to which reference is hereby made. The
summaries of certain provisions of documents described below are not
necessarily complete, and in each instance reference is hereby made to the
copies of such documents (including the definitions therein of certain terms)
which are on file with the Commission. Wherever particular sections of, or
terms defined in, such documents are referred to herein, such sections or
defined terms are incorporated by reference herein. Capitalized terms not
defined herein have the meanings assigned to such terms in the accompanying
Prospectus.

Each FELINE PRIDES will be issued under the Purchase Contract Agreement
between the Company and the Purchase Contract Agent. The FELINE PRIDES
offered hereby initially will consist of (A) 12,600,000 units referred to as
Income PRIDES and (B) at least 1,400,000 units referred to as Growth PRIDES.
Each Income PRIDES will initially consist of a unit comprised of (a) a
Purchase Contract under which (i) the holder (including, initially, an
Underwriter) will purchase from the Company on the Purchase Contract
Settlement Date, for an amount of cash equal to the Stated Amount a number of
newly issued shares of Common Stock equal to the Settlement Rate described
below under "Description of the Purchase Contracts--General," and (ii) the
Company will pay Contract Adjustment Payments to the holder at the rate of
.53% of the Stated Amount per amount, and (b) (i) a beneficial ownership in a
related 6.22% Capital Security, having a stated liquidation amount per
Capital Security equal to the Stated Amount, representing an undivided
beneficial ownership interest in the assets of the Trust, which will consist
solely of the Debentures, (ii) in the case of a distribution of the
Debentures upon the dissolution of the Trust as a result of an Investment
Company Event, as described below, or otherwise, Debentures having a
principal amount equal to the stated liquidation amount or (iii) upon the
occurrence of a Tax Event Redemption prior to the Purchase Contract
Settlement Date, the appropriate Applicable Ownership Interest in the
Treasury Portfolio. "Applicable Ownership Interest" means, with respect to an
Income PRIDES and the U.S. Treasury Securities in the Treasury Portfolio, a
1/40, or 2.5%, undivided beneficial ownership interest in a $1,000 principal
or interest amount of a principal or interest strip in a U.S. Treasury
Security included in such Treasury Portfolio which matures on or prior to
May 15, 2001 and (B) for each scheduled interest payment date on the
Debentures that occurs after the Tax Event Redemption Date, a .038875%
undivided beneficial ownership interest in a $1,000 face amount of such U.S.
Treasury Security which is a principal or interest strip maturing on such
date.

Each Growth PRIDES will initially consist of a unit comprised of (a) a
Purchase Contract under which (i) the holder will purchase from the Company
on the Purchase Contract Settlement Date, for an amount in cash equal to the
Stated Amount, a number of newly issued shares of Common Stock of the
Company, equal to the Settlement Rate, and (ii) the Company will pay the
holder Contract Adjustment Payments at the rate of .78% of the Stated Amount,
and (b) a 1/40 undivided beneficial ownership interest in a Treasury
Security.
<PAGE>
The purchase price of each FELINE PRIDES will be allocated between the
related Purchase Contract and the related Capital Security or interest in a
Treasury Security in proportion to their respective fair market values at the
time of purchase. The Company expects that the entire purchase price of a
FELINE PRIDES will be allocated to the related Capital Security or interest
in a Treasury Security and that no amount will be allocated to the related
Purchase Contract. Such position generally will be binding on each beneficial
owner of each Income PRIDES (but not on the IRS (as defined herein)). See
"Certain Federal Income Tax Consequences--FELINE PRIDES--Allocation of
Purchase Price." As long as a FELINE PRIDES is in the form of an Income
PRIDES or Growth PRIDES, the related Capital Securities or the appropriate
Applicable Ownership Interest of the Treasury Portfolio or the Treasury
Securities, as applicable, will be pledged to the Collateral Agent, to secure
the holder's obligation to purchase Common Stock under the related Purchase
Contracts.

Creating Growth PRIDES

Each holder of an Income PRIDES (unless a Tax Event Redemption has
occurred) will have the right, at any time on or prior to the fifth Business
Day immediately preceding the Purchase Contract Settlement Date, to
substitute for the related Capital Securities held by the Collateral Agent
Treasury Securities in an aggregate principal amount equal to the aggregate
stated liquidation amount of such Capital Securities. Because Treasury
Securities are issued in integral multiples of $1,000, holders of Income
PRIDES may make such substitution only in integral multiples of 40 Income
PRIDES; provided, however, if a Tax Event Redemption has occurred prior to
the Purchase Contract Settlement Date and the Treasury Portfolio has become a
component of the Income PRIDES, holders of such Income PRIDES may make such
substitutions only in integral multiples of 1,600,000 Income PRIDES (but
obtaining the release of the Treasury Portfolio rather than the Capital
Securities), at any time on or prior to the second Business Day immediately
preceding the Purchase Contract Settlement Date. FELINE PRIDES with respect
to which Treasury Securities have been substituted for the related Capital
Securities or the appropriate Applicable Ownership Interest of the Treasury
Portfolio, as the case may be, as collateral to secure such holder's
obligation under the related Purchase Contracts will be referred to as Growth
PRIDES. To create 40 Growth PRIDES, (unless a Tax Event Redemption has
occurred), the Income PRIDES holder will (a) deposit with the Collateral
Agent a Treasury Security having a principal amount at maturity of $1,000 and
(b) transfer 40 Income PRIDES to the Purchase Contract Agent accompanied by a
notice stating that the Income PRIDES holder has deposited a Treasury
Security with the Collateral Agent and requesting that the Purchase Contract
Agent instruct the Collateral Agent to release to such holder the 40 Capital
Securities relating to such 40 Income PRIDES. In the event that Contract
Adjustment Payments are at a higher rate for Growth PRIDES than for Income
PRIDES, holders of Income PRIDES wishing to create Growth PRIDES will also be
required to deliver cash in an amount equal to the excess of the Contract
Adjustment Payments that would have accrued since the last Payment Date
through the date of substitution on the Growth PRIDES being created by such
holders, over the Contract Adjustment Payments that have accrued over the
same period on the related Income PRIDES. Upon such deposit and receipt of an
instruction from the Purchase Contract Agent, the Collateral Agent will
effect the release of the related Capital Security from the pledge under the
Pledge Agreement free and clear of the Company's security interest therein to
the Purchase Contract Agent, which will (i) cancel the 40 Income PRIDES, (ii)
transfer the 40 related Capital Securities to such holder and (iii) deliver
<PAGE>
40 Growth PRIDES to the holder. The Treasury Security will be substituted for
the Capital Securities and will be pledged with the Collateral Agent to
secure the holder's obligation to purchase Common Stock under the related
Purchase Contracts. The related Capital Securities released to the holder
thereafter will trade separately from the resulting Growth PRIDES. Contract
Adjustment Payments will be payable by the Company on such Growth PRIDES on
each Payment Date from the later of March 23, 1998 and the last Payment Date
on which Contract Adjustment Payments were paid. In addition, OID will accrue
on the related Treasury Securities.

Creating Income PRIDES

Each holder of a Growth PRIDES (unless a Tax Event Redemption has
occurred) will have the right, at any time on or prior to the fifth Business
Day immediately preceding the Purchase Contract Settlement Date, to
substitute for the related Treasury Securities held by the Collateral Agent
Capital Securities in an aggregate principal amount equal to the aggregate
stated liquidation amount of such Capital Securities, thereby creating Income
PRIDES. Because Treasury Securities are issued in integral multiples of
$1,000, holders of Growth PRIDES may make such substitutions only in integral
multiples of 40 Growth PRIDES; provided, however, if a Tax Event Redemption
has occurred and the Treasury Portfolio has become a component of the Income
PRIDES, holders of the Growth PRIDES, may make such substitution only in
integral multiples of 1,600,000 Growth PRIDES, at any time, on or prior to
the second Business Day immediately preceding the Purchase Contract
Settlement Date. To create 40 Income PRIDES (unless a Tax Event Redemption
has occurred), the Growth PRIDES holder will (a) deposit with the Collateral
Agent 40 Capital Securities and (b) transfer 40 Growth PRIDES certificates to
the Purchase Contract Agent accompanied by a notice stating that the Growth
PRIDES holder has deposited 40 Capital Securities with the Collateral Agent
and requesting that the Purchase Contract Agent instruct the Collateral Agent
to release to such Growth PRIDES holder the Treasury Security relating to
such Growth PRIDES. Upon such deposit and receipt of an instruction from the
Purchase Contract Agent, the Collateral Agent will effect the release of the
related Treasury Security from the pledge under the Pledge Agreement free and
clear of the Company's security interest therein to the Purchase Contract
Agent, which will (i) cancel the 40 Growth PRIDES, (ii) transfer the related
Treasury Security to such holder of Growth PRIDES and (iii) deliver 40 Income
PRIDES to such holder of Growth PRIDES. The substituted Capital Securities
will be pledged with the Collateral Agent to secure such Income PRIDES
holder's obligation to purchase Common Stock under the related Purchase
Contracts. Cumulative cash distributions, payable quarterly at a rate of
6.75% of the Stated Amount per annum (subject to the Company's deferral
rights) on such Income PRIDES, will be payable on such Income PRIDES by the
Company on each Payment Date from the later of March 23, 1998 and the last
Payment Date on which such cumulative cash distributions, if any, were paid.

Holders who elect to substitute Pledged Securities, thereby creating
Growth PRIDES or Income PRIDES or recreating Income PRIDES or Growth PRIDES
(as discussed below), shall be responsible for any fees or expenses payable
in connection with such substitution. See "Certain Provisions of the Purchase
Contract Agreement and the Pledge Agreement--Miscellaneous."
<PAGE>
Current Payments

Holders of Income PRIDES are entitled to receive aggregate cash
distributions at a rate of 6.75% of the Stated Amount per annum from and
after March 23, 1998, payable quarterly in arrears. The quarterly payments on
the Income PRIDES will consist of (i) cumulative cash distributions on the
related Capital Securities or the Treasury Portfolio, as applicable, payable
at the rate of 6.22% of the Stated Amount per annum and (ii) Contract
Adjustment Payments payable by the Company at the rate of .53% of the Stated
Amount per annum, subject (in the case of distributions on the Capital
Securities and the Contract Adjustment Payments) to the Company's right of
deferral as described herein.

Each holder of Growth PRIDES will be entitled to receive quarterly
Contract Adjustment Payments payable by the Company at the rate of .78% of
the Stated Amount per annum, subject to the Company's rights of deferral. In
addition, OID will accrue on the related Treasury Securities.

The ability of the Trust to make the quarterly distributions on the
Capital Securities is solely dependent upon the receipt of corresponding
interest payments from the Company on the Debentures. The Company has the
right at any time, and from time to time, limited to a period not extending
beyond the maturity of the Debentures, to defer the interest payments on the
Debentures. As a consequence of such deferral, quarterly distributions
(unless a Tax Event Redemption has occurred) to holders of Income PRIDES (or
any Capital Securities outstanding after the Purchase Contract Settlement
Date or after a substitution of collateral resulting in the creation of
Growth PRIDES) would be deferred (but despite such deferral, would continue
to accumulate quarterly and would accrue interest thereon compounded
quarterly at the rate of 7% per annum through and including May 15, 2001, and
at the Reset Rate thereafter). The Company also has the right to defer the
payment of Contract Adjustment Payments on the related Purchase Contracts
until the Purchase Contract Settlement Date; however, deferred Contract
Adjustment Payments will bear additional Contract Adjustment Payments at the
rate of 7% per annum (such deferred installments of Contract Adjustment
Payments, together with the additional Contract Adjustment Payments, shall be
referred to as the "Deferred Contract Adjustment Payments"). See "Description
of the Purchase Contracts--Contract Adjustment Payments" and "Description of
the Capital Securities--Distributions." If a Tax Event Redemption has
occurred and the Treasury Portfolio has become a component of the Income
PRIDES, quarterly distributions on the Treasury Portfolio, as a portion of
the cumulative quarterly distributions to the holders of Income PRIDES, will
not be deferred.

The Company's obligations with respect to the Debentures will be senior
and unsecured and will rank on a parity in right of payment with all other
senior unsecured obligations of the Company. The Company's obligations with
respect to the Contract Adjustment Payments will be subordinated and junior
in right of payment to the Company's Senior Indebtedness.

Voting and Certain Other Rights

Holders of Capital Securities, in their capacities as such holders, will
not be entitled to vote to appoint, remove or replace, or to increase or
decrease the number of Regular Trustees and will generally have no voting
rights except in the limited circumstances described under "Description of
the Capital Securities--Voting Rights." Holders of Purchase Contracts
<PAGE>
relating to the Income PRIDES or Growth PRIDES, in their capacities as such
holders, will have no voting or other rights in respect of the Common Stock.

Listing of the Securities

The Income PRIDES and the Growth PRIDES have been approved for listing
on the NYSE, subject to official notice of issuance. If Capital Securities
are separately traded to a sufficient extent that the applicable exchange
listing requirements are met, the Company will endeavor to cause such
securities to be listed on such exchange on which the Income PRIDES and the
Growth PRIDES are then listed, including, if applicable, the NYSE. See
"Underwriting."

NYSE Symbol of Common Stock

The Common Stock is listed on the NYSE under the symbol "IR."

Miscellaneous

The Company or its affiliates may from time to time purchase any of the
Securities offered hereby which are then outstanding by tender, in the open
market or by private agreement.

DESCRIPTION OF THE PURCHASE CONTRACTS

General

Each Purchase Contract underlying a FELINE PRIDES (unless earlier
terminated, or earlier settled at the holder's option) will obligate the
holder of such Purchase Contract to purchase, and the Company to sell, on the
Purchase Contract Settlement Date, for an amount in cash equal to the Stated
Amount of such FELINE PRIDES, a number of newly issued shares of Common Stock
equal to the Settlement Rate. The Settlement Rate will be calculated as
follows (subject to adjustment under certain circumstances): (a) if the
Applicable Market Value is equal to or greater than the Threshold
Appreciation Price of $58.38, which is approximately 21% above the Reference
Price, the Settlement Rate will be .4282; accordingly, if, between the date
of this Prospectus Supplement and the period during which the Applicable
Market Value is measured, the market price for the Common Stock increases to
an amount that is higher than the Threshold Appreciation Price, the aggregate
market value of the shares of Common Stock issued upon settlement of each
Purchase Contract (assuming that such market value is the same as the
Applicable Market Value of such Common Stock) will be higher than the Stated
Amount, and if such market price is the same as the Threshold Appreciation
Price, the aggregate market value of such shares (assuming that such market
value is the same as the Applicable Market Value of such Common Stock) will
be equal to the Stated Amount; (b) if the Applicable Market Value is less
than the Threshold Appreciation price but greater than the Reference Price,
the Settlement Rate will be equal to the Stated Amount divided by the
Applicable Market Value; accordingly, if the market price for the Common
Stock increases between the date of this Prospectus Supplement and the period
during which the Applicable Market Value is measured but such market price is
less than the Threshold Appreciation Price, the aggregate market value of the
shares of Common Stock issued upon settlement of each Purchase Contract
(assuming that such market value is the same as the Applicable Market Value
of such Common Stock) will be equal to the Stated Amount; and (c) if the
<PAGE>
Applicable Market Value is less than or equal to the Reference Price, the
Settlement Rate (which is equal to the Stated Amount divided by the Reference
Price) will be .5181; accordingly, if the market price for the Common Stock
decreases between the date of this Prospectus Supplement and the period
during which the Applicable Market Value is measured, the aggregate market
value of the shares of Common Stock issued upon settlement of each Purchase
Contract (assuming that such market value is the same as the Applicable
Market Value of such Common Stock) will be less than the Stated Amount, and
if such market price stays the same, the aggregate market value of such
shares (assuming that such market value is the same as the Applicable Market
Value of such Common Stock) will be equal to the Stated Amount. "Closing
Price" of the Common Stock on any date of determination means the closing
sale price (or, if no closing price is reported, the last reported sale
price) of the Common Stock on the NYSE on such date or, if the Common Stock
is not listed for trading on the NYSE on any such date, as reported in the
composite transactions for the principal United States securities exchange on
which the Common Stock is so listed, or if the Common Stock is not so listed
on a United States national or regional securities exchange, as reported by
the Nasdaq Stock Market, or, if the Common Stock is not so reported, the last
quoted bid price for the Common Stock in the over-the-counter market as
reported by the National Quotation Bureau or similar organization, or, if
such bid price is not available, the market value of the Common Stock on such
date as determined by a nationally recognized independent investment banking
firm retained for this purpose by the Company. A "Trading Day" means a day on
which the Common Stock (A) is not suspended from trading on any national or
regional securities exchange or association or over-the-counter market at the
close of business and (B) has traded at least once on the national or
regional securities exchange or association or over-the-counter market that
is the primary market for the trading of the Common Stock.

No fractional shares of Common Stock will be issued by the Company
pursuant to the Purchase Contracts. In lieu of fractional shares otherwise
issuable (calculated on an aggregate basis) in respect of Purchase Contracts
being settled by a holder of Income PRIDES or Growth PRIDES, the holder will
be entitled to receive an amount of cash equal to such fraction of a share
times the Applicable Market Value.

On the Business Day immediately preceding the Purchase Contract
Settlement Date, unless a holder of Income PRIDES or Growth PRIDES (i) has
settled the related Purchase Contracts prior to the Purchase Contract
Settlement Date through the early delivery of cash to the Purchase Contract
Agent in the manner described under "--Early Settlement," (ii) in the case of
Income PRIDES, has settled the related Purchase Contracts with separate cash
on the Business Day immediately preceding the Purchase Contract Settlement
Date pursuant to prior notice in the manner described under "--Notice to
Settle with Cash", (iii) has had the Capital Securities related to such
holder's Purchase Contracts remarketed in the manner described herein in
connection with settling such Purchase Contracts, or (iv) an event described
under "--Termination" below has occurred, then (A) in the case of Income
PRIDES (unless a Tax Event Redemption has occurred) the Company will exercise
its rights as a secured party to dispose of the Capital Securities in
accordance with applicable law and (B) in the case of Growth PRIDES or Income
PRIDES (in the event that a Tax Event Redemption has occurred), the principal
amount of the related Treasury Securities or the appropriate Applicable
Ownership Interest of the Treasury Portfolio, as applicable, when paid at
maturity, will automatically be applied to satisfy in full the holder's
obligation to purchase Common Stock under the related Purchase Contracts.
<PAGE>
Such Common Stock will then be issued and delivered to such holder or such
holder's designee, upon presentation and surrender of the certificate
evidencing such FELINE PRIDES (a "FELINE PRIDES Certificate") and payment by
the holder of any transfer or similar taxes payable in connection with the
issuance of the Common Stock to any person other than such holder.

Each holder of Income PRIDES or Growth PRIDES, by acceptance thereof,
will under the terms of the Purchase Contract Agreement and the related
Purchase Contracts be deemed to have (a) irrevocably agreed to be bound by
the terms of the related Purchase Contracts and the Pledge Agreement for so
long as such holder remains a holder of such FELINE PRIDES, and (b) duly
appointed the Purchase Contract Agent as such holder's attorney-in-fact to
enter into and perform the related Purchase Contracts on behalf of and in the
name of such holder. In addition, each beneficial owner of Income PRIDES or
Growth PRIDES, by acceptance of such interest, will be deemed to have agreed
to treat (i) itself as the owner of the related Capital Securities, the
appropriate Applicable Ownership Interest of the Treasury Portfolio or
Treasury Securities, as the case may be, and (ii) the Debentures as
indebtedness of the Company for all United States federal tax purposes.

Remarketing

Pursuant to the Remarketing Agreement and subject to the terms of the
Remarketing Underwriting Agreement between the Remarketing Agent, the
Purchase Contract Agent, the Company and the Trust, the Capital Securities of
Income PRIDES holders' who have failed to notify the Purchase Contract Agent
on or prior to the fifth Business Day immediately preceding the Purchase
Contract Settlement Date in the manner described under "--Notice to Settle
with Cash" of their intention to settle the related Purchase Contracts with
separate cash on the Business Day immediately preceding the Purchase Contract
Settlement Date will be remarketed on the third Business Day immediately
preceding the Purchase Contract Settlement Date. The Remarketing Agent will
use its reasonable efforts to remarket such Capital Securities on such date
at a price of approximately 100.5% of the aggregate stated liquidation amount
of such Capital Securities, plus accrued and unpaid distributions (including
deferred distributions), if any, thereon. The portion of the proceeds from
such remarketing equal to the aggregate stated liquidation amount of such
Capital Securities will be applied automatically to satisfy in full such
Income PRIDES holders' obligations to purchase Common Stock under the related
Purchase Contracts. In addition, after deducting as the Remarketing Fee an
amount not exceeding 25 basis points (.25%) of the aggregate stated
liquidation amount of the remarketed securities, from any amount of such
proceeds in excess of the aggregate stated liquidation amount of the
remarketed Capital Securities plus any accrued and unpaid distributions
(including deferred distributions, if any), the Remarketing Agent will remit
the remaining portion of the proceeds, if any, for the benefit of such
holder. Income PRIDES holders whose Capital Securities are so remarketed will
not otherwise be responsible for the payment of any Remarketing Fee in
connection therewith. If, in spite of using its reasonable efforts, the
Remarketing Agent cannot remarket the related Capital Securities (other than
to the Company) of such holders of Income PRIDES at a price not less than
100% of the aggregate stated liquidation amount of such Capital Securities
plus accrued and unpaid distributions (including deferred distributions) and
thus resulting in a Failed Remarketing, the Company will exercise its rights
as a secured party to dispose of the Capital Securities in accordance with
the applicable law and satisfy in full, from the proceeds of such
disposition, such holder's obligation to purchase Common Stock under the
<PAGE>
related Purchase Contracts; provided, that if the Company exercises such
rights as a secured creditor, any accrued and unpaid distributions (including
any deferred distributions) on such Capital Securities will be paid in cash
by the Company to the holders of record of such Capital Securities. The
Company will cause a notice of such Failed Remarketing to be published on the
second Business Day immediately preceding the Purchase Contract Settlement
Date by publication in a daily newspaper in the English language of general
circulation in The City of New York, which is expected to be The Wall Street
Journal. In addition, the Company will request, not later than seven nor more
than 15 calendar days prior to the remarketing date, that the Depository
notify its participants holding Capital Securities, Income PRIDES and Growth
PRIDES of such remarketing, including, in the case of a Failed Remarketing,
the procedures that must be followed if a Capital Security holder wishes to
exercise its right to put its Capital Security to the Company as described
herein. If required, the Company will endeavor to ensure that a registration
statement with regard to the full amount of the Capital Securities to be
remarketed shall be effective in such form as will enable the Remarketing
Agent to rely on it in connection with the remarketing process. It is
currently anticipated that Merrill Lynch, Pierce, Fenner & Smith Incorporated
will be the Remarketing Agent.

Early Settlement

A holder of Income PRIDES may settle the related Purchase Contracts on
or prior to the fifth Business Day immediately preceding the Purchase
Contract Settlement Date by presenting and surrendering the FELINE PRIDES
Certificate evidencing such Income PRIDES at the offices of the Purchase
Contract Agent with the form of "Election to Settle Early" on the reverse
side of such certificate completed and executed as indicated, accompanied by
payment (payable to the Company in immediately available funds) of an amount
equal to the Stated Amount times the number of Purchase Contracts being
settled; provided, however, if a Tax Event Redemption has occurred prior to
the Purchase Contract Settlement Date and the Treasury portfolio has become a
component of the Income PRIDES, holders of such Income PRIDES may settle
early only in integral multiples of 1,600,000 Income PRIDES (and the related
appropriate Applicable Ownership Interest of the Treasury Portfolio) at any
time on or prior to the second Business Day immediately preceding the
Purchase Contract Settlement Date. A holder of Growth PRIDES may settle the
related Purchase Contracts on or prior to the second Business Day immediately
preceding the Purchase Contract Settlement Date by presenting and
surrendering the FELINE PRIDES Certificate evidencing such Growth PRIDES at
the offices of the Purchase Contract Agent with the form of "Election to
Settle Early" on the reverse side of such certificate completed and executed
as indicated, accompanied by payment in immediately available funds of an
amount equal to the Stated Amount times the number of Purchase Contracts
being settled. So long as the FELINE PRIDES are evidenced by one or more
global security certificates deposited with the Depositary (as defined
herein), procedures for early settlement will also be governed by standing
arrangements between the Depositary and the Purchase Contract Agent.

Upon Early Settlement of the Purchase Contracts related to any Income
PRIDES or Growth PRIDES, (a) the holder will receive .4282 newly issued
shares of Common Stock per Income PRIDES or Growth PRIDES having a Stated
Amount of $25 (regardless of the market price of the Common Stock on the date
of such Early Settlement), subject to adjustment under the circumstances
described in "--Anti-Dilution Adjustments" below, (b) the Capital Securities,
the appropriate Applicable Ownership Interest of the Treasury Portfolio or
<PAGE>
Treasury Securities, as the case may be, related to such Income PRIDES or
Growth PRIDES will thereupon be transferred to the holder free and clear of
the Company's security interest therein, (c) the holder's right to receive
Deferred Contract Adjustment Payments, if any, on the Purchase Contracts
being settled will be forfeited, (d) the holder's right to receive future
Contract Adjustment Payments will terminate and (e) no adjustment will be
made to or for the holder on account of Deferred Contract Adjustment
Payments, if any, or any amounts accrued in respect of Contract Adjustment
Payments.

If the Purchase Contract Agent receives a FELINE PRIDES Certificate,
accompanied by the completed "Election to Settle Early" and requisite
immediately available funds, from a holder of FELINE PRIDES by 5:00 p.m., New
York City time, on a Business Day, that day will be considered the settlement
date. If the Purchase Contract Agent receives the foregoing after 5:00 p.m.,
New York City time, on a Business Day or at any time on a day that is not a
Business Day (other than from Income PRIDES holders after the occurrence of a
Tax Event Redemption), the next Business Day will be considered the
settlement date.

Upon Early Settlement of Purchase Contracts in the manner described
above, presentation and surrender of the FELINE PRIDES Certificate evidencing
the related Income PRIDES or Growth PRIDES and payment of any transfer or
similar taxes payable by the holder in connection with the issuance of the
related Common Stock to any person other than the holder of such Income
PRIDES or Growth PRIDES, the Company will cause the shares of Common Stock
being purchased to be issued, and the related Capital Securities, the
appropriate Applicable Ownership Interest of the Treasury Portfolio or
Treasury Securities, as the case may be, securing such Purchase Contracts to
be released from the pledge under the Pledge Agreement (described in "--
Pledged Securities and Pledge Agreement") and transferred, within three
Business Days following the settlement date, to the purchasing holder or such
holder's designee.

Notice to Settle with Cash

A holder of an Income PRIDES or Growth PRIDES wishing to settle the
related Purchase Contract with separate cash on the Business Day immediately
preceding the Purchase Contract Settlement Date must notify the Purchase
Contract Agent by presenting and surrendering the FELINE PRIDES Certificate
evidencing such Income PRIDES or Growth PRIDES at the offices of the Purchase
Contract Agent with the form of "Notice to Settle by Separate Cash" on the
reverse side of the certificate completed and executed as indicated on or
prior to 5:00 p.m., New York City time, on the second Business Day
immediately preceding the Purchase Contract Settlement Date in the case of a
Growth PRIDES holder or an Income PRIDES holder (if a Tax Event Redemption
has occurred) and on the fifth Business Day immediately preceding the
Purchase Contract Settlement Date in the case of an Income PRIDES holder (if
a Tax Event has not occurred). If a holder that has given notice of such
holder's intention to settle the related Purchase Contract with separate cash
fails to deliver such cash to the Collateral Agent on the Business Day
immediately preceding the Purchase Contract Settlement Date, then the Company
will exercise its right as a secured party to dispose of, in accordance with
applicable law, the related Capital Security or Treasury Security, as the
case may be, to satisfy in full, from the disposition of such Capital
Security or the appropriate Applicable Ownership Interest of the Treasury
<PAGE>
Portfolio, such holder's obligation to purchase Common Stock under the
related Purchase Contracts.

Contract Adjustment Payments

Contract Adjustment Payments will be fixed at a rate per annum of .53%
of the Stated Amount per Purchase Contract in the case of Income PRIDES, and
at a rate per annum of .78% of the Stated Amount per Purchase Contract in the
case of Growth Prides. Contract Adjustment Payments that are not paid when
due (after giving effect to any permitted deferral thereof) will bear
interest thereon at the rate per annum of 7% thereof, compounded quarterly,
until paid. Contract Adjustment Payments payable for any period will be
computed on the basis of a 360-day year of twelve 30-day months. Contract
Adjustment Payments will accrue from March 23, 1998 and will be payable
quarterly in arrears on February 16, May 16, August 16 and November 16 of
each year, commencing May 16, 1998.

Contract Adjustment Payments will be payable to the holders of Purchase
Contracts as they appear on the books and records of the Purchase Contract
Agent on the relevant record dates, which, as long as the Income PRIDES or
Growth PRIDES remain in book-entry only form, will be one Business Day prior
to the relevant payment dates. Such distributions will be paid through the
Purchase Contract Agent who will hold amounts received in respect of the
Contract Adjustment Payments for the benefit of the holders of the Purchase
Contracts relating to such Income PRIDES or Growth PRIDES. Subject to any
applicable laws and regulations, each such payment will be made as described
under "--Book-Entry System." In the event that the Income PRIDES or Growth
PRIDES do not continue to remain in book-entry only form, the Company shall
have the right to select relevant record dates, which shall be more than one
Business Day but less than 60 Business Days prior to the relevant payment
dates. In the event that any date on which Contract Adjustment Payments are
to be made on the Purchase Contracts related to the Income PRIDES or Growth
PRIDES is not a Business Day, then payment of the Contract Adjustment
Payments payable on such date will be made on the next succeeding day which
is a Business Day (and without any interest or other payment in respect of
any such delay), except that, if such Business Day is in the next succeeding
calendar year, such payment shall be made on the immediately preceding
Business Day, in each case with the same force and effect as if made on such
payment date. A "Business Day" shall mean any day other than Saturday, Sunday
or any other day on which banking institutions in New York City (in the State
of New York) are permitted or required by any applicable law to close.

The Company's obligations with respect to Contract Adjustment Payments
will be subordinated and junior in right of payment to the Company's
obligations under the Senior Indebtedness.

Option to Defer Contract Adjustment Payments

The Company may, at its option and upon prior written notice to the
holders of the FELINE PRIDES and the Purchase Contract Agent, defer the
payment of Contract Adjustment Payments on the Purchase Contracts until no
later than the Purchase Contract Settlement Date. However, Deferred Contract
Adjustment Payments, if any, will bear additional Contract Adjustment
Payments at the rate of 7% per annum (compounding on each succeeding Payment
Date) until paid. If the Purchase Contracts are terminated (upon the
occurrence of certain events of bankruptcy, insolvency or reorganization with
<PAGE>
respect to the Company), the right to receive Contract Adjustment Payments
and Deferred Contract Adjustment Payments, if any, will also terminate.

In the event that the Company elects to defer the payment of Contract
Adjustment Payments on the Purchase Contracts until the Purchase Contract
Settlement Date, each holder of FELINE PRIDES will receive on the Purchase
Contract Settlement Date in respect of the Deferred Contract Adjustment
Payments, in lieu of a cash payment, a number of shares of Common Stock equal
to (x) the aggregate amount of Deferred Contract Adjustment Payments payable
to such holder divided by (y) the Applicable Market Value.

In the event the Company exercises its option to defer the payment of
Contract Adjustment Payments, until the Deferred Contract Adjustment Payments
have been paid, the Company shall not declare or pay dividends on, make
distributions with respect to, or redeem, purchase or acquire, or make a
liquidation payment with respect to, any of its capital stock or make
guarantee payments with respect to the foregoing (other than (i) purchases or
acquisitions of capital stock of the Company in connection with the
satisfaction by the Company of its obligations under any employee benefit
plans or the satisfaction by the Company of its obligations pursuant to any
contract or security outstanding on the date of such event requiring the
Company to purchase capital stock of the Company, (ii) as a result of a
reclassification of the Company's capital stock or the exchange or conversion
of one class or series of the Company's capital stock for another class or
series of the Company capital stock, (iii) the purchase of fractional
interests in shares of the Company's capital stock pursuant to the conversion
or exchange provisions of the Company capital stock or the security being
converted or exchanged, (iv) dividends or distributions in capital stock of
the Company (or rights to acquire capital stock) or repurchases or
redemptions of capital stock solely from the issuance or exchange of capital
stock or (v) redemptions or repurchases of any rights outstanding under a
shareholder rights plan).

Anti-Dilution Adjustments

The formula for determining the Settlement Rate will be subject to
adjustment (without duplication) upon the occurrence of certain events,
including: (a) the payment of dividends (and other distributions) of Common
Stock on Common Stock; (b) the issuance to all holders of Common Stock of
rights, warrants or options entitling them, for a period of up to 45 days, to
subscribe for or purchase Common Stock at less than the Current Market Price
(as defined herein) thereof; (c) subdivisions, splits and combinations of
Common Stock; (d) distributions to all holders of Common Stock of evidences
of indebtedness of the Company, shares of capital stock, securities, cash or
property (excluding any dividend or distribution covered by clause (a) or (b)
above and any dividend or distribution paid exclusively in cash); (e)
distributions consisting exclusively of cash to all holders of Common Stock
in an aggregate amount that, together with (i) other all-cash distributions
made within the preceding 12 months and (ii) any cash and the fair market
value, as of the expiration of the tender or exchange offer referred to
below, of consideration payable in respect of any tender or exchange offer by
the Company or a subsidiary thereof for the Common Stock concluded within the
preceding 12 months, exceeds 15% of the Company's aggregate market
capitalization (such aggregate market capitalization being the product of the
Current Market Price of the Common Stock multiplied by the number of shares
of Common Stock then outstanding) on the date of such distribution; and (f)
the successful completion of a tender or exchange offer made by the Company
<PAGE>
or any subsidiary thereof for the Common Stock which involves an aggregate
consideration that, together with (i) any cash and the fair market value of
other consideration payable in respect of any tender or exchange offer by the
Company or a subsidiary thereof for the Common Stock concluded within the
preceding 12 months and (ii) the aggregate amount of any all-cash
distributions to all holders of the Company's Common Stock made within the
preceding 12 months, exceeds 15% of the Company's aggregate market
capitalization on the expiration of such tender or exchange offer. The
"Current Market Price" per share of Common Stock on any day means the average
of the daily Closing Prices for the five consecutive Trading Days selected by
the Company commencing not more than 30 Trading Days before, and ending not
later than, the earlier of the day in question and the day before the "ex
date" with respect to the issuance or distribution requiring such
computation. For purposes of this paragraph, the term "ex date," when used
with respect to any issuance or distribution, shall mean the first date on
which the Common Stock trades regular way on such exchange or in such market
without the right to receive such issuance or distribution.

In the case of certain reclassifications, consolidations, mergers, sales
or transfers of assets or other transactions pursuant to which the Common
Stock is converted into the right to receive other securities, cash or
property, each Purchase Contract then outstanding would, without the consent
of the holders of the related Income PRIDES or Growth PRIDES, as the case may
be, become a contract to purchase only the kind and amount of securities,
cash and other property receivable upon consummation of the transaction by a
holder of the number of shares of Common Stock which would have been received
by the holder of the related Income PRIDES or Growth PRIDES immediately prior
to the date of consummation of such transaction if such holder had then
settled such Purchase Contract.

If at any time the Company makes a distribution of property to its
stockholders which would be taxable to such stockholders as a dividend for
United States federal income tax purposes (i.e., distributions of evidences
of indebtedness or assets of the Company, but generally not stock dividends
or rights to subscribe to capital stock) and, pursuant to the Settlement Rate
adjustment provisions of the Purchase Contract Agreement, the Settlement Rate
is increased, such increase may give rise to a taxable dividend to holders of
FELINE PRIDES. See "Certain Federal Income Tax Consequences--Purchase
Contracts--Adjustment to Settlement Rate."

In addition, the Company may make such increases in the Settlement Rate
as the Board of Directors of the Company deems advisable to avoid or diminish
any income tax to holders of its capital stock resulting from any dividend or
distribution of capital stock (or rights to acquire capital stock) or from
any event treated as such for income tax purposes or for any other reasons.

Adjustments to the Settlement Rate will be calculated to the nearest
1/10,000th of a share. No adjustment in the Settlement Rate shall be required
unless such adjustment would require an increase or decrease of at least one
percent in the Settlement Rate; provided, however, that any adjustments which
by reason of the foregoing are not required to be made shall be carried
forward and taken into account in any subsequent adjustment.

The Company will be required, within ten Business Days following the
adjustment of the Settlement Rate, to provide written notice to the Purchase
Contract Agent of the occurrence of such event and a statement in reasonable
<PAGE>
detail setting forth the method by which the adjustment to the Settlement
Rate was determined and setting forth the revised Settlement Rate.

Each adjustment to the Settlement Rate will result in a corresponding
adjustment to the number of shares of Common Stock issuable upon early
settlement of a Purchase Contract.

Termination

The Purchase Contracts, and the rights and obligations of the Company
and of the holders of the FELINE PRIDES thereunder (including the right
thereunder to receive accrued Contract Adjustment Payments or Deferred
Contract Adjustment Payments and the right and obligation to purchase Common
Stock), will automatically terminate upon the occurrence of certain events of
bankruptcy, insolvency or reorganization with respect to the Company. Upon
such termination, the Collateral Agent will release the related Capital
Securities, the appropriate Applicable Ownership Interest of the Treasury
Portfolio or Treasury Securities, as the case may be, held by it to the
Purchase Contract Agent for distribution to the holders, subject in the case
of the Treasury Portfolio to the Purchase Contract Agent's disposition of the
subject securities for cash and the payment of such cash to the holders to
the extent that the holders would otherwise have been entitled to receive
less than $1,000 of any such security. Upon such termination, however, such
release and distribution may be subject to a delay. In the event that the
Company becomes the subject of a case under the Bankruptcy Code, such delay
may occur as a result of the automatic stay under the Bankruptcy Code and
continue until such automatic stay has been lifted. The Company expects any
such delay to be limited.

Pledged Securities and Pledge Agreement

Pledged Securities will be pledged to the Collateral Agent, for the
benefit of the Company, pursuant to the Pledge Agreement to secure the
obligations of holders of FELINE PRIDES to purchase Common Stock under the
related Purchase Contracts. The rights of holders of FELINE PRIDES to the
related Pledged Securities will be subject to the Company's security interest
therein created by the Pledge Agreement. No holder of Income PRIDES or Growth
PRIDES will be permitted to withdraw the Pledged Securities related to such
Income PRIDES or Growth PRIDES from the pledge arrangement except (i) to
substitute Treasury Securities for the related Capital Securities or the
appropriate Applicable Ownership Interest of the Treasury Portfolio, as the
case may be, (ii) to substitute Capital Securities or the appropriate
Applicable Ownership Interest of the Treasury Portfolio, as the case may be,
for the related Treasury Securities (for both (i) and (ii), as provided for
under "Description of the FELINE PRIDES--Substitution of Pledged Securities"
and "--Recreating Income PRIDES or Growth PRIDES") or (iii) upon the
termination or Early Settlement of the related Purchase Contracts. Subject to
such security interest and the terms of the Purchase Contract Agreement and
the Pledge Agreement, each holder of Income PRIDES (unless a Tax Event
Redemption has occurred) will be entitled through the Purchase Contract Agent
and the Collateral Agent to all of the proportional rights and preferences of
the related Capital Securities (including distribution, voting, redemption,
repayment and liquidation rights), and each holder of Growth PRIDES or Income
PRIDES (if a Tax Event Redemption has occurred) will retain beneficial
ownership of the related Treasury Securities or the appropriate Applicable
Ownership Interest of the Treasury Portfolio, as applicable, pledged in
<PAGE>
respect of the related Purchase Contracts. The Company will have no interest
in the Pledged Securities other than its security interest.

Except as described in "Description of the Purchase Contracts--General,"
the Collateral Agent will, upon receipt of distributions on the Pledged
Securities, distribute such payments to the Purchase Contract Agent, which
will in turn distribute those payments, together with Contract Adjustment
Payments received from the Company, to the persons in whose names the related
Income PRIDES or Growth PRIDES are registered at the close of business on the
Record Date immediately preceding the date of such distribution.

Book Entry-System

The Depository Trust Company (the "Depositary") will act as securities
depositary for the FELINE PRIDES. The FELINE PRIDES will be issued only as
fully-registered securities registered in the name of Cede & Co. (the
Depositary's nominee). One or more fully-registered global security
certificates ("Global Security Certificates"), representing the total
aggregate number of FELINE PRIDES, will be issued and will be deposited with
the Depositary and will bear a legend regarding the restrictions on exchanges
and registration of transfer thereof referred to below.

The laws of some jurisdictions require that certain purchasers of
securities take physical delivery of securities in definitive form. Such laws
may impair the ability to transfer beneficial interests in the FELINE PRIDES
so long as such FELINE PRIDES are represented by Global Security
Certificates.

The Depositary is a limited-purpose trust company organized under the
New York Banking Law, a "banking organization" within the meaning of the New
York Banking Law, a member of the Federal Reserve System, a "clearing
corporation" within the meaning of the New York Uniform Commercial Code and a
"clearing agency" registered pursuant to the provisions of Section 17A of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"). The
Depositary holds securities that its participants ("Participants") deposit
with the Depositary. The Depositary also facilitates the settlement among
Participants of securities transactions, such as transfers and pledges, in
deposited securities through electronic computerized book-entry changes in
Participants' accounts, thereby eliminating the need for physical movement of
securities certificates. Direct Participants include securities brokers and
dealers, banks, trust companies, clearing corporations and certain other
organizations ("Direct Participants"). The Depositary is owned by a number of
its Direct Participants and by the NYSE, the American Stock Exchange, Inc.,
and the National Association of Securities Dealers, Inc. Access to the
Depositary system is also available to others, such as securities brokers and
dealers, banks and trust companies that clear transactions through or
maintain a direct or indirect custodial relationship with a Direct
Participant either directly or indirectly ("Indirect Participants"). The
rules applicable to the Depositary and its Participants are on file with the
Commission.

No FELINE PRIDES represented by Global Security Certificates may be
exchanged in whole or in part for FELINE PRIDES registered, and no transfer
of Global Security Certificates in whole or in part may be registered, in the
name of any person other than the Depositary or any nominee of the Depositary
unless the Depositary has notified the Company that it is unwilling or unable
to continue as depositary for such Global Security Certificates or has ceased
<PAGE>
to be qualified to act as such as required by the Purchase Contract Agreement
or there shall have occurred and be continuing a default by the Company in
respect of its obligations under one or more Purchase Contracts. All FELINE
PRIDES represented by one or more Global Security Certificates or any portion
thereof will be registered in such names as the Depositary may direct.

As long as the Depositary or its nominee is the registered owner of the
Global Security Certificates, such Depositary or such nominee, as the case
may be, will be considered the sole owner and holder of the Global Security
Certificates and all FELINE PRIDES represented thereby for all purposes under
the FELINE PRIDES and the Purchase Contract Agreement. Except in the limited
circumstances referred to above, owners of beneficial interests in Global
Security Certificates will not be entitled to have such Global Security
Certificates or the FELINE PRIDES represented thereby registered in their
names, will not receive or be entitled to receive physical delivery of FELINE
PRIDES Certificates in exchange therefor and will not be considered to be
owners or holders of such Global Security Certificates or any FELINE PRIDES
represented thereby for any purpose under the FELINE PRIDES or the Purchase
Contract Agreement. All payments on the FELINE PRIDES represented by the
Global Security Certificates and all transfers and deliveries of Capital
Securities, Treasury Portfolio, Treasury Securities and Common Stock with
respect thereto will be made to the Depositary or its nominee, as the case
may be, as the holder thereof.

Ownership of beneficial interests in the Global Security Certificates
will be limited to Participants or persons that may hold beneficial interests
through institutions that have accounts with the Depositary or its nominee.
Ownership of beneficial interests in Global Security Certificates will be
shown only on, and the transfer of those ownership interests will be effected
only through, records maintained by the Depositary or its nominee (with
respect to Participants' interests) or any such Participant (with respect to
interests of persons held by such Participants on their behalf). Procedures
for settlement of Purchase Contracts on the Purchase Contract Settlement Date
or upon Early Settlement will be governed by arrangements among the
Depositary, Participants and persons that may hold beneficial interests
through Participants designed to permit such settlement without the physical
movement of certificates. Payments, transfers, deliveries, exchanges and
other matters relating to beneficial interests in Global Security
Certificates may be subject to various policies and procedures adopted by the
Depositary from time to time. None of the Company, the Purchase Contract
Agent or any agent of the Company or the Purchase Contract Agent will have
any responsibility or liability for any aspect of the Depositary's or any
Participant's records relating to, or for payments made on account of,
beneficial interests in Global Security Certificates, or for maintaining,
supervising or reviewing any of the Depositary's records or any Participant's
records relating to such beneficial ownership interests.

The information in this section concerning the Depositary and its
book-entry system has been obtained from sources that the Company and the
Trust believe to be reliable, but neither the Company nor the Trust takes
responsibility for the accuracy thereof.

<PAGE>
CERTAIN PROVISIONS OF THE PURCHASE CONTRACT
AGREEMENT AND THE PLEDGE AGREEMENT

General

Distributions on the FELINE PRIDES will be payable, Purchase Contracts
(and documents related thereto) will be settled and transfers of the FELINE
PRIDES will be registrable at the office of the Purchase Contract Agent in
the Borough of Manhattan, The City of New York. In addition, in the event
that the FELINE PRIDES do not remain in book-entry form, payment of
distributions on the FELINE PRIDES may be made, at the option of the Company,
by check mailed to the address of the person entitled thereto as shown on the
Security Register.

Shares of Common Stock will be delivered on the Purchase Contract
Settlement Date (or earlier upon Early Settlement), or, if the Purchase
Contracts have terminated, the related Pledged Securities will be delivered
potentially after a delay as a result of the imposition of the automatic stay
under the Bankruptcy Code (see "Description of the Purchase Contracts--
Termination"), in each case upon presentation and surrender of the FELINE
PRIDES Certificate at the office of the Purchase Contract Agent. The Company
expects any such delay to be limited.

If a holder of outstanding Income PRIDES or Growth PRIDES fails to
present and surrender the FELINE PRIDES Certificate evidencing such Income
PRIDES or Growth PRIDES to the Purchase Contract Agent on the Purchase
Contract Settlement Date, the shares of Common Stock issuable in settlement
of the related Purchase Contract and in payment of any Deferred Contract
Adjustment Payments will be registered in the name of the Purchase Contract
Agent and, together with any distributions thereon, shall be held by the
Purchase Contract Agent as agent for the benefit of such holder, until such
FELINE PRIDES Certificate is presented and surrendered or the holder provides
satisfactory evidence that such certificate has been destroyed, lost or
stolen, together with any indemnity that may be required by the Purchase
Contract Agent and the Company.

If the Purchase Contracts have terminated prior to the Purchase Contract
Settlement Date, the related Pledged Securities have been transferred to the
Purchase Contract Agent for distribution to the holders entitled thereto and
a holder fails to present and surrender the FELINE PRIDES Certificate
evidencing such holder's Income PRIDES or Growth PRIDES to the Purchase
Contract Agent, the related Pledged Securities delivered to the Purchase
Contract Agent and payments thereon shall be held by the Purchase Contract
Agent as agent for the benefit of such holder, until such FELINE PRIDES
Certificate is presented or the holder provides the evidence and indemnity
described above.

The Purchase Contract Agent will have no obligation to invest or to pay
interest on any amounts held by the Purchase Contract Agent pending
distribution, as described above.

No service charge will be made for any registration of transfer or
exchange of the FELINE PRIDES, except for any tax or other governmental
charge that may be imposed in connection therewith.

Modification

The Purchase Contract Agreement and the Pledge Agreement will contain
provisions permitting the Company and the Purchase Contract Agent or
Collateral Agent, as the case may be, with the consent of the holders of not
<PAGE>
less than a majority of the Purchase Contracts at the time outstanding, to
modify the terms of the Purchase Contracts, the Purchase Contract Agreement
and the Pledge Agreement, except that no such modification may, without the
consent of the holder of each outstanding Purchase Contract affected thereby,
(a) change any Payment Date, (b) change the amount or type of Pledged
Securities related to such Purchase Contract, impair the right of the holder
of any Pledged Securities to receive distributions on such Pledged Securities
(except for the rights of holders of Income PRIDES to substitute Treasury
Securities for the related Capital Securities or Treasury Portfolio, as the
case may be, or the rights of holders of Growth PRIDES to substitute Capital
Securities or Treasury Portfolio, as the case may be, for the related
Treasury Securities) or otherwise adversely affect the holder's rights in or
to such Pledged Securities, (c) change the place or currency of payment or
reduce any Contract Adjustment Payments or any Deferred Contract Adjustment
Payments, (d) impair the right to institute suit for the enforcement of such
Purchase Contract, (e) reduce the amount of Common Stock purchasable under
such Purchase Contract, increase the price to purchase Common Stock on
settlement of such Purchase Contract, change the Purchase Contract Settlement
Date or otherwise adversely affect the holder's rights under such Purchase
Contract or (f) reduce the above-stated percentage of outstanding Purchase
Contracts the consent of whose holders is required for the modification or
amendment of the provisions of the Purchase Contracts, the Purchase Contract
Agreement or the Pledge Agreement; provided, that if any amendment or
proposal referred to above would adversely affect only the Income PRIDES or
the Growth PRIDES, then only the affected class of holder will be entitled to
vote on such amendment or proposal and such amendment or proposal shall not
be effective except with the consent of the holders of not less than a
majority of such class.

No Consent to Assumption

Each holder of Income PRIDES or Growth PRIDES, by acceptance thereof,
will under the terms of the Purchase Contract Agreement and the Income PRIDES
or Growth PRIDES, as applicable, be deemed expressly to have withheld any
consent to the assumption (i.e., affirmance) of the related Purchase
Contracts by the Company or its trustee in the event that the Company becomes
the subject of a case under the Bankruptcy Code.

Consolidation, Merger, Sale or Conveyance

The Company will covenant in the Purchase Contract Agreement that it
will not merge or consolidate with any other entity or sell, assign,
transfer, lease or convey all or substantially all of its properties and
assets to any person, firm or corporation unless the Company is the
continuing corporation or the successor corporation is a corporation
organized under the laws of the United States of America or a state thereof
and such corporation expressly assumes the obligations of the Company under
the Purchase Contracts, the Debentures, the Purchase Contract Agreement and
the Pledge Agreement, and the Company or such successor corporation is not,
immediately after such merger, consolidation, sale, assignment, transfer,
lease or conveyance, in default in the performance of any of its obligations
thereunder.

Title

The Company, the Purchase Contract Agent and the Collateral Agent may
treat the registered owner of any FELINE PRIDES as the absolute owner thereof
<PAGE>
for the purpose of making payment and settling the related Purchase Contracts
and for all other purposes.

Replacement of FELINE PRIDES Certificates

In the event that physical certificates have been issued, any mutilated
FELINE PRIDES Certificate will be replaced by the Company at the expense of
the holder upon surrender of such certificate to the Purchase Contract Agent.
FELINE PRIDES Certificates that become destroyed, lost or stolen will be
replaced by the Company at the expense of the holder upon delivery to the
Company and the Purchase Contract Agent of evidence of the destruction, loss
or theft thereof satisfactory to the Company and the Purchase Contract Agent.
In the case of a destroyed, lost or stolen FELINE PRIDES Certificate, an
indemnity satisfactory to the Purchase Contract Agent and the Company may be
required at the expense of the holder of the FELINE PRIDES evidenced by such
certificate before a replacement will be issued.

Notwithstanding the foregoing, the Company will not be obligated to
issue any Income PRIDES or Growth PRIDES on or after the Purchase Contract
Settlement Date (or after Early Settlement) or after the Purchase Contracts
have terminated. The Purchase Contract Agreement will provide that in lieu of
the delivery of a replacement FELINE PRIDES Certificate following the
Purchase Contract Settlement Date, the Purchase Contract Agent, upon delivery
of the evidence and indemnity described above, will deliver the Common Stock
issuable pursuant to the Purchase Contracts included in the Income PRIDES or
Growth PRIDES evidenced by such certificate, or, if the Purchase Contracts
have terminated prior to the Purchase Contract Settlement Date, transfer the
principal amount of the Pledged Securities included in the Income PRIDES or
Growth PRIDES evidenced by such certificate.

Governing Law

The Purchase Contract Agreement, the Pledge Agreement and the Purchase
Contracts will be governed by, and construed in accordance with, the laws of
the State of New York.

Information Concerning the Purchase Contract Agent

The Bank of New York will be the Purchase Contract Agent. The Purchase
Contract Agent will act as the agent for the holders of Income PRIDES and
Growth PRIDES from time to time. The Purchase Contract Agreement will not
obligate the Purchase Contract Agent to exercise any discretionary actions in
connection with a default under the terms of the Income PRIDES and Growth
PRIDES or the Purchase Contract Agreement.

The Purchase Contract will contain provisions limiting the liability of
the Purchase Contract Agent. The Purchase Contract Agreement will contain
provisions under which the Purchase Contract Agent may resign or be replaced.
Such resignation or replacement would be effective upon the appointment of a
successor.

The Purchase Contract Agent maintains commercial banking relationships
with the Company.
<PAGE>
Information Concerning the Collateral Agent

The Chase Manhattan Bank will be the Collateral Agent. The Collateral
Agent will act solely as the agent of the Company and will not assume any
obligation or relationship of agency or trust for or with any of the holders
of the Income PRIDES and Growth PRIDES except for the obligations owed by a
pledgee of property to the owner thereof under the Pledge Agreement and
applicable law.

The Pledge Agreement will contain provisions limiting the liability of
the Collateral Agent. The Pledge Agreement will contain provisions under
which the Collateral Agent may resign or be replaced. Such resignation or
replacement would be effective upon the appointment of a successor.

The Chase Manhattan Bank maintains commercial banking relationships with
the Company.

Miscellaneous

The Purchase Contract Agreement will provide that the Company will pay
all fees and expenses related to (i) the offering of the FELINE PRIDES, (ii)
the retention of the Collateral Agent and (iii) the enforcement by the
Purchase Contract Agent of the rights of the holders of the FELINE PRIDES;
provided, however, that holders who elect to substitute the related Pledged
Securities, thereby creating Growth PRIDES or Income PRIDES or recreating
Income PRIDES or Growth PRIDES, shall be responsible for any fees or expenses
payable in connection with such substitution, as well as any commissions,
fees or other expenses incurred in acquiring the Pledged Securities to be
substituted, and the Company shall not be responsible for any such fees or
expenses.
<PAGE>
DESCRIPTION OF THE CAPITAL SECURITIES

The Capital Securities, a certain portion of which form a component of
the Income PRIDES, and a certain portion of which will trade separately, will
be issued pursuant to the terms of the Declaration. See "Description of the
FELINE PRIDES--Substitution of Pledged Securities." The Declaration will be
qualified as an indenture under the Trust Indenture Act. The Institutional
Trustee, The First National Bank of Chicago, an independent trustee, will act
as indenture trustee for the Capital Securities under the Declaration for
purposes of compliance with the provisions of the Trust Indenture Act. The
terms of the Capital Securities will include those stated in the Declaration
and those made part of the Declaration by the Trust Indenture Act. The
following summary of certain provisions of the Capital Securities and the
Declaration is not necessarily complete, and reference is hereby made to the
copy of the Declaration (including the definitions therein of certain terms)
which is filed as an exhibit to the Registration Statement relating to this
Prospectus Supplement, the Trust Act and the Trust Indenture Act. Whenever
particular defined terms are referred to in this Prospectus Supplement, such
defined terms are incorporated herein by reference. The following
descriptions of certain terms of the Capital Securities offered hereby
supplements and, to the extent inconsistent with, replaces the description of
the general terms and provisions of the Capital Securities set forth in the
accompanying Prospectus, to which reference is hereby made.

General

The Declaration authorizes the Regular Trustees to issue on behalf of
the Trust the Trust Securities, which represent undivided beneficial
ownership interests in the assets of the Trust. All of the Common Securities
will be owned, directly or indirectly, by the Company. The Common Securities
rank on a parity, and payments will be made thereon on a pro rata basis, with
the Capital Securities, except that upon the occurrence and during the
continuance of an Indenture Event of Default, the rights of the holders of
the Common Securities to receive payment of periodic distributions and
payments upon liquidation, redemption and otherwise will be subordinated to
the rights of the holders of the Capital Securities. The Declaration does not
permit the issuance by the Trust of any securities other than the Trust
Securities or the incurrence of any indebtedness by the Trust. Pursuant to
the Declaration, the Institutional Trustee will own the Debentures purchased
by the Trust for the benefit of the holders of the Trust Securities. The
payment of distributions out of money held by the Trust, and payments upon
redemption of the Capital Securities or liquidation of the Trust, are
guaranteed by the Company to the extent described under "Description of the
Guarantee." The Guarantee, when taken together with the Company's
obligations under the Debentures and the Indenture and its obligations under
the Declaration, including the obligations to pay costs, expenses, debts and
liabilities of the Trust (other than with respect to the Capital Securities),
provides a full and unconditional guarantee of amounts due on the Capital
Securities. The Guarantee will be held by The First National Bank of Chicago,
the Guarantee Trustee, for the benefit of the holders of the Capital
Securities. The Guarantee does not cover payment of distributions when the
Trust does not have sufficient available funds to pay such distributions. In
such event, the remedy of a holder of Capital Securities is to vote to direct
the Institutional Trustee to enforce the Institutional Trustee's rights under
the Debentures (except in the limited circumstances in which the holder may
<PAGE>
take direct action). See "--Declaration Events of Default" and "--Voting
Rights."

Distributions

Distributions on the Capital Securities will be fixed initially at a
rate per annum of 6.22% of the stated liquidation amount of $25 per Capital
Security. Distributions applicable on the Capital Securities that remain
outstanding on and after the Purchase Contract Settlement Date will be reset
on the third Business Day immediately preceding the Purchase Contract
Settlement Date. See "--Market Rate Reset." Distributions in arrears for
more than one quarter will accumulate at the rate of 6.22% per annum through
and including May 15, 2001 and at the Reset Rate thereafter, compounded
quarterly. The term "distribution" as used herein includes any such
accumulated distributions unless otherwise stated. The amount of
distributions payable for any period will be computed on the basis of a
360-day year of twelve 30-day months.

Distributions on the Capital Securities will be cumulative and will
accrue from March 23, 1998 and will be payable quarterly in arrears on
February 16, May 16, August 16, and November 16 of each year, commencing
May 16, 1998, when, as and if funds are available for payment. Distributions
will be made by the Institutional Trustee, except as otherwise described
below.

The Company has the right under the Indenture to defer payments of
interest on the Debentures by extending the interest payment period from time
to time on the Debentures, which right, if exercised, would defer quarterly
distributions on the Capital Securities (though such distributions would
continue to accrue with interest at the rate of 6.22% per annum through and
including May 15, 2001, and at the Reset Rate thereafter) during any such
extended interest payment period. Such right to extend the interest payment
period for the Debentures is limited to a period, in the aggregate, not
extending beyond the maturity date of the Debentures. In the event that the
Company exercises this right, then (a) the Company shall not declare or pay
dividends on, make distributions with respect to, or redeem, purchase or
acquire, or make a liquidation payment with respect to, any of its capital
stock (other than (i) purchases or acquisitions of capital stock of the
Company in connection with the satisfaction by the Company of its obligations
under any employee benefit plans or the satisfaction by the Company of its
obligations pursuant to any contract or security outstanding on the date of
such event requiring the Company to purchase capital stock of the Company,
(ii) as a result of a reclassification of the Company's capital stock or the
exchange or conversion of one class or series of the Company's capital stock
for another class or series of the Company's capital stock, (iii) the
purchase of fractional interests in shares of the Company's capital stock
pursuant to the conversion or exchange provisions of such capital stock or
the security being converted or exchanged, (iv) dividends or distributions in
capital stock of the Company (or rights to acquire capital stock) or
repurchases or redemptions of capital stock solely from the issuance or
exchange of capital stock or (v) redemptions or repurchases of any rights
outstanding under a shareholder rights plan or the declaration thereunder of
a dividend of rights in the future), (b) the Company shall not make any
payment of interest, principal or premium, if any, on or repay, repurchase or
redeem any debt securities issued by the Company that rank junior to such
Debentures, and (c) the Company shall not make any guarantee payments with
respect to the foregoing other than pursuant to the Guarantee. Prior to the
<PAGE>
termination of any such Extension Period, the Company may further extend the
interest payment period; provided, that such Extension Period, together with
all such previous and further extensions thereof, may not extend beyond the
maturity date of the Debentures. Upon the termination of any Extension Period
and the payment of all amounts then due, the Company may select a new
Extension Period, subject to the above requirements. See "Description of the
Debentures--Interest" and "--Option to Extend Interest Payment Period." If
distributions are deferred, the deferred distributions and accrued interest
thereon shall be paid to holders of record of the Capital Securities as they
appear on the books and records of the Trust on the record date next
following the termination of such Extension Period.

Distributions on the Capital Securities must be paid on the dates
payable to the extent that the Trust has funds available in the Property
Account for the payment of such distributions. The Trust's funds available
for distribution to the holders of the Capital Securities will be limited to
payments received from the Company on the Debentures. See "Description of the
Debentures." The payment of distributions out of moneys held by the Trust is
guaranteed by the Company to the extent set forth under "Description of the
Guarantee." Distributions on the Capital Securities will be payable to the
holders thereof, including the Collateral Agent, as they appear on the books
and records of the Trust on the relevant record dates, which, as long as the
Capital Securities remain in book-entry only form, will be one Business Day
prior to the relevant payment dates. Such distributions will be paid through
the Institutional Trustee who will hold amounts received in respect of the
Debentures in the Property Account for the benefit of the holders of the
Capital Securities. Subject to any applicable laws and regulations and the
provisions of the Declaration, each such payment will be made as described
under "--Book-Entry Only Issuance--The Depository Trust Company" below. With
respect to Capital Securities not in book-entry form, the Regular Trustees
shall have the right to select relevant record dates, which shall be more
than one Business Day but less than 60 Business Days prior to the relevant
payment dates. In the event that any date on which distributions are to be
made on the Capital Securities is not a Business Day, then payment of the
distributions payable on such date will be made on the next succeeding day
which is a Business Day (and without any interest or other payment in respect
of any such delay), except that, if such Business Day is in the next
succeeding calendar year, such payment shall be made on the immediately
preceding Business Day, in each case with the same force and effect as if
made on such record date.

Market Rate Reset

The applicable quarterly distribution rate on the Capital Securities and
the interest rate on the related Debentures that remain outstanding on and
after the Purchase Contract Settlement Date will be reset on the third
Business Day immediately preceding the Purchase Contract Settlement Date to
the Reset Rate, which will be equal to the sum of the Reset Spread and the
rate on the Two-Year Benchmark Treasury in effect on the third Business Day
immediately preceding the Purchase Contract Settlement Date and will be
determined by the Reset Agent as the rate the Capital Securities should bear
in order for a Capital Security to have an approximate market value on the
third Business Day immediately preceding the Purchase Contract Settlement
Date of 100.5% of the Stated Amount; provided that the Company may limit such
Reset Rate to be no higher than the rate on the Two-Year Benchmark Treasury
on the Purchase Contract Settlement Date plus 200 basis points (2%). Such
market value may be less than 100.5%, including where the Reset Spread is
<PAGE>
limited to the maximum of 2%. The "Two-Year Benchmark Treasury" shall mean
direct obligations of the United States (which may be obligations traded on a
when-issued basis only) having a maturity comparable to the remaining term to
maturity of the Capital Securities, as agreed upon by the Company and the
Reset Agent. The rate for the Two-Year Benchmark Treasury will be the bid
side rate displayed at 10:00 A.M., New York City time, on the third Business
Day immediately preceding the Purchase Contract Settlement Date in the
Telerate system (or if the Telerate system is (a) no longer available on the
third Business Day immediately preceding the Purchase Contract Settlement
Date or (b) in the opinion of the Reset Agent (after consultation with the
Company) no longer an appropriate system from which to obtain such rate, such
other nationally recognized quotation system as, in the opinion of the Reset
Agent (after consultation with the Company) is appropriate). If such rate is
not so displayed, the rate for the Two-Year Benchmark Treasury shall be, as
calculated by the Reset Agent, the yield to maturity for the Two-Year
Benchmark Treasury, expressed as a bond equivalent on the basis of a year of
365 or 366 days, as applicable, and applied on a daily basis, and computed by
taking the arithmetic mean of the secondary market bid rates, as of 10:30
A.M., New York City time, on the third Business Day immediately preceding the
Purchase Contract Settlement Date of three leading United States government
securities dealers selected by the Reset Agent (after consultation with the
Company) (which may include the Reset Agent or an affiliate thereof). The
Company may limit the Reset Rate to be no higher than the rate on the
Two-Year Benchmark Treasury on the third Business Day immediately preceding
the Purchase Contract Settlement Date plus 200 basis points (2%). It is
currently anticipated that Merrill Lynch, Pierce, Fenner & Smith Incorporated
will be the investment banking firm acting as the Reset Agent.

On the tenth Business Day immediately preceding the Purchase Contract
Settlement Date, the Two-Year Benchmark Treasury to be used to determine the
Reset Rate on the Purchase Contract Settlement Date will be selected and the
Reset Spread to be added to the rate on the Two-Year Benchmark Treasury in
effect on the third Business Day immediately preceding the Purchase Contract
Settlement Date will be established by the Reset Agent, and the Reset Spread
and the Two-Year Benchmark Treasury will be announced by the Company (the
"Reset Announcement Date"). The Company will cause a notice of the Reset
Spread and such Two-Year Benchmark Treasury to be published on the Business
Day following the Reset Announcement Date by publication in a daily newspaper
in the English language of general circulation in The City of New York, which
is expected to be The Wall Street Journal. The Company will request, not
later than 7 nor more than 15 calendar days prior to the Reset Announcement
Date, that the Depositary notify its participants holding Capital Securities,
Income PRIDES or Growth PRIDES of such Reset Announcement Date and of the
procedures that must be followed if any owner of FELINE PRIDES wishes to
settle the related Purchase Contract with cash on the Business Day
immediately preceding the Purchase Contract Settlement Date.

Optional Remarketing

Pursuant to the Remarketing Agreement and subject to the terms of the
Remarketing Underwriting Agreement, on or prior to the fifth Business Day
immediately preceding the Purchase Contract Settlement Date, but no earlier
than the Payment Day immediately preceding the Purchase Contract Settlement
Date, holders of separate Capital Securities which are not components of
Income PRIDES may elect to have their Capital Securities remarketed in the
same manner as the Capital Securities which are component of Income PRIDES,
by delivering their Capital Securities along with a notice of such election
<PAGE>
to the Custodial Agent. The Custodial Agent will hold such Capital Securities
in an account separate from the collateral account in which the Pledged
Securities will be held. Holders of Capital Securities electing to have their
Capital Securities remarketed will also have the right to withdraw such
election on or prior to the fifth Business Day immediately preceding the
Purchase Contract Settlement Date.

Optional Redemption

The Debentures are redeemable at the option of the Company, in whole but
not in part, on not less than 30 days nor more than 60 days notice, upon the
occurrence and continuation of a Tax Event under the circumstances described
under "Description of the Debentures--Tax Event Redemption". If the Company
redeems the Debentures upon the occurrence and continuation of a Tax Event,
the proceeds from such repayment shall simultaneously be applied on a pro
rata basis to redeem Capital Securities having an aggregate stated
liquidation amount equal to the aggregate principal amount of the Debentures
so redeemed at a Redemption Price, per Capital Security, equal to the
Redemption Amount plus accrued and unpaid interest thereon to the date of
such redemption. Such proceeds will be payable in cash to the holders of such
Capital Securities. If the Tax Event Redemption occurs prior to the Purchase
Contract Settlement Date, the Redemption Price payable to the Collateral
Agent, in liquidation of the Income PRIDES holders' interests in the Trust,
will be simultaneously applied by the Collateral Agent to purchase on behalf
of the holders' of the Income PRIDES the Treasury Portfolio. The Treasury
Portfolio will be pledged with the Collateral Agent to secure the obligation
of Income PRIDES holders' to purchase Common Stock under the related Purchase
Contracts.

Put Option Upon a Failed Remarketing

If a Failed Remarketing has occurred, holders of Trust Securities
(including, following the distribution of the Debentures upon a dissolution
of the Trust as described herein, such holders of Debentures), holding such
Trust Securities (or Debentures, as the case may be), following the Purchase
Contract Settlement Date will have the right, in the case of Trust
Securities, to require the Trust to distribute their pro rata share of the
Debentures to the Exchange Agent, who will put such Debentures to the Company
on behalf of such holders (or in the case of Debentures held directly, the
holders of such Debentures shall have the right to put such Debentures
directly to the Company) on June 1, 2001, upon at least three Business Days'
prior notice, at a price equal to the principal amount, plus accrued and
unpaid interest (including deferred interest), if any, thereon.

Redemption Procedures

If the Trust gives a notice of redemption (which notice will be
irrevocable) in respect of all of the Capital Securities, then, by 12:00
noon, New York City time, on the redemption date, provided that the Company
has paid to the Institutional Trustee sufficient amount of cash in connection
with the related redemption or maturity of the Debentures, the Trust will
irrevocably deposit with the Depositary, the Purchase Contract Agent or the
Collateral Agent, as applicable, funds sufficient to pay the applicable
Redemption Price and will give the Depositary, the Purchase Contract Agent or
the Collateral Agent, as applicable, irrevocable instructions and authority
to pay the Redemption Price to the holders of the Capital Securities so
called for redemption. If notice of redemption shall have been given and
<PAGE>
funds deposited as required, then, immediately prior to the close of business
on the date of such deposit, distributions will cease to accrue and all
rights of holders of such Capital Securities so called for redemption will
cease, except the right of the holders of such Capital Securities to receive
the Redemption Price but without interest on such Redemption Price. In the
event that any date fixed for redemption of Capital Securities is not a
Business Day, then payment of the Redemption Price payable on such date will
be made on the next succeeding day that is a Business Day (without any
interest or other payment in respect of any such delay), except that, if such
Business Day falls in the next calendar year, such payment will be made on
the immediately preceding Business Day.

Distribution of the Debentures

"Investment Company Event" means that the Regular Trustees shall have
received an opinion from independent counsel experienced in practice under
the 1940 Act (as defined below) to the effect that, as a result of the
occurrence of a change in law or regulation or a written change in
interpretation or application of law or regulation by any legislative body,
court, governmental agency or regulatory authority (a "Change in 1940 Act
Law"), which Change in 1940 Act Law becomes effective on or after the date of
this Prospectus Supplement, there is more than an insubstantial risk that the
Trust is or will be considered an "investment company" which is required to
be registered under the Investment Company Act of 1940, as amended (the "1940
Act").

If, at any time, an Investment Company Event shall occur and be
continuing, the Trust shall be dissolved, with the result that Debentures
with an aggregate principal amount equal to the aggregate stated liquidation
amount of, with an interest rate identical to the distribution rate of, and
accrued and unpaid interest equal to accrued and unpaid distributions on, the
Trust Securities, would be distributed to the holders of the Trust Securities
in liquidation of such holders' interests in the Trust on a pro rata basis
within 90 days following the occurrence of such Investment Company Event;
provided, however, that such dissolution and distribution shall be
conditioned on the Company being unable to avoid such Investment Company
Event within such 90-day period by taking some ministerial action or pursuing
some other similar reasonable measure that will have no adverse effect on the
Trust, the Company or the holders of the Trust Securities and will involve no
material cost. If an Investment Company Event occurs, Debentures distributed
to the Collateral Agent in liquidation of such holder's interest in the Trust
would be pledged (in lieu of the Capital Securities) to secure Income PRIDES
holders' obligations to purchase Common Stock under the Purchase Contracts.

The Company will have the right at any time to dissolve the Trust and,
after satisfaction of liabilities of creditors of the Trust as provided by
applicable law, cause the Debentures to be distributed to the holders of the
Trust Securities. As of the date of any distribution of Debentures upon
dissolution of the Trust, (i) the Capital Securities will no longer be deemed
to be outstanding, (ii) the Depositary or its nominee, as the record holder
of the Capital Securities, will receive a registered global certificate or
certificates representing the Debentures to be delivered upon such
distribution, and (iii) any certificates representing Capital Securities not
held by the Depositary or its nominee will be deemed to represent Debentures
having an aggregate principal amount equal to the aggregate stated
liquidation amount of, with an interest rate identical to the distribution
rate of, and accrued and unpaid interest equal to accrued and unpaid
<PAGE>
distributions on, such Capital Securities until such certificates are
presented to the Company or its agent for transfer or reissuance. Debentures
distributed to the Collateral Agent in liquidation of the interest of the
holders of the Capital Securities in the Trust would be substituted for the
Capital Securities and pledged to secure Income PRIDES holders' obligations
to purchase Common Stock under the Purchase Contracts.

There can be no assurance as to the market prices for either the Capital
Securities or the Debentures that may be distributed in exchange for the
Capital Securities if a dissolution of the Trust were to occur. Accordingly,
the Capital Securities or such Debentures that an investor may receive if a
dissolution of the Trust were to occur may trade at a discount to the price
that the investor paid to purchase the Capital Securities forming a part of
the Income PRIDES offered hereby.

Liquidation Distribution Upon Dissolution

In the event of any voluntary or involuntary dissolution of the Trust
(unless a Tax Event Redemption has occurred), the then holders of the Capital
Securities will be entitled to receive out of the assets of the Trust, after
satisfaction of liabilities to creditors, Debentures in an aggregate
principal amount equal to the aggregate stated liquidation amount of, with an
interest rate identical to the distribution rate of, and accrued and unpaid
interest equal to accrued and unpaid distributions on, the Capital Securities
on a pro rata basis in exchange for such Capital Securities.

The holders of the Common Securities will be entitled to receive
distributions upon any such dissolution pro rata with the holders of the
Capital Securities, except that if a Declaration Event of Default has
occurred and is continuing, the Capital Securities shall have a preference
over the Common Securities with regard to such distributions.

Pursuant to the Declaration, the Trust shall dissolve (i) on March 23,
2004, the expiration of the term of the Trust, (ii) upon the bankruptcy of
the Company or the holder of the Common Securities, (iii) upon the filing of
a certificate of dissolution or its equivalent with respect to the Company or
the revocation of the charter of the Company and the expiration of 90 days
after the date of revocation without a reinstatement thereof, (iv) after the
receipt by the Institutional Trustee of written direction from the Company to
dissolve the Trust, (v) upon the distribution of Debentures, (vi) upon the
occurrence and continuation of a Tax Event Redemption or (vii) upon the entry
of a decree of a judicial dissolution of the holder of the Common Securities,
the Company or the Trust.

Declaration Events of Default

An event of default under the Indenture (an "Indenture Event of
Default") constitutes an event of default under the Declaration with respect
to the Trust Securities (a "Declaration Event of Default"); provided, that
pursuant to the Declaration, the holder of the Common Securities will be
deemed to have waived any Declaration Event of Default with respect to the
Common Securities until all Declaration Events of Default with respect to the
Capital Securities have been cured, waived or otherwise eliminated. Until
such Declaration Events of Default with respect to the Capital Securities
have been so cured, waived or otherwise eliminated, the Institutional Trustee
will be deemed to be acting solely on behalf of the holders of the Capital
Securities and only the holders of the Capital Securities will have the right
<PAGE>
to direct the Institutional Trustee with respect to certain matters under the
Declaration and, therefore, the Indenture. If a Declaration Event of Default
with respect to the Capital Securities is waived by holders of Capital
Securities, such waiver will also constitute the waiver of such Declaration
Event of Default with respect to the Common Securities without any further
act, vote or consent of the holders of the Common Securities. If the
Institutional Trustee fails to enforce its rights under the Debentures in
respect of an Indenture Event of Default after a holder of record of Capital
Securities has made a written request, such holder of record of Capital
Securities may, to the fullest extent permitted by applicable law, institute
a legal proceeding against the Company to enforce the Institutional Trustee's
rights under the Debentures without first proceeding against the
Institutional Trustee or any other person or entity. Notwithstanding the
foregoing, if a Declaration Event of Default has occurred and is continuing
and such event is attributable to the failure of the Company to pay interest
or principal on the Debentures on the date such interest or principal is
otherwise payable (after giving effect to any right of deferral), then a
holder of Capital Securities may institute a Direct Action to such holder
directly of the principal of or interest on the Debentures having a principal
amount equal to the aggregate liquidation amount of the Capital Securities of
such holder. In connection with such Direct Action, the Company shall have
the right under the Indenture to set off any payment made to such holder of
the Company. The holders of Capital Securities will not be able to exercise
directly any other remedy available to the holders of the Debentures. See
"Effect of Obligations under the Debentures and the Guarantee."

Upon the occurrence of a Declaration Event of Default, the Institutional
Trustee as the sole holder of the Debentures will have the right under the
Indenture to declare the principal of and interest on the Debentures to be
immediately due and payable. The Company and the Trust are each required to
file annually with the Institutional Trustee an officers' certificate as to
its compliance with all conditions and covenants under the Declaration.

Voting Rights

Except as described herein, under the Trust Act and the Trust Indenture
Act and under "Description of the Guarantee--Modification of the Guarantee;
Assignment," and as otherwise required by law and the Declaration, the
holders of the Capital Securities will have no voting rights.

Subject to the requirement of the Institutional Trustee obtaining a tax
opinion in certain circumstances set forth in the last sentence of this
paragraph, the holders of a majority in aggregate stated liquidation amount
of the Capital Securities have the right to direct the time, method and place
of conducting any proceeding for any remedy available to the Institutional
Trustee, or direct the exercise of any trust or power conferred upon the
Institutional Trustee under the Declaration, including the right to direct
the Institutional Trustee, as holder of the Debentures, to (i) exercise the
remedies available under the Indenture with respect to the Debentures, (ii)
waive any past Indenture Event of Default that is waivable under the
Indenture, (iii) exercise any right to rescind or annul a declaration that
the principal of all the Debentures shall be due and payable or (iv) consent
to any amendment, modification or termination of the Indenture or the
Debentures where such consent shall be required; provided, however, that,
where a consent or action under the Indenture would require the consent or
act of holders of more than a majority in principal amount of the Debentures
(a "Super-Majority") affected thereby, only the holders of at least such
<PAGE>
Super-Majority in aggregate stated liquidation amount of the Capital
Securities may direct the Institutional Trustee to give such consent or take
such action. The Institutional Trustee shall notify all holders of the
Capital Securities of any notice of default received from the Debt Trustee
(as defined herein) with respect to the Debentures. Such notice shall state
that such Indenture Event of Default also constitutes a Declaration Event of
Default. Except with respect to directing the time, method and place of
conducting a proceeding for a remedy, the Institutional Trustee shall not
take any of the actions described in clauses (i), (ii) or (iii) above unless
the Institutional Trustee has obtained an opinion of tax counsel experienced
in such matters to the effect that, as a result of such action, the Trust
will not fail to be classified as a grantor trust for federal income tax
purposes.

In the event the consent of the Institutional Trustee, as the holder of
the Debentures, is required under the Indenture with respect to any
amendment, modification or termination of the Indenture or the Debentures,
the Institutional Trustee shall request the direction of the holders of the
Capital Securities and the Common Securities with respect to such amendment,
modification or termination and shall vote with respect to such amendment,
modification or termination as directed by a majority in stated liquidation
amount of the Capital Securities and the Common Securities voting together as
a single class; provided, however, that where a consent under the Indenture
would require the consent of a Super-Majority, the Institutional Trustee may
only give such consent at the direction of the holders of at least the
proportion in stated liquidation amount of the Capital Securities and the
Common Securities which the relevant Super-Majority represents of the
aggregate principal amount of the Debentures outstanding. The Institutional
Trustee shall not take any such action in accordance with the directions of
the holders of the Capital Securities and the Common Securities unless the
Institutional Trustee has obtained an opinion of tax counsel experienced in
such matters to the effect that, as a result of such action, the Trust will
not fail to be classified as a grantor trust for United States federal income
tax purposes.

A waiver of an Indenture Event of Default will constitute a waiver of
the corresponding Declaration Event of Default.

Any required approval or direction of holders of Capital Securities may
be given at a separate meeting of holders of Capital Securities convened for
such purpose, at a meeting of all of the holders of Trust Securities or
pursuant to written consent. The Regular Trustees will cause a notice of any
meeting at which holders of Capital Securities are entitled to vote, or of
any matter upon which action by written consent of such holders is to be
taken, to be mailed to each holder of record of Capital Securities. Each such
notice will include a statement setting forth the following information: (i)
the date of such meeting or the date by which such action is to be taken;
(ii) a description of any resolution proposed for adoption at such meeting on
which such holders are entitled to vote or of such matter upon which written
consent is sought; and (iii) instructions for the delivery of proxies or
consents. No vote or consent of the holders of Capital Securities will be
required for the Trust to cancel Capital Securities or distribute Debentures
in accordance with the Declaration.

Notwithstanding that holders of Capital Securities are entitled to vote
or consent under any of the circumstances described above, any of the Capital
Securities that are owned at such time by the Company or any entity directly
<PAGE>
or indirectly controlling or controlled by, or under direct or indirect
common control with, the Company, shall not be entitled to vote or consent
and shall, for purposes of such vote or consent, be treated as if such
Capital Securities were not outstanding.

The procedures by which holders of Capital Securities may exercise their
voting rights are described below. See "--Book-Entry Only Issuance--The
Depository Trust Company."

Holders of the Capital Securities will have no rights to appoint or
remove the Ingersoll-Rand Trustees, who may be appointed, removed or replaced
solely by the Company as the indirect or direct holder of all of the Common
Securities.

Modification of the Declaration

The Declaration may be modified and amended if approved by the Regular
Trustees (and in certain circumstances the Institutional Trustee or the
Delaware Trustee), provided, that if any proposed amendment provides for, or
the Regular Trustees otherwise propose to effect, (i) any action that would
adversely affect the powers, preferences or special rights of the Trust
Securities, whether by way of amendment to the Declaration or otherwise or
(ii) the dissolution of the Trust other than pursuant to the terms of the
Declaration, then the holders of the Trust Securities voting together as a
single class will be entitled to vote on such amendment or proposal and such
amendment or proposal shall not be effective except with the approval of at
least a majority in such stated liquidation amount of the Trust Securities
affected thereby; provided further, that if any amendment or proposal
referred to in clause (i) above would adversely affect only the Capital
Securities or the Common Securities, then only the affected class will be
entitled to vote on such amendment or proposal and such amendment or proposal
shall not be effective except with the approval of a majority in stated
liquidation amount of such class of securities. In addition, the Declaration
may be amended without the consent of the holders of the Trust Securities to,
among other things, cause the Trust to continue to be classified for United
States federal income tax purposes as a grantor trust.

Notwithstanding the foregoing, no amendment or modification may be made
to the Declaration if such amendment or modification would (i) cause the
Trust to be classified as other than a grantor trust for purposes of United
States federal income taxation, (ii) reduce or otherwise adversely affect the
powers of the Institutional Trustee or (iii) cause the Trust to be deemed an
"investment company" which is required to be registered under the 1940 Act.

Mergers, Consolidations or Amalgamations

The Trust may not consolidate, amalgamate, merge with or into, or be
replaced by, or convey, transfer or lease its properties and assets
substantially as an entirety, to any corporation or other body, except as
described below or as described in "Liquidation Distribution Upon
Dissolution." The Trust may, with the consent of the Regular Trustees and
without the consent of the holders of the Trust Securities, consolidate,
amalgamate, merge with or into, or be replaced by a trust organized as such
under the laws of any State; provided, that (i) if the Trust is not the
surviving entity, such successor entity either (x) expressly assumes all of
the obligations of the Trust under the Trust Securities or (y) substitutes
for the Trust Securities other securities having substantially the same terms
<PAGE>
as the Trust Securities (the "Successor Securities"), so long as the
Successor Securities rank the same as the Trust Securities with respect to
distributions and payments upon liquidation, redemption and otherwise, (ii)
the Company expressly acknowledges a trustee of such successor entity
possessing the same powers and duties as the Institutional Trustee as the
holder of the Debentures, (iii) if the Capital Securities are listed, any
Successor Securities will be listed upon notification of issuance, on any
national securities exchange or with another organization on which the
Capital Securities are then listed or quoted, (iv) such merger,
consolidation, amalgamation or replacement does not cause the Capital
Securities (including any Successor Securities) to be downgraded by any
nationally recognized statistical rating organization, (v) such merger,
consolidation, amalgamation or replacement does not adversely affect the
rights, preferences and privileges of the holders of the Trust Securities
(including any Successor Securities) in any material respect (other than with
respect to any dilution of the holders' interest in the new entity), (vi)
such successor entity has a purpose substantially identical to that of the
Trust, (vii) prior to such merger, consolidation, amalgamation or
replacement, the Company has received an opinion of a nationally recognized
independent counsel to the Trust experienced in such matters to the effect
that, (A) such merger, consolidation, amalgamation or replacement does not
adversely affect the rights, preferences and privileges of the holders of the
Trust Securities (including any Successor Securities) in any material respect
(other than with respect to any dilution of the holders' interest in the new
entity), (B) following such merger, consolidation, amalgamation or
replacement, neither the Trust nor such successor entity will be required to
register as an investment company under the 1940 Act and (C) following such
merger, consolidation, amalgamation or replacement, the Trust (or the
successor entity) will continue to be classified as a grantor trust for
federal income tax purposes, and (viii) the Company guarantees the
obligations of such successor entity under the Successor Securities at least
to the extent provided by the Guarantee and the Common Securities Guarantee
(as defined herein). Notwithstanding the foregoing the Trust shall not,
except with the consent of holders of 100% in stated liquidation amount of
the Trust Securities, consolidate, amalgamate, merge with or into, or be
replaced by any other entity or permit any other entity to consolidate,
amalgamate, merge with or into, or replace it, if such consolidation,
amalgamation, merger or replacement would cause the Trust or the successor
entity to be classified as other than a grantor trust for federal income tax
purposes.

Book-Entry Only Issuance--The Depository Trust Company

In the event that the Capital Securities are issued as one or more
fully-registered global Capital Securities certificates representing the
total aggregate number of Capital Securities, the Depositary will act as
securities depositary for any Capital Securities that are held separately
from the Income PRIDES. In such event, the Capital Securities will be issued
only as fully-registered securities registered in the name of Cede & Co. (the
Depositary's nominee). However, under certain circumstances, the Regular
Trustees with the consent of the Company may decide not to use the system of
book-entry transfers through the DTC with respect to the Capital Securities.
In that event, certificates of the Capital Securities will be printed and
delivered to the holders.

The laws of some jurisdictions require that certain purchasers of
securities take physical delivery of securities in definitive form. Such laws
<PAGE>
may impair the ability to transfer beneficial interests in the global Capital
Securities as represented by a global certificate.

Purchases of Capital Securities within the Depositary's system must be
made by or through Direct Participants, which will receive a credit for the
Capital Securities on the Depositary's records. The ownership interest of
each actual purchaser of each Capital Security (a "Beneficial Owner") is in
turn to be recorded on the Direct and Indirect Participants' records.
Beneficial Owners will not receive written confirmation from the Depositary
of their purchases, but Beneficial Owners are expected to receive written
confirmations providing details of the transaction, as well as periodic
statements of their holdings, from the Direct or Indirect Participants
through which the Beneficial Owners purchased Capital Securities. Transfers
of ownership interests in the Capital Securities are to be accomplished by
entries made on the books of Participants acting on behalf of Beneficial
Owners. Beneficial Owners will not receive certificates representing their
ownership interests in the Capital Securities, except in the event that use
of the book-entry system for the Capital Securities is discontinued.

To facilitate subsequent transfers, all the Capital Securities deposited
by Participants with the Depositary will be registered in the name of the
Depositary's nominee, Cede & Co. The deposit of Capital Securities with the
Depositary and their registration in the name of Cede & Co. effect no change
in beneficial ownership. The Depositary has no knowledge of the actual
Beneficial Owners of the Capital Securities. The Depositary's records reflect
only the identity of the Direct Participants to whose accounts such Capital
Securities are credited, which may or may not be the Beneficial Owners. The
Participants will remain responsible for keeping account of their holdings on
behalf of their customers.

So long as the Depositary or its nominee is the registered owner or
holder of a global certificate, the Depositary or such nominee, as the case
may be, will be considered the sole owner or holder of the Capital Securities
represented thereby for all purposes under the Declaration and the Capital
Securities. No Beneficial Owner of an interest in a global certificate will
be able to transfer that interest except in accordance with the Depositary
applicable procedures, in addition to those provided for under the
Declaration.

The Depositary has advised the Company that it will take any action
permitted to be taken by a holder of Capital Securities (including the
presentation of Capital Securities for exchange as described below) only at
the direction of one or more Participants to whose account the Depositary's
interests in the global certificates are credited and only in respect of such
portion of the stated liquidation amount of Capital Securities as to which
such Participant or Participants has or have given such directions. However,
if there is a Declaration Event of Default under the Capital Securities, the
Depositary will exchange the global certificates for certificated securities,
which it will distribute to its Participants.

Conveyance of notices and other communications by the Depositary to
Direct Participants and Indirect Participants and by Direct Participants and
Indirect Participants to Beneficial Owners will be governed by arrangements
among them, subject to any statutory or regulatory requirements that may be
in effect from time to time.
<PAGE>
Although voting with respect to the Capital Securities is limited, in
those cases where a vote is required, neither the Depositary nor Cede & Co.
will itself consent or vote with respect to Capital Securities. Under its
usual procedures, the Depositary would mail an omnibus proxy to the Trust as
soon as possible after the record date. The omnibus proxy assigns Cede &
Co.'s consenting or voting rights to those Direct Participants to whose
accounts the Capital Securities are credited on the record date (identified
in a listing attached to the omnibus proxy). The Company and the Trust
believe that the arrangements among the Depositary, Direct and Indirect
Participants, and Beneficial Owners will enable the Beneficial Owners to
exercise rights equivalent in substance to the rights that can be directly
exercised by a record holder of a beneficial interest in the Trust.

Distribution payments on the Capital Securities issued in the form of
one or more global certificates will be made to the Depositary in immediately
available funds. The Depositary's practice is to credit Direct Participants'
accounts on the relevant payment date in accordance with their respective
holdings shown on the Depositary's records unless the Depositary has reason
to believe that it will not receive payments on such payment date. Payments
by Participants to Beneficial Owners will be governed by standing
instructions and customary practices, as is the case with securities held for
the account of customers in bearer form or registered in "street name," and
such payments will be the responsibility of such Participant and not of the
Depositary, the Trust or the Company, subject to any statutory or regulatory
requirements to the contrary that may be in effect from time to time. Payment
of distributions to the Depositary is the responsibility of the Trust,
disbursement of such payments to Direct Participants is the responsibility of
the Depositary, and disbursement of such payments to the Beneficial Owners is
the responsibility of Direct and Indirect Participants.

Except as provided herein, a Beneficial Owner in a global Capital
Security certificate will not be entitled to receive physical delivery of
Capital Securities. Accordingly, each Beneficial Owner must rely on the
procedures of the Depositary to exercise any rights under the Capital
Securities.

Although the Depositary has agreed to the foregoing procedure in order
to facilitate transfer of interests in the global certificates among
Participants, the Depositary is under no obligation to perform or continue to
perform such procedures and such procedures may be discontinued at any time.
None of the Company, the Trust or any Ingersoll-Rand Trustee will have any
responsibility for the performance by the Depositary or its Direct
Participants or Indirect Participants under the rules and procedures
governing the Depositary. The Depositary may discontinue providing its
services as securities depositary with respect to the Capital Securities at
any time by giving reasonable notice to the Trust. Under such circumstances,
in the event that a successor securities depositary is not obtained, Capital
Securities certificates are required to be printed and delivered to holders.
Additionally, the Regular Trustees (with the consent of the Company) may
decide to discontinue use of the system of book-entry transfers through the
Depositary (or any successor depositary) with respect to the Capital
Securities. In that event, certificates for the Capital Securities will be
printed and delivered to holders. In each of the above circumstances, the
Company will appoint a paying agent with respect to the Capital Securities.

The information in this section concerning the Depositary and the
Depositary's book-entry system has been obtained from sources that the
<PAGE>
Company and the Trust believe to be reliable, but neither the Company nor the
Trust takes responsibility for the accuracy hereof.

Registrar, Transfer Agent and Paying Agent

Payments in respect of the Capital Securities represented by the global
certificates shall be made to the Depositary, which shall credit the relevant
accounts at the Depositary on the applicable distribution dates, or, in the
case of certificated securities, such payments shall be made by check mailed
to the address of the holder entitled thereto as such address shall appear on
the Register. The Paying Agent shall be permitted to resign as Paying Agent
upon 30 days' written notice to the Ingersoll-Rand Trustees. In the event
that The First National Bank of Chicago shall no longer be the Paying Agent,
the Regular Trustees shall appoint a successor to act as Paying Agent (which
shall be a bank or trust company).

The First National Bank of Chicago will act as registrar, transfer agent
and paying agent for the Capital Securities. Registration of transfers of
Capital Securities will be effected without charge by or on behalf of the
Trust, but upon payment (and the giving of such indemnity as the Trust or the
Company may require) in respect of any tax or other government charge which
may be imposed in relation to it.

Information Concerning the Institutional Trustee

The Institutional Trustee prior to the occurrence of a default with
respect to the Trust Securities and after the curing and or waiver of any
defaults that may have occurred, undertakes to perform only such duties as
are specifically set forth in the Declaration and, after default, shall
exercise the same degree of care as a prudent individual would exercise in
the conduct of his or her own affairs. Subject to such provisions, the
Institutional Trustee is under no obligation to exercise any of the powers
vested in it by the Declaration at the request of any holder of Capital
Securities, unless offered reasonable indemnity by such holder against the
costs, expenses and liabilities which might be incurred thereby. The holders
of Capital Securities will not be required to offer such indemnity in the
event such holders, by exercising their voting rights, direct the
Institutional Trustee to take any action it is empowered to take under the
Declaration following a Declaration Event of Default. The Institutional
Trustee also serves as trustee under the Guarantee.

The Institutional Trustee maintains commercial banking relationships
with the Company.

Governing Law

The Declaration and the Capital Securities will be governed by, and
construed in accordance with, the internal laws of the State of Delaware.

Miscellaneous

The Regular Trustees are authorized and directed to operate the Trust in
such away so that the Trust will not be required to register as an
"investment company" under the 1940 Actor be characterized as other than a
grantor trust for federal income tax purposes. The Company is authorized and
directed to conduct its affairs so that the Debentures will be treated as
indebtedness of the Company for federal income tax purposes. In this
<PAGE>
connection, the Company and the Regular Trustees are authorized to take any
action not inconsistent with applicable law, the Declaration, the certificate
of trust of the Trust or the certificate of incorporation of the Company,
that each of the Company and the Regular Trustees determines in its
discretion to be necessary or desirable to achieve such end, as long as such
action does not adversely affect the interests of the holders of the Capital
Securities or vary the terms thereof.

Holders of the Capital Securities have no preemptive or similar rights.

DESCRIPTION OF THE GUARANTEE

Set forth below is a summary of information concerning the Guarantee
which will be executed and delivered by the Company for the benefit of the
holders from time to time of Trust Securities. The Guarantee will be
qualified as an indenture under the Trust Indenture Act. The First National
Bank of Chicago will act as the Guarantee Trustee for the purposes of
compliance with the provisions of the Trust Indenture Act. The terms of the
Guarantee will be those set forth in the Guarantee and those made part of the
Guarantee by the Trust Indenture Act. The following summary is not
necessarily complete, and reference is hereby made to the copy of the form of
Guarantee (including the definitions therein of certain terms) which is filed
as an exhibit to the Registration Statement relating to this Prospectus
Supplement, and to the Trust Indenture Act. Whenever particular defined terms
of the Guarantee are referred to in this Prospectus Supplement, such defined
terms are incorporated herein by reference. The Guarantee will be held by the
Guarantee Trustee for the benefit of the holders of the Capital Securities.
The following descriptions of certain terms of the Guarantee supplements and,
to the extent inconsistent with, replaces the description of the general
terms and provisions of the Guarantee set forth in the accompanying
Prospectus, to which reference is hereby made.

General

Pursuant to the Guarantee, the Company will irrevocably and
unconditionally agree, to the extent set forth therein, to pay in full on a
senior unsecured basis, to the holders of the Trust Securities issued by the
Trust, the Guarantee Payments (as defined herein) (except to the extent paid
by the Trust), as and when due, regardless of any defense, right of set-off
or counterclaim which the Trust may have or assert. The following payments or
distributions with respect to Trust Securities issued by the Trust to the
extent not paid by or on behalf of the Trust (the "Guarantee Payments"), will
be subject to the Guarantee thereon (without duplication): (i) any accrued
and unpaid distributions which are required to be paid on the Trust
Securities, to the extent the Trust shall have funds available therefor; (ii)
the redemption price, including all accumulated and unpaid distributions to
the date of redemption, of Trust Securities in respect of which the related
Debentures have been redeemed by the Company upon the occurrence of a Tax
Event Redemption, to the extent the Trust shall have funds available
therefor; and (iii) upon a voluntary or involuntary dissolution of the Trust
(other than in connection with the distribution of Debentures to the holders
of Trust Securities), the lesser of (a) the aggregate of the stated
liquidation amount and all accrued and unpaid distributions on such Trust
Securities to the date of payment, to the extent the Trust has funds
available therefor, and (b) the amount of assets of the Trust remaining
available for distribution to holders of the Trust Securities in liquidation
of the Trust. The Company's obligation to make a Guarantee Payment may be
<PAGE>
satisfied by direct payment of the required amounts by the Company to the
holders of Trust Securities or by causing the Trust to pay such amounts to
such holders.

The Guarantee will be a full and unconditional guarantee on a senior
unsecured basis with respect to the Trust Securities issued by the Trust, but
will not apply to any payment of distributions except to the extent the Trust
shall have funds available therefor. If the Company does not make interest
payments on the Debentures purchased by the Trust, the Trust will not pay
distributions on the Trust Securities and will not have funds available
therefor. See "Effect of Obligations under the Debentures and the Guarantee."

The Guarantee, when taken together with the Company's obligations under
the Debentures, the Indenture, and the Declaration, will have the effect of
providing a full and unconditional guarantee on a senior unsecured basis by
the Company of payments due on the Trust Securities.

The Guarantee is for the benefit of all the holders of the Trust
Securities (including the holders of the Common Securities), provided,
however, that upon an Indenture Event of Default, holders of Capital
Securities shall have priority over holders of Common Securities with respect
to distributions and payments on liquidation, redemption or otherwise.

Certain Covenants of the Company

In the Guarantee, the Company will covenant that, so long as any Trust
Securities issued by the Trust remain outstanding, if there shall have
occurred any event that would constitute an event of default under the
Guarantee or the Declaration, then (a) the Company shall not declare or pay
any dividend on, make any distributions with respect to, or redeem, purchase,
acquire or make a liquidation payment with respect to, any of its capital
stock (other than (i) purchases or acquisitions of capital stock of the
Company in connection with the satisfaction by the Company of its obligations
under any employee or agent benefit plans or the satisfaction by the Company
of its obligations pursuant to any contract or security outstanding on the
date of such event requiring the Company to purchase capital stock of the
Company, (ii) as a result of a reclassification of the Company's capital
stock or the exchange or conversion of one class or series of the Company's
capital stock for another class or series of the Company's capital stock,
(iii) the purchase of fractional interests in shares of the Company's capital
stock pursuant to the conversion or exchange provisions of such capital stock
or the security being converted or exchanged, (iv) dividends or distributions
in capital stock of the Company (or rights to acquire capital stock) or
repurchases or redemptions of capital stock solely from the issuance or
exchange of capital stock or (v) redemptions or repurchases of any rights
outstanding under a shareholder rights plan (or the declaration thereunder of
a dividend of rights in the future), (b) the Company shall not make any
payment of interest, principal or premium, if any, on or repay, repurchase or
redeem any debt securities issued by the Company which rank junior to the
Debentures and (c) the Company shall not make any guarantee payments with
respect to the foregoing (other than payments pursuant to the Guarantee).

Modification of the Guarantee; Assignment

Except with respect to any changes which do not adversely affect the
rights of holders of Trust Securities (in which case no vote will be
required), the Guarantee may be amended only with the prior approval of the
<PAGE>
holders of not less than a majority in stated liquidation amount of the
outstanding Trust Securities issued by the Trust. All guarantees and
agreements contained in the Guarantee shall bind the successors, assigns,
receivers, trustees and representatives of the Company and shall inure to the
benefit of the holders of the Trust Securities then outstanding.

Termination

The Guarantee will terminate (a) upon distribution of the Debentures
held by the Trust to the holders of the Trust Securities, (b) upon full
payment of the redemption price of all the Trust Securities in the event that
all of the Debentures are repurchased by the Company upon the occurrence of a
Tax Event Redemption or (c) upon full payment of the amounts payable in
accordance with the Declaration upon liquidation of the Trust. The Guarantee
will continue to be effective or will be reinstated, as the case may be, if
at any time any holder of Trust Securities must return payment of any sums
paid under the Trust Securities or the Guarantee.

Events of Default

An event of default under the Guarantee will occur upon the failure of
the Company to perform any of its payment or other obligations thereunder.

The holders of a majority in stated liquidation amount of the Trust
Securities have the right to direct the time, method and place of conducting
any proceeding for any remedy available to the Guarantee Trustee in respect
of the Guarantee or to direct the exercise of any trust or power conferred
upon the Guarantee Trustee under the Guarantee. If the Guarantee Trustee
fails to enforce such Guarantee, any holder of Trust Securities may institute
a legal proceeding directly against the Company to enforce such holder's
rights under the Guarantee, without first instituting a legal proceeding
against the Trust, the Guarantee Trustee or any other person or entity. The
Company waives any right or remedy to require that any action be brought
first against the Trust or any other person or entity before proceeding
directly against the Company.

Status of the Guarantee

The Guarantee will constitute an unsecured obligation of the Company and
will rank on a parity with all of the Company's other senior unsecured
obligations.

Information Concerning the Guarantee Trustee

The Guarantee Trustee, prior to the occurrence of a default with respect
to the Guarantee, undertakes to perform only such duties as are specifically
set forth in the Guarantee and, after default, shall exercise the same degree
of care as a prudent individual would exercise in the conduct of his or her
own affairs. Subject to such provisions, the Guarantee Trustee is under no
obligation to exercise any of the powers vested in it by the Guarantee at the
request of any holder of Capital Securities, unless offered reasonable
indemnity against the costs, expenses and liabilities which might be incurred
thereby; but the foregoing shall not relieve the Guarantee Trustee, upon the
occurrence of an event of default under the Guarantee, from exercising the
rights and powers vested in it by the Guarantee.
<PAGE>
The Guarantee Trustee maintains commercial banking relationships with
the Company.

Governing Law

The Guarantee will be governed by and construed in accordance with the
internal laws of the State of New York.
<PAGE>
DESCRIPTION OF THE DEBENTURES

Set forth below is a description of the specific terms of the Debentures
in which the Trust will invest the proceeds from the issuance and sale of the
Trust Securities. The following description is not necessarily complete, and
reference is hereby made to the copy of the form of the Indenture to be
entered into between the Company and The Bank of New York, as trustee (the
"Debt Trustee"), as supplemented or amended from time to time (as so
supplemented and amended, the "Indenture") which is filed as an exhibit to
the Registration Statement relating to this Prospectus Supplement, and to the
Trust Indenture Act. Certain capitalized terms used herein are defined in the
Indenture.

Under certain circumstances involving the dissolution of the Trust,
Debentures may be distributed to the holders of the Trust Securities in
liquidation of the Trust. See "Description of the Capital Securities--
Distribution of the Debentures." The following descriptions of certain terms
of the Debentures supplement and, to the extent inconsistent with, replaces
the description of the general terms and provisions of the Debt Securities
set forth in the accompanying Prospectus, to which reference is hereby made.

General

The Debentures will be issued as senior unsecured debt under the
Indenture and will rank on a parity in right of payment with all of the
Company's other senior unsecured debt obligations. The Debentures will be
limited in aggregate principal amount to $414.9 million.

The Debentures will not be subject to a sinking fund provision. Unless a
Tax Event Redemption has occurred prior to the Purchase Contract Settlement
Date, the entire principal amount of the Debentures will mature and become
due and payable, together with any accrued and unpaid interest thereon
including Compound Interest (as defined herein) and expenses and taxes of the
Trust, if any, on May 16, 2003.

The Company will have the right at any time to dissolve the Trust and
cause the Debentures to be distributed to the holders of the Trust
Securities. If Debentures are distributed to holders of Trust Securities in
liquidation of such holders' interests in the Trust, such Debentures will
initially be issued as a Global Security (as defined herein). As described
herein, under certain limited circumstances, Debentures may be issued in
certificated form in exchange for a Global Security. See "--Book-Entry and
Settlement" below. In the event that Debentures are issued in certificated
form, such Debentures will be in denominations of $25 and integral multiples
thereof and may be transferred or exchanged at the offices described below.
Payments on Debentures issued as a Global Security will be made to the
Depositary, a successor depositary or, in the event that no depositary is
used, to a Paying Agent for the Debentures. In the event Debentures are
issued in certificated form, principal and interest will be payable, the
transfer of the Debentures will be registrable and Debentures will be
exchangeable for Debentures of other denominations of a like aggregate
principal amount, at the corporate trust office or agency of the Debt
Trustee, New York, New York; provided, that at the option of the Company,
payment of interest may be made by check mailed to the address of the holder
entitled thereto or by wire transfer to an account appropriately designated
by the holder entitled thereto. Notwithstanding the foregoing, so long as the
<PAGE>
holder of any Debentures is the Institutional Trustee, the payment of
principal and interest on the Debentures held by the Institutional Trustee
will be made at such place and to such account as may be designated by the
Institutional Trustee.

The Indenture does not contain provisions that afford holders of the
Debentures protection in the event of a highly leveraged transaction or other
similar transaction involving the Company that may adversely affect such
holders.

Interest

Each Debenture shall bear interest initially at the rate of 6.22% per
annum from the original date of issuance, payable quarterly in arrears on
February 16, May 16, August 16 and November 16 of each year (each an
"Interest Payment Date"), commencing May 16, 1998, to the person in whose
name such Debenture is registered, subject to certain exceptions, at the
close of business on the Business Day next preceding such Interest Payment
Date. The applicable interest rate on the Debentures and the distribution
rate on the related Capital Securities outstanding on and after the Purchase
Contract Settlement Date will be reset on the third Business Day immediately
preceding the Purchase Contract Settlement Date to the Reset Rate. In the
event the Debentures shall not continue to remain in book-entry only form,
the Company shall have the right to select record dates, which shall be more
than fifteen Business Days but less than 60 Business Days prior to the
Interest Payment Date. The amount of interest payable for any period will be
computed on the basis of a 360-day year consisting of twelve 30-day months.
The amount of interest payable for any period shorter than a full quarterly
period for which interest is computed will be computed on the basis of the
actual number of days elapsed in such 90-day period. In the event that any
date on which interest is payable on the Debentures is not a Business Day,
then payment of the interest payable on such date will be made on the next
succeeding day that is a Business Day (and without any interest or other
payment in respect of any such delay), except that, if such Business Day is
in the next succeeding calendar year, then such payment shall be made on the
immediately preceding Business Day, in each case with the same force and
effect as if made on such date.

Tax Event Redemption

If a Tax Event shall occur and be continuing, the Company may, at its
option, redeem Debentures in whole (but not in part) at any time at a
Redemption Price equal to, for each Debenture, the Redemption Amount plus
accrued and unpaid interest thereon, including Compound Interest and expenses
and taxes of the Trust, if any, to the date of redemption (the "Tax Event
Redemption Date"). If, following the occurrence of a Tax Event, the Company
exercises its option to redeem the Debentures, then the proceeds of such
redemption will be applied to redeem Trust Securities having a liquidation
amount equal to the principal amount of Debentures to be paid in accordance
with their terms, at the Redemption Price. Such Redemption Price will be
payable in cash to the holders of such Trust Securities. If such Tax Event
Redemption occurs prior to the Purchase Contract Settlement Date, the
Redemption Price payable in liquidation of the Income PRIDES holders'
interest in the Trust will be distributed to the Collateral Agent, who in
turn will apply an amount equal to the Redemption Amount of such Redemption
Price to purchase the Treasury Portfolio on behalf of the holders of Income
PRIDES and remit the remaining portion, if any, of such Redemption Price to
<PAGE>
the Purchase Contract Agent for payment to the holders of such Income PRIDES.
Such Treasury Portfolio will be substituted for the Capital Securities and
will be pledged with the Collateral Agent to secure such Income PRIDES
holders' obligation to purchase the Company's Common Stock under the Purchase
Contracts; provided, that if the Tax Event Redemption occurs after the
Purchase Contract Settlement Date, such Treasury Portfolio will not be
purchased.

"Tax Event" means the receipt by the Trust of an opinion of a nationally
recognized independent tax counsel experienced in such matters to the effect
that, as a result of (a) any amendment to, change in, or announced proposed
change in, the laws (or any regulations thereunder) of the United States or
any political subdivision or taxing authority thereof or therein affecting
taxation, (b) any amendment to or change in an interpretation or application
of such laws or regulations by any legislative body, court, governmental
agency or regulatory authority or (c) any interpretation or pronouncement
that provides for a position with respect to such laws or regulations that
differs from the generally accepted position on the date the Trust Securities
are issued, which amendment, change or proposed change is effective or
which interpretation or pronouncement is announced on or after the date of
issuance of the Trust Securities under the Declaration, there is more than an
insubstantial risk that (i) interest payable by the Company on the Debentures
would not be deductible, in whole or in part, by the Company for United
States federal income tax purposes or (ii) the income of the Trust would be
subject to United States federal income tax or the Trust would be subject to
more than a de minimis amount of other taxes, duties or other governmental
charges.

"Treasury Portfolio" means, with respect to the Applicable Principal
Amount of Debentures (a) if the Tax Event Redemption Date occurs prior to the
Purchase Contract Settlement Date, a portfolio of zero-coupon U.S. Treasury
Securities consisting of (i) interest or principal strips of U.S. Treasury
Securities which mature on or prior to May 15, 2001 in an aggregate amount
equal to the Applicable Principal Amount and (ii) with respect to each
scheduled interest payment date on the Debentures that occurs after the Tax
Event Redemption Date interest or principal strips of U.S. Treasury
Securities which mature on or prior to such date in an aggregate amount equal
to the aggregate interest payment that would be due on the Applicable
Principal Amount of the Debentures on such date, and (b) if the Tax Event
Redemption Date occurs after the Purchase Contract Settlement Date, a
portfolio of zero-coupon U.S. Treasury Securities consisting of (i) principal
or interest strips of U.S. Treasury Securities which mature on or prior to
May 15, 2003 in an aggregate amount equal to the Applicable Principal Amount
and (ii) with respect to each scheduled interest payment date on the
Debentures that occurs after the Tax Event Redemption Date interest or
principal strips of such U.S. Treasury Securities which mature on or prior to
such date in an aggregate amount equal to the aggregate interest payment that
would be due on the Applicable Principal Amount of the Debentures on such
date.

"Applicable Principal Amount" means either (i) if the Tax Event
Redemption Date occurs prior to the Purchase Contract Settlement Date, the
aggregate principal amount of the Debentures corresponding to the aggregate
stated liquidation amount of the Capital Securities which are components of
Income PRIDES on the Tax Event Redemption Date or (ii) if the Tax Event
Redemption occurs on or after the Purchase Contract Settlement Date, the
aggregate principal amount of the Debentures corresponding to the aggregate
<PAGE>
stated liquidation amount of the Capital Securities outstanding on such Tax
Event Redemption Date.

"Redemption Amount" means for each Debenture, the product of (i) the
principal amount of such Debenture and (ii) a fraction whose numerator is the
Treasury Portfolio Purchase Price and whose denominator is the Applicable
Principal Amount.

"Treasury Portfolio Purchase Price" means the lowest aggregate price
quoted by a primary U.S. government securities dealer in New York City (a
"Primary Treasury Dealer") to the Quotation Agent on the third Business Day
immediately preceding the Tax Event Redemption Date for the purchase of the
Treasury Portfolio for settlement on the Tax Event Redemption Date.

"Quotation Agent" means (i) Merrill Lynch Government Securities, Inc.
and its respective successors, provided, however, that if the foregoing shall
cease to be a Primary Treasury Dealer, the Company shall substitute therefor
another Primary Treasury Dealer, and (ii) any other Primary Treasury Dealer
selected by the Company.

Notice of any redemption will be mailed at least 30 days but not more
than 60 days before the redemption date to each registered holder of
Debentures to be prepaid at its registered address. Unless the Company
defaults in payment of the Redemption Price, on and after the redemption date
interest shall cease to accrue on such Debentures.

Option to Extend Interest Payment Period

The Company shall have the right at any time, and from time to time,
during the term of the Debentures, to defer payments of interest by extending
the interest payment period for a period not extending beyond the maturity
date of the Debentures, at the end of which Extension Period,the Company
shall pay all interest then accrued and unpaid (including any expenses and
taxes of the Trust, as herein defined) together with interest thereon
compounded quarterly at the rate of 6.22% per annum through and including
May 15,2001, and at the Reset Rate thereafter, to the extent permitted by
applicable law ("Compound Interest"); provided, that during any such
Extension Period, (a) the Company shall not declare or pay dividends or make
any distribution with respect to, or redeem, purchase, acquire or make a
liquidation payment with respect to, any of its capital stock (other than (i)
purchases or acquisitions of capital stock of the Company in connection with
the satisfaction by the Company of its obligations under any employee or
agent benefit plans or the satisfaction by the Company of its obligations
pursuant to any contract or security outstanding on the date of such event
requiring the Company to purchase capital stock of the Company, (ii) as a
result of a reclassification of the Company's capital stock or the exchange
or conversion of one class or series of the Company's capital stock for
another class or series of the Company capital stock, (iii) the purchase of
fractional interests in shares of the Company's capital stock pursuant to the
conversion or exchange provisions of such capital stock or the security being
converted or exchanged, (iv) dividends or distributions incapital stock of
the Company (or rights to acquire capital stock) or repurchases or
redemptions of capital stock solely from the issuance or exchange of capital
stock or (v) redemptions or repurchases of any rights outstanding under a
shareholder rights plan or the declaration thereunder of a dividend of rights
in the future), (b) the Company shall not make any payment of interest,
principal or premium, if any, on or repay, repurchase or redeem any debt
<PAGE>
securities issued by the Company that rank junior to the Debentures, and (c)
the Company shall not make any guarantee payments with respect to the
foregoing (other than payments pursuant to the Guarantee). Prior to the
termination of any such Extension Period, the Company may further defer
payments of interest by extending the interest payment period; provided,
however, that such Extension Period, including all such previous and further
extensions, may not extend beyond the maturity of the Debentures. Upon the
termination of any Extension Period and the payment of all amounts then due,
the Company may commence a new Extension Period, subject to the terms set
forth in this section. No interest during an Extension Period, except at the
end thereof, shall be due and payable, but the Company, at its option, may
prepay on any Interest Payment Date all of the interest accrued during the
then elapsed portion of an Extension Period. The Company has no present
intention of exercising its right to defer payments of interest by extending
the interest payment period on the Debentures. If the Institutional Trustee
shall be the sole holder of the Debentures, the Company shall give the
Regular Trustees and the Institutional Trustee notice of its selection of
such Extension Period one Business Day prior to the earlier of (i) the date
distributions on the Capital Securities are payable or (ii) the date the
Regular Trustees are required to give notice, if applicable, to the NYSE (or
other applicable self-regulatory organization) or to holders of the Capital
Securities of the record or payment date of such distribution. The Regular
Trustees shall give notice of the Company's selection of such Extension
Period to the holders of the Capital Securities. If the Institutional Trustee
shall not be the sole holder of the Debentures, the Company shall give the
holders of the Debentures notice of its selection of such Extension Period
ten Business Days prior to the earlier of (i) the Interest Payment Date or
(ii) the date upon which the Company is required to give notice, if
applicable, to the NYSE (or other applicable self-regulatory organization) or
to holders of the Debentures of the record or payment date of such related
interest payment.

Expenses and Taxes of the Trust

In the Indenture, the Company, as borrower, has agreed to pay all debts
and other obligations (other than with respect to the Trust Securities) and
all costs and expenses of the Trust (including the costs and expenses
relating to the organization of the Trust, the fees and expenses of the
Trustees and the costs and expenses relating to the operation of the Trust)
and to pay any and all taxes and all costs and expenses with respect thereto
(other than United States withholding taxes) to which the Trust might become
subject. The Company also has agreed in the Indenture to execute such
additional agreements as may be necessary or desirable to give full effect to
the foregoing.

Indenture Events of Default

If any Indenture Event of Default shall occur and be continuing, the
Institutional Trustee, as the holder of the Debentures, will have the right
to declare the principal of and the interest on the Debentures (including any
Compound Interest and expenses and taxes of the Trust, if any) and any other
amounts payable under the Indenture to be forthwith due and payable and to
enforce its other rights as a creditor with respect to the Debentures.

The following are Events of Default under the Indenture with respect to
the Debentures: (1) failure to pay interest on the Debentures when due,
continued for 30 days; provided, however, that if the Company is permitted by
<PAGE>
the terms of the Debentures to defer the payment in question, then the date
on which such payment is due and payable shall be the date on which the
Company is required to make payment following such deferral, if such deferral
has been elected pursuant to the terms of the Debentures; (2) failure to pay
the principal of (or premium, if any, on) the Debentures when due and payable
at the stated maturity date, upon redemption or otherwise; provided, however,
if the Company is permitted by the terms of the Debentures to defer the
payment in question, the date on which such payment is due and payable shall
be the date on which the Company is required to make payment following such
deferral, if such deferral has been elected pursuant to the terms of the
Debentures; (3) failure to observe or perform in any material respect certain
other covenants contained in the Indenture, continued for a period of 90 days
after written notice has been given to the Company by the Debt Trustee or
holders of at least 25% in aggregate principal amount of the outstanding
Debentures; and (4) certain events of bankruptcy, insolvency or
reorganization relating to the Company.

The Indenture provides that the Debt Trustee shall, within 90 days after
the occurrence of any Default or Event of Default with respect to the
Debentures, give the holders of the Debentures notice of all uncured Defaults
or Events of Default known to it (the term "Default" includes any event which
after notice or passage of time or both would be an Event of Default);
provided, however, that, except in the case of a Default in the payment of
the principal of (or premium, if any, on) or interest on the Debentures, the
Debt Trustee shall be protected in withholding such notice so long as the
board of directors, the executive committee or directors or responsible
officers of the Debt Trustee in good faith determine that the withholding of
such notice is in the interest of the holders of the Debentures.

If an Event of Default with respect to the Debentures occurs and is
continuing, the Debt Trustee or the holders of at least 25% in aggregate
principal amount of the outstanding Debentures, by notice in writing to the
Company (and to the Debt Trustee if given by the holders of at least 25% in
aggregate principal amount of the Debentures), may declare the unpaid
principal of and accrued interest to the date of acceleration on all the
outstanding Debentures to be due and payable immediately and, upon any such
declaration, the Debentures shall become immediately due and payable.

In addition, in the case of the Debentures held by the Trust, if an
Event of Default has occurred and is continuing and such event is
attributable to the failure of the Company to pay interest or principal, then
a holder of Capital Securities may directly institute a proceeding against
the Company for payment.

Any such declaration with respect to the Debentures may be annulled and
past Events of Default and Defaults (except, unless theretofore cured, an
Event of Default or a Default in payment of principal of or interest on the
Debentures) may be waived by the holders of a majority of the principal
amount of the outstanding Debentures, upon the conditions provided in the
Indenture.

An Indenture Event of Default also constitutes a Declaration Event of
Default. The holders of Capital Securities in certain circumstances have the
right to direct the Institutional Trustee to exercise its rights as the
holder of the Debentures. See "Description of the Capital Securities--
Declaration Events of Default" and "--Voting Rights." Notwithstanding the
foregoing, if an Event of Default has occurred and is continuing and such
<PAGE>
event is attributable to the failure of the Company to pay interest or
principal on the Debentures on the date such interest or principal is
otherwise payable, the Company acknowledges that a holder of Capital
Securities may directly institute a proceeding for enforcement of payment to
such holder directly of the principal of and interest on the Debentures
having a principal amount equal to the aggregate stated liquidation amount of
the Capital Securities of such holder after the respective due date specified
in the Debentures. In connection with such action, the Company shall have the
right under the Indenture to set-off any payment made to such holder by the
Company. The holders of Capital Securities will not be able to exercise
directly any other remedy available to the holders of the Debentures.

Book-Entry and Settlement

If distributed to holders of Capital Securities in connection with the
involuntary or voluntary dissolution of the Trust, the Debentures will be
issued in the form of one or more global certificates (each a "Global
Security") registered in the name of the Depositary or its nominee. Except
under the limited circumstances described below, Debentures represented by
the Global Security will not be exchangeable for, and will not otherwise be
issuable as, Debentures in certificated form. The Global Securities described
above may not be transferred except by the Depositary to a nominee of the
Depositary or by a nominee of the Depositary to the Depositary or another
nominee of the Depositary or to a successor depositary or its nominee.

The laws of some jurisdictions require that certain purchasers of
securities take physical delivery of such securities in certificated form.
Such laws may impair the ability to transfer beneficial interests in such a
Global Security.

Except as provided below, owners of beneficial interests in such a
Global Security will not be entitled to receive physical delivery of
Debentures in certificated form and will not be considered the holders (as
defined in the Indenture) thereof for any purpose under the Indenture, and no
Global Security representing Debentures shall be exchangeable, except for
another Global Security of like denomination and tenor to be registered in
the name of the Depositary or its nominee or to a successor Depositary or its
nominee. Accordingly, each Beneficial Owner must rely on the procedures of
the Depositary or if such person is not a Participant, on the procedures of
the Participant through which such person owns its interest to exercise any
rights of a holder under the Indenture.

The Depositary

If Debentures are distributed to holders of Capital Securities in
liquidation of such holders' interests in the Trust, the Depositary will act
as securities depositary for the Debentures. For a description of the
Depositary and the specific terms of the depositary arrangements, see
"Description of the Capital Securities--Book-Entry Only Issuance--The
Depository Trust Company." As of the date of this Prospectus Supplement, the
description therein of the Depositary's book-entry system and the
Depositary's practices as they relate to purchases, transfers, notices and
payments with respect to the Capital Securities apply in all material
respects to any debt obligations represented by one or more Global Securities
held by the Depositary. The Company may appoint a successor to the Depositary
or any successor depositary in the event the Depositary or such successor
<PAGE>
depositary is unable or unwilling to continue as a depositary for the Global
Securities.

None of the Company, the Trust, the Institutional Trustee, any paying
agent and any other agent of the Company or the Debt Trustee will have any
responsibility or liability for any aspect of the records relating to or
payments made on account of beneficial ownership interests in a Global
Security for such Debentures or for maintaining, supervising or reviewing any
records relating to such beneficial ownership interests.

A Global Security shall be exchangeable for Debentures registered in the
names of persons other than the Depositary or its nominee only if (i) the
Depositary notifies the Company that it is unwilling or unable to continue as
a depositary for such Global Security and no successor depositary shall have
been appointed, (ii) the Depositary at any time, ceases to be a clearing
agency registered under the Exchange Act at which time the depositary is
required to be so registered to act as such depositary and no successor
depositary shall have been appointed, (iii) the Company, in its sole
discretion, determines that such Global Security shall be so exchangeable or
(iv) there shall have occurred an Indenture Event of Default with respect to
such Debentures. Any Global Security that is exchangeable pursuant to the
preceding sentence shall be exchangeable for Debentures registered in such
names as the Depositary shall direct. It is expected that such instructions
will be based upon directions received by the Depositary from its
Participants with respect to ownership of beneficial interests in such Global
Security.

Governing Law

The Indenture and the Debentures will be governed by, and construed in
accordance with, the internal laws of the State of New York.

Miscellaneous

The Company will pay all fees and expenses related to (i) the offering
of the Trust Securities and the Debentures, (ii) the organization,
maintenance and dissolution of the Trust, (iii) the retention of the
Ingersoll-Rand Trustees and (iv) the enforcement by the Institutional Trustee
of the rights of the holders of the Capital Securities.

EFFECT OF OBLIGATIONS UNDER THE
DEBENTURES AND THE GUARANTEE

As set forth in the Declaration, the sole purpose of the Trust is to
issue the Trust Securities evidencing undivided beneficial interests in the
assets of the Trust, and to invest the proceeds from such issuance and sale
in the Debentures and engage in only those other activities necessary or
incidental thereto.

As long as payments of interest and other payments are made when due on
the Debentures, such payments will be sufficient to cover distributions and
payments due on the Trust Securities because of the following factors: (i)
the aggregate principal amount of Debentures will be equal to the sum of the
aggregate stated liquidation amount of the Trust Securities; (ii) the
interest rate and the interest and other payment dates on the Debentures will
match the distribution rate and distribution and other payment dates for the
Trust Securities; (iii) the Company shall pay, and the Trust shall not be
obligated to pay, directly or indirectly, all costs, expenses, debts, and
<PAGE>
obligations of the Trust (other than with respect to the Trust Securities);
and (iv) the Declaration further provides that the Ingersoll-Rand Trustees
shall not take or cause or permit the Trust to, among other things, engage in
any activity that is not consistent with the purposes of the Trust.

Payments of distributions (to the extent funds therefor are available)
and other payments due on the Capital Securities (to the extent funds
therefor are available) are guaranteed by the Company as and to the extent
set forth under "Description of the Guarantee." If the Company does not make
interest payments on the Debentures purchased by the Trust, the Trust will
not have sufficient funds to pay distributions on the Capital Securities. The
Guarantee does not apply to any payment of distributions unless and until the
Trust has sufficient funds for the payment of such distributions.

If the Company fails to make interest or other payments on the
Debentures when due (taking account of any Extension Period), the Declaration
provides a mechanism whereby the holders of the Capital Securities, using the
procedures described in "Description of the Capital Securities--Book-Entry
Only Issuance--The Depository Trust Company" and "--Voting Rights," may
direct the Institutional Trustee to enforce its rights under the Indenture.
If the Institutional Trustee fails to enforce its rights under the Indenture
in respect of an Indenture Event of Default, such holder of record of Capital
Securities may, to the fullest extent permitted by applicable law, institute
a legal proceeding against the Company to enforce the Institutional Trustee's
rights under the Indenture without first instituting any legal proceeding
against the Institutional Trustee or any other person or entity.
Notwithstanding the foregoing, if a Declaration Event of Default has occurred
and is continuing and such event is attributable to the failure of the
Company to pay interest or principal on the Debentures on the date such
interest or principal is otherwise payable, then a holder of Capital
Securities may directly institute a proceeding against the Company for
payment. The Company, under the Guarantee, acknowledges that the Guarantee
Trustee shall enforce the Guarantee on behalf of the holders of the Capital
Securities. If the Company fails to make payments under the Guarantee, the
Guarantee provides a mechanism whereby the holders of the Capital Securities
may direct the Guarantee Trustee to enforce its rights thereunder.
Notwithstanding the foregoing, if the Company has failed to make a payment
under the Guarantee, any holder of Capital Securities may institute a legal
proceeding directly against the Company to enforce its rights under the
Guarantee without first instituting a legal proceeding against the Trust, the
Guarantee Trustee, or any other person or entity.

The Guarantee, when taken together with the Company's obligations under
the Debentures and the Indenture and its obligations under the Declaration,
including its obligations to pay costs, expenses, debts and liabilities of
the Trust (other than with respect to the Trust Securities), has the effect
of providing a full and unconditional guarantee of amounts due on the Capital
Securities. See "Description of the Guarantee."

CERTAIN FEDERAL INCOME TAX CONSEQUENCES

The following is a summary of certain of the material United States
federal income tax consequences of the purchase, ownership and disposition of
FELINE PRIDES, Capital Securities and Common Stock acquired under a Purchase
Contract. Unless otherwise stated, this summary applies only to "U.S.
Holders" who purchase Income PRIDES, Growth PRIDES or Capital Securities upon
original issuance for an amount equal to the initial offering price thereof.
The term "U.S. Holder" means the beneficial owner of an Income PRIDES, Growth
<PAGE>
PRIDES or Capital Security who is (i) a person who is a citizen or resident
of the United States, (ii) a corporation or partnership created or organized
in or under the laws of the United States or any state thereof or the
District of Columbia, (iii) an estate the income of which is subject to
United States federal income taxation, regardless of its source, or (iv) a
trust if a court within the United States is able to exercise primary
supervision over the administration of such trust and one or more United
States persons have the authority to control all substantial decisions of
such trust. The tax treatment of a U.S. Holder may vary depending on such
U.S. Holder's particular situation. This summary does not deal with special
classes of U.S. Holders such as banks, thrifts, real estate investment
trusts, regulated investment companies, insurance companies, dealers in
securities or currencies, tax-exempt investors, certain U.S. expatriates, or
U.S. Holders that will hold FELINE PRIDES, Capital Securities or Common Stock
acquired under a Purchase Contract as a position in a "straddle," as part of
a "synthetic security" or "hedge," as part of a "conversion transaction" or
other integrated investment, or as other than a capital asset. This summary
does not address the tax consequences to U.S. Holders that have a functional
currency other than the U.S. dollar or the tax consequences to shareholders,
partners or beneficiaries of a U.S. Holder of FELINE PRIDES, Capital
Securities or Common Stock acquired pursuant to a Purchase Contract. Further,
it does not include any description of any alternative minimum tax
consequences or the tax laws of any state, local or foreign government that
may be applicable. PROSPECTIVE INVESTORS THAT ARE NOT UNITED STATES PERSONS
(WITHIN THE MEANING OF SECTION 7701(a)(30) OF THE CODE) ARE URGED TO CONSULT
THEIR OWN TAX ADVISORS REGARDING THE UNITED STATES FEDERAL INCOME TAX
CONSEQUENCES OF AN INVESTMENT IN FELINE PRIDES OR CAPITAL SECURITIES,
INCLUDING THE POTENTIAL APPLICATION OF UNITED STATES WITHHOLDING TAXES.

This summary is based upon the Internal Revenue Code of 1986, as amended
(the "Code"), Treasury regulations (including proposed Treasury regulations)
issued thereunder, Internal Revenue Service ("IRS") rulings and
pronouncements and judicial decisions now in effect, all of which are subject
to change. Any such changes may be applied retroactively in a manner that
could cause the tax consequences to vary substantially from the consequences
described below, possibly adversely affecting a U.S. Holder.

No statutory, administrative or judicial authority directly addresses
the treatment of FELINE PRIDES or instruments similar to FELINE PRIDES for
United States federal income tax purposes. As a result, no assurance can be
given that the IRS will agree with the tax consequences described herein.
PROSPECTIVE INVESTORS ARE URGED TO CONSULT THEIR OWN TAX ADVISORS WITH
RESPECT TO THE TAX CONSEQUENCES TO THEM OF THE PURCHASE, OWNERSHIP AND
DISPOSITION OF THE FELINE PRIDES OR CAPITAL SECURITIES IN LIGHT OF THEIR OWN
PARTICULAR CIRCUMSTANCES, INCLUDING THE TAX CONSEQUENCES UNDER STATE, LOCAL,
FOREIGN AND OTHER TAX LAWS AND THE POSSIBLE EFFECTS OF CHANGES IN UNITED
STATES FEDERAL OR OTHER TAX LAWS.

FELINE PRIDES

Allocation of Purchase Price. A U.S. Holder's acquisition of FELINE
PRIDES will be treated as an acquisition of a unit consisting of two
components--in the case of an Income PRIDES, the Capital Security and the
Purchase Contract constituting such Income PRIDES and, in the case of a
Growth PRIDES, the Treasury Security interest and the Purchase Contract
constituting such Growth PRIDES. The purchase price of each FELINE PRIDES
will be allocated between the two components in proportion to their
<PAGE>
respective fair market values at the time of purchase. Such allocation will
establish the U.S. Holder's initial tax basis in the Capital Security or
Treasury Security interest and the Purchase Contract. The Company will report
the fair market value of each Capital Security and Treasury Security interest
so that the entire purchase price of a FELINE PRIDES will be allocable to the
Capital Security or Treasury Security interest, as the case may be, and no
amount will be allocable to the Purchase Contract. This position will be
binding upon each U.S. Holder (but not on the IRS) unless such U.S. Holder
explicitly discloses a different position on a statement attached to such
U.S. Holder's timely filed United States federal income tax return for the
taxable year in which a FELINE PRIDES is acquired. Thus, absent such
disclosure, a U.S. Holder should allocate the purchase price for a FELINE
PRIDES in accordance with the foregoing. The remainder of this discussion
assumes that this allocation of purchase price will be respected for United
States federal income tax purposes. A different allocation could affect the
timing and character of income to a U.S. Holder.

Ownership of Capital Securities or Treasury Securities. A U.S. Holder
will be treated as owning the Capital Securities or Treasury Securities
constituting a part of the Income PRIDES or Growth PRIDES, respectively. The
Company and, by acquiring FELINE PRIDES, each U.S. Holder agree to treat such
U.S. Holder as the owner, for United States federal, state and local income
and franchise tax purposes, of the Capital Securities or Treasury Securities
constituting a part of the FELINE PRIDES beneficially owned by such U.S.
Holder. Based upon such agreement, the Company intends to take the position,
and the remainder of this summary assumes, that U.S. Holders of FELINE PRIDES
will be treated as the owners of the Capital Securities or Treasury
Securities constituting a part of such FELINE PRIDES for United States
federal, state and local income and franchise tax purposes. The United States
federal income tax consequences of owning the Capital Securities or Treasury
Securities are discussed below (see "--Capital Securities," "--Treasury
Securities" and "--Tax Event Redemption of Capital Securities.").

Sale or Disposition of FELINE PRIDES. Upon a disposition of FELINE
PRIDES, a U.S. Holder will be treated as having sold, exchanged or disposed
of the Purchase Contract and the Capital Securities, Treasury Portfolio or,
in the case of Growth PRIDES, the Treasury Securities, that constitute such
FELINE PRIDES and generally will have gain or loss equal to the difference
between the portion of the proceeds to such U.S. Holder allocable to the
Purchase Contract and the Capital Securities, Treasury Portfolio or Treasury
Securities, as the case may be, and such U.S. Holder's respective adjusted
tax bases in the Purchase Contract and the Capital Securities, Treasury
Portfolio or Treasury Securities. Such gain or loss generally will be capital
gain or loss, except to the extent that such U.S. Holder is treated as having
received an amount with respect to accrued but unpaid interest on the Capital
Securities or the Treasury Portfolio that such U.S. Holder has not included
in gross income previously, which amount will be treated as ordinary interest
income, or to the extent such U.S. Holder is treated as having received an
amount with respect to accrued Contract Adjustment Payments or Deferred
Contract Adjustment Payments, which may be treated as ordinary income, in
each case to the extent not previously included in income. Such gain or loss
generally will be capital gain or loss and generally will be long-term
capital gain or loss if the U.S. Holder held such Capital Securities for more
than one year immediately prior to such disposition. Long-term capital gains
of individuals are eligible for reduced rates of taxation depending upon the
holding period of such capital assets. The deductibility of capital losses is
subject to limitations. If the disposition of FELINE PRIDES occurs when the
<PAGE>
Purchase Contract has negative value, the U.S. Holder should be considered to
have received additional consideration for the Capital Securities, Treasury
Portfolio or Treasury Securities in an amount equal to such negative value
and to have paid such amount to be released from the U.S. Holder's obligation
under the Purchase Contract. U.S. Holders should consult their tax advisors
regarding a disposition of the FELINE PRIDES at a time when the Purchase
Contract has negative value.

In determining gain or loss, payments to a U.S. Holder of Contract
Adjustment Payments or Deferred Contract Adjustment Payments that have not
previously been included in the income of such U.S. Holder should either
reduce such U.S. Holder's tax basis in the Purchase Contract or result in an
increase in the amount realized on the disposition of the Purchase Contract.
Any Contract Adjustment Payments or Deferred Contract Adjustment Payments
included in a U.S. Holder's income but not paid should increase such U.S.
Holder's tax basis in the Purchase Contract. Payments in cash that have been
made by a U.S. Holder to create Growth PRIDES but not offset against payments
of Contract Adjustment Payments or Deferred Contract Adjustment Payments may
increase such U.S. Holder's tax basis in the Purchase Contract or result in a
decrease in the amount realized on the disposition of the Purchase Contract
(see "--Income from Contract Adjustment Payments and Deferred Contract
Adjustment Payments; Delivery of Cash" above).

Capital Securities

Classification of the Trust. In connection with the issuance of the
FELINE PRIDES, Simpson Thacher & Bartlett ("Tax Counsel"), will deliver an
opinion that, under current law and assuming compliance with the terms of the
Declaration, and based on certain facts and assumptions contained in such
opinion, the Trust will be classified as a grantor trust and not as an
association taxable as a corporation for United States federal income tax
purposes. As a result, each U.S. Holder of Capital Securities will be treated
as owning an undivided beneficial ownership interest in the Debentures.
Accordingly, each U.S. Holder of Capital Securities will be required to
include in its gross income its pro rata share of the interest income or OID
that is paid or accrued on the Debentures. See "--Interest Income and
Original Issue Discount."

Classification of the Debentures. The Company, the Trust and, by
acquiring Income PRIDES or Capital Securities, each U.S. Holder agree to
treat the Debentures as indebtedness of the Company for all United States tax
purposes. In connection with the issuance of the Debentures, Tax Counsel will
deliver an opinion that, under current law, and based on certain
representations, facts and assumptions set forth in such opinion, the
Debentures will be classified as indebtedness for United States federal
income tax purposes.

Interest Income and Original Issue Discount. Under the applicable
Treasury regulations, the Debentures will not be considered to have been
issued with OID within the meaning of Section 1273(a) of the Code.
Accordingly, except as set forth below, stated interest on the Debentures
generally will be included in income by a U.S. Holder at the time such
interest income is paid or accrued in accordance with such U.S. Holder's
regular method of tax accounting. If, however, the Company exercises its
right to defer payments of interest on the Debentures, U.S. Holders will be
required to accrue the stated interest on the Debentures (as OID) on a daily
economic accrual basis (using the constant-yield-to-maturity method of
<PAGE>
accrual set forth in Section 1272 of the Code) even though the Company will
not pay such interest during the deferral period, and even though some U.S.
Holders may use the cash method of tax accounting. Moreover, thereafter the
Debentures will be taxed as OID instruments for as long as they remain
outstanding. Thus, all U.S. Holders would be required to continue to include
the stated interest on the Debentures in income on a daily economic accrual
basis, regardless of their method of tax accounting and in advance of the
receipt of cash attributable to such interest income. Under the OID economic
accrual rules, a U.S. Holder would accrue an amount of interest income each
year that approximates the stated interest payments called for under the
terms of the Debentures, and actual cash payments of interest on the
Debentures would not be reported separately as taxable income. Any amount of
OID included in a U.S. Holder's gross income will increase such U.S. Holder's
tax basis in its Capital Securities, and the amount of a distribution
received by a U.S. Holder with respect to such Capital Securities will reduce
the tax basis of such Capital Securities.

The Treasury regulations described above have not yet been addressed in
any rulings or other interpretations by the IRS, and it is possible that the
IRS could take a contrary position. If the IRS were to assert successfully
that the stated interest on the Debentures was OID regardless of whether the
Company exercises its right to defer payments of interest on such Debentures,
all U.S. Holders would be required to include such stated interest in income
on a daily economic accrual basis as described above.

U.S. Holders that are corporations will not be entitled to a dividends
received deduction with respect to any income recognized with respect to the
Capital Securities.

Distribution of Debentures to U.S. Holders of Capital Securities. A
distribution by the Trust of the Debentures as described under the caption
"Description of the Capital Securities--Liquidation Distribution Upon
Dissolution" would be non-taxable to U.S. Holders. In such event, a U.S.
Holder would have an aggregate tax basis in the Debentures received in the
liquidation equal to the aggregate tax basis such U.S. Holder had in its
Capital Securities surrendered therefor, and the holding period of such
Debentures would include the period during which such U.S. Holder had held
such Capital Securities. Also, a U.S. Holder would continue to include
interest (or OID) in respect of Debentures received from the Trust in the
manner described under "--Interest Income and Original Issue Discount."

Sales, Exchanges or Other Dispositions of Capital Securities. Gain or
loss will be recognized by a U.S. Holder on a sale, exchange, redemption or
other taxable disposition (collectively, a "disposition") of a Capital
Security (including a redemption for cash or the remarketing thereof) in an
amount equal to the difference between the amount realized by the U.S. Holder
on the disposition of the Capital Security (except to the extent that such
amount realized is characterized as a payment in respect of accrued but
unpaid interest on such U.S. Holder's allocable share of the Debentures that
such U.S. Holder has not included in gross income previously, which amount
will be taxable as ordinary interest income) and the U.S. Holder's adjusted
tax basis in such Capital Security. Selling expenses incurred by a U.S.
Holder, including the remarketing fee, will reduce the amount of gain or
increase the amount of loss recognized by such U.S. Holder upon a disposition
of a Capital Security. Gain or loss realized by a U.S. Holder on a
disposition of a Capital Security generally will be capital gain or loss and
generally will be long-term capital gain or loss if the U.S. Holder held such
<PAGE>
Capital Security for more than one year immediately prior to such
disposition. Long-term capital gains of individuals are eligible for reduced
rates of taxation depending upon the holding period of such capital assets.
The deductibility of capital losses is subject to limitations.

Treasury Securities

Original Issue Discount. A U.S. Holder of Growth PRIDES will be required
to treat its ownership interest in the Treasury Securities comprising a
Growth PRIDES as an interest in a bond originally issued on the date such
Growth PRIDES is purchased and having OID equal to the excess of the Stated
Amount of the Growth PRIDES over the purchase price of the Growth PRIDES. A
U.S. Holder will be required to include such OID in income on a daily
economic accrual basis over the period between the issue date of the Growth
PRIDES and the day immediately preceding the Purchase Contract Settlement
Date, regardless of such U.S. Holder's method of tax accounting. Amounts of
OID included in a U.S. Holder's gross income will increase such U.S. Holder's
tax basis in its Treasury Security interest.

Sales, Exchanges or Other Dispositions of Treasury Securities. In the
event that a U.S. Holder obtains the release of Treasury Securities by
delivering Capital Securities to the Collateral Agent, gain or loss will be
recognized by the U.S. Holder on a subsequent disposition of the Treasury
Securities in an amount equal to the difference between the amount realized
by the U.S. Holder on such disposition and the U.S. Holder's adjusted tax
basis in the Treasury Securities. Such gain or loss generally will be capital
gain or loss and generally will be long-term capital gain or loss if the U.S.
Holder held such Treasury Securities for more than one year immediately prior
to such disposition. Long-term capital gains of individuals are eligible for
reduced rates of taxation depending upon the holding period of such capital
assets. The deductibility of capital losses is subject to limitations.

Purchase Contracts

Income From Contract Adjustment Payments and Deferred Contract
Adjustment Payments; Delivery of Cash. There is no direct authority
addressing the treatment, under current law, of the Contract Adjustment
Payments and Deferred Contract Adjustment Payments (if any), or the delivery
of cash in respect of excess accrued Contract Adjustment Payments (if any) by
a U.S. Holder of Income PRIDES upon the creation of Growth PRIDES and such
treatment is unclear. Contract Adjustment Payments and Deferred Contract
Adjustment Payments, if any, may constitute taxable income to a U.S. Holder
of FELINE PRIDES when received or accrued, in accordance with the U.S.
Holder's regular method of tax accounting. To the extent the Company is
required to file information returns with respect to Contract Adjustment
Payments or Deferred Contract Adjustment Payments, it intends to report such
payments as taxable income to each U.S. Holder. If Contract Adjustment
Payments are properly treated as taxable income, the delivery of cash by a
U.S. Holder in respect of excess accrued Contract Adjustment Payments upon
the creation of Growth PRIDES, should offset the amount of income that such
U.S. Holder would otherwise recognize for United States federal income tax
purposes with respect to such Contract Adjustment Payments for the relevant
taxable year. U.S. Holders should consult their own tax advisors concerning
the treatment of Contract Adjustment Payments and Deferred Contract
Adjustment Payments and the delivery of cash upon creation of Growth PRIDES,
including the possibility that any Contract Adjustment Payment or Deferred
Contract Adjustment Payment may be treated as a loan, purchase price
<PAGE>
adjustment, rebate or payment analogous to an option premium, rather than
being includible in income on a current basis, and that the delivery of cash
upon creation of Growth PRIDES may be treated as a purchase price adjustment,
rather than as an offset to Contract Adjustment Payments or Deferred Contract
Adjustment Payments. The treatment of Contract Adjustment Payments, Deferred
Contract Adjustment Payments and the delivery of cash upon creation of Growth
PRIDES could affect a U.S. Holder's tax basis in a Purchase Contract or
Common Stock received under a Purchase Contract or the amount realized by a
U.S. Holder upon the sale or disposition of a FELINE PRIDES or the
termination of a Purchase Contract. See "--Acquisition of Common Stock under
a Purchase Contract," "--Sale or Disposition of FELINE PRIDES" and
"--Termination of Purchase Contract."

Acquisition of Common Stock Under a Purchase Contract. A U.S. Holder of
FELINE PRIDES generally will not recognize gain or loss on the purchase of
Common Stock under a Purchase Contract, except with respect to any cash paid
in lieu of a fractional share of Common Stock. Subject to the following
discussion, a U.S. Holder's aggregate initial tax basis in the Common Stock
received under a Purchase Contract generally should equal the purchase price
paid for such Common Stock plus such U.S. Holder's tax basis in the Purchase
Contract (if any), less the portion of such purchase price and tax basis
allocable to the fractional share. Payments of Contract Adjustment Payments
or Deferred Contract Adjustment Payments that have been received in cash by a
U.S. Holder but not included in income by such U.S. Holder should reduce such
U.S. Holder's tax basis in the Purchase Contract or the Common Stock to be
received thereunder; payments in cash that have been made by a U.S. Holder to
create Growth PRIDES but not offset against payments of Contract Adjustment
Payments or Deferred Contract Adjustment Payments may increase such U.S.
Holder's tax basis in the Purchase Contract or the Common Stock to be
received thereunder (see "--Income from Contract Adjustment Payments and
Deferred Contract Adjustment Payments" above). The holding period for Common
Stock received under a Purchase Contract will commence on the day of the
acquisition of such Common Stock.

Ownership of Common Stock Acquired Under the Purchase Contract. Any
dividend on Common Stock paid by the Company out of its current or
accumulated earnings and profits (as determined for United States federal
income tax purposes) will be includible in income by a U.S. Holder when
received. Any such dividend will be eligible for the dividends received
deduction if received by an otherwise qualifying corporate U.S. Holder that
meets the holding period and other requirements for the dividends received
deduction.

Upon a disposition of Common Stock, a U.S. Holder generally will
recognize capital gain or loss equal to the difference between the amount
realized and such U.S. Holder's adjusted tax basis in the Common Stock. Such
gain or loss generally will be capital gain or loss and generally will be
long-term capital gain or loss if the U.S. Holder held such Common Stock for
more than one year immediately prior to such disposition. Long-term capital
gains of individuals are eligible for reduced rates of taxation depending
upon the holding period of such capital assets. The deductibility of capital
losses is subject to limitations.

Early Settlement of Purchase Contract. A U.S. Holder of FELINE PRIDES
will not recognize gain or loss on the receipt of such U.S. Holder's
proportionate share of Capital Securities, Treasury Securities or the
Treasury Portfolio upon Early Settlement of a Purchase Contract and will have
<PAGE>
the same tax basis in such Capital Securities, Treasury Securities or the
Treasury Portfolio as before such Early Settlement.

Termination of Purchase Contract. If a Purchase Contract terminates, a
U.S. Holder of FELINE PRIDES will recognize gain or loss equal to the
difference between the amount realized (if any) upon such termination and
such U.S. Holder's adjusted tax basis (if any) in the Purchase Contract at
the time of such termination. Payments of Contract Adjustment Payments or
Deferred Contract Adjustment Payments, if any, received by a U.S. Holder but
not included in income by such U.S. Holder should either reduce such U.S.
Holder's tax basis in the Purchase Contract or result in an amount realized
on the termination of the Purchase Contract. Any Contract Adjustment Payments
or Deferred Contract Adjustment Payments included in a U.S. Holder's income
but not paid should increase such U.S. Holder's tax basis in the Purchase
Contract; payments in cash that have been made by a U.S. Holder to create
Growth PRIDES but not offset against payments of Contract Adjustment Payments
or Deferred Contract Adjustment Payments may increase such U.S. Holder's tax
basis in the Purchase Contract or result in a deduction on the termination of
the Purchase Contract (see "--Income from Contract Adjustment Payments and
Deferred Contract Adjustment Payments" above). Such gain or loss generally
will be capital gain or loss and generally will be long-term capital gain or
loss if the U.S. Holder held such Purchase Contract for more than one year
immediately prior to such disposition. Long-term capital gains of individuals
are eligible for reduced rates of taxation depending upon the holding period
of such capital assets. The deductibility of capital losses is subject to
limitations. A U.S. Holder will not recognize gain or loss on the receipt of
such U.S. Holder's proportionate share of the Capital Securities, Treasury
Securities or Treasury Portfolio upon termination of the Purchase Contract
and will have the same tax basis in such Capital Securities, Treasury
Securities or Treasury Portfolio as before such distribution.

Adjustment to Settlement Rate. U.S. Holders of FELINE PRIDES might be
treated as receiving a constructive distribution from the Company if (i) the
Settlement Rate is adjusted and as a result of such adjustment the
proportionate interest of U.S. Holders of FELINE PRIDES in the assets or
earnings and profits of the Company is increased and (ii) the adjustment is
not made pursuant to a bona fide, reasonable anti-dilution formula. An
adjustment in the Settlement Rate would not be considered made pursuant to
such a formula if the adjustment were made to compensate a U.S. Holder for
certain taxable distributions with respect to the Common Stock. Thus, under
certain circumstances, an increase in the Settlement Rate might give rise to
a taxable dividend to U.S. Holders of FELINE PRIDES even though such U.S.
Holders would not receive any cash related thereto.

Substitution of Treasury Securities to Create or Recreate Growth PRIDES

A U.S. Holder of an Income PRIDES that delivers Treasury Securities to
the Collateral Agent in substitution for Capital Securities generally will
not recognize gain or loss upon the delivery of such Treasury Securities or
the release of the Capital Securities to such U.S. Holder. Such U.S. Holder
will continue to take into account items of income or deduction otherwise
includible or deductible, respectively, by such U.S. Holder with respect to
such Treasury Securities and Capital Securities, and such U.S. Holder's tax
basis in the Treasury Securities, the Capital Securities and the Purchase
Contract will not be affected by such delivery and release. Cash payments, if
any, made by a U.S. Holder of Income PRIDES which is creating Growth PRIDES
in respect of any rate differential on the Contract Adjustment Payments due
<PAGE>
on an Income PRIDES and a Growth PRIDES should offset the amount of income
that such U.S. Holder may be required to recognize for United States federal
income tax purposes with respect to such Contract Adjustment Payments. See
"Purchase Contracts - Income from Contract Adjustment Payments and Deferred
Contract Adjustment Payments; Delivery of Cash".

Substitution of Capital Securities to Create or Recreate Income PRIDES

A U.S. Holder of a Growth PRIDES that delivers Capital Securities to the
Collateral Agent in substitution for Treasury Securities generally will not
recognize gain or loss upon the delivery of such Capital Securities or the
release of the Treasury Securities to the U.S. Holder. Such U.S. Holder will
continue to take into account items of income or deduction otherwise
includible or deductible, respectively, by such U.S. Holder with respect to
such Treasury Securities and Capital Securities, and such U.S. Holder's tax
bases in the Treasury Securities, the Capital Securities and the Purchase
Contract will not be affected by such delivery and release.

Tax Event Redemption of Capital Securities

A Tax Event Redemption will be a taxable event for U.S. Holders of
Capital Securities. Gain or loss will be recognized by a U.S. Holder in an
amount equal to the difference between the Redemption Price (whether paid
directly to such U.S. Holder or applied by the Collateral Agent to the
purchase of the Treasury Portfolio on behalf of holders of Income PRIDES),
except to the extent of amounts paid in respect of accrued but unpaid
interest not previously included in income, which will be taxable as ordinary
interest income, and the U.S. Holder's adjusted tax basis in the Capital
Securities. Gain or loss realized by a U.S. Holder upon a Tax Event
Redemption generally will be capital gain or loss and generally will be long-
term capital gain or loss if the U.S. Holder held such Capital Securities for
more than one year immediately prior to such Tax Event Redemption. Long-term
capital gains of individuals are eligible for reduced rates of taxation
depending upon the holding period of such capital assets. The deductibility
of capital losses is subject to limitations.

Ownership of Treasury Portfolio. The Company, the Trust and, by
acquiring Income PRIDES, each U.S. Holder agree to treat such U.S. Holder as
the owner, for United States federal, state and local income and franchise
tax purposes, of the Applicable Ownership Interest of the Treasury Portfolio
constituting a part of the Income PRIDES beneficially owned by such U.S.
Holder in the event of a Tax Event Redemption prior to the Purchase Contract
Settlement Date. Based on such agreement, each U.S. Holder will include in
income any amount earned on such pro rata portion of the Treasury Portfolio
for all United States federal, state and local income and franchise tax
purposes. The remainder of this summary assumes that U.S. Holders of Income
PRIDES will be treated as the owners of the Applicable Ownership Interest of
the Treasury Portfolio constituting a part of such Income PRIDES for United
States federal, state and local income and franchise tax purposes.

Interest Income and Original Issue Discount. The Treasury Portfolio will
consist of stripped U.S. Treasury Securities. Following a Tax Event
Redemption prior to the Purchase Contract Settlement Date, a U.S. Holder of
Income PRIDES will be required to treat its pro rata portion of each U.S.
Treasury Security in the Treasury Portfolio as a bond that was originally
issued on the date the Collateral Agent acquired the relevant U.S. Treasury
Securities and will include OID in income over the life of the U.S. Treasury
<PAGE>
Securities in an amount equal to the U.S. Holder's pro rata portion of the
excess of the amounts payable on such U.S. Treasury Securities over the value
of the U.S. Treasury Securities at the time the Collateral Agent acquires
them on behalf of holders of Income PRIDES. The amount of such excess will
constitute only a portion of the total amounts payable in respect of the
Treasury Portfolio. Consequently, a portion of each scheduled interest
payment to U.S. Holders will be treated as a tax-free return of the U.S.
Holder's investment in the Treasury Portfolio and will not be considered
current income for United States federal income tax purposes.

A U.S. Holder, whether on the cash or accrual method of tax accounting,
will be required to include OID (other than OID on short-term U.S. Treasury
Securities as defined below) in income for United States federal income tax
purposes as it accrues on a constant yield to maturity basis. See "--Interest
Income and Original Issue Discount" above. In the case of any U.S. Treasury
Security with a maturity of one year or less from the date it is purchased (a
"short-term U.S. Treasury Security"), in general only accrual basis taxpayers
will be required to include OID in income as it is accrued. Unless such an
accrual basis U.S. Holder elects to accrue the OID on a short-term U.S.
Treasury Security according to the constant-yield-to-maturity method, such
OID will be accrued on a straight-line basis.

Tax Basis of the Treasury Portfolio. A U.S. Holder's initial tax basis
in such U.S. Holder's Applicable Ownership Interest of the Treasury Portfolio
will equal such U.S. Holder's pro rata portion of the amount paid by the
Collateral Agent for the Treasury Portfolio. A U.S. Holder's tax basis in the
Treasury Portfolio will be increased by the amount of OID included in income
with respect thereto and decreased by the amount of cash received in respect
of the Treasury Portfolio.

Backup Withholding Tax and Information Reporting

Payments under the FELINE PRIDES, Capital Securities or Common Stock
acquired under a Purchase Contract, the proceeds received with respect to a
fractional share of Common Stock upon the settlement of a Purchase Contract,
and the sale of FELINE PRIDES, Capital Securities or Common Stock acquired
under a Purchase Contract, may be subject to information reporting and United
States federal backup withholding tax at the rate of 31% if the U.S. Holder
thereof fails to supply an accurate taxpayer identification number or
otherwise fails to comply with applicable United States information reporting
or certification requirements. Any amounts so withheld will be allowed as a
credit against such U.S. Holder's United States federal income tax liability.

UNDERWRITING

Subject to the terms and conditions set forth in an Underwriting
Agreement (the "Underwriting Agreement") among the Company, the Trust and
Merrill Lynch, Pierce, Fenner & Smith Incorporated, (the "Underwriter"), the
Company and the Trust have agreed to sell to the Underwriter, and the
Underwriter has agreed to purchase from the Company and the Trust, 12,600,000
Income PRIDES, 1,400,000 Growth PRIDES and 1,400,000 Capital Securities. In
the Underwriting Agreement, the Underwriter has agreed, subject to the terms
and conditions set forth therein, to purchase all of the Income PRIDES,
Growth PRIDES and Capital Securities offered hereby if any of the Income
PRIDES, Growth PRIDES or Capital Securities are purchased.
<PAGE>
The Underwriter has advised the Company and the Trust that it proposes
initially to offer the Income PRIDES, Growth PRIDES and Capital Securities to
the public at the public offering price set forth on the cover page of this
Prospectus Supplement and to certain dealers at such price less a concession
not in excess of $.45 per Income PRIDES, $.345 per Growth PRIDES and $.125
per Capital Security. After the initial public offering, the public offering
prices and concessions may be changed.

Until the distribution of the Securities is completed, rules of the
Commission may limit the ability of the Underwriter and any selling group
members to bid for and purchase the Securities or shares of Common Stock. As
an exception to these rules, the Underwriter is permitted to engage in
certain transactions that stabilize the price of the Securities or the Common
Stock. Such transactions consist of bids or purchases for the purpose of
pegging, fixing or maintaining the price of the Securities or the Common
Stock.

If the Underwriter creates a short position in the Securities in
connection with the Offering, i.e., if it sells more Securities than are set
forth on the cover page of this Prospectus Supplement, the Underwriter may
reduce that short position by purchasing Securities in the open market. The
Underwriter may also elect to reduce any short position by exercising all or
part of the over-allotment options described below.

The Underwriter may also impose a penalty bid on certain selling group
members. This means that if the Underwriter purchases Securities in the open
market to reduce the Underwriter's short position or to stabilize the price
of the Securities, it may reclaim the amount of the selling concession from
any selling group members who sold those Securities as part of the Offering.

In general, purchases of a security for the purpose of stabilization or
to reduce a short position could cause the price of the security and the
Common Stock of the Company to be higher than it might be in the absence of
such purchases. The imposition of a penalty bid might also have an effect on
the price of a security to the extent that it were to discourage resales of
the security.

Neither the Company, the Trust nor the Underwriter makes any
representation or prediction as to the direction or magnitude of any effect
that the transactions described above may have on the price of the Securities
or the Common Stock. In addition, neither the Company nor the Underwriter
makes any representation that the Underwriter will engage in such transaction
or that such transactions, once commenced, will not be discontinued without
notice.

The Company and the Trust have granted to the Underwriter options,
exercisable for 30 days following the date of this Prospectus Supplement, to
purchase up to an additional 1,890,000 Income PRIDES, 210,000 Growth PRIDES
and 210,000 Capital Securities from the Company and the Trust at the Price to
Public set forth on the cover page of this Prospectus Supplement less the
underwriting discount; provided, however, that the Underwriter must purchase,
proportionally, at least as many Capital Securities as Growth PRIDES and must
purchase, proportionately, at least as many Growth PRIDES as Income PRIDES.
The Underwriter may exercise these options only to cover over-allotments, if
any, made on the sale of the Income PRIDES, Growth PRIDES and Capital
Securities offered hereby.
<PAGE>
The Company and the Trust have agreed, for a period of 90 days after the
date of this Prospectus Supplement, to not, without the prior written consent
of the Underwriter, directly or indirectly, sell, offer to sell, grant any
option for the sale of, or otherwise dispose of, or enter into any agreement
to sell, any Income PRIDES, Growth PRIDES, Purchase Contracts, Capital
Securities or Common Stock, as the case may be, or any securities of the
Company similar to the Income PRIDES, Growth PRIDES, Purchase Contracts,
Capital Securities or Common Stock or any security convertible into or
exchangeable or exercisable for Income PRIDES, Growth PRIDES, Purchase
Contracts, Capital Securities or Common Stock other than shares of Common
Stock or options for shares of Common Stock issued pursuant to or sold in
connection with any employee benefit, dividend reinvestment and stock option
and stock purchase plans of the Company and its subsidiaries and other than
the Growth PRIDES or Income PRIDES to be created or recreated upon
substitution of Pledged Securities, or shares of Common Stock issuable upon
early settlement of the Income PRIDES or Growth PRIDES or upon exercise of
stock options.

Prior to this offering, there has been no public market for the Income
PRIDES, Growth PRIDES and the Capital Securities. The public offering price
for the Income PRIDES, Growth PRIDES and the Capital Securities was
determined in negotiations between the Company, the Trust and the
Underwriter. In determining the terms of the Income PRIDES, Growth PRIDES and
the Capital Securities including the public offering price, the Company, the
Trust and the Underwriter considered the market price of the Common Stock and
also considered the Company's recent results of operations, the future
prospects of the Company and the industry in general, market prices and terms
of, and yields on, securities of other companies considered to be comparable
to the Company and prevailing conditions in the securities markets. The
Income PRIDES and Growth PRIDES have been approved for listing on the NYSE.
If Capital Securities are separately traded to a sufficient extent that the
applicable exchange listing requirements are met, the Company will endeavor
to cause such securities to be listed on such exchange on which the Income
PRIDES and the Growth PRIDES are then listed, including, if applicable, the
NYSE. There can be no assurance that an active trading market will develop
for the Income PRIDES, the Growth PRIDES or the Capital Securities or that
the Income PRIDES, Growth PRIDES or Capital Securities will trade in the
public market subsequent to the offering at or above the initial public
offering price.

The Company and the Trust have agreed to indemnify the Underwriter
against, or to contribute to payments that the Underwriters may be required
to make in respect of, certain liabilities, including liabilities under the
Securities Act of 1933, as amended.

This Prospectus Supplement, as amended or stickered, may be used by the
Remarketing Agent for remarketing the Capital Securities at such time as is
necessary.

In the ordinary course of their respective businesses, the Underwriter
and its affiliates have performed, and may in the future perform, investment
banking and/or commercial banking services for the Company.

LEGAL OPINIONS

The validity of the Purchase Contracts, the Debentures and Guarantee
will be passed upon for the Company and the Trust by Simpson, Thacher &
<PAGE>
Bartlett, New York, New York. Certain matters of Delaware law with respect to
the validity of the Capital Securities offered hereby will be passed upon for
the Company and the Trust by Richards, Layton & Finger P.A., special Delaware
counsel to the Company and the Trust. The validity of the Common Stock will
be passed upon by Patricia Nachtigal, Vice President and General Counsel of
the Company. As of February 27, 1998, Ms. Nachtigal owned 26,735 shares of
Common Stock and had options to purchase an additional 162,000 shares. The
validity of the Purchase Contracts, the Common Stock issuable upon settlement
thereof, the Debentures and the Capital Securities, will be passed upon for
the Underwriter by Skadden, Arps, Slate, Meagher & Flom LLP, New York, New
York.
<PAGE>
INDEX OF TERMS FOR PROSPECTUS SUPPLEMENT

1940 Act . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . S-51
Applicable Market Value . . . . . . . . . . . . . . . . . . . . . . . . S-12
Bankruptcy Code . . . . . . . . . . . . . . . . . . . . . . . . . . . . S-13
Beneficial Owner . . . . . . . . . . . . . . . . . . . . . . . . . . . S-55
Capital Securities . . . . . . . . . . . . . . . . . . . . . . . . . . S-1
Change in 1940 Act Law . . . . . . . . . . . . . . . . . . . . . . . . S-51
Code . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . S-66
Collateral Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . S-8
Common Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . S-2
Common Stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . S-2
Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . S-1
Compound Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . S-62
Contract Adjustment Payments . . . . . . . . . . . . . . . . . . . . . S-2
Custodial Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . S-14
Debentures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . S-2
Debt Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . S-60
Declaration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . S-6
Declaration Events of Default . . . . . . . . . . . . . . . . . . . . . S-52
Deferred Contract Adjustment Payments . . . . . . . . . . . . . . . . . S-10
Depositary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . S-44
Direct Action . . . . . . . . . . . . . . . . . . . . . . . . . . . . S-27
Direct Participants . . . . . . . . . . . . . . . . . . . . . . . . . . S-44
Disposition . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . S-68
Early Settlement . . . . . . . . . . . . . . . . . . . . . . . . . . . S-13
Exchange Act . . . . . . . . . . . . . . . . . . . . . . . . . . . . . S-44
Extension Periods . . . . . . . . . . . . . . . . . . . . . . . . . . . S-15
Failed Remarketing . . . . . . . . . . . . . . . . . . . . . . . . . . S-3
FELINE PRIDES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . S-1
FELINE PRIDES Certificate . . . . . . . . . . . . . . . . . . . . . . . S-39
Global Security . . . . . . . . . . . . . . . . . . . . . . . . . . . . S-64
Global Security Certificates . . . . . . . . . . . . . . . . . . . . . S-44
Growth PRIDES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . S-2
Guarantee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . S-3
Guarantee Payments . . . . . . . . . . . . . . . . . . . . . . . . . . S-57
Indenture . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . S-60
Indenture Event of Default . . . . . . . . . . . . . . . . . . . . . . S-52
Indirect Participants . . . . . . . . . . . . . . . . . . . . . . . . . S-44
Ingersoll-Rand Company . . . . . . . . . . . . . . . . . . . . . . . . S-1
Ingersoll-Rand Trustees . . . . . . . . . . . . . . . . . . . . . . . . S-6
Institutional Trustee . . . . . . . . . . . . . . . . . . . . . . . . . S-31
Interest Payment Date . . . . . . . . . . . . . . . . . . . . . . . . . S-60
IRS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . S-66
NYSE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . S-1
OID . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . S-2
Participants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . S-44
Payment Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . S-11
Pledge Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . S-8
Pledged Securities . . . . . . . . . . . . . . . . . . . . . . . . . . S-23
Preference Stock . . . . . . . . . . . . . . . . . . . . . . . . . . . S-32
Primary Treasury Dealer . . . . . . . . . . . . . . . . . . . . . . . . S-62
Property Account . . . . . . . . . . . . . . . . . . . . . . . . . . . S-31
Purchase Contract . . . . . . . . . . . . . . . . . . . . . . . . . . . S-2
Purchase Contract Agent . . . . . . . . . . . . . . . . . . . . . . . . S-8
Purchase Contract Agreement . . . . . . . . . . . . . . . . . . . . . . S-8
<PAGE>
Purchase Contract Settlement Date . . . . . . . . . . . . . . . . . . . S-2
Redemption Price . . . . . . . . . . . . . . . . . . . . . . . . . . . S-4
Reference Price . . . . . . . . . . . . . . . . . . . . . . . . . . . . S-2
Regular Trustees . . . . . . . . . . . . . . . . . . . . . . . . . . . S-31
Remarketing Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . S-11
Remarketing Agreement . . . . . . . . . . . . . . . . . . . . . . . . . S-11
Remarketing Fee . . . . . . . . . . . . . . . . . . . . . . . . . . . . S-3
Remarketing Underwriting Agreement . . . . . . . . . . . . . . . . . . S-11
Reset Announcement Date . . . . . . . . . . . . . . . . . . . . . . . . S-50
Reset Rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . S-3
Reset Spread . . . . . . . . . . . . . . . . . . . . . . . . . . . . . S-3
Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . S-1
Senior Indebtedness . . . . . . . . . . . . . . . . . . . . . . . . . . S-3
Settlement Rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . S-2
Short-term U.S. Treasury Security . . . . . . . . . . . . . . . . . . . S-71
Sponsor . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . S-6
Stated Amount . . . . . . . . . . . . . . . . . . . . . . . . . . . . . S-2
Successor Securities . . . . . . . . . . . . . . . . . . . . . . . . . S-54
Super-Majority . . . . . . . . . . . . . . . . . . . . . . . . . . . . S-53
Tax Counsel . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . S-67
Tax Event Redemption . . . . . . . . . . . . . . . . . . . . . . . . . S-4
Tax Event Redemption Date . . . . . . . . . . . . . . . . . . . . . . . S-61
Threshold Appreciation Price . . . . . . . . . . . . . . . . . . . . . S-2
Treasury Securities . . . . . . . . . . . . . . . . . . . . . . . . . . S-2
Trust . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . S-1
Trust Indenture Act . . . . . . . . . . . . . . . . . . . . . . . . . . S-6
Trust Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . S-2
Underwriter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . S-72
Underwriting Agreement . . . . . . . . . . . . . . . . . . . . . . . . S-72

<PAGE>
[THIS PAGE LEFT INTENTIONALLY BLANK]
<PAGE>
PROSPECTUS
$1,200,000,000
INGERSOLL-RAND COMPANY
Stock Purchase Contracts,
Stock Purchase Units and Debentures
INGERSOLL-RAND
FINANCING I
Capital Securities
Guaranteed as Set Forth Herein By
INGERSOLL-RAND COMPANY

Ingersoll-Rand Company (the "Company") may from time to time offer
together or separately (i) Stock Purchase Contracts ("Stock Purchase
Contracts") to purchase shares of common stock, $2 par value per share
("Common Stock"), of the Company, (ii) Stock Purchase Units, each
representing ownership of a Stock Purchase Contract and Capital Securities
(as defined below) or debt obligations of third parties, including U.S.
Treasury securities, securing the holder's obligation to purchase Common
Stock under the Stock Purchase Contracts ("Stock Purchase Units"), and (iii)
its subordinated debentures (the "Debentures"). Ingersoll-Rand Financing I, a
statutory business trust created under the laws of the State of Delaware (the
"Trust"), may offer capital securities ("Capital Securities"), representing
undivided beneficial ownership interests in the assets of the Trust. The
Stock Purchase Contracts, Stock Purchase Units, Debentures and Capital
Securities are collectively called the "Securities."

The Securities offered pursuant to this Prospectus may be issued in one
or more series or issuances and will be limited to $1,200,000,000 aggregate
public offering price (or, in the case of Debentures, its equivalent (based
on the applicable exchange rate at the time of issue) if issued with
principal amounts denominated in one or more foreign currencies, or such
greater amount if issued at an original issue discount, as shall result in
aggregate proceeds of $1,200,000,000). Certain specific terms of the
particular Securities in respect of which this Prospectus is being delivered
are set forth in the accompanying Prospectus Supplement (the "Prospectus
Supplement"), including, where applicable, (i) in the case of Stock Purchase
Contracts, the number of shares of Common Stock issuable thereunder, the
purchase price of the Common Stock, the date or dates on which the Common
Stock is required to be purchased by the holders of the Stock Purchase
Contracts, any periodic payments required to be made by the Company to the
holders of the Stock Purchase Contracts or vice versa, and the terms of the
offering and sale thereof, (ii) in the case of Stock Purchase Units, the
specific terms of the Stock Purchase Contracts and any Capital Securities or
debt obligations of third parties securing the holder's obligation to
purchase the Common Stock under the Stock Purchase Contracts, and the terms
of the offering and sale thereof, (iii) in the case of Debentures, the
specific designation, aggregate principal amount, denominations, maturity,
interest payment dates, interest rate (which may be fixed or variable) or
method of calculating interest, if any, applicable Extension Period (as
defined below) or interest deferral terms, if any, place or places where
principal, premium, if any, and interest, if any, will be payable, any terms
of redemption, any sinking fund provisions, terms for any conversion or
exchange into other securities, initial offering or purchase price, methods
of distribution and any other special terms, and (iv) in the case of Capital
Securities, the specific title, aggregate amount, stated liquidation
preference, number of securities, the rate of payment of periodic cash
distributions ("Distributions") or method of calculating such rate,
<PAGE>
applicable Extension Period or Distribution deferral terms, if any, place or
places where Distributions will be payable, any terms of redemption, initial
offering or purchase price, methods of distribution and any other special
terms. If so specified in the applicable Prospectus Supplement, the
Securities offered thereby may be issued in whole or in part in the form of
one or more temporary or permanent global securities ("Global Securities").

The Debentures will be senior unsecured obligations of the Company and
will rank pari passu in right of payment with all of the Company's other
senior unsecured obligations. If provided in an accompanying Prospectus
Supplement, the Company will have the right to defer payments of interest on
any series of Debentures by extending the interest payment period thereon at
any time or from time to time for such number of consecutive interest payment
periods (which shall not extend beyond the maturity of the Debentures) with
respect to each deferral period as may be specified in such Prospectus
Supplement (each, an "Extension Period"). See "Description of Debentures--
Option to Defer Interest Payments."

The Company will be the owner of the common securities (the "Common
Securities," and, together with the Capital Securities, the "Trust
Securities") of the Trust. The payment of Distributions with respect to the
Capital Securities and payments on liquidation or redemption with respect to
the Capital Securities, in each case out of funds held by the Trust, will be
irrevocably guaranteed by the Company to the extent described herein (the
"Guarantee"). Certain payments in respect of the Common Securities may also
be guaranteed by the Company. See "Description of the Guarantee." The
obligations of the Company under the Guarantee will be senior unsecured
obligations of the Company and will rank pari passu with all of the Company's
other senior unsecured obligations. Concurrently with the issuance by the
Trust of the Capital Securities, the Trust will invest the proceeds thereof
and any contributions made in respect of the Common Securities in the
Debentures, which will have terms corresponding to the terms of the Capital
Securities. The Debentures will be the sole assets of the Trust, and payments
under the Debentures and those made by the Company in respect of fees and
expenses incurred by the Trust will be the only revenue of the Trust. Upon
the occurrence of certain events as are described herein and in the
accompanying Prospectus Supplement, the Company may redeem the Debentures and
cause the redemption of the Trust Securities. In addition, if provided in the
applicable Prospectus Supplement, the Company may dissolve the Trust at any
time and, after satisfaction of the liabilities to creditors of the Trust as
provided by applicable law, cause the Debentures to be distributed to the
holders of the Capital Securities in liquidation of their interest in the
Trust. See "Description of Capital Securities--Redemption--Distribution of
Debentures" and "--Liquidation Distribution Upon Dissolution."

Holders of the Capital Securities will be entitled to receive cumulative
cash Distributions accruing from the date of original issuance and payable
periodically as specified in an accompanying Prospectus Supplement. If
provided in an accompanying Prospectus Supplement, the Company will have the
right to defer payments of interest on the Debentures by extending the
interest payment period thereon at any time or from time to time for one or
more Extension Periods (which shall not extend beyond the maturity of the
Debentures). If interest payments are so deferred, Distributions on the
Capital Securities will also be deferred and the Company will not be
permitted, subject to certain exceptions set forth herein, to declare or pay
any cash distributions with respect to the Company's capital stock or debt
securities that rank pari passu with or junior to the Debentures. During an
<PAGE>
Extension Period, Distributions will continue to accumulate (and the Capital
Securities will accumulate additional Distributions thereon at the rate per
annum if and as specified in the related Prospectus Supplement). See
"Description of Capital Securities--Distributions."

Taken together, the Company's obligations under the Debentures, the
Indenture (as defined herein), the Declaration (as defined herein) and the
Guarantee, in the aggregate, have the effect of providing a full, irrevocable
and unconditional guarantee of payments of Distributions and other amounts
due on the Capital Securities. See "Relationship Among the Capital
Securities, the Debentures and the Guarantee."

The Common Stock is listed on the New York Stock Exchange, the London
Stock Exchange and the Amsterdam Stock Exchange under the trading symbol
"IR." The Prospectus Supplement will state whether any Securities offered
thereby will be listed on any national securities exchange. If such
Securities are not listed on any national securities exchange, there can be
no assurance that there will be a secondary market for any such Securities.

THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF
THIS PROSPECTUS. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.

The Company may sell the Securities to or through underwriters, through
dealers or agents, directly to purchasers or through a combination of such
methods. See "Plan of Distribution." The accompanying Prospectus Supplement
sets forth the names of any underwriters, dealers or agents, if any, involved
in the sale of the Securities in respect of which this Prospectus is being
delivered and any applicable fee, commission or discount arrangements with
them.

THIS PROSPECTUS MAY NOT BE USED TO CONSUMMATE SALES OF SECURITIES
UNLESS ACCOMPANIED BY A PROSPECTUS SUPPLEMENT.

THE DATE OF THIS PROSPECTUS IS MARCH 17, 1998.
<PAGE>
No dealer, salesperson or other person has been authorized to give any
information or make any representations, other than those contained or
incorporated by reference in this Prospectus and the applicable Prospectus
Supplement, and if given or made such information or representations must not
be relied upon as having been authorized by the Company or the Trust or any
agent, underwriter or dealer. This Prospectus and the applicable Prospectus
Supplement do not constitute an offer of any securities other than those to
which they relate, or an offer to sell or a solicitation of an offer to buy
those to which they relate in any jurisdiction to any person to whom it is
unlawful to make such offer or solicitation in such jurisdiction. The
delivery of this Prospectus and/or the applicable Prospectus Supplement at
any time does not imply that the information herein or therein is correct as
of any time subsequent to its date.

AVAILABLE INFORMATION

The Company is subject to the informational requirements of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and, in
accordance therewith, files reports, proxy statements and other information
with the Securities and Exchange Commission (the "Commission"). Such reports,
proxy statements and other information filed by the Company with the
Commission can be inspected and copied at the public reference facilities of
the Commission at Room 1024, 450 Fifth Street, N.W., Washington, D.C. 20549
and at the regional offices of the Commission located at 7 World Trade
Center, 13th Floor, Suite 1300, New York, New York 10048 and Suite 1400,
Citicorp Center, 14th Floor, 500 West Madison Street, Chicago, Illinois
60661. Copies of such material can also be obtained at prescribed rates by
writing to the Public Reference Section of the Commission at 450 Fifth
Street, N.W., Washington, D.C. 20549. The Commission also maintains a site on
the world wide web at http:www.sec.gov that contains reports, proxy and
information statements and other information filed electronically by the
Company. In addition, such reports, proxy statements and other information
may be inspected at the offices of the New York Stock Exchange, 20 Broad
Street, New York, New York 10005, upon which the Common Stock is traded.

This Prospectus constitutes a part of a registration statement on Form
S-3 (together with all amendments and exhibits thereto, the "Registration
Statement") filed by the Company and the Trust with the Commission under the
Securities Act of 1933, as amended (the "Securities Act"). This Prospectus
and any accompanying Prospectus Supplement do not contain all of the
information set forth in the Registration Statement, certain parts of which
are omitted in accordance with the rules and regulations of the Commission.
For further information with respect to the Company, the Trust and the
Securities offered hereby, reference is made to the Registration Statement
and the exhibits and the financial statements, notes and schedules filed as a
part thereof or incorporated by reference therein, which may be inspected at
the public reference facilities of the Commission, at the addresses set forth
above. Statements made in this Prospectus and any Prospectus Supplement
concerning the contents of any documents referred to herein are not
necessarily complete, and in each instance reference is hereby made to the
copy of such document filed as an exhibit to the Registration Statement or
otherwise filed with the Commission.

No separate financial statements of the Trust have been included herein.
The Company and the Trust do not consider that such financial statements
would be material to holders of the Capital Securities because the Trust is a
newly formed special purpose entity, has no operating history or independent
<PAGE>
operations and is not engaged in and does not propose to engage in any
activity other than its holding as trust assets the Debentures and the
issuance of the Trust Securities. See "The Trust," "Description of
Debentures," "Description of Capital Securities" and "Description of the
Guarantee."

INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE

The Company's Annual Report on Form 10-K for the fiscal year ended
December 31, 1997, the Company's Current Reports on Form 8-K dated October
31, 1997 and March 9, 1998 are incorporated herein by reference and made a
part of this Prospectus, and all documents filed by the Company with the
Commission pursuant to Sections 13(a), 13(c), 14 or 15(d) of the 1934 Act
subsequent to the date of this Prospectus but prior to the termination of the
offering of the Securities shall be deemed to be incorporated herein by
reference and made a part of this Prospectus from the date of filing of such
documents. Any statement contained in a document incorporated or deemed to be
incorporated by reference herein shall be deemed to be modified or superseded
for purposes of this Prospectus and any amendment or supplement hereto to the
extent that a statement contained herein or in any other subsequently filed
document which also is or is deemed to be incorporated by reference herein
modifies or supersedes such statement. Any statement so modified or
superseded shall not be deemed, except as so modified or superseded, to
constitute a part of this Prospectus or any such amendment or supplement.

The Company will provide without charge to each person, including any
beneficial owner, to whom this Prospectus is delivered, on the written or
oral request of any such person, a copy of any or all of the foregoing
documents incorporated herein by reference (other than exhibits to such
documents unless such exhibits are specifically incorporated by reference
into such documents). Requests should be directed to Ingersoll-Rand Company,
P.O. Box 8738, Woodcliff Lake, New Jersey 07675, Attention: R.G. Heller,
Secretary (telephone 201-573-0123).

THE COMPANY

Ingersoll-Rand manufactures and sells primarily nonelectrical machinery
and equipment. Principal products include the following:

Agricultural sprayers
Air balancers
Air compressors & accessories
Air dryers
Air logic controls
Air motors
Air and electric tools
Architectural hardware trim
Asphalt compactors
Asphalt pavers
Automated production systems
<PAGE>
Automotive components
Ball bearings
Blasthole drills
Blowers
Centrifugal pumps
Compact hydraulic excavators
Construction equipment
Diaphragm pumps
Directional drills
Door closers
Door control hardware
Door locks, latches & locksets
Doors and door frames (steel)
Drilling equipment and accessories
Electrical security systems
Engineered pumps
Engine-starting systems
Exit devices
Extrusion pump systems
Fastener-tightening systems
Fluid-handling equipment
Foundation drills
<PAGE>
Golf cars
Hoists
Hydraulic breakers
Lubrication equipment
Material handling equipment
Mining equipment
Multistage pumps
Needle roller bearings
Parts-washing systems
Paving equipment
Pneumatic breakers
Pneumatic cylinders
Pneumatic valves
Portable compressors
Portable generators
Portable light towers
Reciprocating pumps
Road-building machinery
Rock drills
Rock stabilizers
Roller bearings
Rotary drills
Rotary pumps
Rough-terrain forklifts
Skid-steer loaders
Soil compactors
Spray-coating systems
Submersible pumps
Transport temperature control systems
Utility vehicles
Vacuum pumps
Vertical turbine pumps
Waterjet-cutting systems
Water-well drills
Winches
<PAGE>
These products are sold primarily under the Company's name and also
under other names including ABG, Aro, Beebe, Blaw-Knox, Bobcat, Carryall,
Centac, Charles Maire, Club Car, Crawlair, Cyclone, Ecoair, Elite, Dixie-
Pacific Fafnir, Falcon, Glynn-Johnson, Ingersoll-Dresser Pumps, Jeumont-
Schneider Pumps, Kilian, Klemm, LCN, McCartney, Melroe, Montabert, NREC,
Newman Tonks, Normbau, Pacific, Phoenix, Pleuger, Promaxx, Samiia, Schlage,
Sensor I, Sierra, Spra-Coupe, Steelcraft, Tensor I, Thermo King, Torrington,
Von Duprin, Worthington and Zimmerman.

The Company employs approximately 47,000 people. It has over 100
manufacturing plants throughout the world.

During the last three years, the Company has been involved in an
aggressive acquisition and divestment program. The larger acquisitions
included the following:

-- the May 1995 acquisition of Clark Equipment Company for
approximately $1.5 billion.

The larger divestitures included:

-- the February 1997 sale of the Company's Clark-Hurth Group to Dana
Corporation for approximately $260 million.

-- the March 1996 sale of the Company's Pulp Machinery Division for
approximately $122 million to Beloit Corporation, a subsidiary of
Harnischfeger Industries, Inc.

-- the December 1996 sale of the remainder of the Process Systems
Group for approximately $58 million to Gencor Industries, Inc.

The Company's principal executive offices are at 200 Chestnut Ridge
Road, Woodcliff Lake, New Jersey 07675 (telephone 201-573-0123).

THE TRUST

The Trust is a statutory business trust created under Delaware law
pursuant to (i) a trust agreement, dated as of August 18, 1997, executed by
the Company, as depositor (the "Sponsor"), and certain of the trustees of the
Trust (the "Ingersoll-Rand Trustees") and (ii) the filing of a certificate of
trust with the Secretary of State of the State of Delaware on August 18,
1997. Such trust agreement will be amended and restated in its entirety (as
so amended and restated, the "Declaration") substantially in the form filed
as an exhibit to the Registration Statement of which this Prospectus forms a
<PAGE>
part. The Declaration will be qualified as an indenture under the Trust
Indenture Act of 1939, as amended (the "Trust Indenture Act"). The Company
will directly or indirectly acquire Common Securities in an aggregate
liquidation amount equal to 3% of the total of the Trust. The Trust exists
for the exclusive purposes of (i) issuing the Trust Securities representing
undivided beneficial interests in its assets, (ii) investing the proceeds of
the Trust Securities in the Debentures and (iii) engaging in only those other
activities necessary or incidental thereto. Unless otherwise specified in the
applicable Prospectus Supplement, the Trust has a term of approximately seven
years, but may dissolve earlier as provided in the Declaration.

Pursuant to the Declaration, the number of Ingersoll-Rand Trustees
initially is five. Three of the Ingersoll-Rand Trustees (the "Regular
Trustees") are persons who are employees or officers of or who are affiliated
with the Company. Pursuant to the Declaration, the fourth trustee will be a
financial institution that is unaffiliated with the Company, which trustee
serves as institutional trustee under the Declaration and as indenture
trustee for the purposes of compliance with the provisions of the Trust
Indenture Act (the "Institutional Trustee"). For the purpose of compliance
with the provisions of the Trust Indenture Act, the Institutional Trustee
will also act as trustee (the "Guarantee Trustee") under the Guarantee and an
affiliate of the Guarantee Trustee will act as the trustee in the State of
Delaware (the "Delaware Trustee") for the purposes of the Trust Act (as
defined herein), until removed or replaced by the holder of the Common
Securities. See "Description of the Guarantee" and "Description of Capital
Securities--Voting Rights; Amendment of Declaration."

The Institutional Trustee will hold title to the Debentures for the
benefit of the holders of the Trust Securities and the Institutional Trustee
will have the power to exercise all rights, powers and privileges under the
Indenture (as defined herein) as the holder of the Debentures. In addition,
the Institutional Trustee will maintain exclusive control of a segregated
non-interest bearing bank account (the "Property Account") to hold all
payments made in respect of the Debentures for the benefit of the holders of
the Trust Securities. The Institutional Trustee will make payments of
distributions and payments on liquidation, redemption and otherwise to the
holders of the Trust Securities out of funds from the Property Account. The
Guarantee Trustee will hold the Guarantee for the benefit of the holders of
the Capital Securities. The Company, as the direct or indirect holder of all
the Common Securities, will have the right to appoint, remove or replace any
Ingersoll-Rand Trustee and to increase or decrease the number of Ingersoll-
Rand Trustees; provided, that the number of Ingersoll-Rand Trustees shall be
at least three, a majority of which shall be Regular Trustees. The Company
will pay all fees and expenses related to the Trust and the offering of the
Trust Securities. See "Description of the Guarantee--Expenses of the Trust."

The rights of the holders of the Capital Securities, including economic
rights, rights to information and voting rights, are set forth in the
Declaration, the Delaware Business Trust Act, as amended (the "Trust Act"),
and the Trust Indenture Act. See "Description of Capital Securities."

The principal place of business of the Trust is c/o Ingersoll-Rand
Company, 200 Chestnut Ridge Road, Woodcliff Lake, New Jersey 07675 and its
telephone number is (201) 573-0123.
<PAGE>
USE OF PROCEEDS

The Company intends to apply the net proceeds from the sale of the
Securities (including Debentures issued to the Trust in connection with the
investment by the Trust of all of the proceeds from the sale of the Capital
Securities) to which this Prospectus relates to its general funds to be used
for capital expenditures, acquisitions and other general corporate purposes.
Funds not required immediately for such purposes may be invested in
short-term obligations or used to reduce the future level of the Company's
commercial paper obligations.

DESCRIPTION OF DEBENTURES

The Debentures are to be issued in one or more series under an
Indenture, as supplemented or amended from time to time (as so supplemented
or amended, the "Indenture"), between the Company and The Bank of New York,
as trustee (the "Debt Trustee"). This summary of certain terms and provisions
of the Debentures and the Indenture is not necessarily complete, and
reference is hereby made to the copy of the form of the Indenture which is
filed as an exhibit to the Registration Statement of which this Prospectus
forms a part, and to the Trust Indenture Act. Whenever particular defined
terms of the Indenture are referred to in this Section or in a Prospectus
Supplement, such defined terms are incorporated herein or therein by
reference.

General

Unless otherwise specified in the applicable Prospectus Supplement, each
series of Debentures will be issued as senior unsecured debt under the
Indenture and will rank pari passu in right of payment with all of the
Company's other senior unsecured obligations. See "--Subordination." Except
as otherwise provided in the applicable Prospectus Supplement, the Indenture
does not limit the incurrence or issuance of other secured or unsecured debt
of the Company, whether under the Indenture, any other indenture that the
Company may enter into in the future or otherwise. See the Prospectus
Supplement relating to any offering of Securities.

The Debentures will be issuable in one or more series pursuant to an
indenture supplemental to the Indenture or a resolution of the Company's
Board of Directors or a committee thereof.

The applicable Prospectus Supplement or Prospectus Supplements will
describe the following terms of the Debentures: (i) the title of the
Debentures; (ii) any limit upon the aggregate principal amount of the
Debentures; (iii) the date or dates on which the principal of the Debentures
is payable or the method of determination thereof; (iv) the rate or rates, if
any, at which the Debentures shall bear interest (including reset rates, if
any, and the method by which any such rate will be determined), the Interest
Payment Dates on which any such interest shall be payable, the right, if any,
of the Company to defer or extend an Interest Payment Date, and the Regular
Record Date for any interest payable on any Interest Payment Date or the
method by which any of the foregoing shall be determined; (v) the place or
places where, subject to the terms of the Indenture as described below under
"-- Payment and Paying Agents," the principal of and premium, if any, and
interest, if any, on the Debentures will be payable and where, subject to the
terms of the Indenture as described below under "-- Denominations,
Registration and Transfer," the Debentures may be presented for registration
<PAGE>
of transfer or exchange and the place or places where notices and demands to
or upon the Company in respect of the Debentures and the Indenture may be
made ("Place of Payment"); (vi) any period or periods within, or date or
dates on which, the price or prices at which and the terms and conditions
upon which Debentures may be redeemed, in whole or in part, at the option of
the Company or a holder thereof; (vii) the obligation or the right, if any,
of the Company or a holder thereof to redeem, purchase or repay the
Debentures and the period or periods within which, the price or prices at
which, the currency or currencies (including currency unit or units) in which
and the other terms and conditions upon which the Debentures shall be
redeemed, repaid or purchased, in whole or in part, pursuant to such
obligation; (viii) the denominations in which any Debentures shall be
issuable if other than denominations of $1,000 and any integral multiple
thereof; (ix) if other than in U.S. Dollars, the currency or currencies
(including currency unit or units) in which the principal of (and premium, if
any) and interest, if any, on the Debentures shall be payable, or in which
the Debentures shall be denominated; (x) any additions, modifications or
deletions in the Events of Default or covenants of the Company specified in
the Indenture with respect to the Debentures; (xi) if other than the
principal amount thereof, the portion of the principal amount of Debentures
that shall be payable upon declaration of acceleration of the maturity
thereof; (xii) any additions or changes to the Indenture with respect to a
series of Debentures as shall be necessary to permit or facilitate the
issuance of such series in bearer form, registrable or not registrable as to
principal, and with or without interest coupons; (xiii) any index or indices
used to determine the amount of payments of principal of and premium, if any,
on the Debentures and the manner in which such amounts will be determined;
(xiv) the terms and conditions relating to the issuance of a temporary Global
Security representing all of the Debentures of such series and exchange of
such temporary Global Security for definitive Debentures of such series; (xv)
subject to the terms described under "-- Global Debentures," whether the
Debentures of the series shall be issued in whole or in part in the form of
one or more Global Securities and, in such case, the depositary for such
Global Securities, which depositary shall be a clearing agency registered
under the Exchange Act; (xvi) the appointment of any paying agent or agents;
(xvii) the terms and conditions of any obligation or right of the Company or
a holder to convert or exchange Debentures into Capital Securities or other
securities; (xviii) the relative degree, if any, to which such Debentures of
the series shall be senior to or be subordinated to other series of such
Debentures or other indebtedness of the Company in right of payment, whether
such other series of Debentures or other indebtedness are outstanding or not;
and (xix) any other terms of the Debentures not inconsistent with the
provisions of the Indenture.

Debentures may be sold at a substantial discount below their stated
principal amount, bearing no interest or interest at a rate which at the time
of issuance is below market rates. Certain material U.S. federal income tax
consequences and special considerations applicable to any such Debentures
will be described in the applicable Prospectus Supplement.

If the purchase price of any of the Debentures is payable in one or more
foreign currencies or currency units or if any Debentures are denominated in
one or more foreign currencies or currency units or if the principal of,
premium, if any, or interest, if any, on any Debentures is payable in one or
more foreign currencies or currency units, the restrictions, elections,
certain material U.S. federal income tax considerations, specific terms and
other information with respect to such issue of Debentures and such foreign
<PAGE>
currency or currency units will be set forth in the applicable Prospectus
Supplement.

If any index is used to determine the amount of payments of principal
of, premium, if any, or interest on any series of Debentures, certain
material U.S. federal income tax, accounting and other considerations
applicable thereto will be described in the applicable Prospectus Supplement.

Denominations, Registration and Transfer

Unless otherwise specified in the applicable Prospectus Supplement, the
Debentures will be issuable only in registered form without coupons in
denominations of $1,000 and any integral multiple thereof. Debentures of any
series will be exchangeable for other Debentures of the same issue and
series, of any authorized denominations, of a like aggregate principal
amount, of the same Original Issue Date and Stated Maturity and bearing the
same interest rate.

Debentures may be presented for exchange as provided above, and may be
presented for registration of transfer (with the form of transfer endorsed
thereon, or a satisfactory written instrument of transfer, duly executed), at
the office of the appropriate Securities Registrar or at the office of any
transfer agent designated by the Company for such purpose with respect to any
series of Debentures and referred to in the applicable Prospectus Supplement,
without service charge and upon payment of any taxes and other governmental
charges as described in the Indenture. The Company will appoint the Debt
Trustee as Securities Registrar under the Indenture. If the applicable
Prospectus Supplement refers to any transfer agents (in addition to the
Securities Registrar) initially designated by the Company with respect to any
series of Debentures, the Company may at any time rescind the designation of
any such transfer agent or approve a change in the location through which any
such transfer agent acts, provided that the Company maintains a transfer
agent in each Place of Payment for such series. The Company may at any time
designate additional transfer agents with respect to any series of
Debentures.

In the event of any redemption, neither the Company nor the Debt Trustee
shall be required to (i) issue, register the transfer of or exchange
Debentures of any series during a period beginning at the opening of business
15 days before the day of selection for redemption of Debentures of that
series and ending at the close of business on the day of mailing of the
relevant notice of redemption or (ii) transfer or exchange any Debentures so
selected for redemption, except, in the case of any Debentures being redeemed
in part, any portion thereof not to be redeemed.

Global Debentures

Unless otherwise specified in the applicable Prospectus Supplement, the
Debentures of a series may be issued in whole or in part in the form of one
or more Global Debentures that will be deposited with, or on behalf of, a
depositary identified in the Prospectus Supplement relating to such series.
Global Debentures may be issued only in fully registered form and in either
temporary or permanent form. Unless and until it is exchanged in whole or in
part for the individual Debentures represented thereby, a Global Debenture
may not be transferred except as a whole by the depositary for such Global
Debenture to a nominee of such depositary or by a nominee of such depositary
<PAGE>
to such depositary or another nominee of such depositary or by the depositary
or any nominee to a successor depositary or any nominee of such successor.

The specific terms of the depositary arrangement with respect to a
series of Debentures will be described in the Prospectus Supplement relating
to such series. The Company anticipates that the following provisions will
generally apply to depositary arrangements.

Upon the issuance of a Global Debenture, and the deposit of such Global
Debenture with or on behalf of the applicable depositary, the depositary for
such Global Debenture or its nominee will credit on its book-entry
registration and transfer system, the respective principal amounts of the
individual Debentures represented by such Global Debenture to the accounts of
persons that have accounts with such depositary ("Participants"). Such
accounts shall be designated by the dealers, underwriters or agents with
respect to such Debentures or by the Company if such Debentures are offered
and sold directly by the Company. Ownership of beneficial interests in a
Global Debenture will be limited to Participants or persons that may hold
interests through Participants. Ownership of beneficial interests in such
Global Debenture will be shown on, and the transfer of that ownership will be
effected only through, records maintained by the applicable depositary or its
nominee (with respect to interests of Participants) and the records of
Participants (with respect to interests of persons who hold through
Participants). The laws of some states require that certain purchasers of
securities take physical delivery of such securities in definitive form. Such
limits and such laws may impair the ability to transfer beneficial interests
in a Global Debenture.

So long as the depositary for a Global Debenture, or its nominee, is the
registered owner of such Global Debenture, such depositary or such nominee,
as the case may be, will be considered the sole owner or holder of the
Debentures represented by such Global Debenture for all purposes under the
Indenture. Except as provided below, owners of beneficial interests in a
Global Debenture will not be entitled to have any of the individual
Debentures of the series represented by such Global Debenture registered in
their names, will not receive or be entitled to receive physical delivery of
any such Debentures of such series in definitive form and will not be
considered the owners or holders thereof under the Indenture.

Payments of principal of (and premium, if any) and interest on
individual Debentures represented by a Global Debenture registered in the
name of a depositary or its nominee will be made to such depositary or its
nominee, as the case may be, as the registered owner of the Global Debenture
representing such Debentures. None of the Company, the Debt Trustee, any
paying agent, or the Securities Registrar for such Debentures will have any
responsibility or liability for any aspect of the records relating to or
payments made on account of beneficial ownership interest of the Global
Debenture for such Debentures or for maintaining, supervising or reviewing
any records relating to such beneficial ownership interests.

The Company expects that the depositary for a series of Debentures or
its nominee, upon receipt of any payment of principal, premium or interest in
respect of a permanent Global Debenture representing any of such Debentures,
immediately will credit Participants' accounts with payments in amounts
proportionate to their respective beneficial interest in the principal amount
of such Global Debenture for such Debentures as shown on the records of such
depositary or its nominee. The Company also expects that payments by
<PAGE>
Participants to owners of beneficial interests in such Global Debenture held
through such Participants will be governed by standing instructions and
customary practices, as is now the case with securities held for the accounts
of customers in bearer form or registered in "street name." Such payments
will be the responsibility of such Participants.

Unless otherwise specified in the applicable Prospectus Supplement, if
the depositary for a series of Debentures is at any time unwilling, unable or
ineligible to continue as depositary and a successor depositary is not
appointed by the Company within 90 days, the Company will issue individual
Debentures of such series in exchange for the Global Debenture representing
such series of Debentures. In addition, unless otherwise specified in the
applicable Prospectus Supplement, the Company may at any time and in its sole
discretion, subject to any limitations described in the Prospectus Supplement
relating to such Debentures, determine not to have any Debentures of such
series represented by one or more Global Debentures and, in such event, will
issue individual Debentures of such series in exchange for such Global
Debentures. Further, if the Company so specifies with respect to the
Debentures of a series, an owner of a beneficial interest in a Global
Debenture representing Debentures of such series may, on terms acceptable to
the Company, the Debt Trustee and the depositary for such Global Debenture,
receive individual Debentures of such series in exchange for such beneficial
interests, subject to any limitations described in the Prospectus Supplement
relating to such Debentures. In any such instance, an owner of a beneficial
interest in a Global Debenture will be entitled to physical delivery of
individual Debentures of the series represented by such Global Debenture
equal in principal amount to such beneficial interest and to have such
Debentures registered in its name. Individual Debentures of such series so
issued will be issued in denominations, unless otherwise specified by the
Company, of $1,000 and integral multiples thereof. The applicable Prospectus
Supplement may specify other circumstances under which individual Debentures
may be issued in exchange for the Global Debenture representing any
Debentures.

Payment and Paying Agents

Unless otherwise indicated in the applicable Prospectus Supplement,
payment of principal of (and premium, if any) and any interest on Debentures
will be made at the office of the Debt Trustee or at the office of such
paying agent or paying agents as the Company may designate from time to time
in the applicable Prospectus Supplement, except that at the option of the
Company payment of any interest may be made (i) except in the case of Global
Debentures, by check mailed to the address of the person or entity entitled
thereto as such address shall appear in the Securities Register or (ii) by
transfer to an account maintained by the person or entity entitled thereto as
specified in the Securities Register, provided that proper transfer
instructions have been received by the Regular Record Date. Unless otherwise
indicated in the applicable Prospectus Supplement, payment of any interest on
Debentures will be made to the person or entity in whose name such Debenture
is registered at the close of business on the Regular Record Date for such
interest, except in the case of Defaulted Interest. The Company may at any
time designate additional paying agents or rescind the designation of any
paying agent; however, the Company will at all times be required to maintain
a paying agent in each Place of Payment for each series of Debentures.

Any moneys deposited with the Debt Trustee or any paying agent, or held
by the Company in trust, for the payment of the principal of (and premium, if
<PAGE>
any) or interest on any Debenture and remaining unclaimed for two years after
such principal (and premium, if any) or interest has become due and payable
shall, at the request of the Company, be repaid to the Company or released
from such trust, as applicable, and the holder of such Debenture shall
thereafter look, as a general unsecured creditor, only to the Company for
payment thereof.

Redemption

Unless otherwise indicated in the applicable Prospectus Supplement,
Debentures will not be subject to any sinking fund.

Unless otherwise indicated in the applicable Prospectus Supplement, the
Company may, at its option, redeem the Debentures of any series in whole at
any time or in part from time to time, at the redemption price set forth in
the applicable Prospectus Supplement plus accrued and unpaid interest to the
date fixed for redemption, and Debentures in denominations larger than $50
may be redeemed in part but only in integral multiples of $50. If the
Debentures of any series are so redeemable only on or after a specified date
or upon the satisfaction of additional conditions, the applicable Prospectus
Supplement will specify such date or describe such conditions.

Except as otherwise specified in the applicable Prospectus Supplement,
if a Special Event (as defined in "Description of Capital Securities--
Redemption--Special Event Redemption" below or in the applicable Prospectus
Supplement) in respect of the Trust shall occur and be continuing, the
Company may, at its option, redeem such series of Debentures, in whole (but
not in part), at a redemption price equal to the amount described in the
applicable Prospectus Supplement. See "Description of Capital Securities--
Redemption--Special Event Redemption."

Notice of any redemption will be mailed at least 30 days but not more
than 60 days before the redemption date to each holder of Debentures to be
redeemed at such holder's registered address. Unless the Company defaults in
the payment of the redemption price, on and after the redemption date
interest shall cease to accrue on such Debentures or portions thereof called
for redemption.

Option to Defer Interest Payments

If provided in the applicable Prospectus Supplement, the Company shall
have the right at any time and from time to time during the term of any
series of Debentures to defer the payment of interest for such number of
consecutive interest payment periods as may be specified in the applicable
Prospectus Supplement (each, an "Extension Period"), subject to the terms,
conditions and covenants, if any, specified in such Prospectus Supplement,
provided that such Extension Period may not extend beyond the Stated Maturity
of the Debentures. Certain material U.S. federal income tax consequences and
special considerations applicable to any such Debentures will be described in
the applicable Prospectus Supplement.

At the end of such Extension Period, the Company shall pay all interest
then accrued and unpaid together with interest thereon compounded
semiannually at the rate specified for the Debentures to the extent permitted
by applicable law ("Compound Interest"); provided, that during any such
Extension Period, (a) the Company shall not declare or pay dividends on, make
any distribution with respect to, or redeem, purchase, acquire or make a
<PAGE>
liquidation payment with respect to, any of its capital stock (other than (i)
purchases or acquisitions of capital stock of the Company in connection with
the satisfaction by the Company of its obligations under any employee benefit
plans or the satisfaction by the Company of its obligations pursuant to any
contract or security outstanding on the date of such event requiring the
Company to purchase capital stock of the Company, (ii) as a result of a
reclassification of the Company's capital stock or the exchange or conversion
of one class or series of the Company's capital stock for another class or
series of the Company's capital stock, (iii) the purchase of fractional
interests in shares of the Company's capital stock pursuant to the conversion
or exchange provisions of such capital stock or the security being converted
or exchanged, (iv) dividends or distributions in capital stock of the Company
(or rights to acquire capital stock) or repurchases or redemptions of capital
stock solely from the issuance or exchange of capital stock or (v)
redemptions or repurchases of any rights outstanding under a shareholder
rights plan or the declaration thereunder of a dividend of rights in the
future), (b) the Company shall not make any payment of interest, principal or
premium, if any, on or repay, repurchase or redeem any debt securities issued
by the Company that rank junior to the Debentures, and (c) the Company shall
not make any guarantee payments with respect to the foregoing (other than
payments pursuant to the Guarantee). Prior to the termination of any such
Extension Period, the Company may further defer payments of interest by
extending the interest payment period; provided, however, that, such
Extension Period, including all such previous and further extensions, may not
extend beyond the maturity of the Debentures. Upon the termination of any
Extension Period and the payment of all amounts then due, the Company may
commence a new Extension Period, subject to the terms set forth in this
section. No interest during an Extension Period, except at the end thereof,
shall be due and payable, but the Company may prepay at any time all or any
portion of the interest accrued during an Extension Period. The Company has
no present intention of exercising its right to defer payments of interest by
extending the interest payment period on the Debentures. If the Institutional
Trustee shall be the sole holder of the Debentures, the Company shall give
the Regular Trustees and the Institutional Trustee notice of its selection of
such Extension Period one Business Day prior to the earlier of (i) the date
distributions on the Capital Securities are payable or (ii) the date the
Regular Trustees are required to give notice to the New York Stock Exchange
(or other applicable self-regulatory organization) or to holders of the
Capital Securities of the record or payment date of such distribution. The
Regular Trustees shall give notice of the Company's selection of such
Extension Period to the holders of the Capital Securities. If the
Institutional Trustee shall not be the sole holder of the Debentures, the
Company shall give the holders of the Debentures notice of its selection of
such Extension Period ten Business Days prior to the earlier of (i) the
Interest Payment Date or (ii) the date upon which the Company is required to
give notice to the New York Stock Exchange (or other applicable self-
regulatory organization) or to holders of the Debentures of the record or
payment date of such related interest payment.

Modification of Indenture

From time to time, the Indenture may be modified by the Company and the
Debt Trustee without the consent of any holders of the Debentures with
respect to certain matters, including (i) to cure any ambiguity, defect or
inconsistency or to correct or supplement any provision which may be
inconsistent with any other provision of the Indenture, (ii) to qualify, or
maintain the qualification of, the Indenture under the Trust Indenture Act
<PAGE>
and (iii) to make any change that does not materially adversely affect the
interests of any holder of Debentures. In addition, under the Indenture,
certain rights and obligations of the Company and the rights of holders of
the Debentures may be modified by the Company and the Debt Trustee with the
written consent of the holders of at least a majority in aggregate principal
amount of the outstanding Debentures; but no extension of the maturity of
Debentures, reduction in the interest rate or extension of the time for
payment of interest, change in the optional redemption or repurchase
provisions in a manner adverse to any holder of Debentures, other
modification in the terms of payment of the principal of, or interest on, the
Debentures, or reduction of the percentage required for modification, will be
effective against any holder of any outstanding Debentures without the
holder's consent.

In addition, the Company and the Debt Trustee may execute, without the
consent of any holder of Debentures, any supplemental Indenture for the
purpose of creating any new series of Debentures.

Indenture Events of Default

The Indenture provides that any one or more of the following described
events with respect to a series of Debentures that has occurred and is
continuing constitutes an "Indenture Event of Default" with respect to such
series of Debentures:

(i) failure for 30 days to pay any interest on such series of the
Debentures when due (subject to the deferral of any due date in the case
of an Extension Period); or

(ii) failure to pay any principal or premium, if any, on such series
of Debentures when due whether at maturity, upon redemption, by
declaration or otherwise; or

(iii) failure to observe or perform in any material respect certain
other covenants contained in the Indenture for 90 days after written
notice has been given to the Company from the Debt Trustee or the
holders of at least 25% in principal amount of such series of
outstanding Debentures; or

(iv) certain events in bankruptcy, insolvency or reorganization of
the Company.

The holders of a majority in outstanding principal amount of such series
of Debentures have the right to direct the time, method and place of
conducting any proceeding for any remedy available to the Debt Trustee. The
Debt Trustee or the holders of not less than 25% in aggregate outstanding
principal amount of such series of Debentures may declare the principal due
and payable immediately upon an Indenture Event of Default. The holders of a
majority in aggregate outstanding principal amount of such series of
Debentures may annul such declaration and waive the default if the default
(other than the non-payment of the principal of such series of Debentures
which has become due solely by such acceleration) has been cured and a sum
sufficient to pay all matured installments of interest and principal due
otherwise than by acceleration has been deposited with the Debt Trustee.

The holders of a majority in outstanding principal amount of the
Debentures affected thereby may, on behalf of the holders of all the
<PAGE>
Debentures, waive any past default, except a default in the payment of
principal or interest (unless such default has been cured and a sum
sufficient to pay all matured installments of interest and principal due
otherwise than by acceleration has been deposited with the Debt Trustee) or a
default in respect of a covenant or provision which under the Indenture
cannot be modified or amended without the consent of the holder of each
outstanding Debenture.

In case an Indenture Event of Default shall occur and be continuing as
to a series of Debentures, all of which are held by the Trust, the
Institutional Trustee will have the right to declare the principal of and the
interest on such Debentures, and any other amounts payable under the
Indenture, to be forthwith due and payable and to enforce its other rights as
a creditor with respect to such Debentures.

Enforcement of Certain Rights by Holders of Capital Securities

If an Indenture Event of Default with respect to the Debentures has
occurred and is continuing and such event is attributable to the failure of
the Company to pay interest or principal on the Debentures on the date such
interest or principal is otherwise payable, a holder of the Capital
Securities may institute a legal proceeding directly against the Company for
enforcement of payment to such holder of the principal of or interest on such
Debentures having a principal amount equal to the aggregate liquidation
amount of the Capital Securities of such holder (a "Direct Action"). The
Company may not amend the Indenture to remove the foregoing right to bring a
Direct Action without the prior written consent of the holders of all of the
Capital Securities. If the right to bring a Direct Action is removed, the
Trust may become subject to the reporting obligations under the Exchange Act.
Unless otherwise specified in the applicable Prospectus Supplement, the
Company shall have the right under the Indenture to set-off any payment made
to such holder of Capital Securities by the Company in connection with a
Direct Action. The holders of Capital Securities will not be able to exercise
directly any other remedy available to the holders of the Debentures unless
there shall have been an Event of Default under the Declaration. See
"Description of Capital Securities--Events of Default; Notice."

Consolidation, Merger, Sale of Assets and Other Transactions

The Indenture provides that the Company shall not consolidate with or
merge into any other person or entity or sell, assign, convey, transfer or
lease its properties and assets substantially as an entirety to any person or
entity unless (i) either the Company is the continuing corporation, or any
successor or purchaser is a corporation, partnership, or trust or other
entity organized under the laws of the United States of America, any State
thereof or the District of Columbia, and any such successor or purchaser
expressly assumes the Company's obligations on the Debentures under a
supplemental indenture; and (ii) immediately after giving effect thereto, no
Indenture Event of Default, and no event which, after notice or lapse of time
or both, would become an Indenture Event of Default, shall have happened and
be continuing.

The general provisions of the Indenture do not afford holders of the
Debentures protection in the event of a highly leveraged or other transaction
involving the Company that may adversely affect holders of the Debentures.
<PAGE>
Satisfaction and Discharge; Defeasance

The Indenture provides that when, among other things, all Debentures not
previously delivered to the Debt Trustee for cancellation (i) have become due
and payable or (ii) will become due and payable at their Stated Maturity
within one year, and the Company deposits or causes to be deposited with the
Debt Trustee, as trust funds in trust for the purpose, an amount in the
currency or currencies in which the Debentures are payable sufficient to pay
and discharge the entire indebtedness on the Debentures not previously
delivered to the Debt Trustee for cancellation, for the principal (and
premium, if any) and interest to the date of the deposit or to the Stated
Maturity, as the case may be, then the Indenture will cease to be of further
effect (except as to the Company's obligations to pay all other sums due
pursuant to the Indenture and to provide the officers' certificates and
opinions of counsel described therein), and the Company will be deemed to
have satisfied and discharged the Indenture. The Company will also have the
right to decease the Debentures if and to the extent indicated in the
applicable Prospectus Supplement.

Conversion or Exchange

If and to the extent indicated in the applicable Prospectus Supplement,
the Debentures of any series may be convertible or exchangeable into Capital
Securities or other securities. The specific terms on which Debentures of any
series may be so converted or exchanged will be set forth in the applicable
Prospectus Supplement. Such terms may include provisions for conversion or
exchange, either mandatory, at the option of the holder, or at the option of
the Company, in which case the number of shares of Capital Securities or
other securities to be received by the holders of Debentures would be
calculated as of a time and in the manner stated in the applicable Prospectus
Supplement.

Governing Law

The Indenture and the Debentures will be governed by and construed in
accordance with the laws of the State of New York.

Miscellaneous

Information Concerning the Debt Trustee

The Debt Trustee shall have and be subject to all the duties and
responsibilities specified with respect to an indenture trustee under the
Trust Indenture Act. Subject to such provisions, the Debt Trustee is under no
obligation to exercise any of the powers vested in it by the Indenture at the
request of any holder of Debentures, unless offered reasonable indemnity by
such holder against the costs, expenses and liabilities which might be
incurred thereby. The Debt Trustee is not required to expend or risk its own
funds or otherwise incur personal financial liability in the performance of
its duties if the Debt Trustee reasonably believes that repayment or adequate
indemnity is not reasonably assured to it.
<PAGE>
The Company maintains trust and other business relationships in the
ordinary course of business with The Bank of New York.

DESCRIPTION OF CAPITAL SECURITIES

Pursuant to the terms of the Declaration, the Ingersoll-Rand Trustees on
behalf of the Trust will issue the Capital Securities and the Common
Securities. The Capital Securities will represent undivided beneficial
ownership interests in the assets of the Trust. This summary of certain
provisions of the Capital Securities and the Declaration is not necessarily
complete, and reference is hereby made to the copy of the Declaration,
including the definitions therein of certain terms, which is filed as an
exhibit to the Registration Statement of which this Prospectus forms a part,
and to the Trust Indenture Act. Wherever particular defined terms of the
Declaration are referred to in this Section or in a Prospectus Supplement,
such defined terms are incorporated herein by reference. The form of
Declaration has been filed as an exhibit to the Registration Statement of
which this Prospectus forms a part.

General

The Capital Securities of the Trust will rank pari passu, and payments
will be made thereon pro rata, with the Common Securities of the Trust except
as described under "--Subordination of Common Securities." Legal title to the
Debentures will be held by the Institutional Trustee in trust for the benefit
of the holders of the Capital Securities and Common Securities. The Guarantee
Agreement executed by the Company for the benefit of the holders of the
Trust's Capital Securities (the "Guarantee") will not guarantee payment of
Distributions or amounts payable on redemption or liquidation of the Capital
Securities when the Trust does not have funds on hand available to make such
payments. See "Description of the Guarantee."

Distributions

The Trust's Capital Securities represent undivided beneficial ownership
interests in the assets of the Trust, and the Distributions on each Capital
Security will be payable at a rate specified in the Prospectus Supplement for
the Capital Securities. The amount of Distributions payable for any period
will be computed on the basis of a 360-day year of twelve 30-day months
unless otherwise specified in the applicable Prospectus Supplement.
Distributions that are in arrears will accumulate additional Distributions
thereon at the rate per annum if and as specified in the applicable
Prospectus Supplement ("Additional Amounts"). The term "Distributions" as
used herein includes any Additional Amounts unless otherwise stated.

Distributions on the Capital Securities will be cumulative, will
accumulate from the date of original issuance and will be payable on such
dates as specified in the applicable Prospectus Supplement. In the event that
any date on which Distributions are payable on the Capital Securities is not
a Business Day (as defined below), payment of the Distribution payable on
such date will be made on the next succeeding day that is a Business Day (and
without any interest or other payment in respect of any such delay) except
that, if such Business Day is in the next succeeding calendar year, payment
of such Distribution shall be made on the immediately preceding Business Day,
in each case with the same force and effect as if made on such date (each
date on which Distributions are payable in accordance with the foregoing, a
"Distribution Date"). A "Business Day" shall mean any day other than a
<PAGE>
Saturday or a Sunday, or a day on which banking institutions in The City of
New York are authorized or required by law or executive order to remain
closed or a day on which the corporate trust office of the Institutional
Trustee or the Debt Trustee is closed for business.

If provided in the applicable Prospectus Supplement, the Company has the
right under the Indenture to defer payments of interest on the Debentures by
extending the interest payment period thereon from time to time for a period
or periods that will be specified in the applicable Prospectus Supplement.
Such extension right, if exercised, would result in the deferral of
Distributions on the Capital Securities (though such Distributions would
continue to accumulate additional Distribution thereon at the rate per annum
if and as specified in the applicable Prospectus Supplement) during any such
extended interest payment period. Such right to extend the interest payment
period for the Debentures is limited to a period not extending beyond the
stated Maturity of the Debentures. In the event that the Company exercises
this right, then (a) the Company shall not declare or pay dividends on, make
distributions with respect to, or redeem, purchase or acquire, or make a
liquidation payment with respect to, any of its capital stock other than (i)
purchases or acquisitions of capital stock (of the Company in connection with
the satisfaction by the Company of its obligations under any employee benefit
plans or the satisfaction by the Company of its obligations pursuant to any
contract or security outstanding on the date of such event requiring the
Company to purchase capital stock of the Company, (ii) as a result or a
reclassification of the Company's capital stock or the exchange or conversion
of one class or a series of the Company's capital stock for another class or
a series of the Company's capital stock, (iii) the purchase of fractional
interests in shares of the Company's capital stock pursuant to the conversion
or exchange provisions of such capital stock or the security being converted
or exchanged, (iv) dividends or distributions in capital stock of the Company
(or rights to acquire capital stock) or repurchases or redemptions of capital
stock solely from the issuance or exchange of capital stock or (v)
redemptions or repurchases of any rights outstanding under a shareholder
rights plan or the declaration thereunder of a dividend of rights in the
future), (b) the Company shall not make any payment of interest, principal or
premium, if any, on or repay, repurchase or redeem any debt securities issued
by the Company that rank junior to the Debentures, and (c) the Company shall
not make any guarantee payments with respect to the foregoing (other than
payments pursuant to the Guarantee). Prior to the termination of any such
Extension Period, the Company may further extend the interest payment period;
provided, that such Extension Period, together with all such previous and
further extensions thereof, may not extend beyond the stated Maturity of the
Debentures. Upon the termination of any Extension Period and the payment of
all amounts then due, the Company may select a new Extension Period, subject
to the above requirements. See "Description of the Debentures--Option to
Defer Interest Payments." If Distributions are deferred, the deferred
Distributions and accumulated additional Distributions thereon shall be paid
to holders of record of the Capital Securities as they appear on the books
and records of the Trust on the record date next following the termination of
such deferral period.

It is anticipated that the revenue of the Trust available for
distribution to holders of its Capital Securities will be limited to payments
under the Debentures in which the Trust will invest the proceeds from the
issuance and sale of the Capital Securities and the Common Securities. See
"Description of Debentures--Debentures." If the Company does not make
interest payments on such Debentures, the Institutional Trustee will not have
funds available to pay Distributions on the Capital Securities. The payment
<PAGE>
of Distributions (if and to the extent the Trust has funds legally available
for the payment of such Distributions and cash sufficient to make such
payments) is guaranteed by the Company on a limited basis as set forth herein
under "Description of the Guarantee."

Distributions on the Capital Securities will be payable to the holders
thereof as they appear on the register of the Trust on the relevant record
dates, which, as long as the Capital Securities remain in book-entry form,
will be one Business Day prior to the relevant Distribution Date. Subject to
any applicable laws and regulations and the provisions of the Declaration,
unless otherwise specified in the applicable Prospectus Supplement, each such
payment will be made as described under "Book-Entry Issuance." In the event
any Capital Securities are not in book-entry form, the relevant record date
for such Capital Securities shall be the date, at least 15 days prior to the
relevant Distribution Date, that is specified in the applicable Prospectus
Supplement.

Redemption

Mandatory Redemption

Unless otherwise specified in the applicable Prospectus Supplement, upon
any repayment or redemption, in whole or in part, of any Debentures that are
held by the Trust unless otherwise specified in the applicable Prospectus
Supplement, whether at maturity or upon earlier redemption as provided in the
Indenture, the proceeds from such repayment or redemption shall be applied by
the Institutional Trustee to redeem a Like Amount (as defined below) of the
related Trust Securities, upon not less than 30 nor more than 60 days notice,
at a redemption price (the "Redemption Price") equal to the aggregate
liquidation amount of such Trust Securities plus accumulated and unpaid
Distributions thereon to the date of redemption (the "Redemption Date") and
the related amount of the premium, if any, paid by the Company upon the
concurrent redemption of such Debentures. See "Description of Debentures--
Optional Redemption." If less than all of any series of Debentures that are
held by the Trust are to be repaid or redeemed on a Redemption Date, then the
proceeds from such repayment or redemption shall be allocated to the
redemption pro rata of the Capital Securities and the Common Securities. The
amount of premium, if any, paid by the Company upon the redemption of all or
any part of any Debentures held by the Trust shall be allocated pro rata to
the Capital Securities and the Common Securities.

Distribution of Debentures

Unless otherwise specified in the applicable Prospectus Supplement, the
Company will have the right at any time to dissolve the Trust and, after
satisfaction of the liabilities of creditors of the Trust as provided by
applicable law, to cause the Debentures in respect of the Trust Securities
issued by the Trust to be distributed to the holders of the Trust Securities
in liquidation of the Trust.

After the liquidation date fixed for any distribution of Debentures held
by the Trust, (i) the Capital Securities will no longer be deemed to be
outstanding, (ii) the depositary (if any) for the Capital Securities, as the
record holder of the Capital Securities, will receive a registered global
certificate or certificates representing the Debentures to be delivered upon
such distribution and (iii) any certificates representing such Capital
Securities not held by or on behalf of such depositary will be deemed to
<PAGE>
represent the Debentures having a principal amount equal to the liquidation
amount of the Capital Securities, and bearing accrued and unpaid interest in
an amount equal to the accrued and unpaid Distributions on the Capital
Securities, until such certificates are presented to the Regular Trustees or
their agent for transfer or reissuance.

There can be no assurance as to the market prices for the Capital
Securities or the Debentures that may be distributed in exchange for Capital
Securities if a dissolution or liquidation of the Trust were to occur.
Accordingly, the Capital Securities that an investor may purchase, or the
Debentures that the investor may receive on dissolution or liquidation of the
Trust, may trade at a discount to the price that the investor paid to
purchase the Capital Securities offered hereby.

Special Event Redemption

If a Tax Event or an Investment Company Event (each as defined in the
applicable Prospectus Supplement, a "Special Event") shall occur and be
continuing, unless otherwise specified in the applicable Prospectus
Supplement, the Company will have the right to redeem the Debentures in whole
(but not in part) and therefore cause a mandatory redemption of the Trust
Securities in whole (but not in part) at the Redemption Price within 90 days
following the occurrence of such Special Event.

If provided in the applicable Prospectus Supplement, the Company shall
have the right to extend or shorten the maturity of any series of Debentures
held by the Trust at the time that the Company exercises its right to elect
to dissolve the Trust and, after satisfaction of the liability to creditors
of the Trust as provided by applicable law, cause such Debentures to be
distributed to the holders of the Capital Securities and Common Securities of
the Trust in liquidation of the Trust, provided that it can extend the
maturity only if certain conditions specified in the applicable Prospectus
Supplement are met at the time such election is made and at the time of such
extension.

"Like Amount" means (i) with respect to a redemption of any Trust
Securities, Trust Securities having a liquidation amount equal to that
portion of the principal amount of Debentures to be contemporaneously
redeemed in accordance with the Indenture, allocated to the Common Securities
and to the Capital Securities based upon the relative liquidation amounts of
such classes of Trust Securities, and the proceeds of which will be used to
pay the Redemption Price of such Trust Securities, and (ii) with respect to a
distribution of Debentures to holders of any Trust Securities in connection
with a dissolution or liquidation of Trust, Debentures having a principal
amount equal to the liquidation amount of the Trust Securities of the holder
to whom such Debentures are distributed.

Redemption Procedures

Capital Securities redeemed on each Redemption Date shall be redeemed at
the Redemption Price with the applicable proceeds from the contemporaneous
redemption of the Debentures. Redemptions of Capital Securities shall be made
and the Redemption Price shall be payable on each Redemption Date only to the
extent that the Trust has funds on hand available for the payment of such
Redemption Price. See also "-- Subordination of Common Securities."
<PAGE>
If the Trust gives a notice of redemption in respect of the Capital
Securities, then, on the Redemption Date, to the extent funds are available,
the Institutional Trustee will deposit irrevocably with the Depositary for
the Capital Securities (if such Capital Securities are issued in the form of
one or more Global Capital Securities) funds sufficient to pay the applicable
Redemption Price and will give such Depositary irrevocable instructions and
authority to pay the Redemption Price to the beneficial owners of the Capital
Securities. See "-- Global Capital Securities" and "Book-Entry Issuance." If
the Capital Securities are not issued in the form of one or more Global
Capital Securities, the Trust, to the extent funds are available, will
irrevocably deposit with the paying agent for the Capital Securities funds
sufficient to pay the applicable Redemption Price and will give such paying
agent irrevocable instructions and authority to pay the Redemption Price to
the holders thereof upon surrender of their certificates evidencing the
Capital Securities. Notwithstanding the foregoing, Distributions payable on
or prior to the Redemption Date for the Capital Securities called for
redemption shall be payable to the holders of the Capital Securities on the
relevant record dates for the related Distribution Dates. If notice of
redemption shall have been given and funds deposited as required, then upon
the date of such deposit, all rights of the holders of the Capital Securities
so called for redemption will cease, except the right of the holders of the
Capital Securities to receive the Redemption Price, but without interest on
such Redemption Price, and the Capital Securities will cease to be
outstanding. In the event that any date fixed for redemption of Capital
Securities is not a Business Day, then payment of the Redemption Price
payable on such date will be made on the next succeeding day which is a
Business Day (and without any interest or other payment in respect of any
such delay), except that, if such Business Day falls in the next calendar
year, such payment will be made on the immediately preceding Business Day. In
the event that payment of the Redemption Price in respect of Capital
Securities called for redemption is improperly withheld or refused and not
paid either by the Trust or by the Company pursuant to the Guarantee as
described under "Description of the Guarantee", Distributions on such Capital
Securities will continue to accumulate at the then applicable rate, from the
Redemption Date originally established by the Trust for the Capital
Securities to the date such Redemption Price is actually paid, in which case
the actual payment date will be the date fixed for redemption for purposes of
calculating the Redemption Price.

Subject to applicable law (including, without limitation, U.S. federal
securities law), the Company or its subsidiaries may at any time and from
time to time purchase outstanding Capital Securities by tender, in the open
market or by private agreement.

If less than all of the Capital Securities and Common Securities issued
by the Trust are to be redeemed on a Redemption Date, then the aggregate
liquidation amount of such Capital Securities and Common Securities to be
redeemed shall be allocated pro rata among the Capital Securities and Common
Securities of such Trust based on the relative liquidation amounts of such
classes of Trust Securities. The particular Capital Securities to be redeemed
shall be selected on a pro rata basis not more than 60 days prior to the
Redemption Date by the Institutional Trustee from the outstanding Capital
Securities not previously called for redemption, by such method as the
Institutional Trustee shall deem fair and appropriate and which may provide
for the selection for redemption of portions (equal to $25 or an integral
multiple of $25 in excess thereof) of the liquidation amount of Capital
Securities of a denomination larger than $25. The Institutional Trustee shall
<PAGE>
promptly notify the registrar in writing of the Capital Securities selected
for redemption and, in the case of any Capital Securities selected for
partial redemption, the liquidation amount thereof to be redeemed. For all
purposes of each Declaration, unless the context otherwise requires, all
provisions relating to the redemption of Capital Securities shall relate, in
case of any Capital Securities redeemed or to be redeemed only in part, to
the portion of the aggregate liquidation amount of Capital Securities which
has been or is to be redeemed.

Notice of any redemption will be mailed at least 30 days but not more
than 60 days before the Redemption Date to each holder of Capital Securities
to be redeemed at its registered address. Unless the Company defaults in
payment of the Redemption Price on the Debentures, on and after the
Redemption Date interest will cease to accrue on the Debentures or portions
thereof (and Distributions will cease to accumulate on the Capital Securities
or portions thereof) called for redemption.

Subordination of Common Securities

Payment of Distributions (including Additional Amounts, if applicable)
on, and the Redemption Price of, the Trust's Capital Securities and Common
Securities, as applicable, shall be made pro rata based on the liquidation
amount of the Capital Securities and Common Securities; provided, however,
that if on any Distribution Date or Redemption Date an Indenture Event of
Default shall have occurred and be continuing, no payment of any Distribution
(including Additional Amounts, if applicable) on, or Redemption Price of, any
of the Trust's Common Securities, and no other payment on account of the
redemption, liquidation or other acquisition of such Common Securities, shall
be made unless payment in full in cash of all accumulated and unpaid
Distributions (including Additional Amounts, if applicable) on all of the
Trust's outstanding Capital Securities for all Distribution periods
terminating on or prior thereto, or in the case of payment of the Redemption
Price the full amount of such Redemption Price on all of the Trust's
outstanding Capital Securities then called for redemption, shall have been
made or provided for, and all funds available to the Institutional Trustee
shall first be applied to the payment in full in cash of all Distributions
(including Additional Amounts, if applicable) on, or Redemption Price of, the
Trust's Capital Securities then due and payable.

In the case of any Event of Default under the Declaration resulting from
an Indenture Event of Default, the Company as holder of the Trust's Common
Securities will be deemed to have waived any right to act with respect to any
such Event of Default under the Declaration until the effect of all such
Events of Default with respect to the Capital Securities have been cured,
waived or otherwise eliminated. Until any such Events of Default under the
Declaration have been so cured, waived or otherwise eliminated, the
Institutional Trustee shall act solely on behalf of the holders of the
Capital Securities and not on behalf of the Company as holder of the Trust's
Common Securities, and only the holders of the Capital Securities will have
the right to direct the Institutional Trustee to act on their behalf.

Liquidation Distribution Upon Dissolution

Unless otherwise specified in the applicable Prospectus Supplement,
pursuant to the Declaration, the Trust shall dissolve (i) on March 23, 2004,
the expiration of the term of the Trust, (ii) upon the bankruptcy of the
Company, (iii) upon the filing of a certificate of dissolution or its
<PAGE>
equivalent with respect to the Company, after receipt by the Institutional
Trustee of written direction from the Company to dissolve the Trust or after
obtaining the consent of the holders of at least a majority in liquidation
amount of the Trust Securities affected thereby voting together as a single
class to dissolve the Trust, or the revocation of the charter of the Company
and the expiration of 90 days after the date of revocation without a
reinstatement thereof, (iv) upon the distribution of Debentures, (v) upon the
entry of a decree of a judicial dissolution of the holder of the Common
Securities, the Company or the Trust, or (vi) upon the redemption of all the
Trust Securities.

If an early dissolution occurs as described in clause (ii), (iii) or (v)
above, the Trust shall be liquidated by the Ingersoll-Rand Trustees as
expeditiously as the Ingersoll-Rand Trustees determine to be possible by
distributing, after satisfaction of liabilities to creditors of the Trust as
provided by applicable law, to the holders of the applicable Trust Securities
a Like Amount of the Debentures that are then held by the Trust, unless such
distribution is determined by the Institutional Trustee not to be practical,
in which event such holders will be entitled to receive out of the assets of
the Trust available for distribution to holders, after satisfaction of
liabilities to creditors of the Trust as provided by applicable law, an
amount equal to, in the case of holders of Capital Securities, the aggregate
of the liquidation amount plus accrued and unpaid Distributions thereon to
the date of payment (such amount being the "Liquidation Distribution"). If
such Liquidation Distribution can be paid only in part because the Trust has
insufficient assets available to pay in full the aggregate Liquidation
Distribution, then the amounts payable directly by the Trust on the Capital
Securities shall be paid on a pro rata basis. The holder(s) of the Trust's
Common Securities will be entitled to receive distributions upon any such
liquidation pro rata with the holders of the Capital Securities, except that
if an Indenture Event of Default has occurred and is continuing, the Capital
Securities shall have a priority over the Common Securities. If specified in
the applicable Prospectus Supplement, a supplemental Indenture may provide
that if an early dissolution occurs as described in clause (v) above, the
Debentures that are then held by the Trust may be subject to optional
redemption in whole (but not in part).

Events of Default; Notice

Any one of the following events constitutes an "Event of Default" under
the Declaration (an "Event of Default") with respect to the Capital
Securities issued thereunder (whatever the reason for such Event of Default
and whether it shall be voluntary or involuntary or be effected by operation
of law or pursuant to any judgment, decree or order of any court or any
order, rule or regulation of any administrative or governmental body):

(i) the occurrence of an Indenture Event of Default under the
Indenture (see "Description of Debentures--Indenture Events of
Default"); or

(ii) default by the Trust in the payment of any Distribution when it
becomes due and payable, and continuation of such default for a period
of 30 days; or

(iii) default by the Trust in the Payment of any Redemption Price of
any Trust Security when it becomes due and payable; or
<PAGE>
(iv) default in the performance, or breach, in any material respect,
of any covenant or warranty of the Ingersoll-Rand Trustees in the
Declaration (other than a covenant or warranty a default in the
performance of which or the breach of which is dealt with in clause (ii)
or (iii) above), and continuation of such default or breach for a period
of 90 days after written notice has been given to the defaulting
Ingersoll-Rand Trustee or Trustees by the holders of at least 25% in
aggregate liquidation amount of the outstanding Capital Securities,
which notice shall specify such default or breach and require it to be
remedied and shall state that such notice is a "Notice of Default" under
the Declaration; or

(v) the occurrence of certain events of bankruptcy or insolvency
with respect to the Institutional Trustee and the failure by the Company
to appoint a successor Institutional Trustee within 60 days thereof.

Within five Business Days after the occurrence of any Event of Default
actually known to the Institutional Trustee, the Institutional Trustee shall
transmit notice of such Event of Default to the holders of the Capital
Securities, the Regular Trustees and the Company, as Sponsor, unless such
Event of Default shall have been cured or waived. The Company, as Sponsor,
and the Regular Trustees are required to file annually with the Institutional
Trustee a certificate as to whether or not they are in compliance with all
the conditions and covenants applicable to them under the Declaration.

If an Indenture Event of Default has occurred and is continuing, the
Capital Securities of the Trust shall have a preference over the Common
Securities of the Trust upon dissolution of the Trust as described above. See
"-- Liquidation Distribution Upon Dissolution." The existence of an Event of
Default does not entitle the holders of Capital Securities to accelerate the
maturity thereof.

Removal of Ingersoll-Rand Trustees

Unless an Indenture Event of Default shall have occurred and be
continuing, any Ingersoll-Rand Trustee may be removed at any time by the
holder of the Common Securities. If an Indenture Event of Default with
respect to any series of Debentures has occurred and is continuing, the
Institutional Trustee and the Delaware Trustee may be removed at such time by
the holders of a majority in liquidation amount of the outstanding Capital
Securities of the Trust. In no event will the holders of the Capital
Securities of the Trust have the right to vote to appoint, remove or replace
the Administrative Trustees, which voting rights are vested exclusively in
the Company as the holder of the Common Securities of the Trust. No
resignation or removal of an Ingersoll-Rand Trustee and no appointment of a
successor trustee shall be effective until the acceptance of appointment by
the successor trustee in accordance with the provisions of the Declaration.

Co-Trustees and Separate Institutional Trustee

Unless an Event of Default with respect to the Capital Securities of the
Trust shall have occurred and be continuing, at any time or times, for the
purpose of meeting the legal requirements of the Trust Indenture Act or of
any jurisdiction in which any part of the Trust Property may at the time be
located, the Company, as the holder of the Common Securities of the Trust,
and the Regular Trustees shall have power to appoint one or more persons
either to act as a co-trustee, jointly with the Institutional Trustee, of all
<PAGE>
or any part of such Trust Property, or to act as separate trustee of any such
property, in either case with such powers as may be provided in the
instrument of appointment, and to vest in such person or persons in such
capacity any property, title, right or power deemed necessary or desirable,
subject to the provisions of the applicable Declaration. In case an Indenture
Event of Default has occurred and is continuing, the Institutional Trustee
alone shall have power to make such appointment.

Merger or Consolidation of Trust Trustees

Any entity into which the Institutional Trustee, the Delaware Trustee or
any Regular Trustee that is not a natural person may be merged or converted
or with which it may be consolidated, or any entity resulting from any
merger, conversion or consolidation to which such Trustee shall be a party,
or any entity succeeding to all or substantially all the corporate trust
business of such Trustee, shall be the successor of such Trustee under the
Declaration, provided such entity shall be otherwise qualified and eligible.

Mergers, Consolidations or Amalgamations

The Trust may not consolidate, amalgamate, merge with or into, or be
replaced by, or convey, transfer or lease its properties and assets
substantially as an entirety, to any corporation or other body, except as
described below or as described in "Liquidation Distribution Upon
Dissolution". The Trust may, with the consent of the Regular Trustees and
without the consent of the holders of the Trust Securities, the Institutional
Trustee or the Delaware Trustee, consolidate, amalgamate, merge with or into,
or be replaced by a trust organized as such under the laws of any State;
provided, that (i) if the Trust is not the survivor, such successor entity
either (x) assumes all of the obligations of the Trust under the Trust
Securities or (y) substitutes for the Trust Securities other securities
having substantially the same terms as the Trust Securities (the "Successor
Securities"), so long as the Successor Securities rank the same as the Trust
Securities rank with respect to distributions and payments upon liquidation,
redemption and otherwise, (ii) the Company expressly acknowledges a trustee
of such successor entity possessing the same powers and duties as the
Institutional Trustee as the holder of the Debentures, (iii) the Capital
Securities or any Successor Securities are listed, or any Successor
Securities will be listed upon notification of issuance, on any national
securities exchange or with another organization on which the Capital
Securities are then listed or quoted, (iv) such merger, consolidation,
amalgamation or replacement does not cause the Capital Securities (including
any Successor Securities) to be downgraded by any nationally recognized
statistical rating organization, (v) such merger, consolidation, amalgamation
or replacement does not adversely affect the rights, preferences and
privileges of the holders of the Trust Securities (including any Successor
Securities) in any material respect (other than with respect to any dilution
of the holders' interest in the new entity), (vi) such successor entity has a
purpose substantially identical to that of the Trust, (vii) prior to such
merger, consolidation, amalgamation or replacement, the Company has received
an opinion of independent counsel to the Trust experienced in such matters to
the effect that, (A) such merger, consolidation, amalgamation or replacement
does not adversely affect the rights, preferences and privileges of the
holders of the Trust Securities (including any Successor Securities) in any
material respect (other than with respect to any dilution of the holders'
interest in the new entity), (B) following such merger, consolidation,
amalgamation or replacement, neither the Trust nor such successor entity will
<PAGE>
be required to register as an investment company under the 1940 Act and (C)
following such merger, consolidation, amalgamation or replacement, the Trust
(or the successor entity) will continue to be classified as a grantor trust
for United States federal income tax purposes and (viii) the Company
guarantees the obligations of such successor entity under the Successor
Securities at least to the extent provided by the Guarantee and the Common
Securities Guarantee. Notwithstanding the foregoing, the Trust shall not,
except with the consent of holders of 100% in liquidation amount of the Trust
Securities, consolidate, amalgamate, merge with or into, or be replaced by
any other entity or permit any other entity to consolidate, amalgamate, merge
with or into, or replace it, if such consolidation, amalgamation, merger or
replacement would cause the Trust or the successor entity to be classified as
other than a grantor trust for United States federal income tax purposes.

Voting Rights; Amendment of Declaration

Except as provided below and under "Description of the Guarantee--
Modification of the Guarantee; Assignment" and as otherwise required by law
and the Declaration, the holders of the Capital Securities will have no
voting rights.

Subject to the requirement of the Institutional Trustee obtaining a tax
opinion in certain circumstances set forth in the last sentence of this
paragraph, the holders of a majority in aggregate liquidation amount of the
Capital Securities have the right to direct the time, method and place of
conducting any proceeding for any remedy available to the Institutional
Trustee, or direct the exercise of any trust or power conferred upon the
Institutional Trustee under the Declaration including the right to direct the
Institutional Trustee, as holder of the Debentures, to (i) exercise the
remedies available under the Indenture with respect to the Debentures, (ii)
waive any past Indenture Event of Default that is waivable under Section 513
of the Indenture, (iii) exercise any right to rescind or annul a declaration
that the principal of all the Debentures shall be due and payable or (iv)
consent to any amendment, modification or termination of the Indenture or the
Debentures where such consent shall be required; provided, however, that,
where a consent or action under the Indenture would require the consent or
act of holders of more than a majority in principal amount of the Debentures
(a "Super-Majority") affected thereby, only the holders of at least such
Super-Majority in aggregate liquidation amount of the Capital Securities may
direct the Institutional Trustee to give such consent or take such action.
The Institutional Trustee shall notify all holders of the Capital Securities
of any notice of default received from the Debt Trustee with respect to the
Debentures. Such notice shall state that such Indenture Event of Default also
constitutes an Event of Default. Except with respect to directing the time,
method and place of conducting a proceeding for a remedy, the Institutional
Trustee shall not take any of the actions described in clause (i), (ii) or
(iii) above unless the Institutional Trustee has obtained an opinion of tax
counsel experienced in such matters to the effect that, as a result of such
action, the Trust will not fail to be classified as a grantor trust for
United States federal income tax purposes.

In the event the consent of the Institutional Trustee, as a holder of
the Debentures, is required under the Indenture with respect to any
amendment, modification or termination of the Indenture, the Institutional
Trustee shall request the direction of the holders of the Trust Securities
with respect to such amendment, modification or termination and shall vote
with respect to such amendment, modification or termination as directed by a
<PAGE>
majority in liquidation amount of the Trust Securities voting together as a
single class; provided, however, that where a consent under the Indenture
would require the consent of a Super-Majority, the Institutional Trustee may
only give such consent at the direction of the holders of at least the
proportion in liquidation amount of the Trust Securities which the relevant
Super-Majority represents of the aggregate principal amount of the Debentures
outstanding. The Institutional Trustee shall be under no obligation to take
any such action in accordance with the directions of the holders of the Trust
Securities unless the Institutional Trustee has obtained an opinion of tax
counsel experienced in such matters to the effect that for the purposes of
United States federal income tax, the Trust will not be classified as other
than a grantor trust.

A waiver of an Indenture Event of Default will constitute a waiver of
the corresponding Event of Default.

Any required approval or direction of holders of Capital Securities may
be given at a separate meeting of holders of Capital Securities convened for
such purpose, at a meeting of all of the holders of Trust Securities or
pursuant to written consent. The Regular Trustees will cause a notice of any
meeting at which holders of Capital Securities are entitled to vote, or of
any matter upon which action by written consent of such holders is to be
taken, to be mailed to each holder of record of Capital Securities. Each such
notice will include a statement setting forth the following information: (i)
the date of such meeting or the date by which such action is to be taken;
(ii) a description of any resolution proposed for adoption at such meeting on
which such holders are entitled to vote or of such matter upon which written
consent is sought; and (iii) instructions for the delivery of proxies or
consents. No vote or consent of the holders of Capital Securities will be
required for the Trust to redeem and cancel Capital Securities or distribute
Debentures in accordance with the Declaration.

Notwithstanding that holders of Capital Securities are entitled to vote
or consent under any of the circumstances described above, any of the Capital
Securities that are owned at such time by the Company or any entity directly
or indirectly controlling or controlled by, or under direct or indirect
common control with, the Company, shall not be entitled to vote or consent
and shall, for purposes of such vote or consent, be treated as if such
Capital Securities were not outstanding.

The procedures by which holders of Capital Securities may exercise their
voting rights are described below. See "Book-Entry Issuance" below.

Global Capital Securities

The Capital Securities of the Trust may be issued in whole or in part in
the form of one or more Global Capital Securities that will be deposited
with, or on behalf of, the depositary identified in the Prospectus Supplement
relating to the Capital Securities. Unless otherwise indicated in the
applicable Prospectus Supplement for the Capital Securities, the depositary
will be The Depository Trust Company ("DTC"). Global Capital Securities may
be issued only in fully registered form and in either temporary or permanent
form. Unless and until it is exchanged in whole or in part for the individual
Capital Securities represented thereby, a Global Capital Security may not be
transferred except as a whole by the depositary for such Global Capital
Security to a nominee of such depositary or by a nominee of such depositary
to such depositary or another nominee of such depositary or by such
<PAGE>
depositary or any nominee to a successor depositary or any nominee of such
successor.

While the specific terms of the depositary arrangement with respect to
the Capital Securities of the Trust (if other than as described under "Book-
Entry Issuance") will be described in the Prospectus Supplement relating to
the Capital Securities, the Company anticipates that the following provisions
will generally apply to depositary arrangements.

Upon the issuance of a Global Capital Security, and the deposit of such
Global Capital Security with or on behalf of the applicable depositary, the
depositary for such Global Capital Security or its nominee will credit, on
its book-entry registration and transfer system, the respective aggregate
liquidation amounts of the individual Capital Securities represented by such
Global Capital Securities to the accounts of Participants. Such accounts
shall be designated by the dealers, underwriters or agents with respect to
such Capital Securities or by the Company if such Capital Securities are
offered and sold directly by the Company. Ownership of beneficial interests
in a Global Capital Security will be limited to Participants or persons that
may hold interests through Participants. Ownership of beneficial interests in
such Global Capital Security will be shown on, and the transfer of that
ownership will be effected only through, records maintained by the applicable
depositary or its nominee (with respect to interests of Participants) and the
records of Participants (with respect to interests of persons who hold
through Participants). The laws of some states require that certain
purchasers of securities take physical delivery of such securities in
definitive form. Such limits and such laws may impair the ability to transfer
beneficial interests in a Global Capital Security.

So long as the depositary for a Global Capital Security, or its nominee,
is the registered owner of such Global Capital Security, such depositary or
such nominee, as the case may be, will be considered the sole owner or holder
of the Capital Securities represented by such Global Capital Security for all
purposes under the Declaration. Except as provided below, owners of
beneficial interests in a Global Capital Security will not be entitled to
have any of the individual Capital Securities represented by such Global
Capital Security registered in their names, will not receive or be entitled
to receive physical delivery of any such Capital Securities in definitive
form and will not be considered the owners or holders thereof under the
Declaration.

Payments of liquidation amount, premium or Distributions in respect of
individual Capital Securities represented by a Global Capital Security
registered in the name of a depositary or its nominee will be made to such
depositary or its nominee, as the case may be, as the registered owner of the
Global Capital Security representing such Capital Securities. None of the
Company, the Institutional Trustee, any paying agent or the registrar for
such Capital Securities will have any responsibility or liability for any
aspect of the records relating to or payments made on account of beneficial
ownership interests of the Global Capital Security representing such Capital
Securities or for maintaining, supervising or reviewing any records relating
to such beneficial ownership interests.

The Company expects that the depositary for the Capital Securities of
the Trust, or its nominee, upon receipt of any payment of liquidation amount,
premium or Distributions in respect of a Global Capital Security representing
any of such Capital Securities, immediately will credit Participants'
<PAGE>
accounts with payments in amounts proportionate to their respective
beneficial interest in the aggregate of such Global Capital Security for such
Capital Securities as shown on the records of such depositary or its nominee.
The Company also expects that payments by Participants to owners of
beneficial interests in such Global Capital Security held through such
Participants will be governed by standing instructions and customary
practices, as is now the case with securities held for the accounts of
customers in bearer form or registered in "street name." Such payments will
be the responsibility of such Participants.

Unless otherwise specified in the applicable Prospectus Supplement, if a
Depositary for the Capital Securities of the Trust is at any time unwilling,
unable or ineligible to continue as a depositary and a successor depositary
is not appointed by the Company within 90 days, the Trust will issue
individual Capital Securities of the Trust in exchange for the Global Capital
Security representing such Capital Securities. In addition, the Company may
at any time and in its sole discretion, subject to any limitations described
in the Prospectus Supplement relating to the Capital Securities, determine
not to have any Capital Securities of the Trust represented by one or more
Global Capital Securities and, in such event, the Trust will issue individual
Capital Securities in exchange for the Global Capital Security or Securities
representing such Capital Securities. Further, if the Company so specifies
with respect to the Capital Securities of the Trust, an owner of a beneficial
interest in a Global Capital Security representing such Capital Securities
may, on terms acceptable to the Company, the Institutional Trustee and the
Depositary for such Global Capital Security, receive individual Capital
Securities in exchange for such beneficial interests, subject to any
limitations described in the Prospectus Supplement relating to such Capital
Securities. In any such instance, an owner of a beneficial interest in a
Global Capital Security will be entitled to physical delivery of individual
Capital Securities represented by such Global Capital Security equal in
liquidation amount to such beneficial interest and to have such Capital
Securities registered in its name. Individual Capital Securities so issued
will be issued in denominations, unless otherwise specified by the Company,
of $25 and integral multiples thereof.

Payment and Paying Agency

Payments in respect of the Capital Securities shall be made to the
applicable depositary, which shall credit the relevant accounts at such
depositary on the applicable Distribution Dates or, if the Capital Securities
are not held by a depositary, such payments shall be made by check mailed to
the address of the holder entitled thereto as such address shall appear on
the Register. Unless otherwise specified in the applicable Prospectus
Supplement, the paying agent for the Capital Securities shall initially be
the Institutional Trustee and any co-paying agent chosen by the Institutional
Trustee and acceptable to the Regular Trustees and the Company. The paying
agent shall be permitted to resign as paying agent upon 30 days' written
notice to the Institutional Trustees and the Company. In the event that the
Institutional Trustee shall no longer be the paying agent, the Regular
Trustees shall appoint a successor to act as paying agent (which shall be a
bank or trust company acceptable to the Regular Trustees and the Company).

<PAGE>
Registrar and Transfer Agent

Unless otherwise specified in the applicable Prospectus Supplement, the
Institutional Trustee will act as registrar and transfer agent for the
Capital Securities.

Registration of transfers of Capital Securities will be effected without
charge by or on behalf of each Trust, but upon payment of any tax or other
governmental charges that may be imposed in connection with any transfer or
exchange. The Trust will not be required to register or cause to be
registered the transfer of the Capital Securities after the Capital
Securities have been called for redemption.

Information Concerning the Institutional Trustee

The Institutional Trustee, other than during the occurrence and
continuance of an Event of Default, undertakes to perform only such duties as
are specifically set forth in the Declaration and, after such Event of
Default, must exercise the same degree of care and skill as a prudent person
would exercise or use in the conduct of his or her own affairs. Subject to
this provision, the Institutional Trustee is under no obligation to exercise
any of the powers vested in it by the Declaration at the request of any
holder of Capital Securities unless it is offered reasonable indemnity
against the costs, expenses and liabilities that might be incurred thereby.
If no Event of Default has occurred and is continuing and the Institutional
Trustee is required to decide between alternative causes of action, construe
ambiguous provisions in the Declaration or is unsure of the application of
any provision of the Declaration, and the matter is not one on which holders
of Capital Securities are entitled under the Declaration to vote, then the
Institutional Trustee shall take such action as is directed by the Company
and if not so directed, shall take such action as it deems advisable and in
the best interests of the holders of the Trust Securities and will have no
liability except for its own bad faith, negligence or willful misconduct.

Miscellaneous

The Regular Trustees are authorized and directed to conduct the affairs
of and to operate the Trust in such a way that the Trust will not be deemed
to be an "investment company" required to be registered under the Investment
Company Act or fail to be classified as a grantor trust for U.S. federal
income tax purposes and so that the Debentures will be treated as
indebtedness of the Company for U.S. federal income tax purposes. In this
connection, the Company and the Regular Trustees are authorized to take any
action, not inconsistent with applicable law, the certificate of trust of the
Trust or the Declaration, that the Company and the Regular Trustees determine
in their discretion to be necessary or desirable for such purposes, as long
as such action does not materially adversely affect the interests of the
holders of the Capital Securities.

Holders of the Capital Securities have no preemptive or similar rights.

The Trust may not borrow money or issue debt or mortgage or pledge any
of its assets.

DESCRIPTION OF THE GUARANTEE

Set forth below is a summary of information concerning the Guarantee
which will be executed and delivered by the Company for the benefit of the
holders from time to time of Trust Securities. The Guarantee will be
<PAGE>
qualified as an indenture under the Trust Indenture Act. The First National
Bank of Chicago, an independent trustee, will act as indenture trustee under
the Guarantee (the "Guarantee Trustee") for the purposes of compliance with
the provisions of the Trust Indenture Act. The terms of the Guarantee will be
those set forth in the Guarantee and those made part of the Guarantee by the
Trust Indenture Act. The following summary is not necessarily complete, and
reference is hereby made to the copy of the form of the Guarantee (including
the definitions therein of certain terms) which is filed as an exhibit to the
Registration Statement of which this Prospectus forms a part, and to the
Trust Indenture Act. Whenever particular defined terms of the Guarantee are
referred to in this Prospectus, such defined terms are incorporated herein by
reference. The Guarantee will be held by the Trustee for the benefit of the
holders of the Trust Securities.

General

Pursuant to the Guarantee, unless otherwise specified in the applicable
Prospectus Supplement, the Company will irrevocably and unconditionally
agree, to the extent set forth therein, to pay in full to the holders of the
Trust Securities, the Guarantee Payments (as defined herein) (except to the
extent paid by the Trust), as and when due, regardless of any defense, right
of set-off or counterclaim which the Trust may have or assert. The following
payments or distributions with respect to Trust Securities issued by the
Trust, to the extent not paid by or on behalf of the Trust (the "Guarantee
Payments"), will be subject to the Guarantee (without duplication): (i) any
accrued and unpaid distributions which are required to be paid on the Trust
Securities, to the extent the Trust shall have funds available therefor; (ii)
with respect to any Trust Securities called for redemption by the Trust, the
redemption price (the "Redemption Price") and all accrued and unpaid
distributions to the date of redemption, to the extent the Trust has funds
available therefor and (iii) upon a voluntary or involuntary dissolution,
winding-up or termination of the Trust (other than in connection with the
distribution of Debentures to the holders of Trust Securities or the
redemption of all of the Trust Securities), the lesser of (a) the aggregate
of the liquidation amount and all accrued and unpaid distributions on the
Trust Securities to the date of payment, to the extent the Trust has funds
available therefor, and (b) the amount of assets of the Trust remaining
available for distribution to holders of the Trust Securities in liquidation
of the Trust. The Company's obligation to make a Guarantee Payment may be
satisfied by direct payment of the required amounts by the Company to the
holders of Trust Securities or by causing the Trust to pay such amounts to
such holders.

The Guarantee will be a full and unconditional guarantee of the
Guarantee Payments with respect to the Trust Securities, but will not apply
to any payment of distributions except to the extent the Trust shall have
funds available therefor. If the Company does not make interest payments on
the Debentures purchased by the Trust, the Trust will not pay distributions
on the Trust Securities issued by the Trust and will not have funds available
therefor. See "Relationship Among the Capital Securities, the Debentures and
the Guarantee." The Guarantee, when taken together with the Company's
obligations under the Indenture and the Declaration, will have the effect of
providing a full and unconditional guarantee on a subordinated basis by the
Company of payments due on the Capital Securities.

The Company has also agreed to irrevocably and unconditionally guarantee
the obligations of the Trust with respect to the Common Securities, except
<PAGE>
that upon an Indenture Event of Default, holders of the Capital Securities
shall have priority over holders of Common Securities with respect to
distributions and payments on liquidation, redemption or otherwise.

Certain Covenants of the Company

In the Guarantee, the Company will covenant that, so long as any Trust
Securities issued by the Trust remain outstanding, if there shall have
occurred any event that would constitute an event of default under the
Guarantee or the Declaration, then (a) the Company shall not declare or pay
any dividend on, make any distributions with respect to, or redeem, purchase,
acquire or make a liquidation payment with respect to, any of its capital
stock (other than (i) purchases or acquisitions of capital stock of the
Company in connection with the satisfaction by the Company of its obligations
under any employee benefit plans or the satisfaction by the Company of its
obligations pursuant to any contract or security outstanding on the date of
such event requiring the Company to purchase capital stock of the Company,
(ii) as a result of a reclassification of the Company's capital stock or the
exchange or conversion of one class or series of the Company's capital stock
for another class or series of the Company's capital stock, (iii) the
purchase of fractional interests in shares of the Company's capital stock
pursuant to the conversion or exchange provisions of such capital stock or
the security being converted or exchanged, (iv) dividends or distributions in
capital stock of the Company (or rights to acquire capital stock) or
repurchases or redemptions of capital stock solely from the issuance or
exchange of capital stock or (v) redemptions or repurchases of any rights
outstanding under a shareholder rights plan or the declaration thereunder of
a dividend of rights in the future), (b) the Company shall not make any
payment of interest, principal or premium, if any, on or repay, repurchase or
redeem any debt securities issued by the Company which rank junior to the
Debentures and (c) the Company shall not make any guarantee payments with
respect to the foregoing (other than payments pursuant to the Guarantee).

Modification of the Guarantee; Assignment

Except with respect to any changes which do not adversely affect the
rights of holders of Trust Securities (in which case no vote will be
required), the Guarantee may be amended only with the prior approval of the
holders of not less than a majority in liquidation amount of the outstanding
Trust Securities issued by the Trust. All guarantees and agreements contained
in the Guarantee shall bind the successors, assigns, receivers, trustees and
representatives of the Company and shall inure to the benefit of the holders
of the Trust Securities then outstanding.

Termination

The Guarantee will terminate as to the Trust Securities (a) upon full
payment of the Redemption Price of all Trust Securities then outstanding, (b)
upon distribution of the Debentures held by the Trust to the holders of the
Trust Securities of the Trust or (c) upon full payment of the amounts payable
in accordance with the Declaration upon liquidation of the Trust. The
Guarantee will continue to be effective or will be reinstated, as the case
may be, if at any time any holder of Trust Securities must return payment of
any sums paid under such Trust Securities or the Guarantee.
<PAGE>
Events of Default

An event of default under the Guarantee will occur upon the failure of
the Company to perform any of its payment or other obligations thereunder.

The holders of a majority in liquidation amount of the Trust Securities
have the right to direct the time, method and place of conducting any
proceeding for any remedy available to the Guarantee Trustee in respect of
the Guarantee or to direct the exercise of any trust or power conferred upon
the Guarantee Trustee under the Guarantee. If the Guarantee Trustee fails to
enforce the Guarantee, any holder of Trust Securities may institute a legal
proceeding directly against the Company to enforce such holder's rights under
the Guarantee, without first instituting a legal proceeding against the
Trust, the Guarantee Trustee or any other person or entity. Notwithstanding
the foregoing, if the Company has failed to make a required guarantee
payment, a holder of Trust Securities may directly institute a proceeding
against the Company for enforcement of the Guarantee for such payment. The
Company waives any right or remedy to require that any action be brought
first against the Trust or any other person or entity before proceeding
directly against the Company.

Status of the Guarantee

The Guarantee will constitute an unsecured obligation of the Company and
will rank on a parity with all of the Company's other senior unsecured
obligations.

Information Concerning the Guarantee Trustee

Governing Law

The Guarantee will be governed by and construed in accordance with the
internal laws of the State of New York.

RELATIONSHIP AMONG THE CAPITAL SECURITIES,
THE DEBENTURES AND THE GUARANTEE

As long as payments of interest and other payments are made when due on
the Debentures, such payments will be sufficient to cover Distributions and
other payments due on the Capital Securities, primarily because (i) the
aggregate principal amount of the Debentures will be equal to the sum of the
aggregate stated liquidation amount of the Capital Securities and Common
Securities; (ii) the interest rate and interest and other payment dates on
the Debentures will match the Distribution rate and Distribution and other
payment dates for the Capital Securities; (iii) the Company shall be
<PAGE>
obligated to pay, directly or indirectly, all costs, expenses, debts and
obligations of the Trust (other than with respect to the Trust Securities);
and (iv) the Declaration further provides that the Trust will not engage in
any activity that is not consistent with the limited purposes of the Trust.

Payments of Distributions and other amounts due on the Capital
Securities (to the extent the Trust has funds available for the payment of
such Distributions) are irrevocably guaranteed by the Company as and to the
extent set forth under "Description of the Guarantee." Taken together, the
Company's obligations under a series of Debentures, the Indenture, the
Declaration and the Guarantee have the effect of providing a full,
irrevocable and unconditional guarantee of payments of Distributions and
other amounts due on the Capital Securities. No single document standing
alone or operating in conjunction with fewer than all of the other documents
constitutes such guarantee. It is only the combined operation of these
documents that has the effect of providing a full, irrevocable and
unconditional guarantee of the Trust's obligations under the Capital
Securities. If and to the extent that the Company does not make payments on
the Debentures, the Trust will not pay Distributions or other amounts due on
the Capital Securities. The Guarantee does not cover payment of Distributions
when the Trust does not have sufficient funds to pay such Distributions. In
such event, the remedy of a holder of Capital Securities is to institute a
legal proceeding directly against the Company for enforcement of payment of
such Distributions to such holder.

Notwithstanding anything to the contrary in the Indenture, the Company
has the right to set-off any payment it is otherwise required to make
thereunder with and to the extent the Company has theretofore made, or is
concurrently on the date of such payment making, a payment under the
Guarantee.

A holder of any Capital Security may institute a legal proceeding
directly against the Company to enforce its rights under the Guarantee
without first instituting a legal proceeding against the Guarantee Trustee,
the Trust or any other person or entity.

The Trust's Capital Securities evidence preferred undivided beneficial
interests in the assets of the Trust, and each Trust exists for the sole
purpose of issuing the Capital Securities and Common Securities and investing
the proceeds thereof in Debentures. A principal difference between the rights
of a holder of a Capital Security and a holder of a Debenture is that a
holder of a Debenture will accrue, and (subject to the permissible extension
of the interest period) is entitled to receive, interest on the principal
amount of Debentures held, while a holder of Capital Securities is only
entitled to receive Distributions if and to the extent the Trust has funds
available for the payment of such Distributions.

Upon any voluntary or involuntary dissolution of the Trust involving the
liquidation of the Debentures, the holders of Capital Securities of the Trust
will be entitled to receive, out of assets held by the Trust, the Liquidation
Distribution in cash. See "Description of Capital Securities--Liquidation
Distribution Upon Dissolution." Upon any voluntary or involuntary liquidation
or bankruptcy of the Company, the Institutional Trustee as holder of the
Debentures would be entitled to receive payment in full of principal and
interest, before any stockholders of the Company receive payments or
distributions.
<PAGE>
DESCRIPTION OF CAPITAL STOCK

The following description of the Company's capital stock summarizes
certain provisions of the Company's Restated Certificate of Incorporation (as
it may be amended, the "Certificate of Incorporation"), the Rights Agreement,
as amended, between the Company and The Bank of New York, as Rights Agent
(the "Rights Agreement") and the New Jersey Business Corporation Act (the
"NJBCA") and is subject to and is qualified in its entirety by reference to
such documents and provisions.

General

The authorized capital stock of the Company consists of 600,000,000
shares of Common Stock and 10,000,000 shares of preference stock, of which
563,000 shares of Series A Preference Stock (the "Series A Preference Stock")
have been reserved for issuance. At December 31, 1997, no shares of the
authorized Preference Stock were issued and outstanding and 165,408,751
shares of the authorized Common Stock were issued and outstanding. The
Company also had outstanding, as of such date, 55,136,201 Series A Preference
Stock Purchase Rights (the "Rights"). See "--Rights Plan."

Common Stock

Dividends. Subject to the rights of holders of Preference Stock, the
Board of Directors may, in its discretion, out of funds legally available for
the payment of dividends and at such times and in such manner as determined
by the Board of Directors, declare and pay dividends on the Common Stock.

Liquidation, Dissolution and Winding Up. In the event of any
liquidation, dissolution or winding up of the Company, whether voluntary or
involuntary, after payment in full has been made to the holders of Preference
Stock of the amounts to which they are respectively entitled or sufficient
sums have been set apart for the payment thereof, the holders of Common Stock
shall be entitled to receive ratably any and all assets remaining to be paid
or distributed, and the holders of Preference Stock shall not be entitled to
share therein.

Voting. Except as otherwise expressly provided in the Certificate of
Incorporation or as may be required by law, the holders of Common Stock of
the Company shall be entitled at all meetings of stockholders to one vote for
each share of such stock held by them respectively and shall vote together
with the holders of Preference Stock as one class. At all elections of
directors, each holder of Common Stock shall be entitled to as many votes as
shall equal the number of votes which such holder would be entitled to cast,
multiplied by the number of directors to be elected, and such holder may cast
all such votes for a single director, or may distribute them, among the
number to be voted for or any two or more of such directors.

Preemptive Rights. No holder of shares of Common Stock shall have any
preemptive or preferential rights to subscribe to or purchase any shares of
any class or series of stock of the Company, now or hereafter authorized, or
any series convertible into, or warrants or other evidences of optional
rights to purchase or subscribe to, shares of any class or series of the
Company, now or hereafter authorized.

All the outstanding shares of Common Stock are fully paid and non-
assessable.
<PAGE>
The registrar and transfer agent for the Common Stock is The Bank of New
York.

Preference Stock

The Certificate of Incorporation provides for Preference Stock which may
be issued, from time to time, in one or more series with certain rights and
limitations as may be fixed by the Board of Directors of the Company. The
Company has no present plan to issue any Preference Stock other than in
accordance with the Rights Plan (as defined herein). However, the Board of
Directors of the Company, without stockholder approval, may issue Preference
Stock that could adversely affect the voting power of holders of the Common
Stock. Issuance of Preference Stock could be utilized, under certain
circumstances, in an attempt to prevent a takeover of the Company.

The following description sets forth certain general terms and
provisions of the Preference Stock to which a Prospectus Supplement may
relate. Certain terms of a series of the Preference Stock offered by a
Prospectus Supplement will be described in such Prospectus Supplement. If so
indicated in the Prospectus Supplement and if permitted by the Certificate of
Incorporation and by law, the terms of any such series may differ from the
terms set forth below. The following description of the Preference Stock
summarizes certain provisions of the Certificate of Incorporation and is
subject to and qualified in its entirety by reference to the Certificate of
Incorporation and the Certificate of Amendment thereto which will be filed
with the Commission promptly after any offering of such series of Preference
Stock. The following description, together with any description of the terms
of a series of Preference Stock set forth in the related Prospectus
Supplement, summarizes all of the material terms of such series of Preference
Stock.

General. The Board of Directors may cause Preference Stock to be issued
from time to time in one or more series and is expressly authorized to fix:

(i) the distinctive designation of such series and the number of
shares which shall constitute such series, which number may be increased
(except as otherwise provided by the Board of Directors in creating such
series) or decreased (but not below the number of shares thereof then
outstanding) from time to time by the Board of Directors;

(ii) the rate of dividends payable on shares of such series and the
date or dates from which dividends shall accumulate;

(iii) the terms, if any, on which shares of such series may be
redeemed, including, without limitation, the redemption price or prices
for such series, which may consist of a redemption price or scale of
redemption prices applicable only to redemption in connection with a
sinking fund (which term as used herein shall include any fund or
requirement for the periodic purchase or redemption of shares), and the
same or a different redemption price or scale of redemption prices
applicable to any other redemption;

(iv) the terms and amount of any sinking fund provided for the
purchase or redemption of shares of such series;
<PAGE>
(v) the amount or amounts which shall be paid to the holders of
shares of such series in case of liquidation, dissolution or winding up
of the Company, whether voluntary or involuntary;

(vi) the terms, if any, upon which the holders of shares of such
series may convert shares thereof into stock of any other class or
classes or of any one or more series of the same class or of another
class or classes; and

(vii) such other rights, preferences and limitations as may be
permitted to be fixed by the Board of Directors of the Company under the
laws of the State of New Jersey as in effect at the time of the creation
of such series.

All shares of Preference Stock, irrespective of series, shall be of
equal rank, and shall be identical in all respects except to the terms fixed
by the Board of Directors as permitted in the Certificate of Incorporation.
The Board of Directors is authorized to change the designation, rights,
preferences and limitations of any series of Preference Stock theretofore
established, no shares of which have been issued. The Board of Directors is
authorized to amend the Certificate of Incorporation to set forth the
designation, number of shares, rights, preferences and limitations of any
series of Preference Stock fixed by the Board of Directors, or to reflect any
change therein made by the Board of Directors, as permitted in the
Certificate of Incorporation.

Dividends. The holders of Preference Stock shall be entitled to receive,
when, as and if declared by the Board of Directors out of funds legally
available for the payment of dividends, cumulative dividends in cash at the
annual rate for each particular series theretofore fixed by the Board of
Directors, payable in respect of each series on the date or dates which shall
be fixed by the Board of Directors with respect to each particular series.

If at any time there are two or more series of Preference Stock
outstanding, any dividend paid upon shares of Preference Stock in an amount
less than all dividends accrued and unpaid on all outstanding shares of
Preference Stock shall be paid ratably among all series of Preference Stock
in proportion to the full amount of dividends accrued and unpaid on each such
series.

So long as any Preference Stock is outstanding, no dividend shall be
paid or declared, nor any distribution be made, on the Common Stock or any
other stock of the Company ranking junior to the Preference Stock in the
payment of dividends (other than a dividend payable in stock of junior rank),
nor shall any shares of Common Stock or any other stock of junior rank be
acquired for consideration by the Company or by any subsidiary except in
exchange for shares of stock of junior rank unless (i) full dividends on the
Preference Stock for all past dividend periods shall have been paid or shall
have been declared and a sufficient sum set apart for the payment thereof and
(ii) all obligations of the Company, if any, with respect to the redemption
or purchase of shares of Preference Stock in accordance with the requirements
of any sinking fund have been met. Subject to the foregoing provisions, such
dividends (payable in cash, stock or otherwise) as may be determined from
time to time by the Board of Directors may be declared and paid on the Common
Stock or any other stock of junior rank out of the remaining funds of the
Company legally available for the payment of dividends; and the Preference
<PAGE>
Stock shall not be entitled to participate in any such dividends, whether
payable in cash, stock or otherwise.

Redemption. If so provided by the Board of Directors, the Company, at
the option of the Board of Directors, or in accordance with the requirements
of any sinking fund for the Preference Stock or any series thereof, may
redeem the whole or any part of the Preference Stock at any time outstanding,
or the whole or any part of any series thereof, at such time or times and
from time to time and at such redemption price or prices as may be fixed by
the Board of Directors pursuant to the Certificate of Incorporation, together
in each case with an amount equal to all unpaid dividends accrued thereon to
the date fixed for such redemption, and otherwise upon the terms and
conditions fixed by the Board of Directors for any such redemption; provided,
however, that no optional redemption of less than all of the Preference Stock
shall take place unless (i) full dividends on the Preference Stock for all
past dividend periods shall have been paid or declared and a sufficient sum
set apart for the payment thereof and (ii) all obligations of the Company, if
any, with respect to the redemption or purchase of shares of Preference Stock
in accordance with the requirements of any sinking fund have been met. If at
any time there are two or more series of Preference Stock outstanding, any
amount expended in purchasing or redeeming shares of Preference Stock
pursuant to the provisions of sinking funds therefor which is less than the
amount then required to be so expended under all such funds shall be expended
ratably among all series of Preference Stock in proportion to the full amount
of expenditures of such funds then required in respect of each such series.

Liquidation, Dissolution and Winding Up. In the event of any
liquidation, dissolution or winding up of the Company, whether voluntary or
involuntary, the holders of each series of Preference Stock then outstanding
shall be entitled to receive out of the assets of the Company, before any
distribution or payment shall be made to the holders of the Common Stock or
any other stock of Company ranking junior to the Preference Stock with
respect to the distribution of assets, the amount determined by the Board of
Directors in creating such series, plus in each case an amount equal to all
unpaid dividends accrued thereon to the date fixed for such payment to the
holders of the Preference Stock. If upon any such liquidation, dissolution or
winding up, two or more series of Preference Stock are outstanding, any
distribution to holders of Preference Stock in an aggregate amount less than
the total payable with respect to all outstanding Preference Stock shall be
made ratably among all series of Preference Stock in proportion to the full
amount payable upon such liquidation, dissolution or winding up in respect of
each such series.

Voting. The holders of Preference Stock shall have the voting rights set
forth below:

(a) Except as otherwise expressly provided in the Certificate of
Incorporation or as may be required by law, the holders of Preference Stock
shall be entitled at all meetings of stockholders to three votes for each
five shares of such stock held by them respectively (a holder of less than
five shares being entitled to no vote) and the holders of all series of
Preference Stock shall vote together with the holders of Common Stock as one
class. At all elections of directors, each holder of Preference Stock shall
be entitled to as many votes as shall equal the number of votes which such
holder would be entitled to cast, multiplied by the number of directors to be
elected, and such holder may cast all such votes for a single director, or
<PAGE>
may distribute them among the number to be voted for or any two or more of
them as such holder may see fit.

(b) If and whenever dividends on the Preference Stock shall be in
arrears in an amount equivalent to six quarterly dividends or mandatory
sinking fund payments shall be in arrears in an amount equal to the aggregate
of all such payments required during one year, then, at any ensuing annual
meeting of stockholders at which at least a majority of the outstanding
shares of Preference Stock are represented, the holders of Preference Stock
of all series thereof then outstanding, voting separately as a class, shall
be entitled to elect two directors. Such right of the holders of Preference
Stock shall continue to be exercisable until all dividends in arrears on
Preference Stock shall have been paid in full or declared and a sum
sufficient for the payment thereof set apart and all mandatory sinking fund
payments in arrears shall have been paid in full, whereupon such right shall
cease. During any time that the holders of Preference Stock are entitled to
elect two such directors, they shall also be entitled to participate with the
Common Stock in the election of any other directors.

(i) the affirmative approval of the holders of at least two-thirds
in interest of Preference Stock of all series thereof then outstanding
present and voting at a meeting, acting as a single class without regard to
series, shall be required for any amendment of the Certificate of
Incorporation altering materially and adversely any existing provision of the
Preference Stock or for the creation, or an increase in the authorized
amount, of any class of stock ranking, as to dividends or assets, prior to
the Preference Stock; and

(ii) the affirmative approval of the holders of at least a majority
in interest of Preference Stock of all series thereof then outstanding
present and voting at a meeting, acting as a single class without regard to
series, shall be required for an increase in the authorized amount of
Preference Stock, or for the creation, or an increase in the authorized
amount, of any class of stock ranking, as to dividends or assets, on a parity
with the Preference Stock;

provided, however, that if any amendment to the Certificate of Incorporation
shall affect adversely the rights or preferences of one or more, but not all,
of the series of Preference Stock at the time outstanding, or shall unequally
adversely affect the rights or preferences of different series of Preference
Stock at the time outstanding, the affirmative approval of the holders of at
least two-thirds in interest of the shares of each such series so adversely
or unequally adversely affected present and voting at a meeting shall be
required in lieu of or (if such affirmative approval is required by law) in
addition to the affirmative approval of the holders of at least two-thirds in
interest of the shares of Preference Stock as a class present and voting at
such meeting.

Preemptive Rights. No holder of shares of any series of Preference Stock
shall have any preemptive or preferential rights to subscribe to or purchase
shares of any class or series of stock of the Company, now or hereafter
authorized, or any securities convertible into, or warrants or other
evidences of optional rights to purchase or subscribe to, shares of any laws
or series of the Company, now or hereafter authorized.
<PAGE>
Other Provisions. Subject to the requirements of paragraph (c) under
"--Voting" above, but notwithstanding any other provisions of the Certificate
of Incorporation, the Board of Directors, in the resolution or resolutions
providing for the issue of any series of Preference Stock, may determine, to
the extent that the Board of Directors may be permitted to do so under the
laws of the State of New Jersey as in effect at the time of the creation of
such series:

(i) the voting rights, full or limited, if any, of the shares of
such series; and whether or not and under what conditions the shares of such
series (alone or together with the shares of one or more other series having
similar provisions) shall be entitled to vote separately as a single class,
for the election of one or more additional directors of the Company in case
of dividend arrearages or other specified events, or upon other matters;

(ii) whether or not and upon what conditions dividends on shares of
such series shall be cumulative and, if cumulative, the date or dates from
which dividends shall accumulate;

(iii) whether or not the holders of shares of such series shall have
any preemptive or preferential rights to subscribe to or purchase shares of
any class or series of stock of the Company, now or hereafter authorized, or
any securities convertible into, or warrants or other evidences of optional
rights to purchase or subscribe to, shares of any class or series of the
Company, now or hereafter authorized; and

(iv) whether or not the issuance of additional shares of such series,
or of any shares of any other series, shall be subject to restrictions as to
issuance, or as to the preferences, rights and qualifications of any such
other series.

Voting Requirements

Majority Voting Requirements. Subject to the provisions described below
under "--Greater Voting Requirements" and except as otherwise expressly
provided in the Certificate of Incorporation or as may be required by law,
the majority voting requirements prescribed in subsections 14A:10-3(2) and
14A:12-4(4) and in paragraphs 14A:9-2(4)(c) and 14A:10-11(1)(c) of the NJBCA
shall apply to the Company. As a result, in the case of each of (i) a plan of
merger or consolidation, (ii) a dissolution of the Company, (iii) an
amendment to the Certificate of Incorporation and (iv) a sale, lease,
exchange or other disposition of all, or substantially all, of the assets of
the Company, any such action shall be approved upon receiving the affirmative
vote of a majority of the votes cast by the holders of shares of the Company
entitled to vote therein, and, in addition, if any class or series is
entitled to vote thereon as a class, the affirmative vote of a majority of
the votes cast in each class vote. Such voting requirements shall generally
be subject to such greater requirements as are provided in the NJBCA for
specific amendments or as may be provided in the Certificate of
Incorporation.

Greater Voting Requirements. The affirmative vote of the holders of
four-fifths of the outstanding shares of all classes of stock of the Company
entitled to vote, considered for the purposes of this paragraph as one class,
shall be required to authorize (i) the merger or consolidation of the Company
or a subsidiary of the Company with or into any other corporation, person or
other entity, (ii) any sale, lease, exchange or other disposition of all or
any material part of the assets of the Company or of any subsidiary of the
<PAGE>
Company to or with any other corporation, person or other entity or (iii) any
issuance or transfer of securities of the Company upon conversion of or in
exchange for the securities or assets of any other corporation, person or
entity if (as of the date of any action taken by the Board of Directors with
respect to such transaction or as of any record date for the determination of
stockholders entitled to notice and to vote with respect thereto or
immediately prior to the consummation of such transaction) such other
corporation, person or other entity referred to in clause (i), clause (ii) or
clause (iii) above is the beneficial owner, directly or indirectly, of more
than 10% of any class of capital stock of the Company. For the purposes
hereof, any corporation, person or other entity shall be deemed to be the
beneficial owner of any shares of capital stock of the Company, (x) which it
has the right to acquire pursuant to any agreement, or upon exercise of
conversion rights, warrants or options, or otherwise, or (y) which are
beneficially owned, directly or indirectly (including shares deemed owned
through application of clause (x) above) by any other corporation, person or
other entity with which it has any agreement, arrangement or understanding
with respect to the acquisition, holding, voting or disposition of stock or
of any material part of the assets of the Company or of it, or which is its
"affiliate" or "associate" as those terms are defined in Rule 12b-2 of the
General Rules and Regulations under the 1934 Act, as in effect on January 1,
1970. Any determination made in good faith by the Board of Directors, on the
basis of information at the time available to it, as to whether any
corporation, person or other entity is the beneficial owner of more than 10%
of any class of capital stock of the Company, or is an "affiliate" or
"associate", as above defined, shall be conclusive and binding for all
purposes of this paragraph. The provisions described in this paragraph shall
not apply to any agreement for the merger of any subsidiary of the Company
with the Company or with another subsidiary of the Company where the Company
or such other subsidiary shall be the surviving corporation and where the
provisions described in this paragraph shall not be changed or otherwise
affected by or by virtue of the merger.

Directors

The Board of Directors shall be divided as equally as may be into three
classes, each of which shall consist of such number as the by-laws may from
time to time provide, but no class shall consist of less than two members. At
each annual election, the successors of the directors of the class whose
terms expire in that year are elected to hold office for the term of three
years, so that the term of office of one class of directors shall expire in
each year. If the number of directors is changed, any newly created
directorships or decrease in directorships shall be so apportioned among the
classes as to make all classes as nearly equal in number as possible. In case
of any increase in the number of directors of any class or classes, the
additional directors may be elected by the Board of Directors, but any such
director so elected shall hold office only until the next succeeding annual
meeting of stockholders and until his successor shall have been elected and
qualified. No decrease in the number of directors shall shorten the term of
any incumbent director. Directors may be removed without cause only upon the
affirmative vote of the holders of at least four-fifths of the shares of
capital stock entitled to vote for the election of directors. Directors may
be removed for cause upon the affirmative vote of two-thirds of the entire
Board. The affirmative vote of the holders of at least four-fifths of the
shares of capital stock entitled to vote for the election of the directors
shall be required for any amendment or deletion of this provision, unless
such amendment or deletion shall have been approved by the unanimous vote of
<PAGE>
the directors then in office, in which case the majority voting requirements
of the NJBCA described above shall apply thereto.

The provisions of the Certificate of Incorporation relating to
directors shall have no application to any directors who may be elected by
the holders of Preference Stock or any series thereof, voting as a class or
series, as the case may be, pursuant to a right to elect directors conferred
upon such holders by reason of default in the payment of dividends, failure
to discharge sinking fund obligations or otherwise. Any such directors shall
be in addition to the directors to be elected pursuant to the paragraph
immediately above and shall be elected in the manner, and serve for such
term, as may be provided in the Certificate of Incorporation.

Rights Plan

On December 7, 1988, the Board of Directors of the Company declared a
dividend distribution of one Right for each outstanding share of Common Stock
of the Company. The dividend was payable on December 22, 1988 to shareholders
of record on that date. Each Right entitles the registered holder to purchase
from the Company one-hundredth (1/100) of a share of a series of preference
stock of the Company, designated as Series A Preference Stock, without par
value (the "Series A Preference Stock"), at a price of $130 (the "Purchase
Price").

On May 6, 1992, the Board of Directors of the Company declared a two-
for-one stock split in the form of a dividend distribution of one share of
Common Stock for each outstanding share of Common Stock (the "First Common
Stock Dividend"). The First Common Stock Dividend was payable on June 1, 1992
to shareholders of record on May 19, 1992. After giving effect to receipt of
the First Common Stock Dividend, each holder of a Right was deemed to be the
holder of (i) one-half of a Right in respect of the share of Common Stock
pursuant to which such Right originally had been issued and (ii) one-half of
a Right in respect of the share of Common Stock received by such holder
pursuant to the First Common Stock Dividend.

On August 6, 1997, the Board of Directors of the Company declared a
three-for-two stock split in the form of a dividend distribution of one share
of Common Stock for every two outstanding shares of Common Stock (the "Second
Common Stock Dividend"). The Second Common Stock Dividend was paid on
September 2, 1997 to shareholders of record on August 19, 1997. After giving
effect to receipt of the Second Common Stock Dividend, each holder of a Right
will be deemed to be the holder of (i) one-third of a Right in respect of the
share of Common Stock pursuant to which such Right originally had been
issued, (ii) one-third of a Right in respect of the share of Common Stock
received by such holder pursuant to the First Common Stock Dividend and (iii)
one-third of a Right in respect of the share of Common Stock received by such
holder pursuant to the Second Common Stock Dividend.

Until the close of business on the Distribution Date, which will occur
on the earlier to occur of (i) the tenth day following a public announcement
that a person or group of affiliated or associated persons (an "Acquiring
Person") other than the Company, any subsidiary of the Company or any
employee benefit plan or employee stock plan of the Company or of any
subsidiary of the Company (an "Exempt Person"), has acquired, or obtained the
right to acquire, beneficial ownership of 15% or more of the outstanding
Common Stock (the "Stock Acquisition Date"), (ii) the declaration by the
Board of Directors that any Person is an Adverse Person or (iii) the tenth
<PAGE>
day after the date of the commencement of, or the first public announcement
of the intent of any person (other than an Exempt Person) to commence, a
tender offer or exchange offer (other than a tender or exchange offer by an
Exempt Person) which would result in the ownership of 15% or more of the
outstanding Common Stock (the earlier of such dates being called the
"Distribution Date"), the Rights will be represented by and transferred with,
and only with, the Common Stock. Until the Distribution Date, new
certificates issued for Common Stock after December 22, 1988 contain a legend
incorporating the Rights Agreement by reference, and the surrender for
transfer of any of the Company's Common Stock certificates constitute the
transfer of the Rights associated with the Common Stock represented by such
certificates. As soon as practicable following the Distribution Date,
separate Right Certificates will be mailed to holders of record of the Common
Stock at the close of business on the Distribution Date, and thereafter the
separate certificates alone will evidence the Rights.

The Rights are not exercisable until the Distribution Date. The Rights
will expire at the close of business on December 22, 1998, unless earlier
redeemed by the Company as described below.

The Series A Preference Stock will be nonredeemable and, unless
otherwise provided in connection with the creation of a subsequent series of
Preference Stock, subordinate to any other series of Preference Stock. The
Series A Preference Stock will, however, rank prior to the Common Stock. The
Series A Preference Stock may not be issued except upon exercise of Rights.
Each share of Series A Preference Stock will be entitled to receive when, as
and if declared, a quarterly dividend in an amount per share equal to 100
times the cash dividends declared on the Company's Common Stock. In addition,
the Series A Preference Stock is entitled to 100 times any non-cash dividends
(other than dividends payable in equity securities) declared on the Common
Stock, in like kind. In the event of a default on such dividends, the holders
of the Series A Preference Stock (together with the holders of any other
Preference Stock similarly entitled) will be entitled to elect two directors.
In the event of liquidation, the holders of Series A Preference Stock will be
entitled to receive a liquidation payment in an amount equal to 100 times the
payment made per share of Common Stock. Each share of Series A Preference
Stock will have 100 votes, voting together with the Common Stock and not as a
separate class unless otherwise required by law or the Certificate of
Incorporation. In the event of any merger, consolidation or other transaction
in which common shares are exchanged, each share of Series A Preference Stock
will be entitled to receive 100 times the amount received per share of Common
Stock. The rights of the Series A Preference Stock as to dividends,
liquidation and voting are protected by anti-dilution provisions.

The Purchase Price payable, and the number of shares of Series A
Preference Stock or other securities or property issuable upon exercise of
the Rights, are subject to adjustment from time to time to prevent dilution
(i) in the event of a stock dividend on, or a subdivision, combination or
reclassification of the Series A Preference Stock, (ii) upon the grant to
holders of the Series A Preference Stock of certain rights or warrants to
subscribe for Series A Preference Stock or convertible securities at less
than the current market price of the Series A Preference Stock or (iii) upon
the distribution to holders of the Series A Preference Stock of evidences of
indebtedness or assets (excluding regular cash dividends and dividends
payable in Series A Preference Stock) or of subscription rights or warrants
(other than those referred to above).
<PAGE>
If (i) any Person (other than an Exempt Person) becomes the beneficial
owner of 15% or more of the then outstanding shares of Common Stock, (ii) the
Board of Directors of the Company, by majority vote, shall declare any Person
to be an Adverse Person, (iii) any Acquiring Person, Adverse Person or any
affiliates or associates thereof engages in one or more "self-dealing"
transactions as described in the Rights Agreement, then each holder of a
Right, other than the Acquiring Person or Adverse Person, will have the right
to receive in lieu of Series A Preference Stock, upon payment of the Purchase
Price, a number of shares of Common Stock having a market value equal to
twice the Purchase Price. This same right will be available to each holder of
record of a Right, other than the Acquiring Person or Adverse Person, if,
while there is an Acquiring Person or Adverse Person, there occurs any
reclassification of securities, any recapitalization of the Company, or any
merger or consolidation or other transaction involving the Company or any of
its subsidiaries which has the effect of increasing by more than 1% the
proportionate ownership interest of the Company or any of its subsidiaries
which is owned or controlled by the Acquiring Person or Adverse Person.
Alternatively, at any time after any person or group acquires 15% or more of
the Common Stock or the Board of Directors determines that a Person is an
Adverse Person, the Board of Directors of the Company may exchange one share
of the Common Stock (or an equivalent share of the Series A Preference Stock)
for each outstanding Right other than Rights held by an Acquiring Person or
Adverse Person, which become void. To the extent that insufficient shares of
Common Stock are available for the exercise in full of the Rights, holders of
Rights will receive upon exercise shares of Common Stock to the extent
available and then Series A Preference Stock, cash, property or other
securities of the Company (which may be accompanied by a reduction in the
Purchase Price), in proportions determined by the Company, so that the
aggregate value received is equal to twice the Purchase Price. Rights are not
exercisable following the occurrence of the events described in this
paragraph until the expiration of the period during which the Rights may be
redeemed as described below. Notwithstanding the foregoing, following the
occurrence of the events described in this paragraph, Rights that are (or,
under certain circumstances, Rights that were) beneficially owned by an
Acquiring Person or an Adverse Person will be void.

Unless the Rights are redeemed earlier, if, after the Stock Acquisition
Date or the declaration by the Board of Directors that a person is an Adverse
Person, the Company is acquired in a merger or other business combination (in
which any shares of the Common Stock are changed into or exchanged for other
securities or assets) or more than 50% of the assets or earning power of the
Company and its subsidiaries (taken as a whole) were to be sold or
transferred in one or a series of related transactions, the Rights Agreement
provides that proper provision shall be made so that each holder of record of
a Right will from and after that time have the right to receive, upon payment
of the Purchase Price, that number of shares of common stock of the acquiring
company which has a market value at the time of such transaction equal to two
times the Purchase Price.

Fractions of shares of Series A Preference Stock may, at the election of
the Company, be evidenced by depositary receipts. The Company may also issue
cash in lieu of fractional shares which are not integral multiples of one
one-hundredth of a share.

At any time until ten days following the Stock Acquisition Date or the
declaration by the Board of Directors that a person is an Adverse Person
(subject to extension by the Board of Directors), the Board of Directors
<PAGE>
(with the concurrence of a majority of the Independent Directors) may cause
the Company to redeem the Rights in whole, but not in part, at a price of
$0.01 per Right. Under certain circumstances set forth in the Rights
Agreement, the decision to redeem shall require the concurrence of a majority
of the Independent Continuing Directors. Immediately upon the action of the
Board of Directors of the Company authorizing redemption of the Rights, the
right to exercise the Rights will terminate, and the only right of the
holders of Rights will be to receive the Redemption Price without any
interest thereon. The term "Independent Directors" means any member of the
Board of Directors of the Company who is not an officer of the Company. The
term "Independent Continuing Directors" means any Independent Director who
was a member of the Board of Directors immediately prior to the time that any
Person shall become an Acquiring Person or Adverse Person, and any
Independent Director who becomes a member of the Board of Directors
subsequent to the time that any Person shall become an Acquiring Person or
Adverse Person if such Independent Director is recommended or nominated to
election on the Board of Directors by a majority of the Independent
Continuing Directors, but shall not include an Acquiring Person or Adverse
Person, or any representative of such Acquiring Person or Adverse Person.

Until the close of business on the tenth day following the Stock
Acquisition Date or the declaration by the Board of Directors that a person
is an Adverse Person, and thereafter for as long as the Rights are
redeemable, the Board of Directors (with the concurrence of a majority of the
Independent Directors) may cause the Company to amend the Rights in any
manner, including an amendment to extend the time period in which the Rights
may be redeemed, but no such amendment shall alter the redemption price, the
date of expiration of the Rights, or the number of one one-hundredths of a
share of Series A Preference Stock for which a Right is exercisable. At any
time when the Rights are not then redeemable, the Company (with the
concurrence of a majority of the Independent Continuing Directors) may amend
the Rights in any manner that does not adversely affect the interests of
holders of the Rights as such.

Until a Right is exercised, the holder, as such, will have no rights as
a shareholder of the Company, including, without limitation, the right to
vote or to receive dividends.

DESCRIPTION OF STOCK PURCHASE CONTRACTS
AND STOCK PURCHASE UNITS

The Company may issue Stock Purchase Contracts, including contracts
obligating holders to purchase from the Company, and the Company to sell to
the holders, a specified number of shares of Common Stock or Preference Stock
at a future date or dates. The consideration per share of Preference Stock or
Common Stock may be fixed at the time the Stock Purchase Contracts are issued
or may be determined by reference to a specific formula set forth in the
Stock Purchase Contracts. The Stock Purchase Contracts may be issued
separately or as a part of units ("Stock Purchase Units") consisting of a
Stock Purchase Contract and Debt Securities, Capital Securities or debt
obligations of third parties, including U.S. Treasury securities, securing
the holders' obligations to purchase the Preference Stock or the Common Stock
under the Stock Purchase Contracts. The Stock Purchase Contracts may require
the Company to make periodic payments to the holders of the Stock Purchase
Units or vice versa, and such payments may be unsecured or prefunded on some
basis. The Stock Purchase Contracts may require holders to secure their
obligations thereunder in a specified manner.
<PAGE>
The applicable Prospectus Supplement will describe the terms of any
Stock Purchase Contracts or Stock Purchase Units. The description in the
Prospectus Supplement will not necessarily be complete, and reference will be
made to the Stock Purchase Contracts, and, if applicable, collateral
arrangements and depositary arrangements, relating to such Stock Purchase
Contracts or Stock Purchase Units.

BOOK-ENTRY ISSUANCE

Unless otherwise specified in the applicable Prospectus Supplement, DTC
will act as depositary for Securities issued in the form of Global
Securities. Such Securities will be issued only as fully-registered
securities registered in the name of Cede & Co. (DTC's nominee). One or more
fully-registered Global Securities will be issued for such Securities
representing in the aggregate the total number of such Securities, and will
be deposited with or on behalf of DTC.

DTC is a limited purpose trust company organized under the New York
Banking Law, a "banking organization" within the meaning of the New York
Banking Law, a member of the Federal Reserve System, a "clearing corporation"
within the meaning of the New York Uniform Commercial Code, and a "clearing
agency" registered pursuant to the provisions of Section 17A of the Exchange
Act. DTC holds securities that its Participants deposit with DTC. DTC also
facilitates the settlement among Participants of securities transactions,
such as transfers and pledges, in deposited securities through electronic
computerized book-entry changes in Participants' accounts, thereby
eliminating the need for physical movement of securities certificates. Direct
Participants include securities brokers and dealers, banks, trust companies,
clearing corporations and certain other organizations ("Direct
Participants"). DTC is owned by a number of its Direct Participants and by
the New York Stock Exchange, Inc., the American Stock Exchange, Inc. and the
National Association of Securities Dealers, Inc. Access to the DTC system is
also available to others such as securities brokers and dealers, banks and
trust companies that clear through or maintain custodial relationships with
Direct Participants, either directly or indirectly ("Indirect Participants").
The rules applicable to DTC and its Participants are on file with the
Commission.

Purchases of Securities within the DTC system must be made by or through
Direct Participants, which will receive a credit for such Securities on DTC's
records. The ownership interest of each actual purchaser of each Security
("Beneficial Owner") is in turn to be recorded on the Direct and Indirect
Participants' records. Beneficial Owners will not receive written
confirmation from DTC of their purchases, but Beneficial Owners are expected
to receive written confirmations providing details of the transactions, as
well as periodic statements of their holdings, from the Direct or Indirect
Participants through which the Beneficial Owners purchased Securities.
Transfers of ownership interests in Securities issued in the form of Global
Securities are to be accomplished by entries made on the books of
Participants acting on behalf of Beneficial Owners. Beneficial Owners will
not receive certificates representing their ownership interests in such
Securities, except in the event that use of the book-entry system for such
Securities is discontinued.

DTC has no knowledge of the actual Beneficial Owners of the Securities
issued in the form of Global Securities; DTC's records reflect only the
identity of the Direct Participants to whose accounts such Securities are
<PAGE>
credited, which may or may not be the Beneficial Owners. The Participants
will remain responsible for keeping account of their holdings on behalf of
their customers.

Conveyance of notices and other communications by DTC to Direct
Participants, by Direct Participants to Indirect Participants, and by Direct
Participants and Indirect Participants to Beneficial Owners will be governed
by arrangements among them, subject to any statutory or regulatory
requirements as may be in effect from time to time.

Redemption notices shall be sent to Cede & Co. as the registered holder
of Securities issued in the form of Global Securities. If less than all of a
series of such Securities are being redeemed, DTC's current practice is to
determine by lot the amount of the interest of each Direct Participant to be
redeemed.

Although voting with respect to Securities issued in the form of Global
Securities is limited to the holders of record of such Securities, in those
instances in which a vote is required, neither DTC nor Cede & Co. will itself
consent or vote with respect to such Securities. Under its usual procedures,
DTC would mail an omnibus proxy (the "Omnibus Proxy") to the issuer of such
Securities as soon as possible after the record date. The Omnibus Proxy
assigns Cede & Co.'s consenting or voting rights to those Direct Participants
to whose accounts such Securities are credited on the record date (identified
in a listing attached to the Omnibus Proxy).

Payments in respect of Securities issued in the form of Global
Securities will be made by the issuer of such Securities to DTC. DTC's
practice is to credit Direct Participants' accounts on the relevant payment
date in accordance with their respective holdings shown on DTC's records
unless DTC has reason to believe that it will not receive payments on such
payment date. Payments by Participants to Beneficial Owners will be governed
by standing instructions and customary practices and will be the
responsibility of such Participant and not of DTC, the Institutional Trustee,
either Trust or the Company, subject to any statutory or regulatory
requirements as may be in effect from time to time. Payments to DTC are the
responsibility of the issuer of the applicable Securities, disbursement of
such payments to Direct Participants is the responsibility of DTC, and
disbursements of such payments to the Beneficial Owners is the responsibility
of Direct and Indirect Participants.

DTC may discontinue providing its services as depositary with respect to
any Securities at any time by giving reasonable notice to the issuer of such
Securities. In the event that a successor depositary is not obtained,
individual Security certificates representing such Securities are required to
be printed and delivered. The Company, at its option, may decide to
discontinue use of the system of book-entry transfers through DTC (or a
successor depositary).

The information in this section concerning DTC and DTC's book-entry
system has been obtained from sources that the Trust and the Company believe
to be accurate, but the Trust and the Company assume no responsibility for
the accuracy thereof. Neither the Trust nor the Company has any
responsibility for the performance by DTC or its Participants of their
respective obligations as described herein or under the rules and procedures
governing their respective operations.
<PAGE>
PLAN OF DISTRIBUTION

Any of the Securities being offered hereby may be sold in any one or
more of the following ways from time to time: (i) through agents; (ii) to or
through underwriters; (iii) through dealers; and (iv) directly by the Company
or, in the case of Capital Securities, by the Trust to purchasers.

The distribution of the Securities may be effected from time to time in
one or more transactions at a fixed price or prices, which may be changed, at
market prices prevailing at the time of sale, at prices related to such
prevailing market prices or at negotiated prices.

Offers to purchase Securities may be solicited by agents designated by
the Company from time to time. Any such agent involved in the offer or sale
of the Securities in respect of which this Prospectus is delivered will be
named, and any commissions payable by the Company or the Trust to such agent
will be set forth, in the applicable Prospectus Supplement. Unless otherwise
indicated in such Prospectus Supplement, any such agent will be acting on a
reasonable best efforts basis for the period of its appointment. Any such
agent may be deemed to be an underwriter, as that term is defined in the
Securities Act, of the Securities so offered and sold.

If Securities are sold by means of an underwritten offering, the Company
and, in the case of an offering of Capital Securities, the Trust will execute
an underwriting agreement with an underwriter or underwriters at the time an
agreement for such sale is reached, and the names of the specific managing
underwriter or underwriters, as well as any other underwriters, the
respective amounts underwritten and the terms of the transaction, including
commissions, discounts and any other compensation of the underwriters and
dealers, if any, will be set forth in the applicable Prospectus Supplement
which will be used by the underwriters to make resales of the Securities in
respect of which this Prospectus is being delivered to the public. If
underwriters are utilized in the sale of any Securities in respect of which
this Prospectus is being delivered, such Securities will be acquired by the
underwriters for their own account and may be resold from time to time in one
or more transactions, including negotiated transactions, at fixed public
offering prices or at varying prices determined by the underwriters at the
time of sale. Securities may be offered to the public either through
underwriting syndicates represented by managing underwriters or directly by
one or more underwriters. If any underwriter or underwriters are utilized in
the sale of Securities, unless otherwise indicated in the applicable
Prospectus Supplement, the underwriting agreement will provide that the
obligations of the underwriters are subject to certain conditions precedent
and that the underwriters with respect to a sale of such Securities will be
obligated to purchase all such Securities if any are purchased.

The Company or the Trust, as applicable, may grant to the underwriters
options to purchase additional Securities, to cover over-allotments, if any,
at the initial public offering price (with additional underwriting
commissions or discounts), as may be set forth in the Prospectus Supplement
relating thereto. If the Company or the Trust, as applicable, grants any
over-allotment option, the terms of such over-allotment option will be set
forth in the Prospectus Supplement for such Securities.

If a dealer is utilized in the sale of the Securities in respect of
which this Prospectus is delivered, the Company or the Trust, as applicable,
will sell such Securities to the dealer as principal. The dealer may then
<PAGE>
resell such Securities to the public at varying prices to be determined by
such dealer at the time of resale. Any such dealer may be deemed to be an
underwriter, as such term is defined in the Securities Act, of the Securities
so offered and sold. The name of the dealer and the terms of the transaction
will be set forth in the Prospectus Supplement relating thereto.

Offers to purchase Securities may be solicited directly by the Company
or the Trust, as applicable, and the sale thereof may be made by the Company
or the Trust directly to institutional investors or others, who may be deemed
to be underwriters within the meaning of the Securities Act with respect to
any resale thereof. The terms of any such sales will be described in the
Prospectus Supplement relating thereto.

Securities may also be offered and sold, if so indicated in the
applicable Prospectus Supplement, in connection with a remarketing upon their
purchase, in accordance with a redemption or repayment pursuant to their
terms, or otherwise, by one or more firms ("remarketing firms"), acting as
principals for their own accounts or as agents for the Company or the Trust,
as applicable. Any remarketing firm will be identified and the terms of its
agreement, if any, with the Company or the Trust and its compensation will be
described in the applicable Prospectus Supplement. Remarketing firms may be
deemed to be underwriters, as that term is defined in the Securities Act, in
connection with the Securities remarketed thereby.

If so indicated in the applicable Prospectus Supplement, the Company or
the Trust, as applicable, may authorize agents and underwriters to solicit
offers by certain institutions to purchase Securities from the Company or the
Trust at the public offering price set forth in the applicable Prospectus
Supplement pursuant to delayed delivery contracts providing for payment and
delivery on the date or dates stated in the applicable Prospectus Supplement.
Such delayed delivery contracts will be subject to only those conditions set
forth in the applicable Prospectus Supplement. A commission indicated in the
applicable Prospectus supplement will be paid to underwriters and agents
soliciting purchases of Securities pursuant to delayed delivery contracts
accepted by the Company or the Trust, as applicable.

Agents, underwriters, dealers and remarketing firms may be entitled
under relevant agreements with the Company or the Trust, as applicable, to
indemnification by the Company or the Trust against certain liabilities,
including liabilities under the Securities Act, or to contribution with
respect to payments which such agents, underwriters, dealers and remarketing
firms may be required to make in respect thereof.

Each series of Securities will be a new issue and, other than the Common
Stock, which is listed on the New York Stock Exchange, the London Stock
Exchange and the Amsterdam Stock Exchange, will have no established trading
market. The Company may elect to list any series of Securities on an
exchange, and in the case of the Common Stock, on any additional exchange,
but, unless otherwise specified in the applicable Prospectus Supplement, the
Company shall not be obligated to do so. No assurance can be given as to the
liquidity of the trading market for any of the Securities.

Agents, underwriters, dealers and remarketing firms may be customers of,
engage in transactions with, or perform services for, the Company and its
subsidiaries in the ordinary course of business.
<PAGE>
LEGAL OPINIONS

Unless otherwise specified in a Prospectus Supplement relating to
particular Securities, the validity of the Securities offered hereby, other
than Capital Securities, will be passed upon for the Company by Simpson
Thacher & Bartlett, New York, New York, and certain matters of Delaware law
with respect to the validity of the Capital Securities offered hereby will be
passed upon for the Company and the Trust by Richards, Layton & Finger P.A.,
special Delaware counsel to the Company and the Trust. The validity of the
Securities offered hereby will be passed upon for the underwriters, dealers
or agents, if any, by counsel to be named in the applicable Prospectus
Supplement.

EXPERTS

The financial statements incorporated in this Registration Statement by
reference to the Company's Annual Report on Form 10-K for the year ended
December 31, 1997, have been so incorporated in reliance on the reports of
Price Waterhouse LLP, independent accountants, given on the authority of said
firm as experts in auditing and accounting. The financial statements of
Thermo King incorporated in this Registration Statement by reference to the
Company's Form 8-K, dated October 31, 1997, have been so incorporated in
reliance on the reports of KPMG Peat Marwick LLP.
<PAGE>
No dealer, salesperson or other individual has been authorized to give any
information or to make any representations other than those contained or
incorporated by reference in this Prospectus Supplement or the Prospectus in
connection with the offer made by this Prospectus Supplement or the
Prospectus and, if given or made, such information or representations must
not be relied upon as having been authorized by the Company, the Trust or the
Underwriter. Neither the delivery of this Prospectus Supplement and the
Prospectus, nor any sale made hereunder and thereunder, shall under any
circumstances, create an implication that there has been no change in the
affairs of the Company or the Trust since the date hereof. This Prospectus
Supplement and the Prospectus shall not constitute an offer or solicitation
by anyone in any state in which such offer or solicitation is not authorized
or in which the person making such offer of solicitation is not qualified to
do so or to anyone to whom it is unlawful to make such offer or solicitation.

TABLE OF CONTENTS
Page
Prospectus Supplement

Prospectus Supplement Summary . . . . . . . . . . . . . . . . . . . . . S-5
Explanatory Diagrams . . . . . . . . . . . . . . . . . . . . . . . . . S-18
Risk Factors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . S-22
The Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . S-28
Summary Historical and Pro Forma
Financial Information of the Company . . . . . . . . . . . . . . . . . S-30
The Trust . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . S-31
Use of Proceeds . . . . . . . . . . . . . . . . . . . . . . . . . . . . S-32
Price Range of Common Stock and Dividends . . . . . . . . . . . . . . . S-32
Condensed Consolidated Capitalization . . . . . . . . . . . . . . . . . S-33
Accounting Treatment . . . . . . . . . . . . . . . . . . . . . . . . . S-34
Description of the Feline Prides . . . . . . . . . . . . . . . . . . . S-35
Description of the Purchase Contracts . . . . . . . . . . . . . . . . . S-38
Certain Provisions of the Purchase Contract
Agreement and the Pledge Agreement . . . . . . . . . . . . . . . . . . S-45
Description of the Capital Securities . . . . . . . . . . . . . . . . . S-47
Description of the Guarantee . . . . . . . . . . . . . . . . . . . . . S-57
Description of the Debentures . . . . . . . . . . . . . . . . . . . . . S-60
Effect of Obligations Under the
Debentures and the Guarantee . . . . . . . . . . . . . . . . . . . . . S-65
Certain Federal Income Tax Consequences . . . . . . . . . . . . . . . . S-66
Underwriting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . S-72
Legal Opinions . . . . . . . . . . . . . . . . . . . . . . . . . . . . S-73
Index of Terms for Prospectus Supplement . . . . . . . . . . . . . . . S-74

Prospectus

Available Information . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Incorporation of Certain Documents by Reference . . . . . . . . . . . . . . 3
The Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
The Trust . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Use of Proceeds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Description of Debentures . . . . . . . . . . . . . . . . . . . . . . . . 6
Description of Capital Securities . . . . . . . . . . . . . . . . . . . . 12
Description of the Guarantee . . . . . . . . . . . . . . . . . . . . . . 21
Relationship Among the Capital Securities,
the Debentures and the Guarantee . . . . . . . . . . . . . . . . . . . . 23
<PAGE>
Description of Capital Stock . . . . . . . . . . . . . . . . . . . . . . 24
Description of Stock Purchase Contracts
and Stock Purchase Units . . . . . . . . . . . . . . . . . . . . . . . . 31
Book-Entry Issuance . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
Plan of Distribution . . . . . . . . . . . . . . . . . . . . . . . . . . 32
Legal Opinions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
Experts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34

INGERSOLL-RAND FINANCING I

14,000,000 FELINE PRIDES SM
(Consisting of 12,600,000 Income PRIDES SM and
1,400,000 Growth PRIDES SM)
1,400,000
CAPITAL SECURITIES

PROSPECTUS SUPPLEMENT

Merrill Lynch & Co.

March 17, 1998

SM Service Mark of Merrill Lynch & Co., Inc.