Exhibit 10.1

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June 14, 2010

Mr. Robert Zafari

AV DU FORT JACO DES MONTECRISTA No. 75

Uccle

Belgium 1180

Dear Robert,

I am pleased to offer you the position of Senior Vice President & President of
Industrial Technologies Sector effective July 1, 2010. You will report to me and
upon completion of the necessary United States (U.S.) work permits and
authorizations, your official location will be transferred from Brussels,
Belgium to Davidson, North Carolina. I look forward to your acceptance of this
promotion and providing leadership to this sector.

 

1. Your starting base salary will be at an annual rate of $440,000 (four hundred
and forty thousand U.S. dollars) paid monthly. When your current salary is
converted from Euros to USD (1.2127), this represents an increase of $57,393 or
15%. Your new salary will be effective on July 1, 2010.

 

2. Your Annual Incentive Matrix (AIM) target opportunity has been increased from
65% to 80% of your base salary effective on July 1, 2010. This represents an
increase in your target opportunity from $248,694 to $352,000 or 42%. For 2010,
your AIM award will be prorated using your previous base salary and AIM target
of 65% (for 6 months), and your new base salary and AIM target effective on
July 1st (for 6 months). Furthermore, the metrics used to determine your 2010
AIM award will be pro-rated between the two positions held.

 

3. For the February 2011 grant, your annual equity award target opportunity will
be increased from $200,000 to $400,000 representing an increase of $200,000 or
100%. At this time it is anticipated that your 2011 equity grant will be made in
an equal proportion of stock options and Restricted Stock Units (RSUs). The
award dollar value wiQ be converted into stock options and RSUs based on the
fair market value of Ingersoll Rand stock on the date the Compensation Committee
approves the awards. Annual equity awards are contingent on and variable with
your sustained performance and demonstrated leadership potential.

 

4. For the February 2011 grant, your Performance Share Unit (PSUs) target will
be increased from $200,000 to $400,000 representing an increase of $200,000 or
100%. Your grant will be converted into PSUs based on the fair market value of
Ingersoll Rand stock on the date the Compensation Committee approves the award.
The actual number of PSUs awarded will be based on Ingersoll Rand’s Earnings per
Share (EPS) growth relative to the S&P 500 Industrial peer companies over the
2011 to 2013 performance period and can range from 0% to 200% of the target
number of PSUs.

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Robert Zafari    2    June 14, 2010

 

5. At the time that you are able to work in the U.S. and begin to pay U.S.
taxes, you will be eligible to participate in U.S. benefit programs to include
qualified and non-qualified retirement plans, deferred compensation, as well as
health and welfare programs.

 

6. You will be provided a company automobile in accordance with our Company car
policy, which in your case provides an executive automobile with a purchase
value of up to $60,000. A portion of the benefit will be imputed to your
statement of gross income for tax purposes. A brief summary is enclosed.

 

7. This position is eligible for participation in the Elected Officer
Supplemental Program (EOSP). The EOSP is a defined benefit pension plan that
provides a target level of retirement benefits reduced (or offset) by other
qualified and non-qualified retirement benefits to which you are entitled. For
non-US citizens, these reductions include any and all benefits accrued or
accumulated by the employee under any Foreign Plan as defined by the EOSP plan
document. At the appropriate time, Jeffrey Blair will be available to help you
coordinate the collection of the information necessary to determine the
reductions (or offsets).

 

8. You will continue to be eligible for the Company’s Executive Health Program.

 

9. Based on your new position, you are eligible for financial and retirement
counseling services through AYCO, a division of Goldman-Sachs. This service
includes investment strategy and tax filing assistance. A portion of the cost
for these services is imputed to your annual income. A representative from AYCO
will contact you soon.

 

10. You will be eligible for an enhanced Executive Long-Term Disability (LTD)
program that covers annual incentive compensation in addition to base salary and
provides a greater benefit than offered in the standard group program.

 

11. You will be provided with a Change in Control Agreement, which provides
economic security in the form of cash payments to the participant and guaranteed
coverage under certain benefit plans in the event of job loss caused by the sale
of all or a substantial part of the Company (2.5 x base salary and annual
incentive target). The agreement will be sent to you shortly after assuming your
position.

 

12. You will be eligible for the Company’s Relocation Program to Davidson, North
Carolina from Brussels, Belgium. A representative from Cartus will be in touch
with you after we receive your acceptance of this offer to explain the program
and begin the process.

 

13.

Based on your promotion to a Senior Vice President, your stock ownership
requirements have increased. Your new requirement (which must be achieved over a
three-year period) has been increased from 6,000 to 40,000 shares. You will
receive communication every year that provides you with your current holdings.
If you fall behind on your guideline requirement, you will be restricted from
exercising your stock options (except in the case of a ‘buy and hold’).

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Robert Zafari    3    June 14, 2010

 

14. Based on your accountabilities in your new position, you are restricted from
transactions involving company stock (exercising options, moving in or out of
company stock held in company plans, or buying or selling company stock on the
open market) except during designated window periods. You will receive
communication from the Corporate Secretary when window periods are open along
with instructions on how to execute transactions.

 

15. Your spouse will be provided with support in obtaining a visa to work in the
United States. Also, your two children will be provided with language training
(English) if needed in a total amount not to exceed $5,000.

 

16. This employment offer is contingent upon obtaining the appropriate temporary
non-immigrant work authorization that will allow you to legally work in the
United States. All employees must demonstrate their employment eligibility
pursuant to the Immigration Reform and Control Act of 1986 within the first
three (3) days of working in the United States and being on a U.S. payroll.
Until these matters are completed, you will remain on Belgium payroll and you
will not participate in U.S. benefit or deferred compensation programs. We
expect to have all necessary approvals completed within the next 30 days or so.
Jeffrey Blair will be your contact who will help coordinate obtaining the
necessary work permits.

Robert, we all believe that you will make a significant contribution in this new
role and I look forward to you taking the helm of the Industrial Technologies
Sector. This offer is contingent upon your acceptance of the Non-Compete and
Proprietary Information agreements. To accept this offer, please sign the
following page as well as the attached Non-Compete and Proprietary agreements
and return to Jeffrey Blair. If you have any questions regarding the changes in
your compensation and benefits, please call Marcia Avedon at 704-655-5821 or
Jeffrey Blair at 732-652-6759.

Sincerely,

 

/s/ Michael W. Lamach Michael W. Lamach Chairman, President and Chief Executive
Officer

 

cc:   Marcia Avedon   Jeffrey Blair

Attachments:

   Executive Automobile Program    Elected Officer Supplemental (Pension)
Program    Non-Compete Agreement    Proprietary Information Agreement

CANDIDATE ACCEPTANCE

I accept your offer of employment with Ingersoll Rand, as Senior Vice
President & President of Industrial Technologies Sector and agree to the
conditions hereon and in the offer letter.

 

/s/ Robert Zafari     June 14, 2010 Robert Zafari     Date

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   1 Centennial Avenue    Piscataway, NJ 08854

August 25, 2010

Mr. Robert Zafari

Ingersoll Rand

800 D Beaty Street

Davidson, NC 28036

Dear Robert,

The purpose of this letter, which serves as an addendum to your employment
agreement dated June 14, 2010, is to confirm additional considerations agreed to
by the Compensation Committee of the Board at their August 5, 2010 meeting.

To ensure that you are not negatively impacted in the event you return to Europe
in the future, after working for Ingersoll Rand in the United States, we have
agreed to make contributions on your behalf to the Belgium social system. These
contributions, which will be imputed to your income, will enable you to maintain
coverage in the Belgium social scheme. This imputed income will be tax neutral
to you. Please note that the pension component of the Belgium social scheme
serves as an offset to the Elected Officer Supplemental (retirement) Program.

In regard to any stock options on which you have already paid taxes in Belgium
(based on the grant value) the company agrees that if you exercise options while
in the United States you will not pay more in income tax (which includes the
taxes you have already paid in Belgium) than what you would owe as a U.S.
taxpayer. Any future stock options granted to you while working in the U.S. will
be taxed based on the U.S. tax rules.

The company also agrees to provide an amount (estimated at $15,000) to help with
your estate planning. This payment is taxable to you.

Robert, if you have any questions or concerns regarding the provisions of this
letter, please do not hesitate to contact me directly on (732) 652-6759.

Very truly yours,

 

/s/ Jeff Blair Jeff Blair Vice President, Total Rewards

 

cc:    Barbara Santoro    Ken Yi