Unassociated Document


    


    June
      5,
      2008

    


    Mr.
      Steven Shawley

    21
      Upper
      Conway Court

    Chesterfield,
      MO 63017

    


    Dear
      Steve,

    


    Congratulations
      on your promotion to Senior Vice President and Chief Financial Officer. This
      position will be located in Davidson, NC. The following summarizes the impact
      of
      the promotion on your compensation and benefits.

    


    
      	
              1.

            	
              Your
                starting base salary will be at an annual rate of $525,000 (five
                hundred,
                twenty-five thousand U.S. dollars) paid monthly. This will be effective
                June 1, 2008.

            


    

    


    
      	
              2.

            	
              Your
                AIM annual target opportunity will remain at 90% of base salary.
                Actual
                AIM awards depend upon your performance, the performance of your
                Sector
                and the performance of Ingersoll-Rand Company Limited. For performance
                year 2008, this variable pay award will be prorated using the respective
                metrics for the two positions you have
                held.

            


    

    


    
      	
              3.

            	
              Your
                annual 2008 stock option award target opportunity (payable February
                2009)
                has been increased to 125% of base salary. Annual stock option awards
                are
                contingent on and variable with your performance and the Company’s
                financial performance, specifically, earnings per share against plan.
                For
                the 2008 performance year, your award will be based on the new target
                for
                the full year.

            


    

    


    
      	
              4.

            	
              In
                addition, you will receive a one-time special stock option grant
                of
                100,000 options. These options will vest 50% on February 15, 2012
                and 50%
                on February 15, 2014 and will be priced based on the Fair Market
                Value on
                June 4, 2008, the date the Compensation Committee approved this
                award.

            


    

    


    
      	
              5.

            	
              Your
                Performance Share target award will increase to 14,000 performance
                shares
                for performance year 2008 (awardable February 2009). For performance
                year
                2008, the terms and conditions of this award will remain virtually
                unchanged from 2007. However, integration teams have been formed
                to work
                on the development of compensation programs including a redesigned
                Long
                Term Incentive Plan for the combined entity, which are expected to
                be in
                place by January 1, 2009. 

            


    

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    
      
        	
                Steve
                  Shawley

              	
2

              	
                June
                  5, 2008

              


      



    
      	
              6.

            	
              You
                are currently fully vested in the Elected Officer Supplemental Program
                (EOSP). If you remain with the Company until age 60, the normal earlier
                retirement reduction will be waived, i.e., you will receive an unreduced
                benefit based on your years of service to that
                date.

            


    

    


    
      	
              7.

            	
              As
                Chief Financial Officer, you will be issued a new Change-in-Control
                agreement with favorable
                provisions.

            


    

    


    
      	
              8.

            	
              You
                will be eligible for the Company’s Relocation Program including the
                completion of your Minneapolis, MN move and home sale assistance
                from both
                St. Louis, MO and Minneapolis, MN.

            


    

    


    Steve,
      congratulations again on your promotion. If you have any questions regarding
      the
      changes in your compensation and benefits, please contact Marcia Avedon
      (201-573-3563 or Rob Butler (201-573-3137).

    


    Sincerely,

    


    


    Herbert
      L. Henkel

    Chairman,
      President and

    Chief
      Executive Officer

    


    
      	
              cc:
                

            	
              Marcia
                Avedon

            


    

    
      	 	
              Rob
                Butler