Unassociated Document


    
      	
              



            	
              U.S.
                Executive Offices

            
	
              P.O.
                Box 0445

            
	
              155
                Chestnut Ridge Road

            
	
              Montvale,
                NJ 07645

            


    

    


    


    April
      7,
      2008

    


    Mr.
      David
      Pannier

    Trane
      Inc.

    1
      Centennial Avenue

    Piscataway,
      NJ 08855

    


    Dear
      David,

    


    I
      am
      pleased to present you with an offer of employment to join Ingersoll Rand (IR)
      as Senior Vice President and Sector President, Trane Residential reporting
      to
      me. Your official date of employment (i.e. your hire date) will be effective
      on
      the consummation of Ingersoll Rand’s acquisition of Trane (the “Closing”) and
      this offer is contingent upon such Closing. At the first meeting of the
      Ingersoll Rand Board of Directors (the “Board”) following your hire date, you
      will be presented for election as a Senior Vice President and Officer of
      Ingersoll-Rand Company Limited (the “Company”). We look forward to your
      accepting this offer as described below and becoming a part of our
      team.

    


    
      	
              1.

            	
              This
                position will be located in Tyler,
                Texas.

            


    

    


    
      	
              2.

            	
              Your
                starting base salary will be at an annual rate of U.S. $325,000 paid
                monthly. Your base salary will be reviewed on an annual basis
                approximately one year from your hire date. Any base salary increases
                will
                be based on your performance, prevailing market data and are subject
                to
                approval by the Compensation Committee of the
                Board.

            


    

    


    
      	
              3.

            	
              This
                position is an “incentive eligible” position, which means you will be
                eligible to participate in the IR annual cash incentive program.
                Your
                annual cash incentive opportunity is targeted at 65% of base salary.
                The
                actual award that an individual may receive can be higher or lower
                than
                the targeted amount depending upon individual performance and the
                performance of the Company. With respect to performance year 2008
                (“Performance Year 2008”), your IR annual incentive cash award will be
                prorated for the period from the date of the Closing and ending on
                December 31, 2008, and will be based on your individual performance,
                the
                performance of the TRS sector and IR performance in
                general.

            


    

    


    
      	
              4.

            	
              As
                soon as administratively practical following the Closing, you will
                receive
                an award of Ingersoll Rand stock options, under the IR Incentive
                Stock
                Plan, as determined by the Compensation Committee of the Board. This
                award
                of IR stock options will be of equivalent Black Scholes value (as
                determined by IR) to recent annual stock option awards you have received
                from Trane. Consistent with the acquisition agreement, this award
                is
                intended to replace the stock option award that you would have received
                from Trane in February 2008, but did not due to the pending
                acquisition.

            


    


    
      
         

      

      
         

        
          

        

      

      
         

      

    

    
      	
              David
                Pannier

            	
              2

            	
              April
                7, 2008

            


    


    


    Starting
      with Performance Year 2008, you will be eligible to receive stock option awards
      in February 2009 and forward under the Incentive Stock Plan as administered
      by
      the Compensation Committee of the Board. Your annual opportunity is currently
      targeted at a Compensation Committee-determined value of the stock option equal
      to approximately $580,500 based on Black Scholes value. Actual stock option
      awards are contingent on and variable with your performance, the Company’s
      financial performance and the estimated value of IR stock options at the end
      of
      the applicable performance period. The Company reserves the right to amend
      annual targets, in line with evolving market and business conditions and
      prevailing practices.

    


    
      	
              5.

            	
              As
                you know, the Trane Long Term Incentive Plan (LTIP) will be paid
                out as of
                the closing date, which we expect to be in the second quarter. For
                the
                remaining months of 2008, you will continue in the LTIP (or a mirror
                image
                of it) at the same target level of annual compensation opportunity,
                i.e.,
                120% of base salary, but based on new Ingersoll Rand performance
                metrics
                currently being developed. Integration teams have been formed to
                work on
                the development of compensation programs for the combined entity,
                which
                are expected to be in place by January 1,
                2009.

            


    

    


    
      	
              6.

            	
              You
                will be eligible to participate in a deferred compensation plan,
                which
                will give you the opportunity to defer almost all of your annual
                cash
                incentive award and LTIP award and up to 50% of your base salary
                on a
                pretax basis, to the extent permitted under the terms of the EDCP
                and
                applicable law. Information regarding the deferred compensation plan
                will
                be sent to you and a representative from our vendor, MullinTBG, will
                contact you to explain this program after you begin your employment.
                

            


    

    


    
      	
              7.

            	
              Following
                the Closing, and possibly into calendar year 2009, integration teams
                from
                both IR and Trane will be working on merging and/or aligning the
                IR and
                Trane benefit programs. Because we want you as an employee of the
                IR group
                of companies, we will, to the extent possible and feasible, take
                all
                actions necessary to transition you to the IR benefit plans as soon
                as
                reasonably possibly; provided that, for a period of one year following
                the
                closing your employee benefits, base salary and long and short-term
                bonus
                compensation opportunity (excluding equity compensation) in the aggregate,
                will be no less favorable than the employee benefits, base salary
                and long
                and short term bonus compensation opportunity (excluding equity
                compensation) provided to you by Trane immediately prior to the Closing.
                

            


    

    


    
      	
              8.

            	
              After
                Closing, you will participate in IR benefits arrangements, for which
                you
                are eligible and to the extent you do not continue to participate
                in a
                similar Trane plan; provided, however, in no event will you participate
                in
                benefit plans and arrangements maintained by Trane and IR of the
                same
                type, or providing the same or similar benefits, at the same time
                (including, without limitation, with respect to
                vacation benefits). 

            


    

    


    
      	
              9.

            	
              As
                an elected officer of the Company, you will be eligible to participate
                in
                the Elected Officer Supplemental Program (EOSP). The EOSP is a
                non-qualified defined benefit pension plan that substantially augments
                IR’s qualified pension plan. A brief summary is
                enclosed.

            


    

    


    
      	
              10.

            	
              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 cost for these services is imputed to your annual income and
                will
                be included in your statement of gross income for tax purposes each
                year.

            


    


    
      
         

      

      
         

        
          

        

      

      
         

      

    

    
      	
              David
                Pannier

            	
              3

            	
              April
                7, 2008

            


    


    


    
      	
              11.

            	
              You
                will be eligible for the Company’s Executive Health Program, a copy of
                which is enclosed.

            


    

    


    
      	
              12.

            	
              As
                an elected officer of the Company, 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 and
                will
                be included in your statement of gross income for tax purposes each
                year.
                A representative from AYCO will contact you after your employment
                date to
                explain the services.

            


    

    


    
      	
              13.

            	
              You
                will continue to be eligible for change in control benefits under
                your
                Trane Change in Control Agreement currently in effect, but, if a
                Change in
                Control of IR occurs you will be entitled to the greater of the benefits
                under your current agreement or those under the standard IR Change
                in
                Control Agreement for similarly situated employees; provided, however,
                in
                no event will you receive benefits under both agreements for the
                same
                termination.

            


    

    


    David,
      we
      all believe that you will make a significant contribution in this continued
      role
      as Sector President and look forward to your future contributions to Ingersoll
      Rand. This offer of employment is contingent upon the satisfaction of several
      items, which are identified on the attached “Conditions of Offer” form. To
      accept this offer, please sign the “Conditions of Offer” form and return it to
      Marcia Avedon.

    


    If
      you
      have any questions regarding your compensation and benefits, please contact
      Marcia Avedon (201-573-3563), Rob Butler (201-573-3137) or myself.

    


    Sincerely,

    


    


    Herbert
      L. Henkel

    Chairman,
      President and

    Chief
      Executive Officer

    


    
      	
              cc:
                

            	
              Marcia
                Avedon

            


    

    
      	 	
              Rob
                Butler

            


    

    


    Attachments


    
      
         

      

      
         

        
          

        

      

      
         

      

    

    
      	
              David
                Pannier

            	
              4

            	
              April
                7, 2008

            


    

     

     

    Conditions
      of Offer

     

    


     

    This
      offer is contingent upon the following:

    


    
      	 	
              1.

            	
              The
                finalization of Ingersoll Rand’s acquisition of Trane (i.e., the closing
                of the sale).

            


    

    


    
      	 	
              2.

            	
              Understanding
                and agreement that your employment is to be “at will”. This means that you
                or the Company, for any reason or no reason, may terminate employment
                and
                that nothing in this offer is intended to create a contract of employment
                for any period of time.

            


    

    


    
      	 	
              3.

            	
              Understanding,
                agreeing and signing and returning the Code of Conduct and Proprietary
                Information forms.

            


    

    


    
      	 	
              4.

            	
              Your
                acceptance and execution of this offer in the space provided below,
                and
                its receipt by Ingersoll Rand no later than one week following the
                date of
                the offer.

            


    

     

     

    
      
        

      

    

    CANDIDATE
      ACCEPTANCE

    


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

    


    
      	 
	 	 

	
              David
                Pannier

            	 	
              Date