Unassociated Document


    September
      5, 2006

    


    Mr.
      William Gauld

    xxxxxxxxxxxxxxxxxxxxxxxx

    xzxxxxxxxxxxxxxxxxxxxxxx
      

    


    Dear
      Bill,

    


    I
      am
      pleased to present you with an offer for the position of Senior Vice President,
      Enterprise Services reporting to me. This position will be located in Davidson,
      NC. You will be presented to the Board of Directors at their first meeting
      following your date of hire for election as a Vice President and Officer of
      Ingersoll-Rand Company Limited (the “Company”) to take effect on the date of
      your election. We look forward to your acceptance of this offer and becoming
      a
      part of our team.

    


    
      	
              1.

            	
              Your
                starting base salary will be at an annual rate of $400,000 (four
                hundred
                thousand U.S. dollars) paid monthly.


            


    

    


    
      	
              2.

            	
              This
                position is an “incentive eligible” position, which means you will be
                eligible to participate in the Annual Incentive Matrix (AIM) Program.
                Your
                annual opportunity is targeted at 75% 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. If you join us by October 1, 2006, your AIM award for performance
                year 2006 will be prorated at 33%. Please see the enclosed AIM brochure
                for further details on this
                program.

            


    

    


    
      	
              3.

            	
              Starting
                with performance year 2006 (first awardable 2007) you will be eligible
                to
                receive stock option awards under the Incentive Stock Plan as administered
                by the Compensation Committee of the Board. Your annual opportunity
                is
                targeted at 100% of your 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.
                If
                you join us by October 1, 2006, your annual stock option award opportunity
                for performance year 2006 (awarded February 2007) will be paid at
                target.
                Please see the enclosed Stock Option brochure for further details
                on this
                program.

            


    

    


    
      	
              4.

            	
              You
                will be recommended to be a participant in the IR Performance Share
                Program (PSP) with a target award level of 8,000 performance shares
                starting performance year 2007 (payable 2008). Awards under the IR
                Performance Share Program are both contingent on and variable with
                achievement of specific objectives. The objectives are established
                each
                year by the Chairman and Compensation Committee, and include several
                financial performance metrics, which for 2007 are E.P.S., Available
                Cash
                Flow and R.O.I.C. Awards from this plan are distributed as cash (unless
                deferred) in February following the Compensation Committee’s approval. In
                subsequent years, you will be eligible for additional annual awards
                of
                similar value with qualifying criteria set at the time of each award.
                Participation in the PSP includes stock ownership requirements, which
                will
                be described in greater detail upon your acceptance in the program
                by the
                Compensation Committee.

            


    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    
      
        	
                William
                  Gauld

              	
                
                  2

                

              	
                September
                  5, 2006

              


      

    

     

    
      	
              5.

            	
              You
                will be eligible to participate in the IR Executive Deferred Compensation
                Plan (EDCP). The EDCP gives you the opportunity to defer your AIM
                award,
                PSP award and up to 50% of your base salary on a pretax basis. Information
                regarding the EDCP will be sent to you and a representative from
                our
                vendor, TBG Financial, will contact you to explain this program after
                you
                begin your employment.

            


    

    


    
      	
              6.

            	
              You
                will be eligible to participate in all employee benefit programs
                offered
                to all Ingersoll Rand salaried employees in accordance with the terms
                and
                conditions of those programs. The enclosed information summarizes
                these
                benefits. Please note that your medical, dental and life insurance
                coverage with Ingersoll Rand will commence on the first day of the
                month
                following employment.

            


    

    


    
      	
              7.

            	
              You
                will be eligible for paid vacation in accordance with Company policy,
                which in your case is three (3) weeks. Vacation days are earned and
                accrued on a monthly basis each calendar
                year.

            


    

    


    
      	
              8.

            	
              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.

            


    

    


    
      	
              9.

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

            


    

    


    
      	
              10.

            	
              This
                position is eligible for participation 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 and, as its name
                denotes, is reserved for elected officers of the company. A brief
                summary
                is enclosed.

            


    

    


    
      	
              11.

            	
              As
                an elected officer, 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 after your employment
                date.

            


    

    


    
      	
              12.

            	
              Also,
                as an elected officer, you will be given a standard 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.

            


    

    


    
      	
              13.

            	
              You
                will be eligible for the Company’s Relocation Program. The timing of the
                relocation will be at your discretion. A representative from Prudential
                Relocation will be in touch with you to explain the program and to
                discuss
                the timing of your relocation.

            


    

    


    
      	
              14.

            	
              In
                the unlikely event of your involuntary termination from Ingersoll
                Rand
                within two years from your date of hire for other than gross cause,
                as
                consideration for your release of whatever claims might be made,
                you will
                receive a) severance of one year’s base salary plus b) the pro-rata amount
                of any Annual Incentive Matrix (AIM) and Performance Share (PSP)
                award
                that is earned as of your termination date, to be paid according
                to plan
                provisions. In addition, you will have 90 days following your termination
                date within which to exercise your vested
                options.

            


    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

       

    

    
      	
              William
                Gauld

            	
              
                3

              

            	
              September
                5, 2006

            


    

     

    Bill,
      we
      all believe that you will make a significant contribution in this new role
      and
      look forward to your contribution 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 in the enclosed UPS envelope along with
      the completed employment application, Background Request form and Self-Identity
      form. 

    


    If
      you
      have any questions regarding your compensation and benefits, please contact
      Rob
      Butler (201-573-3137), Connie Roseler (201-573-3052) or myself.

    


    Sincerely,

     

    

    Herbert
      L. Henkel

    Chairman,
      President and

    Chief
      Executive Officer

    


    cc:
       Robert
      Butler 

    Gillian
      Scholes

    


    Attachments: AIM
      Program Brochure

     Stock
      Option Program Brochure

     Elected
      Officer Supplemental (Pension) Program

     Ingersoll
      Rand Key Benefits Summary

     Executive
      Health Program Summary 


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    
      	
              William
                Gauld

            	
              
                4

              

            	
              September
                5, 2006

            


    

     

    Conditions
      of Offer


    


    This
      offer is contingent upon the following:

    


    
      	 	
              1.

            	
              Verification
                of information signed and submitted in connection with the Ingersoll
                Rand
                employment application and authorization for Release of Personal
                Data
                Records Information.

            


    

    


    
      	 	
              2.

            	
              Passing
                the required drug and alcohol screening. All test results will be
                handled
                in strict confidence. Attached is the substance abuse screen requirements
                and release along with the control form and list of
                locations.

            


    

    


    
      	 	
              3.

            	
              Providing
                proof of identity and employment eligibility pursuant to the Immigration
                Reform and Control Act of 1986 within three (3) working days after
                the
                actual commencement of work. A copy is enclosed with instructions
                for
                completing the form along with a list of acceptable verification
                documents.

            


    

    


    
      	 	
              4.

            	
              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.

            


    

    


    
      	 	
              5.

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

            


    

     

    CANDIDATE
      ACCEPTANCE

    


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

     

    
      	 	 	 	 
	/s/
              William Gauld	 	 	September
              8, 2006
	
              
William
              Gauld	 	 	
              
Date